Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Deutsch Services Pty Ltd v Apex Bespoke Pty Ltd [2024] NSWCATAP 193 Hearing dates: On the papers Date of orders: 03 October 2024 Decision date: 03 October 2024 Jurisdiction: Appeal Panel Before: G Blake AM SC, Senior Member S Higgins, Senior Member Decision: (1) Leave to appeal is refused. (2) The issue of costs of the appeal is to be determined as follows: (a) Apex Bespoke Pty Ltd to file with the Appeal Panel and serve on Deutsch Services Pty Ltd any costs submissions within 14 days from the date of this decision. (b) Deutsch Services Pty Ltd to file with the Appeal Panel and serve on the Apex Bespoke Pty Ltd any costs submissions within 28 days from the date of this decision. (c) Apex Bespoke Pty Ltd to file with the Appeal Panel and serve on Deutsch Services Pty Ltd costs submissions in reply by 35 days from the date of this decision. (d) The costs submissions of the parties are to identify whether an oral hearing on costs is sought, and if so, why. (e) Subject to consideration of the costs submissions of the parties the Appeal Panel may determine the issue of costs on the papers and without a further oral hearing pursuant to s 50(2) of the Civil and Administrative Tribunal Act 2013 (NSW). Catchwords: APPEALS – Leave to appeal - Legislation Cited: Civil and Administrative Tribunal Act 2013 (NSW) Civil and Administrative Tribunal Rules 2014 (NSW) Home Building Act 1989 (NSW) Uniform Civil Procedure Rules 2005 (NSW) Cases Cited: Champion Homes Pty Ltd v Guirgis [2018] NSWCATAP 54 Collins v Urban [2014] NSWCATAP 17 Forsyth v Gibbs [2009] 1 Qd R 403; [2008] QCA 103 FTB v Children's Guardian [2024] NSWCATAP 174 Hawach v A & A Building Services Pty Ltd [2024] NSWCATAP 138 Manca v Tullipan Homes Pty Ltd [2023] NSWCATAP 329 Promina Design & Construction Pty Ltd v The Owners-Strata Plan No 97449 [2023] NSWCATAP 252 Ryan v BKB Motor Vehicle Repairs Pty Ltd [2017] NSWCATAP 39 Texts Cited: NCAT Consumer and Commercial Division Guideline - Home Building Applications NCAT Procedural Direction 5 - Acceptance of Home Building Claims Category: Principal judgment Parties: Deutsch Services Pty Ltd (Appellant) Apex Bespoke Pty Ltd (Respondent) Representation: Counsel: J Pokoney (Appellant) Solicitors: Deutsch Partners (Appellant) Carmody Lawyers (Respondent) File Number(s): 2024/00210023 Publication restriction: Nil Decision under appeal Court or tribunal: Civil and Administrative Tribunal Jurisdiction: Consumer and Commercial Division Citation: n/a Date of Decision: 31 May 2024 Before: G Ellis SC, Senior Member File Number(s): 2024/00084453 REASONS FOR DECISION 1. This is an internal appeal, by Deutsch Services Pty Ltd, from orders (decision) made, on 31 May 2024, at a directions hearing, by the Tribunal in the Consumer and Commercial Division concerning proceedings lodged, by Apex Bespoke Pty Ltd, under the Home Building Act 1989 (NSW) (HB Act). 2. It is not disputed that the decision the subject of this appeal is an interlocutory decision and an internal appeal from an interlocutory decision can only be made with the leave of the Appeal Panel: see Civil and Administrative Tribunal Act 2013 (NSW) (NCAT Act), sections 4(1) and 80(2)(a). 3. In this appeal, the onus is on Deutsch Services Pty Ltd to satisfy the Appeal Panel that leave to appeal should be granted. 4. We have decided that Deutsch Services Pty Ltd has failed to establish that leave should be granted. 5. It follows that we have decided to refuse leave to appeal. Background 1. In July 2022, the appellant, Deutsch Services Pty Ltd (DSPL or owner), and the respondent, Apex Bespoke Pty Ltd (Apex or builder), entered into a residential building agreement (the contract) for Apex to carry out residential building works (the works) to the dwelling on the Vaucluse property owned by DSPL at that time. 2. On 27 February 2024, Apex lodged a 'Home Building Application' form with the Tribunal seeking an order, under s 48O(1)(a) of the HB Act, that DSPL pay it the sum of $207,352.17 and interest thereon in respect of 23 variations to the works under the contract or, alternatively, the quantum meruit amount in respect of works undertaken by it at the request of DSPL (file number 2024/00084453 (Apex's claim)). Attached to Apex's application is a Schedule that sets out Apex's reasons for the application. Particulars of the variations are listed in that Schedule. 3. In response to that claim, on 18 April 2024, DSPL lodged an 'Online' home building application with the Tribunal (file number 2024/00145234 (DSLP's claim)). In that application DSPL identified: 1. Apex as the respondent, 2. the Vaucluse property as the place of dispute, 3. the value of the claim is $1,340,000, 4. the application was a cross-claim, and 5. the order sought is an order that the 'matter' be transferred to the Supreme Court of NSW because the application exceeds the jurisdictional limit of the Tribunal. 1. Attached to DSPL's application to the Tribunal were two copies of a Supreme Court, Technology & Construction List 'Cross-Summons List Statement' (the T&C List Cross-Summons List Statement), dated 17 April 2024 and signed by David Deutsch as solicitor for DSPL, and an ASIC 'Current Organisation Extract' for Apex. The cover sheet of the T&C List Statement identifies Apex as the 'Plaintiff' and DSPL as the 'Respondent' and DSPL as the 'Cross-Claimant' and Apex as the 'Cross-Defendant'. 2. In its T&C List Cross-Summons List Statement, DSPL pleads causes of action of breach of the contract and negligence against Apex that is alleged to arise out of Apex's failure to provide or inform it of the contents of the October 2022 mould report it had commissioned in respect of the Vaucluse property whereby it suffered loss and damage. That loss and damage being the lost opportunity to sell the Vaucluse property for the negotiated price and the price the property was eventually sold for (the difference being $1,340,000.00), the holding costs in respect of the property and the sales and marketing costs in relation to the property incurred during the subsequent sales campaign. 3. On 31 May 2024, both applications were before the Tribunal at a directions hearing, where the Tribunal made the following orders: 1. File number 2024/00084453 – Apex's claim: 1. The hearing is adjourned to a date and time to be confirmed by the registrar. 2. On or before 07 June 2024 each party is to advise the Tribunal, by email, of any UNAVAILABLE dates for a hearing during the months of August, September, and October in 2024. 3. The applicant is to file and serve its documents in support of the application by 28 June 2024. 4. The respondent is to file and serve its documents in response to the application by 26 July 2024. … 1. File number 2024/00145234 – DSPL's claim: 1. The Tribunal orders that this application be transferred to the Supreme Court. 2. The costs of this application are to form part of the costs of the proceedings in the Supreme Court. 3. The hearing listed on 13 June 13 June 2024 09.15 AM is vacated and the parties are no longer required to attend. Reasons for decision: The amount claimed exceeds the limit if (sic) the Tribunal's jurisdiction. DSPL's Notice of Appeal 1. On 6 June 2024, DSPL lodged this appeal in which it seeks to appeal the whole of the orders made by the Tribunal on 31 May 2024 in file number 2024/00084553 (Apex's claim). 2. In its Notice of Appeal, DSPL seeks leave to appeal on the grounds that the Tribunal erred in failing to transfer the proceedings in file number 2024/00084553 (Apex's claim) to the Supreme Court of New South Wales (Supreme Court), including in circumstances where the related proceedings (DSLP's claim) were transferred. 3. We have dealt with DSPL's Notice of Appeal in more detail below. Proceedings before the Appeal Panel 1. On 26 June 2024, at the initial call-over of the DSPL's appeal the Appeal Panel made orders including: 1. granting leave to DSPL and Apex to be legally represented; 2. noting that Apex neither consented to or opposed the appeal and made a submitting appearance reserving its position solely as to costs; 3. that, by 17 July 2024, DSPL was to provide the Tribunal and Apex: 1. all evidence given to the Tribunal at first instance on which it intended to rely; 2. any evidence not given to the Tribunal at first instance that it intends to seek leave to rely; 3. written submissions in support of the appeal; and 4. if to be relied on in the appeal, a typed transcript of any oral reasons given by the Tribunal and/or what happened at the hearing at first instance; and 1. dispensing with a hearing in the following terms: The Tribunal dispenses with a hearing pursuant to s 50(2) Civil and Administrative Tribunal Act 2013. The appeal is to be decided on the papers without an oral hearing after 17 July 2024. If the Appeal Panel to whom the appeal is allocated decides an oral hearing is necessary, the appellant will be advised. 1. We were allocated this appeal on 19 August 2024 and are satisfied that, having regard to the abovementioned orders and the material provided by DSPL on 18 July 2024, that an oral hearing is not necessary as the issues for determination in this appeal can be adequately determined in the absence of the parties by considering the material provided by DSPL. Scope and nature of internal appeals – leave to appeal principles 1. An internal appeal to the Appeal Panel does not simply provide a losing party in the Tribunal below with an opportunity to run their again: Ryan v BKB Motor Vehicle Repairs Pty Ltd [2017] NSWCATAP 39 at [10]. 2. It is well established that the principles governing an application for leave to appeal under the NCAT Act are the same principles applied by the courts: Collins v Urban [2014] NSWCATAP 17 at [84] and FTB v Children's Guardian [2024] NSWCATAP 174 at [10]. 3. It is also well established that an application for leave to appeal against an interlocutory decision of the Tribunal in the Consumer and Commercial Division, clause 12 of Schedule 4 of the NCAT Act is of no application to section 80(2)(a) of the NCAT Act: see Champion Homes Pty Ltd v Guirgis [2018] NSWCATAP 54 (Champion Homes) at [33] to [35]; and Manca v Tullipan Homes Pty Ltd [2023] NSWCATAP 329 at [11]. 4. In Champion Homes at [35], the Appeal Panel summarised the principles applicable to leave applications as follows (citations omitted): 35. As stated in various decisions of the Tribunal … the principles to be applied are to be derived from the principles applicable to leave applications in courts. These principles include the following: (1) It is unnecessary and unwise to lay down rigid rules of practice or exhaustive criteria governing the grant of leave to appeal. (2) However, the requirement for leave is a filter restricting access to the appeal process. (3) Leave should only be granted where there are substantial reasons to allow an appellate review. (4) Circumstances justifying leave may be an error of principle resulting in substantial injustice. However, these concepts may not be cumulative. (5) There is a difference between the exercise of a discretion concerning a matter of practice and procedure and an exercise of a discretion that determines substantive rights. (6) Where an interlocutory decision effectively determines the substantive rights of the parties, that may be a significant factor in favour of granting leave to appeal. (7) In connection with a matter of practice and procedure, restraint should be applied in reviewing such decisions, especially if an application for leave is made during the course of a hearing. (8) Leave should not be granted unless a substantial injustice would result and the decision is attended with sufficient doubt to warrant it being reconsidered by the appeal body. What is sufficient is dependent on the particular case. (9) Lastly, subject to the above, the matters set out in Collins v Urban … are also relevant to the exercise of a discretion to grant leave. Material before the Appeal Panel 1. In support of its application for leave to appeal, DSPL provided the following material: 1. An outline of written submissions dated 17 July 2024; 2. A paginated and indexed bundle of documents that included: 1. a copy of DSPL's Notice of Appeal, 2. orders made by the Appeal Panel on 26 June 2024, 3. orders made by the Tribunal on 31 May 2024 in respect of DSPL's claim and Apex's claim, 4. DSPL's application to the Tribunal, 5. Apex's application to the Tribunal, 6. DSPL's T&C List Cross-Summons List Statement of 17 April 2024, and 7. an affidavit sworn, on 16 July 2024, by David Deutsch, as the director of DSPL. 1. The affidavit of David Deutsch post-dates the date of the decision the subject of this appeal. Hence, leave must be granted to DSPL to rely on this affidavit. Yet, no application has been made by DSPL for leave to adduce new evidence. Hence, we have considered this affidavit no further, in particular, paragraph 6 of the affidavit that is evidence of David Deutsch's intention in the cross-claim advanced in the T&C List Cross-Summons List Statement. DSPL's grounds of appeal and leave to appeal 1. In its Notice of Appeal, DSPL provided the following as its reasons why leave to appeal should be granted: 1. The appeal concerns the appellant's application to transfer these proceedings to the Supreme Court of NSW (which was heard together with the appellant's application to transfer the related proceedings 2024/00145234 to the Supreme Court of NSW). 2. The separation of the two proceedings, in circumstances where the appellant advances the related proceedings by way of set off against any liability in the proceedings before NCAT, will cause prejudice to the parties in the form of duplication of costs as well as a risk of inconsistent findings of fact (as the set-off will be advanced by way of defence in the NCAT Proceedings whilst simultaneously being advanced in the Supreme Court of NSW). 3. The appeal involves a matter of general public importance, being the principles which govern the Tribunal's discretion to transfer proceedings to a Court under cl 6, sch 4 of the Civil & Administrative Tribunal Act 2013. 1. In the event leave to appeal is granted and the appeal is allowed, the orders sought by DSLP in its Notice of Appeal are: 1. The orders made by the Tribunal on 31 May 2024 regarding Tribunal file number 2024/00084553 (Apex's claim) be set aside. 2. An order that the proceedings in regarding Tribunal file number 2024/00084553 (Apex's claim) be transferred to the Supreme Court. 3. An order that the respondent (Apex) to pay the appellant's (DSLP) costs of and incidental to this appeal. 1. In its written submissions, DSPL contends: 1. the appeal raises a question of public importance – namely, whether, in exercising the power to transfer proceedings to a court, the Tribunal should transfer associated application(s) forming a de facto cross-claim even if they would (by themselves) fall within the Tribunal's jurisdiction. In this regard, DSPL noted that, unlike rule 9.9 of the Uniform Civil Procedure Rules 2005 (NSW) (UCPR), the NCAT Act and the Civil and Administrative Tribunal Rules 2014 (NSW) (NCAT Rules) do not provide for 'cross-claims' within single proceedings to be filed. Instead, a new application is filed and allocated with its own proceeding number. Nonetheless, it is common for such associated proceedings to be described as 'cross-claims' in the Tribunal and heard together. As the rationale behind rule 9.9 of the UCPR is for proceedings on a 'cross – claim' to be carried on together with the proceedings from which the 'cross-claim' arises, it is equally compelling for matters such as these in the Tribunal, with separate file numbers, are transferred together to a court; and 2. the outcome of the appeal has significant ramifications for the parties, in that there would be a duplication of costs and the prospect of inconsistent findings of fact if Apex's claim was not transferred to the Supreme Court. DSPL contends that these ramifications warrant the Appeal Panel's intervention as the Tribunal's discretion had miscarried by failing to transfer Apex's claim. Consideration 1. As noted above, this application for leave to appeal, is not an opportunity for DSPL to re-argue its case for Apex's claim to be transferred to the Supreme Court together with its claim. Instead, the onus is on DSPL to identify an error by the Tribunal in making the orders it made and that this error or errors warrant a grant of leave to appeal. For the reasons that follow, we find that DSPL has failed to identify any error by the Tribunal, let alone an error that warrants a grant of leave to appeal the orders that were made. 2. First, it is not disputed that Apex's claim was appropriately made and that the Tribunal has jurisdiction to hear and determine that claim: see HB Act sections 48A, 48J(b) and 48K and NCAT Procedural Direction 5 'Acceptance of Home Building Claims' (Procedural Direction 5) at [4(b)]. 3. Nor is it disputed that the Tribunal had the power to make the orders that were made concerning Apex's claim. What is in dispute is DSPL's contention that the Tribunal erred in failing to transfer Apex's claim to the Supreme Court together with its claim made by way of a cross-claim. 4. The Tribunal's power to transfer proceedings are contained in clause 6(1) of Schedule 4 of the NCAT Act. That clause relevantly provides as follows: 6 Transfer of proceedings to courts or to other tribunals (1) If the parties in any proceedings for the exercise of a Division function so agree, or if the Tribunal of its own motion or on the application of a party so directs, the proceedings are— (a) to be transferred to a court (in accordance with the rules of that court) that has jurisdiction in the matter, and (b) to continue before that court as if the proceedings had been instituted there. 1. Clause 6(2) of Schedule 4 of the NCAT Act contains a similar provision for proceedings instituted in a court to be transferred to the Tribunal. 2. In this case, on 31 May 2024, at a directions hearing, the Tribunal had before it two proceedings, namely the building claim of Apex and the building claim (a cross-claim) of DSPL. 3. In its building claim (a cross-claim), DSPL made an application for an order that its claim to be transferred to the Supreme Court because the damages sought exceeded the jurisdictional (monetary) limit of the Tribunal. DSPL did not however, also seek an order that Apex's claim be transferred. 4. The Tribunal made the order sought by DSPL regarding its claim on the grounds that it exceeded the jurisdictional (monetary) limit of the Tribunal. DSPL does not contend that the Tribunal erred in making this order, and appropriately so: see Promina Design & Construction Pty Ltd v The Owners-Strata Plan No 97449 [2023] NSWCATAP 252 at [101] and [139].At the same time, it has not been contended that had the damages sought been within the monetary limit prescribed in section 48K(1) of the HB Act [$500,000], the Tribunal would not have had the jurisdiction to hear and determine its claim (a cross-claim) at the same time as Apex's claim: see NCAT Procedural Direction 5 'Acceptance of Home Building Claims' (Procedural Direction 5) at [4(c)] and the 'Home Building Applications Guideline' of the Consumer and Commercial Division at [7] to [9]. 5. Other than the Tribunal having before it DSPL's T&C List Cross-Summons List Statement, DSPL has not provided any evidence of what occurred during the directions hearing on 31 May 2024. That is, there is no evidence of any oral application or submission having been made to the Tribunal that Apex's claim should be transferred to the Supreme Court together with DSPL's claim (a cross-claim). This includes submissions along the lines made by DSPL in this application for leave to appeal concerning alleged prejudice such as duplication of costs and risks of inconsistent findings. Nor is there any evidence of any oral findings made by the Tribunal in response to any such application or submissions. 6. While in this appeal, DSPL submits that its claim, as set out in the T&C List Cross-Summons List Statement, is a cross-claim that is advanced by way of set-off against any liability arising from Apex's claim, this is not in fact reflected in the terms of the Cross-Summons List Statement as there is no specific pleaded claim of set-off, be it contractual or equitable: see Hawach v A & A Building Services Pty Ltd [2024] NSWCATAP 138 at [96] and following, and Forsyth v Gibbs [2009] 1 Qd R 403; [2008] QCA 103. That is, naming Apex as the Plaintiff and Cross-Defendant, in the Cross-Summons List Statement does not of itself establish a claim of set-off. 7. While DSPL may have argued such a claim before the Tribunal at the directions hearing, in the absence of any evidence of such arguments have been made and the Tribunal's findings in regard thereto, it is not possible to determine whether the Tribunal erred in making the order it made, on 31 May 2024, regarding Apex's claim. 8. As a general rule, parties will appear by AVL at a directions hearing of their respective home building applications in the Consumer and Commercial Division. Directions hearings are also recorded. We note there is no evidence of DSPL having made an application for a copy of the recording concerning its claim and that of Apex, including any oral reasons given by the Tribunal regarding the orders that were made on 31 May 2024 in both proceedings. Yet, orders were made by the Appeal Panel, on 26 June 2024, for DSPL to provide a transcript of the hearing in the event it sought to rely on what had occurred at the directions hearing. This it has failed to do. 9. Hence, based on this failure alone, DSPL's application for leave to appeal must fail. 10. For completeness we find that, contrary to the submissions of DSPL, nothing turns on the fact that a separate file number is allocated to a home building application lodged with the Tribunal as a cross-claim. As we have noted above, the general rule is that a cross claim will be heard and determined together with the related home building application. And any application for the transfer of a cross-claim and/or the related home building application are determined by the Tribunal, pursuant to clause 6(1) of Schedule 4 of the NCAT Act, on their respective merits. Conclusions 1. For the reasons set out above we find that DSPL has failed to identify any error by the Tribunal in the orders it made on 31 May 2024 concerning Apex's claim and based on this finding we have decided to refuse DSPL's application for leave to appeal. 2. This leaves the issue of costs. As noted above, Apex made a submitting appearance in this appeal and reserved its rights as to costs. 3. Our orders set out how any costs application Apex may make is to be dealt with. Orders 1. We make the following orders: 1. Leave to appeal is refused. 2. The issue of costs of the appeal is to be determined as follows: 1. Apex Bespoke Pty Ltd to file with the Appeal Panel and serve on Deutsch Services Pty Ltd any costs submissions within 14 days from the date of this decision. 2. Deutsch Services Pty Ltd to file with the Appeal Panel and serve on the Apex Bespoke Pty Ltd any costs submissions within 28 days from the date of this decision. 3. Apex Bespoke Pty Ltd to file with the Appeal Panel and serve on Deutsch Services Pty Ltd costs submissions in reply by 35 days from the date of this decision. 4. The costs submissions of the parties are to identify whether an oral hearing on costs is sought, and if so, why. 5. Subject to consideration of the costs submissions of the parties the Appeal Panel may determine the issue of costs on the papers and without a further oral hearing pursuant to s 50(2) of the Civil and Administrative Tribunal Act 2013 (NSW). ********** I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales. Registrar DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 03 October 2024