Civil and Administrative Tribunal New South Wales Medium Neutral Citation: S & G Homes Pty Ltd t/as Pavilion Homes v Owen [2015] NSWCATAP 190 Hearing dates: 29 May 2015 Date of orders: 09 September 2015 Decision date: 09 September 2015 Jurisdiction: Appeal Panel Before: N Hennessy LCM, Deputy President R Perrignon, Senior Member Decision: (1) The time for filing the notice of appeal is extended to 23 December 2014. (2) Leave is granted to appeal against an interlocutory decision. (3) Leave is granted for the appeal to be made on grounds other than a question of law. (4) The decision under appeal is set aside. (5) The following issues are referred to the Tribunal for reconsideration in accordance with the Appeal Panel's reasons for decision: (a) whether the Tribunal should exercise its discretion under s 59(1)(b) of the Civil and Administrative Tribunal Act 2013 to make consent orders in the terms of the agreed settlement or in terms that are consistent with the terms of the agreed settlement; and (b) if not, whether the Tribunal should exercise its discretion under s 59(2) to dismiss the application. Catchwords: PRACTICE AND PROCEDURE – consent orders made by Tribunal in terms of agreed settlement – meaning of s 59(1)(b) of Civil and Administrative Tribunal Act 2013 (NSW) – exercise of discretion to make consent orders –Tribunal must take into account whether it had power to make the consent orders and must make those orders reasonably Legislation Cited: Civil and Administrative Tribunal Act 2013 (NSW), s 41, 59(1)(b) Civil and Administrative Tribunal Rules 2014 (NSW) Commonwealth Electoral Act 1918 (Cth) Community Land Management Act 1989 (NSW), s 64 Home Building Act 1989 (NSW), s 48J, 48K, 48O Motor Accident Compensation Act 1999 (NSW), s 108 Retail Leases Act 1994 (NSW), s 68(1) Strata Schemes Management Act 1996 (NSW), s 125 Workers Compensation Act 1987 (repealed), s 151C(1), s 262 Cases Cited: Baker v Rothmans of Pall Mall (Australia) Ltd (1999) NSWCCR 374 Beck v Weinstock [2012] NSWCA 289 Berowra Holdings Pty Limited v Gordon (2006) 225 CLR 364; [2006] HCA 32 Bourdon v Outridge [2006] NSWSC 491 Carr v Finance Corporation of Australia Ltd (No 1) [1981] HCA 20; (1981) 147 CLR 246 Emad Trolley Pty Ltd v Shigar [2003] NSWCA 231 Fordham Laboratories Pty Limited v Sor [2011] NSWSC 706 Gallo v Dawson [1990] HCA 30, 93 ALR 479 Gaynor v Burns [2015] NSWCATAP 184 Haritos v Commissioner of Taxation [2015] FCAFC 92 House v The King [1936] HCA 40; (1936) 55 CLR 499 Jackson v NSW Land and Housing Corporation [2014] NSWCATAP 22 Lavery v Dimension Tilers Pty Ltd [2015] NSWCATCD 59 (14 April 2015) Licul v Corney [1976] HCA 6; (1976) 50 ALJR 439 Minister for Aboriginal Affairs v Peko Wallsend Ltd [1986] HCA 40; (1986) 162 CLR 24 Minister for Immigration and Citizenship v Li [2013] HCA 18 Nassim Attileh v State Rail Authority of New South Wales [2005] NSWCA 64 Nationwide News Pty Ltd v Bradshaw (1986) 84 FLR 49 Texts Cited: Mark Aronson & Matthew Groves, Judicial Review of Administrative Action, (5th ed 2013, Lawbook Co) Bernard Cairns, Australian Civil Procedure (10th ed 2014, Law Book Co) Tom Davie, Annotated Home Building Act 1989 (NSW) (2000, Prospect Media Pty Ltd) Category: Principal judgment Parties: S & G Homes Pty Ltd t/as Pavilion Homes (Appellant) Shane Owen (Respondent) Representation: Counsel: J Raftery (Appellant) R de Meyrick (Respondent) Solicitors: Endeavour Legal (Appellant) Lovegrove Smith & Cotton (Respondent) File Number(s): AP 14/60483 Decision under appeal Court or tribunal: Civil and Administrative Tribunal Jurisdiction: Consumer and Commercial Division Date of Decision: 19 November 2014 Before: N Vrabac File Number(s): HB 13/32968 HB 14/19971 reasons for decision Background 1. A builder, S & G Homes Pty Ltd, has appealed from a consent order that it pay a homeowner, Mr Owen, $85,000 for defective and incomplete work. The Tribunal made that order following a hearing as to whether it had jurisdiction to hear the application. The homeowner submitted that the Tribunal did not have jurisdiction because the application had been lodged out of time and also because it had not been investigated by the Commissioner for Fair Trading. Before the Tribunal determined those issues, the parties lodged terms of agreement and the Tribunal made consent orders in accordance with those terms. 2. Section 59 of the Civil and Administrative Tribunal Act 2013 (NSW) (NCAT Act) gives the Tribunal power to make consent orders in certain circumstances. In exercising that power s 59(1)(b) requires that the Tribunal be "satisfied that it would have the power to make a decision in the terms of the agreed settlement or in terms that are consistent with the terms of the agreed settlement." The main question of law on appeal is whether the Tribunal lawfully exercised its discretion to make consent orders in this case. For the reasons set out below we have found that it did not. Having reached that conclusion, the appropriate course is to set aside the consent orders. We direct the Tribunal to reconsider the making of those orders in accordance with these reasons: NCAT Act, s 81. Proceedings before the Consumer and Commercial Division 1. On 16 March 2005 the homeowner contracted with the builder to build a new home. The homeowner took possession of the property on 17 June 2006 although there were ongoing discussions with the builder about rectifying alleged defects. Seven years later, on 20 April 2013, the homeowner applied to the Consumer and Commercial Division of the Tribunal seeking damages of $1,148,700 for defective and incomplete work. On 20 June 2013, the homeowner filed an Amended Application Form claiming the same amount. The builder lodged a cross claim for unpaid monies. 2. On 16 June 2014, the Tribunal listed the matter for a preliminary hearing on the question of whether the application and the cross claim had been lodged out of time and, if so, whether they should be accepted. Section 48K of the Home Building Act 1989 (NSW) provides that the Tribunal "does not have jurisdiction" in respect of building claims which have not been lodged within certain statutory time limits. 3. The builder also submitted that the Commissioner for Fair Trading had not investigated the claim prior to lodgement. Section 48J of the Home Building Act provides that the principal registrar "must reject any application for the determination of a home building claim" unless she is "satisfied that the subject matter of the claim has been investigated" by the Commissioner for Fair Trading. The President may direct that such a claim be accepted without such an investigation having been made. 4. On 19 November 2013 the Tribunal heard the parties in relation to the preliminary questions but did not determine whether the application and the cross claim had been made within time or whether the claim had been investigated by the Commissioner for Fair Trading. Following the hearing, the parties were invited to attempt to negotiate a settlement of their claims. After those discussions, the parties signed a document headed "Terms of Settlement": Between Shane Owen ("Owner") and S & G Homes P/L t/as Pavillion Homes ("Builder") 1. Application and cross application stood over for 3 months. 2. Builder to pay owner $85,000 inclusive of costs by 14 January 2015. 3. Upon the payment of the above sum on or before the due date the builder and Owner agree to the withdrawal and dismissal of their respective claims and release each other from all claims. 4. Parties agree to execute a formal deed of release. (signed) Shane Owen (signed) Boris Planinac on behalf of S & G Homes P/L 1. The hearing resumed and the Tribunal made the following orders: 1. By determination of member, on 19 November 2014 the hearing was adjourned to a date to be fixed by the Registrar. 2. By consent, the application and cross application stood over for 3 months. 3. Builder to pay Owner $85,000 inclusive of costs by 14 January. 4. Upon the payment of the above sum the Builder and the Owner agree to the withdrawal and dismissal of their respective claims and release each other from all other claims. 5. Parties agree to execute a formal deed of release. Preliminary issues 1. Two preliminary issues arise on appeal: whether the appeal should be accepted even though it was lodged out of time and whether the order that the builder pay the homeowner $85,000 is an interlocutory decision which requires the Appeal Panel's leave before the appeal can proceed. Appeal lodged out of time 1. Unless an extension is granted, an appeal against a decision in a home building matter must be lodged within 28 days from the day on which the appellant was notified of the decision or given reasons for the decision, whichever is later: Civil and Administrative Tribunal Rules 2014 (NSW), cl 25(4). The builder received the consent orders on 20 November 2014 and filed the appeal on 23 December 2014, five days late. 2. The Tribunal may extend the time for the lodging of an appeal: NCAT Act, s 41. Relevant considerations include: the length of the delay, the reason for the delay, the extent of any prejudice suffered by the respondent and whether the appellant has a fairly arguable case on appeal: Jackson v NSW Land and Housing Corporation [2014] NSWCATAP 22. The discretion to extend time may only be exercised if strict compliance with the rules will work an injustice on the appellant: Gallo v Dawson [1990] HCA 30, 93 ALR 479 at [2]. 3. A delay of five days is relatively short. There was no formal evidence as to the reason for the delay but it was said from the bar table, without objection, that the Lindt Café siege on 15 December 2014 contributed to the builder's inability to lodge the appeal on time. The appeal was filed two days before Christmas Day. 4. We accept the builder's reasons for not filing on time. Apart from having to defend the appeal and bear the costs and delay of doing so, the homeowner did not point to any particular prejudice he would suffer if time were extended. The builder has a fairly arguable case. In all the circumstances it would work an injustice on the builder if it was not able to appeal, given the short delay in filing the notice and the merit of the appeal. The time for filing the notice of appeal is extended to 23 December 2014. Interlocutory decisions require leave 1. An internal appeal against an interlocutory decision may only be made with leave of the Appeal Panel: NCAT Act, s 80(2)(a). 2. The decision in this case was that "Builder to pay Owner $85,000 inclusive of costs by 14 January." If the builder did not pay the homeowner $85,000 by the due date, the matter would have been restored to the list. Neither the builder nor the homeowner has withdrawn their application and neither application has been dismissed. Before the time for payment had arrived, the builder appealed the decision. 3. The consent order does not come within any of the categories of "interlocutory decision" as defined in s 4 of the NCAT Act: "interlocutory decision" of the Tribunal means a decision made by the Tribunal under legislation concerning any of the following: (a) the granting of a stay or adjournment, (b) the prohibition or restriction of the disclosure, broadcast or publication of matters, (c) the issue of a summons, (d) the extension of time for any matter (including for the lodgement of an application or appeal), (e) an evidential matter, (f) the disqualification of any member, (g) the joinder or misjoinder of a party to proceedings, (h) the summary dismissal of proceedings, (i) any other interlocutory issue before the Tribunal. 1. In Carr v Finance Corporation of Australia Ltd (No 1) [1981] HCA 20; (1981) 147 CLR 246, Gibbs CJ explained the test for determining whether a judgment is final as being "whether the judgment or order appealed from, as made, finally determines the rights of the parties": Licul v Corney [1976] HCA 6; (1976) 50 ALJR 439 at 444. In our view the order for the payment of money finally determined the rights of the parties even though the Tribunal did not dismiss the claim or the cross claim. If that is correct, the consent order is not an interlocutory order. 2. If we are wrong, and the decision that the builder pays the homeowner $85,000 is an interlocutory order, we must consider whether leave should be granted for the builder to appeal against that decision. 3. The legislation does not provide any guidance as to the relevant considerations when determining whether to grant leave. Those principles must be derived from the objects of the NCAT Act and the nature of the appeal. 4. The 'guiding principle' of the NCAT Act is "to facilitate the just, quick and cheap resolution of the real issues in the proceedings": s 36. The purpose of requiring leave to appeal from interlocutory decisions is to minimise costs and to make sure that the real issues in dispute are determined justly and quickly. The importance and complexity of the subject matter is also relevant. The practice and procedure of the Tribunal should be implemented so as to facilitate the resolution of the issues between the parties in such a way that the cost to the parties and the Tribunal is proportionate to the importance and complexity of the subject-matter of the proceedings: NCAT Act, s 36(2). 5. The criteria for granting leave are particularly strict in the case of interlocutory decisions: Nationwide News Pty Ltd v Bradshaw (1986) 84 FLR 49, 51 - 52, 60 - 61. The appellant must show a doubt about the correctness of the first instance decision and that an injustice would be done if the decision is to stand: Bernard Cairns, Australian Civil Procedure (10th ed 2014, Law Book Co) at 734. 6. If the decision is an interlocutory decision, it is not merely a matter of practice and procedure. In effect, the decision that the builder pay the homeowner $85,000 determines the rights of the parties even though the application has not been dismissed. There is considerable doubt as to the correctness of the Tribunal's decision and it would be unjust for the order to stand if the Tribunal's discretion has miscarried. For those reasons, leave is granted to appeal against the consent order. Grounds of appeal on questions of law 1. The builder has a right to appeal on any question of law: NCAT Act, s 80(2)(b). The grounds of appeal relate to the meaning of 59(1)(b) of the NCAT Act and certain provisions of the Home Building Act. Section 59 of the NCAT Act gives the Tribunal power to make consent orders in certain circumstances: (1) The Tribunal may, in any proceedings, make such orders (including an order dismissing the application or appeal that is the subject of the proceedings) as it thinks fit to give effect to any agreed settlement reached by the parties in the proceedings if: (a) the terms of the agreed settlement are in writing, signed by or on behalf of the parties and lodged with the Tribunal, and (b) the Tribunal is satisfied that it would have the power to make a decision in the terms of the agreed settlement or in terms that are consistent with the terms of the agreed settlement. (2) The Tribunal may dismiss the application or appeal that is the subject of the proceedings if it is not satisfied that it would have the power to make a decision in the terms of the agreed settlement or in terms consistent with the terms of the agreed settlement. 1. The builder appealed on three grounds. The first ground was that there was no "agreed settlement" between the parties as required by s 59. The second ground was that the Tribunal could not have been satisfied that it had power to make the consent orders in the absence of any finding on the contested out of time issue. The third ground was that the Tribunal could not have been satisfied that it had power to make the consent orders in the absence of any finding as to whether the matter had been investigated by the Commissioner for Fair Trading. Were the terms of settlement an "agreed settlement" between the parties? 1. The builder submitted that the only agreed settlement would have been the Deed of Release mentioned in the terms of settlement had it been executed. This ground of appeal is arguably an appeal on a question of fact or on a mixed question of fact and law: Haritos v Commissioner of Taxation [2015] FCAFC 92 at [62]. If the ground of appeal is not on a question of law, but on another ground, we grant leave for the appeal to proceed because it can be dealt with shortly: NCAT Act, s 80(2)(b). 2. The builder relied on a letter that the owner's solicitor, Mr Cotton, wrote to the NCAT registry on 18 December 2014, after the appeal had been filed. The letter assumes, incorrectly, that the Tribunal did not make any orders on 19 November 2014. As Mr Cotton did not attend that hearing, he was apparently ignorant of the fact that consent orders were made on that date. 3. Apart from this letter, and the parties' acknowledgment that they engaged in discussions and signed terms of settlement, there is no evidence as to what transpired at the hearing on 19 November 2014. We did not accept into evidence an affidavit of Mr Paninac, a director of the builder, dated 27 May 2015. That affidavit was filed two days before the hearing in circumstances where directions had been made on 6 March 2015 for the appellant to file and serve its evidence by 2 April 2015. In addition, no reason was given for the late filing of Mr Paninac's affidavit. 4. The homeowner would have been prejudiced by the filing of the late evidence, not only because of its lateness, but also because Mr de Meyrick, counsel for the homeowner, had been present at the preliminary hearing before the Consumer and Commercial Division on 19 November 2014. He indicated that the admission of this evidence would raise a real possibility of his becoming a witness as to what had occurred, obliging him to cease to retain his brief, and to request that other counsel be retained in his stead: cl 95(d) of the Barristers Rules as they then stood. 5. As a matter of fairness we also refused to accept into evidence a late affidavit of Mr Owen dated 22 May 2015. 6. In the absence of any evidence to the contrary, the signed Terms of Settlement is probative evidence that the parties had reached an "agreed settlement." We do not accept the builder's submission that the only agreed settlement would have been the Deed of Release mentioned in the terms of settlement had it been executed. The agreement that "Builder to pay Owner $85,000 inclusive of costs by 14 January" is not conditional upon the execution of a Deed of Release. We find that there was an agreed settlement. This ground of appeal has not been made out. Powers when proceedings settle 1. Section 59(1) of the NCAT Act gives the Tribunal power to make orders in accordance with the terms of an agreed settlement or in terms consistent with the terms of the agreed settlement. By virtue of s 59(2), the Tribunal also has power to dismiss the application if it is not satisfied that it would have the power to make a decision in the terms of the agreed settlement or in terms consistent with the terms of the agreed settlement. 2. The use of the word "may" and the phrase "such orders at it thinks fit" persuade us that the powers given in s 59(1) and s 59(2) are discretionary powers. The exercise of a discretionary power such as that in s 59(1), will only miscarry in certain limited circumstances. In House v The King [1936] HCA 40; (1936) 55 CLR 499 at 504-5) the High Court required an appeal body to consider whether it "appears" that "some error has been made in exercising the discretion": If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed ... 1. When exercising discretionary power, the Tribunal will make an error of law if it fails to take into account a relevant consideration that it is bound to take into account: Minister for Aboriginal Affairs v Peko Wallsend Ltd [1986] HCA 40; (1986) 162 CLR 24. The Tribunal is bound to consider whether it is satisfied that it would have the power to make a decision in the terms of the agreed settlement because s 59(1)(b) expressly states that the Tribunal may make consent orders if it is satisfied that it has power to do so. 2. While there is an "area in which a decision-maker has a genuinely free discretion", any discretionary power must be exercised "reasonably": Minister for Immigration and Citizenship v Li [2013] HCA 18 at [63] and [66]; [2013] HCA 18; 249 CLR 332 at 362 and 363 (Hayne, Kiefel and Bell JJ.) In assessing reasonableness, the appellate body must look to the scope and purpose of the statute conferring the discretionary power and to its objectives. 3. The mischief or object to which s 59(1)(b) is directed is to ensure that the enforcement mechanisms available in relation to Tribunal orders are reserved for cases where the Tribunal is satisfied that it would have had power to make the order. The difference between a private agreement between the parties and a court order was explained in Beck v Weinstock [2012] NSWCA 289 at [61]: [61] A characteristic of judgments and orders of a court that belong in the mandatory part of the court order is that they take effect through the authority of the court. A court order produces legal consequences through the very fact that it is made by the court. . . . It happens when the court gives a judgment that A pay $X to B, where the judgment itself is a source of the liability to pay the $X. A court order that commands that some act be done is itself a source of an obligation to perform that act. Special enforcement procedures appropriate to judgments and orders can be invoked to achieve the effect that the judgment or order is obeyed. By contrast, an agreement inter partes that the court has noted creates obligations that are merely contractual ones, not obligations based in any way on the authority of the court. The enforcement mechanisms available concerning it are the same as would have been available if the agreement had been made, but not noted by the court. 1. It would not be in the interests of justice for the Tribunal to make enforceable orders if it would not otherwise have the power to make those orders. 2. While the weight to be given to any particular matter under consideration is a matter for the Tribunal, its decision will be "manifestly unreasonable" if it fails to give adequate weight to a relevant factor of great importance or gives excessive weight to an irrelevant factor of no importance: Minister for Aboriginal Affairs v Peko-Wallsend Ltd [1986] HCA 40; (1986) 162 CLR 24 at 41, Gibbs CJ and Dawson J agreeing at 30, 71; Minister for Immigration and Citizenship v Li [2013] HCA 18 at [72]; [2013] HCA 18; 249 CLR 332 at 365, 366. This concept has been explained in the context of the exercise of appellate review of judicial discretion as the result being "unreasonable or plainly unjust": House v King [1936] HCA 40; (1936) 55 CLR 499 at 505. 3. Prior to making the consent orders the Tribunal heard the parties in relation to the preliminary questions but did not determine whether the application and the cross claim had been made within time or whether the claim had been investigated by the Commissioner for Fair Trading. After the parties lodged the terms of the agreed settlement, the Tribunal made consent orders but gave no reasons for doing so. In cases where there is no dispute as to the Tribunal's powers, that may be entirely appropriate: Gaynor v Burns [2015] NSWCATAP 184 at [14] and [15]. But if reasons are not given where there is a contest between the parties as to the power of the Tribunal to entertain the application, it is not possible for the appellate body to determine whether the matters in s 59(1)(b) have been taken into account. 4. If the out of time issue and/or the requirement for the claim to have been investigated by the Commissioner for Fair Trading go to the "power of the Tribunal to make a decision" then the Tribunal will have erred by failing to take the matters in s 59(1)(b) into account or by making a decision which lacks an "evident" justification: Minister for Immigration and Citizenship v Li [2013] HCA 18 at [76]; Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24 at 41; Mark Aronson & Matthew Groves, Judicial Review of Administrative Action, (5th ed 2013, Lawbook Co). Do the matters in s 48J and s 48K go to the Tribunal's power to make a decision? 1. The phrase "would have power to make a decision" in s 59(1)(b) must be interpreted in context and in light of the mischief s 59 is designed to address. Where the Tribunal makes consent orders, the decision itself is the source of the liability to pay and special enforcement procedures can be invoked. A Deed of Release, or some other private agreement between the parties, may create contractual or other obligations which are not enforceable in the same way. As a matter of public policy it is important that the Tribunal only give its imprimatur to agreements between the parties that it would otherwise have the power to make. 2. The Tribunal's powers are set out in the Home Building Act and the NCAT Act and Regulations. The Home Building Act regulates residential building work and certain other work in New South Wales. While the parties to a contract may seek to obtain remedies through the courts for any breach of that contract, if they wish to obtain a remedy from the Tribunal, their claim must come within the provisions of the legislation. The Home Building Act modifies the principles of freedom of contract by protecting homeowners through statutory warranties. The statutory warranties scheme is a core element of the consumer protection framework of the Act. It creates legally enforceable standards for the quality and performance of building work. The legislation also protects builders by, for example, imposing time limits for applying to the Tribunal: Tom Davie, Annotated Home Building Act 1989 (NSW) (2000, Prospect Media Pty Ltd) at ix -xvi. 3. Part 3A of the Home Building Act deals with resolving building disputes. Division 5 is headed "Powers of Tribunal". The Tribunal has power to make the orders listed in s 48O: (1) In determining a building claim, the Tribunal is empowered to make one or more of the following orders as it considers appropriate: (a) an order that one party to the proceedings pay money to another party or to a person specified in the order, whether by way of debt, damages or restitution, or refund any money paid by a specified person, (b) an order that a specified amount of money is not due or owing by a party to the proceedings to a specified person, or that a party to the proceedings is not entitled to a refund of any money paid to another party to the proceedings, (c) an order that a party to the proceedings: (i) do any specified work or perform any specified service or any obligation arising under this Act or the terms of any agreement, or (ii) do or perform, or refrain from doing or performing, any specified act, matter or thing. 1. It is uncontroversial that these are the kinds of substantive orders the Tribunal has power to make. 2. Division 4 of Part 3A of the Home Building Act is headed "Jurisdiction of Tribunal in relation to building claims." Section 48K(1) gives the Tribunal jurisdiction to hear and determine any building claim in which the amount claimed does not exceed $500,000. While it is not necessary for us to determine this issue, we are of the opinion that the Tribunal is bound to take into account the amount of the claim before making a consent order: Bourdon v Outridge [2006] NSWSC 491 at [25]. (We note that at a directions hearing on 16 December 2013 the homeowner's claim was reduced to $350,000.) 3. Sub-sections 48K(3), (4), (6) and (7) provide that the Tribunal does not have jurisdiction in respect of certain building claims which have been lodged out of time: (3) The Tribunal does not have jurisdiction in respect of a building claim relating to building goods or services that have been supplied to or for the claimant if the date on which the claim was lodged is more than 3 years after the date on which the supply was made (or, if made in instalments, the date on which the supply was last made). (4) The Tribunal does not have jurisdiction in respect of a building claim relating to building goods or services that are required under a contract to be supplied to or for the claimant on or by a specified date or within a specified period but which have not been so supplied if the date on which the claim was lodged is more than 3 years after the date on or by which the supply was required under the contract to be made or, if required to be made in instalments, the last date on which the supply was required to be made. (5) The fact that a building claim arises out of a contract that also involves the sale of land does not prevent the Tribunal from hearing that building claim. (6) The Tribunal does not have jurisdiction in respect of a building claim arising out of a contract of insurance required to be entered into under this Act if the date on which the claim was lodged is more than 10 years after the date on which the residential building work the subject of the claim was completed. (7) The Tribunal does not have jurisdiction in respect of a building claim arising from a breach of a statutory warranty implied under Part 2C if the date on which the claim is lodged is after the end of the period within which proceedings for a breach of the statutory warranty must be commenced (as provided by section 18E). (Emphasis added) 1. Section 41 of the NCAT Act gives the Tribunal power to extend time in certain circumstances: (1) The Tribunal may, of its own motion or on application by any person, extend the period of time for the doing of anything under any legislation in respect of which the Tribunal has jurisdiction despite anything to the contrary under that legislation. (2) Such an application may be made even though the relevant period of time has expired. 1. Division 3 of Part 3A of the Home Building Act is headed "Making an application for determination of a building claim". Section 48J provides that: The principal registrar of the Tribunal must reject any application to the Tribunal for the determination of a building claim unless: (a) the principal registrar is satisfied that the subject-matter of the building claim has been investigated under Division 2, or (b) the President of the Tribunal directs that the building claim be accepted without such an investigation having been made. 1. Under s 49D(2), after investigating a dispute "an inspector must cause a written report to be prepared on the results of the investigation and cause copies of the report to be given to the complainant and the person with whom the complainant is in dispute." 2. In a Procedural Direction, the President has directed that certain classes of claims which will be accepted without investigation: NCAT Consumer and Commercial Division Procedural Direction 2. The Procedural Direction concludes with the following statement: These directions do not preclude the President from directing in the individual case that a building claim not falling within the ambit of these directions be accepted by the Divisional Registrar without an investigation under Division 2 of the Home Building Act 1989 having been made. 1. When categorising 'powers' courts have distinguished between "jurisdictional facts", "pre-conditions" to the exercise of powers and procedural matters which do not constitute a pre-condition to the exercise of powers. That classification is useful when determining the meaning of 'powers' in s 59(1)(b). If the matter under consideration is a jurisdictional fact or a pre-condition to the exercise of the Tribunal's powers, the Tribunal will be bound to take it into account when deciding whether to make consent orders. Otherwise, it will not. 2. Jurisdictional facts are facts which must exist in order for the decision to be valid. Those facts must have an "objective" existence and must be "essential" to the validity of the decision: Timbarra Protection Coalition Inc v Ross Mining NL (1999) 46; Mark Aronson & Matthew Groves, Judicial Review of Administrative Action, (5th ed 2013, Lawbook Co) at 235. Neither party submitted that either the out of time provisions in s 48K or the requirement for investigation of a claim by the Commissioner of Fair Trading constitutes a jurisdictional fact. 3. In Vero Insurance Ltd v Buckle [2008] NSWSC 73 the Supreme Court held at [65], in relation to s 48K(3) of the Home Building Act, that the application in that case had been lodged out of time and that the former Consumer, Trader and Tenancy Tribunal, the predecessor to the Consumer and Commercial Division of the NCAT, did not have jurisdiction to entertain it. The Court explained its conclusion at [64]: 64 What is envisaged by the provisions of s 48K(3) cannot be categorised as a limitation defence. It is not of the nature of a defence that operates to bar a remedy. The language of the provision operates as a jurisdictional matter where jurisdiction is attracted by reason of the claim arising from a supply of building goods or services. The claim must be lodged within the three year period after the date on which the supply was made. If the claim is not brought within that period, there is no jurisdiction to entertain it. 65 In this case, the supply of building goods or services had taken place by 5 December 2000. As the application was not brought until 12 May 2006, it has been instituted well out of time and the Tribunal has no jurisdiction to entertain it. 1. The effect of this decision is that s 48K(3), (4), (6) and (7) are pre-conditions to the exercise of the Tribunal's jurisdiction: Parisienne Basket Shoes Pty Ltd v Whyte (1938) 59 CLR 369 at 391-392; Berowra Holdings Pty Limited v Gordon (2006) 225 CLR 364 at 374-376; [2006] HCA 32. Each of those sub-sections relates to the "power of the Tribunal to make a decision". 2. The power in s 41 of the NCAT Act to extend time is limited to legislation "in respect of which the Tribunal has jurisdiction". The Tribunal has jurisdiction under the Home Building Act but because the Tribunal does not have jurisdiction to entertain a home building claim which has been lodged out of time, s 41 should not be interpreted so as to give the Tribunal that jurisdiction. The conferral of jurisdiction needs to be express. It follows that the Tribunal does not have power to extend the time for making an application because to do so would purport to give the Tribunal jurisdiction it does not otherwise have. 3. The signing of terms of agreed settlement does not absolve the Tribunal of the requirement to consider whether it has the power to make the consent orders. The combined effect of s 59(1)(b) of the NCAT Act and s 48K of the Home Building Act is that where there is a dispute as to time limits, before making consent orders the Tribunal must consider whether it is "satisfied" that the application has been made within the time limits prescribed in s 48K. We are of the opinion that the Tribunal has erred by failing to take into account the matters in s 59(1)(b) or by making a decision which lacks an "evident" justification. The justification for making the consent orders was not evident in circumstances where the Tribunal had heard but not determined a contested hearing as to its jurisdiction. 4. We now turn to consider whether s 48J of the Home Building Act relates to the power of the Tribunal. According to the builder, there is no evidence that the claim has been investigated by the Commissioner of Fair Trading pursuant to s 48D and no written report as required by s 48D(2) of the Act. In those circumstances the builder submitted that the Tribunal has no jurisdiction to hear it and therefore no power to make consent orders under s 59 of the NCAT Act. The owner submitted that compliance by the principal registrar with s 48J does not affect the Tribunal's jurisdiction. 5. There are no appellate decisions of which we are aware interpreting the words "must reject any application" in s 48J of the Home Building Act. There are two inconsistent first instance decisions. In 2005 the Consumer, Trader and Tenancy Tribunal (the predecessor to the Consumer and Commercial Division) held that s 48J of the Home Building Act relates to the Tribunal's jurisdiction to hear and determine 'building claims': Napper v Miracle Handyman Services (Home Building) [2007] NSWCTTT 87 at [14]. In 2015 the Tribunal described non-compliance with s 48J as a "procedural irregularity" which could be cured by a grant of leave under s 48J or by an investigation under Division 2: Lavery v Dimension Tilers Pty Ltd [2015] NSWCATCD 59 (14 April 2015) at [10]. 6. Provisions relating to compulsory pre-lodgement processes are directed to ensuring that as many claims as possible are resolved before proceedings are commenced in the Tribunal. As well as the Home Building Act, three other statutes which give NCAT jurisdiction provide for compulsory pre-lodgement processes. The relevant provisions are found in the: Retail Leases Act 1994 (NSW), s 68(1), Strata Schemes Management Act 1996 (NSW), s 125 and Community Land Management Act 1989 (NSW), s 64. 7. Section 68(1) of the Retail Leases Act provides that certain retail tenancy disputes: " … may not be the subject of proceedings before any court unless and until the Registrar has certified in writing that mediation under this Part has failed to resolve the dispute or matter or the court is otherwise satisfied that mediation under this Part is unlikely to resolve the dispute or matter." 1. In Fordham Laboratories Pty Limited v Sor [2011] NSWSC 706 Price J held at [43] that the requirement to mediate "is not a condition precedent to the commencement of proceedings, but the court may not proceed to hear and determine the dispute unless satisfied that mediation is unlikely to resolve the dispute." 2. Other civil statutes which provide for damages encourage or require pre-lodgement investigation, conciliation or mediation. Relevant phrases include "cannot be commenced," "cannot commence court proceedings," "may not be the subject matter of proceedings" and "is not entitled to commence court proceedings." 3. The builder relied on several decisions interpreting s 262 of the now repealed Workers Compensation Act 1987 (NSW) and s 108 of the Motor Accident Compensation Act 1999 (NSW): Nassim Attileh v State Rail Authority of New South Wales [2005] NSWCA 64 at [29]; Baker v Rothmans of Pall Mall (Australia) Ltd (1999) NSWCCR 374; and Emad Trolley Pty Ltd v Shigar [2003] NSWCA 231 at [44] and [73]. The homeowner sought to distinguish these decisions on the basis that s 48J does not prevent a person from commencing proceedings. It merely obliges the Registrar to reject any application to the Tribunal for the determination of a building claim unless the claim has been investigated or the President directs that the building claim be accepted without an investigation. 4. Neither party drew our attention to the High Court's decision in Berowra Holdings Pty Ltd v Gordon (2006) 225 CLR 364. That decision is relevant and authoritative. The provision in issue was s 151C(1) of the Workers Compensation Act 1987: A person to whom compensation is payable under this Act is not entitled to commence court proceedings for damages in respect of the injury concerned against the employer liable to pay that compensation until 6 months have elapsed since notice of the injury was given to the employer. 1. The plaintiff was injured in the course of his employment with the defendant. In contravention of s 151C(1) the plaintiff commenced proceedings in the District Court less than two months after giving notice of injury to the defendant. The defendant made an offer of compromise but notified the plaintiff that it wished to withdraw the offer and relied on s 151C. The plaintiff accepted the offer. The defendant then applied to the District Court for leave to withdraw the offer and for an order that the proceedings be dismissed. The District Court held that the proceedings were a nullity for want of jurisdiction. The plaintiff appealed to the Court of Appeal. 2. Mason P (with whom Sheller JA and Beazley JA agreed) held at [34] and [35] that although s 151C(1) is a condition precedent of a procedural nature that must be satisfied before the commencement of proceedings, proceedings commenced in contravention of that provision are not a nullity. 3. The High Court affirmed the Court of Appeal's decision but for slightly different reasons. Rather than being a nullity, proceedings commenced in contravention of s 151C engage the jurisdiction and procedural rules of the court but are vulnerable to an application by the defendant to strike out the initiating process. At 376 [36] the High Court said that s 151C should not be read as if it is a pre-condition to the court's jurisdiction to determine claims for damages based on work injuries. 4. Like s 151C of the Workers Compensation Act and s 68(1) of the Retail Leases Act, s 48J of the Home Building Act is not a pre-condition to the Tribunal's jurisdiction to determine home building claims. The Tribunal's discretion in s 59(1)(b) will not miscarry if it fails to be satisfied that s 48J has been complied with before making a consent order. Conclusion 1. Section 59(1)(b) of the NCAT Act gives the Tribunal discretionary power to make consent orders if it is satisfied that it would have the power to make a decision in the terms of the agreed settlement or in terms that are consistent with the terms of the agreed settlement. Where there has been a dispute as to the Tribunal's powers, the Tribunal is bound to consider whether it is satisfied that it has power to make the order and to make that decision reasonably in the sense referred to in Minister for Immigration and Citizenship v Li [2013] HCA 18. If it is not so satisfied it may dismiss the application: NCAT Act s 59(2). In particular, if there is a dispute as to whether a matter has been lodged within the time limits set out in s 48K of the Home Building Act, the Tribunal must direct its mind to that matter before making consent orders and must not make an order that it unreasonable. That is not the case in relation to a dispute as to whether there has been compliance with s 48J of the Home Building Act. Because that provision does not relate to the power of the Tribunal to make a decision, the Tribunal is not bound to consider whether the proposed consent orders comply with that provision. 2. Following a hearing, the Tribunal may allow or dismiss the appeal, confirm, affirm, vary, set aside or quash the decision under appeal, substitute a new decision or refer the matter to the Tribunal for reconsideration: NCAT Act, s 81. ORDERS 1. We make the following orders: 1. The time for filing the notice of appeal is extended to 23 December 2014. 2. Leave is granted to appeal against an interlocutory decision. 3. Leave is granted for the appeal to be made on grounds other than a question of law. 4. The decision under appeal is set aside. 5. The following issues are referred to the Tribunal for reconsideration in accordance with the Appeal Panel's reasons for decision: 1. whether the Tribunal should exercise its discretion under s 59(1)(b) of the Civil and Administrative Tribunal Act 2013 to make consent orders in the terms of the agreed settlement or in terms that are consistent with the terms of the agreed settlement; and 2. if not, whether the Tribunal should exercise its discretion under s 59(2) to dismiss the application. 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: 09 September 2015