NCAT Appeal Panel Goes 0 for 2 in Supreme Court

Do NCAT decisions really help us understand strata title laws ...

Most strata commentators eagerly await NCAT decisions as guides for interpreting untested [or established] strata laws. But, since NCAT decisions aren’t binding on anyone and they keep getting overturned on appeal, I’m don’t think they have much value to strata stakeholders.

[7.25 minutes estimated reading time, 1420 words]

Introduction

In most Australian states a Tribunal [and not a Court] is the primary place where strata disputes are determined.  In New South Wales that’s NCAT [the NSW Civil and Administrative Tribunal].

So, NCAT decisions are used by many strata stakeholders and commentators as guides for interpreting and applying strata laws.  It’s important to have guidance because many strata law provisions are new and/or have never been legally considered and because so many people are affected daily and repeatedly by decisions about how strata laws work. 

But, I have concerns about relying on NCAT decisions too heavily, or at all, which I’ll outline below.

I’m not sure that NCAT is much help on strata law.

Non-binding NCAT decisions can’t be relied on

Tribunals and Courts operate in a hierarchy where there’s another higher level forum that can overrule decisions on appeal … eventually reaching the High Court of Australia as the ultimate decision-maker. 

Plus, there’s a legal principle that says Tribunals and Courts must apply laws in the ways superior Tribunals and Courts have decided they work.  For you Latin lovers, it’s called ‘stare decisis’.

That creates a body of legal interpretations and precedents that provide certainty about how laws work and allows everyone to organise their activities with the law.

But Tribunals and Courts are not bound by their previous decisions and can make different decisions.

So, one NCAT member doesn’t need to make consistent decisions on the same issues as another NCAT member.  And, they often don’t.

NCAT members do have to follow the decisions of the NCAT Appeal Panel.  But, the NCAT Appeal Panel doesn’t have to follow its own previous decisions and can decide the same issue differently.

This leaves litigants in the predicament that previous NCAT or NCAT Appeal Panel decisions are persuasive [at best] but do not guarantee a similar outcome.

That’s not really very useful.

So, we need appeals to higher level Courts to create precedents.

There are many NCAT decisions, but few appeals

Before January 2014 NCAT decisions were appealed to the District Court under s 200 of the Strata Schemes Management Act 2015. 

But, then s 200 of the Strata Schemes Management Act 2015 was repealed, and NCAT decisions are now appealed to the NCAT Appeal Panel under s 80 of the Civil and Administrative Tribunal Act 2013 over mistakes of law and, in some limited circumstances, over mistakes of fact.

And, if a strata litigant is unhappy with an NCAT Appeal Panel decision, they can appeal the decision over mistakes of law to the NSW Supreme Court of the NSW Court of Appeal [depending on whether or not the NCAT Appeal Panel included a judicial member] under s 83 of the Civil and Administrative Tribunal Act 2013.

That means there’s a discrete set of NCAT Appeal Panel decisions on strata title matters and NSW Court of Appeal reviews of those decisions since January 2014.

Here’s a summary of the appeal numbers for NCAT strata law cases.

2014 1 NCAT Appeal Panel strata decision only

2015    8 NCAT Appeal Panel strata decisions only

2016    3 NCAT Appeal Panel strata decisions only

2017    9 NCAT Appeal Panel strata decisions only

2018    15 NCAT Appeal Panel strata decisions only

2019    37 NCAT Appeal Panel strata decisions only

2020    34 NCAT Appeal Panel strata decisions and 2 NSW Court of Appeal decisions

2021    4 NCAT Appeal Panel strata decisions [so far] only

When you consider that of 108 total NCAT Appeal Decisions on strata title matters only 2 have been appealed; that’s less than a 2% review ratio.

That could mean the rest of the NCAT cases are well decided and the parties happily accepted the outcomes. 

But, since both of the appeals to the NSW Court of Appeal ended up overturning the NCAT Appeal Panel decisions, I’m not confident about that. 

So, let’s explore the NSW Court of Appeal decisions a bit further.

Poor NCAT appeal outcomes don’t inspire confidence

Two NCAT Appeal Panel strata cases were reviewed by the NSW Court of Appeal in 2020.

Cooper v The Owners – Strata Plan No 58068 [2020] NSWCA 250 was decided in October 2020 and concerned the validity of a pet ban by-law.  I’ve written about the implications of the decision in my January 2021 article The Dogs of Strata War or The By-Law is Dead: Long Live the By-Law.

In Cooper’s case, the NSW Court of Appeal overturned the NCAT decision and ruled in the opposite way.

Vickery v The Owners – Strata Plan No 80412 [2020] NSWCA 284 was decided in November 2020 and concerned NCAT’s powers to make orders for damages in favour of a strata owner where a strata building failed to repair and maintain the building.

In Vickery’s case, the NSW Court of Appeal also overturned the NCAT decision and ruled in the opposite way.  Admittedly it was a 2/1 decision.

So, since 2014 NCAT decisions on strata law matters have been overturned every time they’ve been reviewed by the NSW Court of Appeal. 

That’s not a great result.  And, it doesn’t inspire confidence.   Plus, some of the NSW Court of Appeal’s comments about NCAT are not flattering either as the following quotes from the decisions illustrate.

From Cooper’s case:

‘this exercise was of limited assistance’ about the NCAT decision when applying language definitions [pp22],

and

‘it [NCAT] failed to identify the standards against which the by-law is to be assessed’ about the NCAT reasoning for by-law validity under s 136(1) [pp23]

From Vickery’s case:

‘the answer to the question raised by this appeal is debatable. Nonetheless, I think the answer is tolerably clear’ about NCAT’s failure to identify damages powers [pp 158],

and

‘I respectfully doubt that the construction of s 232 is advanced by the debate as to the jurisprudential nature of the tort of damages for breach of statutory duty’ about NCAT consideration and application of tort law principles [pp 168].

So, it looks like senior NSW judges think the NCAT Appeal Panel has been wrong every time they’ve been asked,

But, there is a silver lining. 

In another that went on appeal from the NCAT Appeal Panel to the NSW Court of Appeal involving a strata building [but about a construction defect claim under the Home Building Act 1989] Dyldam Developments Pty Ltd v The Owners – Strata Plan 85305 [2020] NSWCA 327, the NCAT decision was upheld.

Why is it so difficult for NCAT?

There are many potential reasons why NCAT decisions are less persuasive than they could be, don’t get appealed very often, and, when appealed, are being overturned.

Here are 5 explanations I can think of. There are probably more.

1. The NCAT dispute process is long, slow and as a result, costly.  Plus, because NCAT orders have limited enforceability it’s not worth pursuing them all the way to the end.

   So, strata litigants are exhausted by the time they get an NCAT Appeal Panel decision and just can’t or don’t go on.

2. An NSW Court of Appeal hearing is expensive [after having already spent considerable money]. 

   So, strata litigants just don’t want to keep spending.

3. Since NCAT is a consumer-focused Tribunal, it has a different mindset that is focused on resolving cases quickly and cost-effectively.  So, NCAT doesn’t have the luxury of spending many hours or days ‘navel gazing’ about esoteric strata law issues.   How many times have parties experienced NCAT trying to limit the dispute and/or push parties into concessions to make the cases faster?

   So, when critically analysed by more senior judges who can spend the time, NCAT decisions don’t look so good.

4. Perhaps NCAT isn’t a black letter law decision-making body at all and shouldn’t be thought of in that way.  But rather, NCAT is a place for strata litigants to get some free [dispute] therapy or where Tribunal Members act like Solomon; cutting strata babies in half.

   So, practical results also don’t look so good when critically analysed.

5. Maybe the NCAT Appeal Panel is still learning strata law since they’ve only been deciding appeals for 6 years and there’s a pretty steep learning curve.

   So, time might lead to better NCAT decisions.

I’ll keep watching appeals from NCAT to see if there’s a change of form in the future or if there’s an NSW appeals hat trick.

March 24, 2021

Francesco …