Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Bark N Purr Pets Pty Ltd v Moussad [2024] NSWCATAP 201 Hearing dates: 22 August 2024 Date of orders: 15 October 2024 Decision date: 15 October 2024 Jurisdiction: Appeal Panel Before: G Burton SC, Senior Member J Ledda, Senior Member Decision: (1) Leave to appeal is granted and the appeal is allowed. (2) The orders made by the Tribunal on 14 May 2024 in proceedings 2023/00372868 are set aside. (3) The proceedings are remitted to a differently- constituted Tribunal in the Consumer and Commercial Division for a reconsideration, in accordance with the reasons of the Appeal Panel, of the issues of liability and damages. (4) The Tribunal in the remitted proceedings may allow the parties to rely on such further evidence as the Tribunal considers appropriate. (5) Subject to order (6), the Respondents must pay the costs of the Appellant in the appeal, on the ordinary basis, as agreed or assessed. (6) If a party seeks a different costs order, the following directions apply: (a) The party seeking the different costs order (the costs applicant) must lodge with the Tribunal and serve on the other party (the costs respondent) their application for costs, along with any supporting submissions (not exceeding five pages in length) and evidence, within 14 days of the date of this decision. (b) The costs respondent must lodge with the Tribunal and serve on the costs applicant any written submissions (not exceeding five pages in length) and evidence in response within a further 14 days of receipt of the costs applicant's submissions. (c) The costs applicant may lodge with the Tribunal and serve on the costs respondent any written submissions (not exceeding 3 pages) in reply within a further 7 days of receipt of the costs respondent's submissions. (d) The parties are to address in their submissions whether, pursuant to s 50(2) of the Civil and Administrative Tribunal Act 2013 (NSW), the Appeal Panel should dispense with a hearing on the issue of the costs of the appeal so that the issue is decided on the papers lodged with the Tribunal and with appearances of the parties not required. Catchwords: LEASES AND TENANCIES — retail lease — claim for damages for losses because of reduction of power supply during lease — expert evidence — application of NCAT Procedural Direction 3 to expert evidence in proceedings under Retail Leases Act 1994 (NSW) APPEALS — leave to appeal because decision at first instance not fair and equitable or against the weight of evidence — remittal of proceedings Legislation Cited: Civil and Administrative Tribunal Act 2013 (NSW) Civil and Administrative Tribunal Rules 2014 (NSW) Home Building Act 1989 (NSW) Retail Leases Act 1994 (NSW) Cases Cited: Allen v TriCare (Hastings) Ltd [2016] NSWCATAP 216 Bull v NSW Land and Housing Corporation [2016] NSWCATAP 266 Chi Building Pty Ltd v Wedgwood [2016] NSWCATAP 64 Collins v Urban [2014] NSWCATAP 17 FTB v Children's Guardian [2024] NSWCATAP 174 Funfood Pty Ltd v Centura Global Holdings Pty Ltd [2022] NSWCATAP 189 HanavePty Ltd v Wine NomadPty Ltd [2022] NSWCATAP 361; [2023] NSWSC 265 Imbree v Chief Commissioner of State Revenue [2024] NSWCATAP 158 Makita (Australia) Pty Ltd v Sprowles [2001] NSWCA 305 Meacham v Commissioner of Police [2020] NSWCATAP 107 Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69 Ryan v BKB Motor Vehicle Repairs Pty Ltd [2017] NSWCATAP 39 The Owners Strata Plan No 63341 v Malachite HoldingsPty Ltd [2018] NSWCATAP 256 Thompson v Chapman [2016] NSWCATAP 6 Walker Corporation v Sydney Harbour Foreshore Authority (2009) 168 LGERA 1; [2009] NSWCA 178. Texts Cited: NCAT Procedural Direction 3 (28 February 2018 and 11 September 2024) Category: Principal judgment Parties: Bark N Purr Pets Pty Ltd (Appellant) Akram Moussad (First respondent) Amel Moussad (Second respondent) Representation: Solicitors: Antony Johnson Legal (Appellant) MLC Legal (Respondent) File Number(s): 2024/00216061 Publication restriction: None Decision under appeal Court or tribunal: Civil and Administrative Tribunal Jurisdiction: Consumer and Commercial Division Citation: N/A Date of Decision: 14 May 2024 Before: G Ellis SC, Senior Member File Number(s): 2023/00372868 REASONS FOR DECISION Introduction 1. This is an appeal against a decision of the Tribunal in the Consumer and Commercial Division (the Tribunal below). 2. The decision of the Tribunal below concerned a claim for damages under the Retail Leases Act 1994 (NSW) (RL Act) made by Bark N Purr Pets Pty Ltd (the Appellant) against Akram Moussad and Amel Moussad (the Respondents) for losses alleged to have been occasioned by a reduction in the power supply to retail premises the Appellant formerly leased from the Respondents. 3. The Appeal Panel has decided to allow the appeal. These are the reasons for our decision. Material before Appeal Panel 1. In addition to the oral submissions of the parties made at the hearing of the appeal, the Appeal Panel has considered the following material: 1. the written reasons for decision of the Tribunal below given on 14 May 2024 (TR); 2. the Notice of Appeal dated 11 June 2024; 3. the Reply to Appeal dated 27 June 2024; 4. the Appellants Bundle dated 22 July 2024 (AB), which contains the written submissions of the Appellant at pp 130–134; 5. the Respondents Bundle dated 25 July 2024 (RB), which contains the written submissions of the Respondents at pp 153–155. Background 1. The Appellant entered a lease (the premises lease) with the Respondents for a term of three years dating from 1 December 2021 for shops 6, 7 and 8 (the leased premises) in a shopping village in Nelsons Bay, NSW. The Appellant conducted a business using the leased premises, which included pet grooming and selling pet food. 2. The premises lease included the following conditions in Annexure B (the enjoyment and disruption lease conditions): 1. Clause 11(a) provided for the Appellant to have quiet enjoyment of the leased premises without interference from the Respondents: (AB at p 22); 2. Clause 11(f) provided that alterations by the Respondents to the infrastructure to the premises must "cause the minimum of inconvenience and disruption to the lessee's business": (AB at p 23). 1. Clause 4(a) in Annexure B of the premises lease (AB at p 19) also included the following term (the own enquiries lease warranty): "The lessee warrants that in entering into this lease, it has relied entirely on it's own enquiries in the state of repair and suitability of the premises for the lessee's intended use and acknowledges to the extent of the lessor has made representations about the state of repair or suitability of the premises for the lessee's intended use, the lessee did not in any way rely on those representations when entering into this lease." 1. The Appellant lodged a claim with the Tribunal in October 2023 seeking damages for losses it alleges it sustained because a reduction in the electricity supply to its leased premises led to intermittent power outages that affected its business. In support of its claim for damages, the Appellant alleged the conduct of the Respondents breached: 1. the enjoyment and disruption lease conditions; and 2. a condition implied at common law that the premises were suitable for the lessee's permitted use; and 3. the condition implied by s 34(1)(d) of the RL Act that a lessor must provide reasonable compensation to a lessee for any loss or damage (other than nominal damage) suffered by the lessee as a consequence of the lessee's failure "to take all reasonable steps to prevent or put a stop to anything that causes significant disruption of, or which has a significant adverse effect on, trading of the lessee in the [retail] shop and that is attributable to causes within the lessor's control". 1. Section 71 of the RL Act provides that a party or former party to a retail shop lease or former retail shop lease may lodge a retail tenancy claim in respect of the lease with the Tribunal for determination of the claim. A retail shop lease is any agreement under which a person grants to another person, for value, a right of occupation of premises for the purpose of the use of the premises as a retail shop: RL Act, s 3(1) (definition of "retail shop lease"). A retail tenancy claim includes a claim in connection with a liability or obligation with which a retail tenancy dispute is concerned for the payment of money, including a claim for compensation under s 34: RL Act, s 70 (definition of "retail tenancy claim", paragraphs (i) and (x)). Division 3 of Pt 8 of the RL Act confers various powers on the Tribunal to determine such claims. 2. There is no dispute that the Appellant's claim in the Tribunal below was a retail tenancy claim. Consequently, the Tribunal below had general jurisdiction over the claim because it involved a matter that the RL Act enabled the Tribunal to make decisions about and the matter did not otherwise fall within the administrative review, appeal or enforcement jurisdiction of the Tribunal: Civil and Administrative Tribunal Act 2013 (NSW) (NCAT Act), s 29(1). The decision made by the Tribunal below in exercise of this jurisdiction was therefore a general decision: NCAT Act, s 29(3). 3. The Appellant submitted in the Tribunal below that, when it took possession of the leased premises in December 2021, it was able to run its business without interruptions to its electricity supply until late in July or early in August 2022 when work was carried out by an electrician (Mr Conway) on shop 10. The Appellant submitted that initially there was an 80 amps supply for shop 6 and a 40 amps supply for shop 8, resulting a combined supply of 120 amps for all three shops that comprised the leased premises. However, following the changes made to the electricity supply to shop 10, the Appellant claimed the electricity supply to shop 6 was reduced from 80 amps to 40 amps. The Appellant claimed that this reduction in relation to shop 6 persisted until remedial work was carried out by another electrician (Mr Pearson), which resulted in the supply to shop 6 being increased from 40 amps to 63 amps. 4. In response, the Respondents submitted that the own enquiries lease warranty meant that the Appellant was to be treated as having relied on its own enquiries before entering the lease, and that the lessee never suggested what was the required electricity supply. The Respondents submitted that the evidence showed that the power supply to shop 6 was originally 40 amps and was never reduced. Rather, it was increased from 40 amps to 63 amp as a result of Mr Pearson's work. Evidence before the Tribunal below 1. The Appellant relied in the Tribunal below on the evidence of the following witnesses: 1. Ms Dartell Ms Dartell was a director of the Appellant at the relevant times. She provided two statutory declarations about which she was cross-examined concerning the financial impact of the power supply issues on the Appellant's business. Her evidence was that there was initially an 80 amps power supply to shop 6 and a 40 amps power supply to shop 8, said to total 120 amps. After the 80 amps main switch was removed from shop 6, she said there was only a total power supply of 40 amps for the shops 6, 7 and 8 combined. However, she conceded in cross-examination that she was not an expert concerning power supply. 1. Ms Samuels Ms Samuels worked in the leased premises. She provided a statutory declaration about which she was cross-examined. Her evidence was that the consequences of the power outages were that she was unable during the outages to blow dry dogs, supply pet food or process EFTPOS payments. 1. Mr Perrin Mr Perrin is an electrician. He was engaged by the Appellant in December 2023 to inspect the leased property. He was told in his letter of instruction that the power supply to the premises was reduced in August 2022 from 80 amps to 40 amps and it was increased in January 2023 to 63 amps for the leased premises. He was also provided with an electrical appliance list for the premises. He inspected the premises on 22 January 2024. He provided a written report dated 25 January 2024 in which he stated that a single-phase 40 amps power supply would be insufficient for the listed appliances. He also stated that a single-phase power supply would not be sufficient: a three-phase supply of 40 amp or 63 amps would be required. Mr Perrin was unwilling to make himself available for cross-examination. No explanation is available for his unwillingness. 1. The Respondents relied in the Tribunal below on the evidence of the following witnesses: 1. Ms Bullock Ms Bullock was the Commercial Property Manager employed by Pure Property Management (the Respondents' managing agent), which was the authorised agent and authorised property manager for the Respondents at the relevant times. She provided a statutory declaration dated 8 March 2024 setting out events said to have occurred in relation to the premises lease between 27 October 2021 and 3 March 2023. 1. Mr Conway Mr Conway is an electrician who provided a statutory declaration about which he was cross-examined. He said that he did electrical work on shop 10, which resulted in shop 8 losing power. He was called by the Respondents' managing agent to remedy the loss of power. He said the loss of power resulted because shop 8 had previously been used as a storage room for a bakery in shop 10, but was now part of the leased premises. He also said that his work upgrading cabling did affect the power supply to shops 6, 7 and 8. 1. Mr Pearson Mr Pearson is an electrician who also provided a statutory declaration about which he was cross-examined. Mr Pearson says he attended the premises on 27 October 2022 to provide a quotation at the behest of the Respondents' managing agent that he was unable to provide until 14 December 2022. He remembers being informed on 23 December 2022 that the power had tripped in the Appellant's shop. He stated his work resulted in the power supply being increased to 63 amps and said that he received no further calls about power tripping after completing his work. Decision of the Tribunal below 1. The Tribunal below found (at TD at [48]) that the Appellant had not proved any case on liability because: 1. it was for the Appellant to satisfy itself that the premises had the power supply that its business required; and 2. there was no credible evidence that the initial power supply was reduced. 1. Consequently, the Tribunal held that the Appellant had not established either a breach of a provision in the premises lease or an entitlement to compensation under s 34(1) of the RL Act: TD at [49]. 2. Given the position as to liability was clear, the Tribunal decided not to make any assessment of the damages that would be payable if liability had been established: TD at [50]. Nature and scope of internal appeals 1. A party to proceedings in which the Tribunal makes a general decision may appeal to an Appeal Panel under s 80 of the NCAT Act against the decision as of right on a question of law or, with the leave of the Appeal Panel, on any other question: NCAT Act, ss 32 and 80(2). As mentioned above, the decision made by the Tribunal below was a general decision. Accordingly, the decision of the Tribunal is appellable 2. However, s 80 of the NCAT Act does not give a party to proceedings for an internally appealable decision a right to appeal the decision on any ground. An appeal is not simply an opportunity for a losing party to rerun its case: Ryan v BKB Motor Vehicle Repairs Pty Ltd [2017] NSWCATAP 39 at [10]. Except where the decision is an interlocutory decision, s 80(2) provides that a party's right to appeal is limited to questions of law. Leave is required for an appeal on any other grounds. In the case of an interlocutory decision, leave is required even if the ground involves a question of law. There is no suggestion that the decision of the Tribunal below was an interlocutory decision. The decision disposed of the Appellant's claim for damages on the basis of a finding that there was no liability. 3. The reference to a question of law in a s 80 of the NCAT Act should be interpreted similarly to "a question of law alone" or a "pure question of law" and therefore excludes questions of mixed fact and law and questions of fact (at least unless they are facts of a jurisdictional nature): FTB v Children's Guardian [2024] NSWCATAP 174 at [8]. The pure question of law must be discernible on the face of the appeal ground and not depend on disputed facts: Imbree v Chief Commissioner of State Revenue [2024] NSWCATAP 158 at [25]. 4. Subject to this requirement for purity, questions of law include the following questions accordingly to the often-cited decision of the Appeal Panel in Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69 at [13]: 1. Whether there has been a failure to provide proper reasons; 2. Whether the Tribunal identified the wrong issue or asked the wrong question; 3. Whether a wrong principle of law has been applied; 4. Whether there was a failure to afford procedural fairness; 5. Whether the Tribunal failed to take into account relevant (i.e., mandatory) considerations; 6. Whether the Tribunal took into account an irrelevant consideration; 7. Whether there was no evidence to support a finding of fact; 8. Whether the decision was so unreasonable that no reasonable decision-maker would have made it. 1. As we have noted, questions raised in an internal appeal other than questions of law require leave from the Appeal Panel. Clause 12(1) of Sch 4 to the NCAT Act limits the power of an Appeal Panel to grant leave for an internal appeal against a general decision of the Tribunal in the Consumer and Commercial Division. It provides that an Appeal Panel may grant leave under s 80(2)(b) of that Act only if the Appeal Panel is satisfied the appellant may have suffered a substantial miscarriage of justice because: 1. the decision of the Tribunal under appeal was not fair and equitable; or 2. the decision of the Tribunal under appeal was against the weight of evidence; or 3. significant new evidence has arisen (being evidence that was not reasonably available at the time the proceedings under appeal were being dealt with). 1. There is a substantial miscarriage of justice for the purposes of cl 12(1) of Sch 4 of the NCAT Act if there was a " 'significant possibility' or a 'chance which was fairly open' that a different and more favourable result would have been achieved for the appellant had the relevant circumstance in para (a) or (b) not occurred or if the fresh evidence under para (c) had been before the Tribunal at first instance": Collins v Urban [2014] NSWCATAP 17 (Collins) at [76]. 2. Without being exhaustive, a decision of the Tribunal will not be fair and equitable if there has been a denial of procedural fairness: Collins at [77(1)]. A decision will be against the weight of evidence if "the evidence in its totality preponderates so strongly against the conclusion found by the tribunal at first instance that it can be said that the conclusion was not one that a reasonable tribunal member could reach": Collins at [77(2)]. 3. Even if one of the three grounds mentioned in cl 12(1) of Sch 4 is satisfied, this merely enlivens the discretion to grant leave. An Appeal Panel must still decide whether it is appropriate to exercise the discretion. In this regard, it was noted in Collins at [84]: "[84] The general principles derived from these cases can be summarised as follows: (1) In order to be granted leave to appeal, the applicant must demonstrate something more than that the primary decision maker was arguably wrong in the conclusion arrived at or that there was a bona fide challenge to an issue of fact: BHP Billiton Ltd v Dunning [2013] NSWCA 421 at [19] and the authorities cited there, Nakad v Commissioner of Police, NSW Police Force [2014] NSWCATAP 10 at [45]; (2) Ordinarily it is appropriate to grant leave to appeal only in matters that involve: (a) issues of principle; (b) questions of public importance or matters of administration or policy which might have general application; or (c) an injustice which is reasonably clear, in the sense of going beyond merely what is arguable, or an error that is plain and readily apparent which is central to the Tribunal's decision and not merely peripheral, so that it would be unjust to allow the finding to stand; (d) a factual error that was unreasonably arrived at and clearly mistaken; or (e) the Tribunal having gone about the fact finding process in such an unorthodox manner or in such a way that it was likely to produce an unfair result so that it would be in the interests of justice for it to be reviewed, BHP Billiton Ltd v Dunning [2013] NSWCA 421 at [20] and the authorities cited there, SAB v SEM [2013] NSWSC 253 at [8] and [9] and the authorities cited there, Nakad v Commissioner of Police, NSW Police Force [2014] NSWCATAP 10 at [45];" 1. The appeal grounds on which the Appellant relies must be approached with these principles in mind. Appeal grounds 1. The Appellant relies on the following appeal grounds in its Notice of Appeal: 1. The expert evidence called by the Respondents failed to comply with NCAT Procedural Direction 3 (appeal ground 1); 2. The Tribunal below erred in making certain findings of fact (appeal ground 2); 3. The Tribunal below erred in finding that power to the leased premises was never reduced and the Respondents had no liability (appeal ground 3). 1. The Appellant submits appeal ground 1 involves a question of law. The Appellant seeks leave to appeal in connection with appeal grounds 2 and 3 on the basis that the decision of the Tribunal below was either not just and equitable or against the weight of evidence. 2. The Appellant also sought leave on the basis that significant new evidence is now available that was not reasonably available at the time of the hearing by the Tribunal below. At the hearing for this appeal, the Appeal Panel refused leave because the Appellant's legal representative conceded that the evidence concerned was available at the time of the Tribunal's hearing but was not produced. 3. The following orders are sought in the Notice of Appeal: 1. The Appellant is entitled by virtue of s 34(1)(d) of the RT Act to compensation for disturbance to its business by the failure of the Respondents to take reasonable steps to stop the disturbance. 2. By virtue of breaches of cl 11 (a) and (f) of the premises lease, and an implied term of the lease that the leased premises would be suitable for their permitted use, the Appellant was entitled to terminate the lease without penalty. 1. Based on the itemised losses set out in the schedule of damages attached to the Notice of Appeal, the amount claimed is around $100,000. 2. In its written submissions, the Appellant seeks its costs in the appeal if it is successful. The Respondents also seek their costs in the appeal if the Appellant is unsuccessful. Appeal ground 1—non-compliance with NCAT Procedural Direction 3 concerning Respondent's expert witnesses 1. The Appellant submits that the Respondents failed to comply with NCAT Procedural Direction 3 in relation to their expert witnesses, namely, Mr Conway and Mr Pearson, and this involves a question of law. In particular, the Appellant submits: 1. the Respondents did not submit the evidence to the Tribunal below as expert evidence, yet the Tribunal treated it as expert evidence and referred to it as expert evidence; and 2. the failure to draw the attention of the Respondents' electricians to the code of conduct may have affected the impartiality of the evidence; and 3. the Tribunal treating that evidence as expert evidence may have affected the weight to be given to it and also the weight to be given to the Appellant's own evidence. 1. The Respondents submit that Mr Conway and Mr Pearson are licensed electricians who provided factual evidence based on their own direct involvement in the matter based on facts as they observed and experienced them. The Respondents submit there was no failure to comply with NCAT Procedural Direction 3 because the Tribunal below was not required to address the issue of weight to be given since the evidence was not expert evidence. 2. NCAT Procedural Direction 3 concerns the use of expert evidence in certain proceedings in the Tribunal and requires experts to comply with a code of conduct set out in the Direction. It also provides for the consequences of non-compliance depending on whether the rules of evidence apply to the proceedings. The Direction in force at the time of the proceedings in the Tribunal below was given under s 26 of the NCAT Act on 28 February 2018 by the then President of the Tribunal. It was recently replaced by a new direction given on 11 September 2024. 3. Each member of the Tribunal, and the parties to proceedings and their representatives, must comply with an applicable procedural direction given under s 26: NCAT Act, s 26(4). It is arguable that in appropriate cases non-compliance with NCAT Procedural Direction 3 may involve a question of law, particularly if the Tribunal below fails to take the non-compliance into account in determining the weight (if any) to be given to the expert evidence concerned. 4. However, it is unnecessary for us to determine whether appeal ground 1 involves a question of law in the circumstances of this case. Even if it does, the ground cannot succeed because NCAT Procedural Direction 3 did not apply to the proceedings in the Tribunal below. 5. Paragraph 11 of the 2018 version of NCAT Procedural Direction 3 limited the application of the Direction to the following proceedings in the Tribunal: 1. Evidence Rules Proceedings (which paragraph 2 of the Direction defined to mean proceedings in which the Tribunal is bound by the rules of evidence); 2. proceedings in the Consumer and Commercial Division involving claims under the Home Building Act 1989 (NSW) where the amount claimed or in dispute is more than $30,000; 3. proceedings in the Occupational Division of the Tribunal for a "profession decision" as defined in cl 29(1) of Sch 5 to the NCAT Act; 4. any other proceedings in which the Tribunal directed the Direction is to apply. 1. The 2024 version of the Direction applies to the same proceedings, but paragraph 11 now also expressly includes certain proposed proceedings. 2. The proceedings before the Tribunal below were proceedings under the RL Act. They were not proceedings in which the Tribunal was bound to apply the rules of evidence: NCAT Act, s 39(2); Funfood Pty Ltd v Centura Global Holdings Pty Ltd [2022] NSWCATAP 189 at [80]. They were neither proceedings under the Home Building Act 1989 (NSW) nor proceedings in the Occupational Division for a profession decision. Also, there is no suggestion that the Tribunal directed that the Direction was to apply to the proceedings. Accordingly, the proceedings before the Tribunal did not fall within kinds of proceedings to which NCAT Procedural Direction 3 applied. 3. It follows that appeal ground 1 must be dismissed even if it involves a question of law. Appeal grounds 2 and 3—erroneous factual findings concerning electricity supply 1. Appeal grounds 2 and 3 can be dealt with together as they both involve challenges to the factual findings of the Tribunal below for which leave is required. Tribunal's findings concerning witnesses and facts 1. Before considering these appeals grounds, something more needs to be said about the findings of the Tribunal below concerning the witnesses and facts. 2. It is clear from its reasons that the Tribunal treated the evidence of Mr Conway and Mr Pearson for the Respondents as expert evidence: TD at [8], [11] and [46]. The Tribunal accepted their evidence because it was "accompanied by reasons and/or supporting evidence": TD at [46]. 3. However, the Tribunal held that Mr Perrin's expert evidence for the Appellant "cannot be given any weight" for the following reasons (TD at [41]): 1. Mr Perrin's opinion that the electricity supply was insufficient to cater for the list of appliances provided did not satisfy the requirements set out in Makita (Australia) Pty Ltd v Sprowles [2001] NSWCA 305 (Makita) for expert evidence because the electricity needs of those appliances was not set out either in that list or in his report. As a result, the factual foundation for his opinion had not been proved and his process of reasoning was not sufficiently indicated. 2. Mr Perrin's refusal to attend for cross-examination suggested he was unwilling to have his opinions tested. 3. The instruction given to Mr Perrin in his letter of instructions concerning the reduction of the power supply was not made out because the supply was not, in the view of the Tribunal, reduced from 80 amps to 40 amps. 4. Mr Perrin's opinion that a three-phase power supply would be required was a mere statement of opinion that lacked any reasons or process of reasoning contrary to what was said in Makita. 1. In relation to the alleged reduction in the power supply, the Tribunal below found as follows: "43 The non-expert opinions given by Ms Dartell do not support the applicant's case on liability. 44 For example, there is no credible evidence to support her suggestion that shop 6 had an 80A power supply at the outset of the subject lease. That proposition was contradicted by the evidence of Mr Pearson that there was a 40A circuit breaker in the electricity supply for shop 6 at that time, with a supporting photo provided. An 80A supply of electricity could pass a 40A circuit breaker. 45 The fact that a piece of electrical equipment bears lettering which says 80A does not mean that is the power supply, just as a car speedometer that contains 200 kph lettering does not indicate that the car can travel at that speed. Further, if an 80A circuit breaker was replaced with a 40A circuit breaker, that does not mean that the supply of electricity was reduced from 80A to 40A. A circuit breaker only operates to set a maximum supply of electricity and does not indicate the amperage of the electricity that is being supplied." 1. The Tribunal summarised its findings of fact (the Tribunal's findings summary) as follows (TD at [47]): "47 Based on the evidence, and bearing in mind the submissions made on behalf of both parties, the Tribunal makes the following findings of fact: (1) The applicant entered a lease of shops 6, 7, and 8 in a shopping village in Nelsons Bay for a term of three years from 1 December 2021. (2) That lease recorded that the applicant had 'relied entirely on its own enquiries in relation to the state of repair and suitability of the premises for the (applicant's) intended use ...' (3) Prior to commencing business at those shops, the applicant carried out renovation work, which included electrical work, being work that was carried out by Mr Perrin. (4) Any electrical work involving shop 8 would have required the electricity supply for shop 8 to be turned off and that would have revealed that the power supply for shop 8 was linked to shop 10. (5) By the time it commenced business in the shops, the applicant knew or ought to have known the power supply to shop 8 was linked to shop 10, shop 10 not being part of the leased premises. (6) Any electricity bills relating to the lease would have revealed that shop 8 did not have its own electricity supply and thus that the electricity supply for shop 8 was being paid by a third party. (7) At the commencement of the subject lease, the power supply to shop 6 was 40A and the power supply to shop 8 was 40A. (8) When Mr Conway carried out work on the power supply to shop 10, shop 8 lost power but, upon learning that the power supply for shop 8 was linked to shop 10, Mr Conway reconnected the power supply to shop 8. (9) Any gap in the supply of electricity to shop 8 was not lengthy and was the result of a matter that should have been detected and corrected by Mr Perrin during the renovation work carried out by the applicant at the commencement of the subject lease. (10) In August or September of 2022 shop 6 began to experience power outages. (11) As a result of those power outages, Mr Pearson increased the power supply to shop 6 from 40A to 63A. (12) That involved increasing the size of the cabling from 6mm to 16mm and, for a supply of 100A, 25mm cabling would be required. (13) At no stage was the supply of electricity to any of the shops the subject of the lease ever reduced. (14) Thus, any inadequacy in the supply of electricity experienced by the applicant was due to the nature and extent of the applicant's electricity usage, being a power supply that was sufficient initially but not later." Submissions 1. In the Notice of Appeal, appeal ground 2 concerning wrong factual findings by the Tribunal below seeks leave on the basis that the decision of the Tribunal was not fair and equitable. Appeal ground 3 concerning the Tribunal's finding that there was no reduction in the power supply to the leased premises seeks leave on the basis that the decision was against the weight of evidence. 2. However, the written submissions of the Appellant do not distinguish between bases for leave for appeal grounds 2 and 3. 3. In its written submissions, the Appellant submits that the findings of fact made at paragraphs 47(7), (8), (9), (13) and (14) of the Tribunal's findings summary were not supported by the evidence available at the time of the hearing before the Tribunal below. It is submitted that, as a result, the Tribunal's decision was not fair and equitable and leave to appeal should be granted. The Appellant points to the following in its written submissions (AB at pp 130−132): 1. Mr Conway stated in his oral evidence that he removed the power from shop 8 and fed it back into the circuit in shop 6 (AB at p 135, Hearing transcript at 12:22). 2. Mr Conway stated in his oral evidence that he did this because it is unsafe for 80 amps to be travelling through a 6mm cable under the Australian Standards and was a fire hazard (AB at pp 135−136, Hearing transcript at 12:22 and 14:50). 3. In re-examination, Mr Conway confirmed that there was an 80 amp main switch in shop 6 (AB at p 136, Hearing transcript at 15:56). 4. The only logical reason to change the circuit breaker from 80 amps to 40 amps is because there was up to 80 amps travelling through a 6mm cable and, according to Mr Conway, it was unsafe and not in conformity with Australian Standards. 5. Mr Conway did not say in his evidence that the power supply to shop 6 was only 40 amps before he undertook his work. 1. In addition, the Appellant submitted in its oral submissions that it was the responsibility of the Respondents rather than its responsibility to ensure that the cabling complied with the relevant Australian Standard for the power supply it carried. Consequently, the own enquiries lease warranty needed to be read with this in mind. 2. In their written submissions, the Respondents submit the findings of fact made by the Tribunal below were supported by the evidence presented during the hearing. They point to the following in their written submissions (RB at p 154): 1. The Appellant relied solely on the non-expert evidence of Ms Dartell to support the Appellant's case on liability. 2. The Appellant contracted an electrician to undertake fit out work who failed to provide written evidence or appear at the hearing. 3. The premises lease included the own enquiries lease warranty given by the Appellant. 4. There was evidence to support a finding that, at the commencement of the premises lease, the power supply to shop 6 was 40 amps and the power supply to shop 8 was 40 amps: (RB at 143−150, Pearson statutory declaration, paras 19, 22, 23, 26 and 27 and photographs pp 145−150; RB at p 151, Conway statutory declaration at paras 9−10; RB at p 156, Hearing transcript at 12:22). 5. Mr Pearson gave evidence that, a result of power outages, he increased the power supply to shop 6 from 40 amps to 63 amps. (RB at p 143, Pearson statutory declaration, paras 10−12) 6. Mr Pearson's evidence was that his work involved increasing the size of the cabling from 6mm to 16mm. He also gave evidence that 25mm cabling would be required for a power supply of 100 amps. (RB at p 156, Hearing transcript at 19:53 and 26:00) Consideration 1. As we noted above, the rules of evidence did not apply to the proceedings in the Tribunal below. Nevertheless, the following evidentiary principles have been applied (sometimes by analogy with the rules of evidence) in proceedings in exercise of the Tribunal's general jurisdiction: 1. findings of fact must be based on logically probative material: Meacham v Commissioner of Police [2020] NSWCATAP 107 at [54]; Chi Building Pty Ltd v Wedgwood [2016] NSWCATAP 64 at [40]–[41]; 2. usually there is a legal burden on the party seeking relief to prove its case and, if the dispute involves civil proceedings, this involves the civil standard of proof (that is, on the balance of probabilities): Bull v NSW Land and Housing Corporation [2016] NSWCATAP 266 at [49]. 1. Also, although we have held that NCAT Procedural Direction 3 did not apply to the proceedings in the Tribunal below, there are well-established principles concerning the use of expert evidence in proceedings in the Tribunal even if the rules of evidence do not apply. These principles were summarised by the Tribunal below as follows (TR at [38]): "The leading decision in relation to the assessment of expert evidence is Makita (Australia) Pty Ltd v Sprowles [2001] NSWCA 305 (Makita), notably at [85] per Heydon JA, which makes it clear that, for such evidence to be accepted, the following considerations apply: (1) the expert's opinion must clearly indicate the facts upon which it is based, (2) those facts must be proved so there is a factual basis for the opinion, (3) the reasons or the process of reasoning for the opinion must be disclosed, and (4) any opinion must fall within the qualifications and experience of the expert. While that decision was considering admissibility in proceedings in a court, it is well-established that the same considerations go to the weight to be given to expert evidence in proceedings in a forum where the rules of evidence do not apply, such as the Tribunal: South Western Sydney Area Health Service v Edmonds [2007] NSWCA 16; Hancock v East Coast Timber Products Pty Limited [2011] NSWCA 11." 1. Similarly, in Allen v TriCare (Hastings) Ltd [2016] NSWCATAP 216 at [191], the Appeal Panel said "the question of the acceptability of expert evidence in the Tribunal will be one of weight not admissibility [and in] addition, the Tribunal is required to be satisfied that expert evidence provides a satisfactory basis upon which it can make its findings". 2. There is no dispute that, after the time of Mr Conway's work on shop 10, the power supply to shop 6 was 40 amps and it remained at that amperage until the work done by Mr Pearson increased the supply to 63 amps. There is, however, a dispute about the extent which Mr Conway's work affected the power supply to shop 8. 3. For the Appellant to make out its case on liability, it was necessary for the Appellant to prove the power supply to the leased premises was reduced by work done by or on behalf of the Respondents. Consequently, the evidence needed to establish that the power supply to the leased premises was greater at the time of the commencement of the lease than it was after the time of Mr Conway's work. 4. The Appellant led evidence at first instance, principally from Ms Dartell, to the effect that, at the commencement of the premises lease, the power supply to shop 6 was 80 amps and the supply to shop 8 was 40 amps, yielding a total power supply of 120 amps for the leased premises: AB at p 6, Dartell statutory declaration at [7]−[8]. Ms Dartell provided evidence, based on annexed photographs to her statutory declaration, that shop 6 originally had a switchbox marked with 80 amps and shop 8 had a switchbox marked with 40 amps. 5. As indicated above, the Tribunal below characterised Mr Dartell's evidence as non-expert evidence. The Tribunal also did not consider the presence at the beginning of the premises lease of an 80 amps switchbox for shop 6 as proof that 80 amps was actually being supplied to the shop at that time. 6. In essence, the Appellant submits that the Tribunal misconstrued the evidence of the Respondents' experts, which then led the Tribunal to make incorrect factual findings to the effect that the Appellant's power supply had not been reduced. 7. Before turning to this evidence, we find that the Tribunal below was correct to treat the evidence of both Mr Conway and Mr Pearson as expert evidence that provided a satisfactory basis for making findings of fact. Moreover, as pointed out in the written submissions for the Respondents, this evidence was also based on their direct experience as the electricians involved in doing the work impacting the leased premises: RS at p 153, para [3]. We also find that the Tribunal was correct to give Mr Perrin's evidence little weight, particularly having regard to his unwillingness to make himself available for cross-examination on his evidence. 8. The Appellant relies particularly on the following excerpts (AB at pp 135–136) from the hearing transcript, at the indicated times, of the cross-examination and re-examination of Mr Conway (with Mr Johnson asking questions for the Appellant and Mr Collins for the Respondents): "10:48 Johnson: And then you were asked to do some work which involved, among other things, changing the 80 amp circuit breaker to a 40 amp circuit breaker for Shop 6. Conway: That wasn't straight away. Johnson: But it did happen? Conway: Yes it happened after. After we had to do that. Johnson: After what? Conway: After we had to isolate the main switchboard running through Tin Tin, the bakery because it didn't meet Australian Standards and we had to turn the power off because the switchboard was getting replaced. Johnson: So you say the power supply to Shops 6,7 and 8 wasn't affected. Are you sure about that? Are you sure Shop 8 had no power afterwards? 12:22 Johnson: Was the power to Shop 8 affected? Conway: Yes. When we isolated the switchboard when we found it was feeding an old store room which is now part of the old bakery. Johnson: Which was Shop 8 in effect? Conway: Yes. Johnson: So the power to Shop 8 was disconnected. Effectively? Conway: Effectively. Yeah. Johnson: So the power to Shop 8 was disconnected and we were left with a 40 amp circuit breaker for Shops 6 and 7? Conway: No. As we found out that Shop 8 had lost power we then had my staff connect it back up to Shops 6's circuit. It was only a power and a lighting circuit for Shop 8 and we connected it to the closest power and lighting circuit and we found at that time it only had a 6mm cable supply feeding Shop 6 sub board which cannot be on an 80 amp supply so as per our Australian Standards it can only be supplied on a 40 amp size circuit breaker because of the size of the cable. Otherwise it can cause fire damage. Being the last electrician on the job it is our duty of care and for our licence and regulations to bring it up to the current code. Johnson: So just confirming Shop 6 only had a 40 amp circuit breaker? Conway: Yes. We put in a 40 amp circuit breaker in the main switchboard room and then we put a 40amp circuit breaker in the Shop 6 sub board. 14:50 Member: Were you given instructions to upgrade? Conway: Yes. It is changing the circuit breaker to the amount the cable can hold. You cannot put 80 amps through a 6mm cable. 15:56 Collins: Which shop had an 80 amp circuit breaker? Conway: Shop 6. It was a main switch not a circuit breaker. Member: Shop 6 had what? Conway: An 80 amp main switch. 1. The evidence above cannot be read in isolation. The statutory declaration provided by Mr Conway provides the context for his evidence. In his declaration, Mr Conway states the following (RB at pp 151−152): 1. Mr Conway was engaged to do work on shop 10 (which is the Tin Tin store referred to in his oral evidence above). The work included upgrading the switchboard. 2. After he completed the work, a call was received from the Respondents' managing agent saying that shop 8 had lost power to its lights and power outlets. 3. Mr Conway was later informed that previously there had been a bakery in shop 10 and that shop 8, which had previously been a storage room for the bakery, was not required by Tin Tin and was now occupied by the Appellant. 4. After tracing cables in the joint roof space, he found that shop 8 was being supplied from the switchboard in shop 10 and that this switchboard was supplied directly from the electricity meter. 5. There was no labelling to indicate that the switchboard was supplying shop 8. 6. When Mr Conway entered shop 8, he observed that it did not have a switchboard but did have two circuit breakers. 7. To return power to the shop 8 as quickly as possible, the circuits had to be connected to the shop 6 switchboard and the lighting circuit and power outlets circuit were brought up to Australian standards and connected to the closest available point returning power and lights to shop 8. He also replaced the 80 amps circuit breaker for shop 6 with a circuit breaker with a 40 amp because it would have been unsafe to leave it in place. 8. Although the cabling was upgraded, power supply to shops 6, 7 and 8 was not affected by the reconnection of the cabling. 9. The owner of the pet shop (that is, the leased premises) would not know what amperage was being supplied to shop 8 because the power was from a separate switchboard and the power usage in that portion of the premises was paid by a third party. Consequently, the owner would not have received a power bill that would have revealed that information. 1. We do not understand the Appellant to challenge this evidence except to the extent it states that the power supply to shops 6, 7 and 8 was not affected. 2. In our opinion, the totality of Mr Conway's evidence supports the following: 1. A 40 amps circuit breaker was installed by Mr Conway for shop 6 because the 6mm cabling was insufficient according to Australian Standards to support an amperage of 80 amps indicated by the then 80 amps mains switch for the store. 2. Moreover, Mr Conway considered that he owed a duty of care to do so because it was unsafe for the cabling to carry a supply of more than 40 amps. This suggests that Mr Conway considered that the cabling was supplying more than this amperage prior to his installation of the circuit breaker. 3. At least from the time of his work, the amperage supplied to shop 6 was limited to 40 amps because of the 40 amps circuit breaker that he installed in the sub-board for the shop. 4. After Mr Conway's work, shop 8 ceased to be supplied from the switchboard of shop 10 (which it seems was a supply the Appellant obtained without having to pay for it). 5. The power supply for shop 8 was then re-routed by Mr Conway through the shop 6 switchboard, which limited amperage to 40 amps because of the newly installed circuit breaker. 1. As we have noted above, the Tribunal below found that at no stage was the supply of electricity to any of the shops comprising the leased premises ever reduced. In addition, the Tribunal found that the fact that shop 6 previously had an 80 amps switch did not necessarily mean that this was the amperage that was actually supplied to the shop because the switch merely limited the maximum amperage. In the Tribunal's view, there was "no credible evidence" to support Ms Dartell's suggestion that shop 6 had an 80 amps power supply at the commencement of the premises lease and her evidence was contradicted by Mr Pearson's evidence. The Tribunal found, instead, that at the commencement of the premises lease the amperage supplied to shop 6 was 40 amps and the amperage supplied to shop 8 was also 40 amps. 2. With respect, the Tribunal below was wrong to find that there was no cogent evidence in support of Ms Dartell's suggestion about the initial total amperage for the leased premises. Mr Conway's evidence indicates that, at the very least, the independent 40 amps power supply that shop 8 had before his work (admittedly, obtained through shop 10) had ceased and was re-routed through shop 6. The 40 amps circuit breaker installed for shop 6 by Mr Conway would have resulted in the power supply for shops 6, 7 and 8 in combination being limited to 40 amps. Even assuming the power supply to shop 6 was already limited to 40 amps before Mr Conway's work, this would still have resulted in a reduction of the power supply for the licensed premises from 80 amps (for shops 6 and 8 combined) to 40 amps. In addition, Mr Conway's evidence that it was necessary to install a 40 amps circuit breaker in shop 6 for safety reasons because of the 6 mm cabling was evidence that he considered the supply of power to shop 6 before his work to be more than the 40 amps proscribed by the Australian Standards for cabling of that width. Otherwise, as the Appellant submits, the work would have been unnecessary. The Tribunal did not deal with these implications of Mr Conway's evidence. A further implication was that the cabling to shop 6 was not upgraded and such cabling was a responsibility of the lessor once the overall power supply to the premises was reduced. 3. The question then becomes whether leave should be granted for an appeal against the Tribunal's decision. Bearing in mind the steps identified in Collins, we have decided to grant leave for the following reasons. 4. First, the decision of the Tribunal below was not fair and equitable because it did not address the implications of Mr Conway's evidence. In addition, although Mr Pearson gave evidence to the effect that the amperage for shop 6 was already 40 amps, he came to this conclusion after Mr Conway had conducted his work. Mr Conway was better placed to make this assessment as his work involved dealing with the pre-existing electrical wiring. Consequently, the preponderance of evidence strongly pointed to a reduction in overall power supply to the licensed premises and the decision of the Tribunal was therefore against the weight of evidence. 5. Second, there was a significant possibility, or a chance that was fairly open, that the Tribunal below would have found in favour of, rather than against, the Appellant on the issue of liability if the implications of Mr Conway's evidence had been addressed by the Tribunal. 6. Third, although the first and second reasons mentioned above are sufficient to enliven the discretion to grant leave, we recognise that there must be a satisfactory basis to justify exercising the discretion in favour of the Appellant. In our view, the basis is that there was an error that is plain and readily apparent and was central to the Tribunal's decision, and not merely peripheral, so that it would be unjust to allow its decision to stand. Conclusions 1. For the reasons given, the Appeal Panel has decided to allow the appeal and set aside the orders of the Tribunal below. However, we must also decide whether it is appropriate to remit the proceedings for hearing and, if so, on what basis. 2. The legal representative for the Appellant conceded at the hearing of the appeal that a remittal would be appropriate if the Appellant was successful. We agree. The Tribunal below did not consider the issue of damages because it decided that the Appellant had not made out its case concerning liability. Accordingly, we do not have the benefit of any findings concerning the loss sustained by the Appellant that is compensable. In addition, the extent of the reduction in power resulting from the Respondents' conduct requires further consideration. Given these circumstances, we will not limit the remittal to the issue of damages. Further, the Tribunal hearing the remitted proceedings should be permitted to allow further evidence if it considers it appropriate to do so. 3. The Member who constituted the Tribunal for the original proceedings commented at points and made findings in relation to witnesses. There will be, in effect, a fresh start on potentially expanded evidence in the further hearing. In those circumstances it is appropriate that the proceedings be remitted to be heard by a Tribunal differently constituted: Walker Corporation v Sydney Harbour Foreshore Authority (2009) 168 LGERA 1; [2009] NSWCA 178at [121] (5) and (7). 4. We shall also make orders concerning the costs in the appeal. As previously mentioned, both parties have sought their costs in the appeal in the event they are successful. Ordinarily, s 60 of the NCAT Act would require each party to pay its or their own costs unless there are special circumstances warranting an order for costs. However, r 38 of the Civil and Administrative Tribunal Rules 2014 (NSW) (NCAT Rules), when read with s 35 of the NCAT Act, allows the Tribunal in proceedings in the Consumer and Commercial Division to award costs in the proceedings even in the absence of special circumstances warranting an award if the amount claimed is more than $30,000. Rule 38 also applies to internal appeals against decisions made in such proceedings: NCAT Rules, r 38A. In relation to an appeal, the amount claimed must be the amount claimed in the appeal rather than at first instance: Allen at [36] et seq, [57]; The Owners Strata Plan No 63341 v Malachite HoldingsPty Ltd [2018] NSWCATAP 256 at [3]-[5]; HanavePty Ltd v Wine NomadPty Ltd [2022] NSWCATAP 361 at [77]-[82] (not the subject of adverse findings on the stated principles in the partly-successful appeal to the Supreme Court on aspects of the substantive decision [2023] NSWSC 265). 5. The amount claimed in the appeal is more than $30,000. Therefore, r 38 of the NCAT Rules applies to this appeal. When applicable, r 38 displaces s 60 of the NCAT Act with the effect that the usual order is for costs to follow the event (that is, the order should be in favour of the successful party): Thompson v Chapman [2016] NSWCATAP 6 at [69]. 6. Since the parties have not provided submissions on costs, we shall allow 14 days from the date of this decision for a party who wishes to seek a different order from the usual order to make an application to that effect and for the other party to have the opportunity to respond. 7. Orders 8. Accordingly, the orders of the Appeal Panel are as follows: 1. Leave to appeal is granted and the appeal is allowed. 2. The orders made by the Tribunal on 14 May 2024 in proceedings 2023/00372868 are set aside. 3. The proceedings are remitted to a differently constituted Tribunal in the Consumer and Commercial Division for a reconsideration, in accordance with the reasons of the Appeal Panel, of the issues of liability and damages. 4. The Tribunal in the remitted proceedings may allow the parties to rely on such further evidence as the Tribunal considers appropriate. 5. Subject to order (6), the Respondents must pay the costs of the Appellant in the appeal, on the ordinary basis, as agreed or assessed. 6. If a party seeks a different costs order, the following directions apply: 1. The party seeking the different costs order (the costs applicant) must lodge with the Tribunal and serve on the other party (the costs respondent) their application for costs, along with any supporting submissions (not exceeding five pages in length) and evidence, within 14 days of the date of this decision. 2. The costs respondent must lodge with the Tribunal and serve on the costs applicant any written submissions (not exceeding five pages in length) and evidence in response within a further 14 days of receipt of the costs applicant's submissions. 3. The costs applicant may lodge with the Tribunal and serve on the costs respondent any written submissions (not exceeding 3 pages) in reply within a further 7 days of receipt of the costs respondent's submissions. 4. The parties are to address in their submissions whether, pursuant to s 50(2) of the Civil and Administrative Tribunal Act 2013 (NSW), the Appeal Panel should dispense with a hearing on the issue of the costs of the appeal so that the issue is decided on the papers lodged with the Tribunal and with appearances of the parties not required. ********** 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: 15 October 2024