Hua Nan Trading and insight into NCAT’s procedural operations

Although the Appellant was self-represented, there are valuable takeaways for lawyers when making NCAT applications (for reasons which will become obvious, this decision is hereafter referred to as “the Second Appeal”).

The Appellant had initially tried to bring proceedings under section 106 of the Strata Schemes Management Act 2015 (NSW) (“the SSMA”), which concerns the duty of an owners corporation to maintain and repair common property. A lot owner may recover from an owners corporation for losses resulting from a breach pursuant to section 106(4). A claim for losses under this section has a limitations period of two years, per section 106(6).

On 2 February 2022, the Appellant initially attempted to file an NCAT application that was in part to preserve limitations, which was to expire on 5 February 2022. Typically, NCAT requires applicants to have attempted mediation with NSW Fair Trading before it will allow an application to be filed. There are exceptions to this, inter alia, if the application is filed to preserve time.

In their application (“the First Application”) the Appellant indicated that they had not engaged in mediation beforehand, stating: “I making (sic) insurance claim. It has not been resolved yet. For the time bar is on, before 05/02/2022. Claim the insurance doesn’t request it”, at [4].

The Registrar made the determination to disallow the First Application on the basis that mediation had not occurred, at [8]. The Registrar’s determination did not make any reference to the implied limitation issue raised by the Appellant. The Registrar’s decision stated that that if the Appellant would like to pursue the issue, a new application should be filed after attempting mediation, at [10]. Subsequently, the Appellant applied for and attended a NSW Fair Trading mediation and filed a second, identical application (“the Second Application”), at [10] – [12].

The Appellant had failed at first instance (“the First Decision”) with the Tribunal finding, “that the second proceedings were not commenced within two years of the appellant first becoming aware of its loss and were therefore out of time”, Hua Nan Trading Pty Ltd v The Owners – Strata Plan No 32396 [2023] NSWCATAP 66 at [26] (“the First Appeal”). The Appellant appealed the First Decision, arguing “to the effect that his proceedings were in time because he had commenced them (the first proceedings) within two years of becoming aware of its loss, and he had only commenced the second proceedings because he had been told to do so and after he had been told to attend a mediation”, the First Appeal at [40].

The Appeal Panel had at the First Appeal upheld the Appellant’s appeal. Some consideration was given by the Appeal Panel that the Appellant was non-legally trained and from culturally and linguistically diverse communities, ibid at [87], and that legislative intent was that the Tribunal was to be informal to facilitate greater access, ibid at [99] – [101], and ultimately deciding to remit the matter back to the Tribunal member, ibid at [110].

After being remitted, the Tribunal again decided (“the Second Decision”) to decline to extend time and dismissed the application, at [19]. The Appellant thus appealed again (“the Second Appeal”). On 28 June 2024, prior to a decision of the Second Appeal, a differently constituted Appeal Panel of Pickard, which determined that the decision in the First Appeal was “plainly wrong”: at [24], and that NCAT does not have the power to extend the two (2) year time period pursuant to s106(6) of the SSMA, at [53]. The Second Appeal thus considered the appeal of the Second Decision within the context of the Pickard. The Appeal Panel in the Second Appeal agreed with Pickard, at [54] and [56].

However, it was important to note that the Appellant’s points of appeal, even at the First Appeal, was mainly that the First Application should have preserved time and should not have been wrongly rejected, c.f. [41]. In respect of this point the Tribunal at the Second Appeal thus found against the Appellant as follows:

1. The Second Application is out of time and the Tribunal had no powers to extend the limitations period of s106(5), at 56];
2. The First Application was rejected by the Registrar, and the time period to appeal the Registrar’s decision was 28-days, which the Appellant had not appealed within that time and is thus also out-of-time at [46].

It is important to note that NCAT operates under a substantially different set of rules regarding limitation periods compared to Courts. NCAT was supposed to, in the words of Wright J and then President of the Tribunal, have a “reduced emphasis on legal technicality, offers litigants the opportunity to present their own cases, without disadvantage and without the need to retain legal practitioners to act on their behalf” at [60].

Section 38 of the Civil and Administrative Tribunal Act 2013 (NSW) (“the CAT Act”) states expressly that NCAT is to “to act with as little formality as the circumstances of the case permit and according to equity, good conscience and the substantial merits of the case without regard to technicalities or legal forms”, subsection (4). However, the writers observe no case law elaborating on the operation of section 38(4).

In respect of the extensions of time, section 41 of the CAT Act gives the Tribunal the discretionary power to grant extensions 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.” This would appear to give the Tribunal the power to extend the time causes of action which or otherwise time limited by statute, including that of section 106.

So, does this decision of Pickard enshrine the proposition that NCAT will always operate strictly on limitation periods? Not necessarily. This interpretation of the decision would seem to render section 41 of the CAT Act otiose. The better view is as stated by Appeal Panel in obiter, at [60], that the basis to whether time should be extended is whether the application itself has merits, where refusing to do so would “work an injustice upon the appellant, [59] citing Gallo v Dawson (1990) 64 ALJR 458, 459 [2] (McHugh J). In this case it determined the Appellant’s “claim was weak” and it was insufficient for the Tribunal to grant an extension.

The decision is, however, surprising. Given the First Application had not been lodged in error, but rather expressed poorly due to language barriers, is there not perhaps a case that the strict compliance with rules resulted in injustice upon the disadvantaged Appellant? It would appear that notwithstanding the wording of section 38, the Tribunal will still only sparsely disregard matters of a highly procedural nature, such as in respect of limitation periods.

Indeed, in this case it was willing to uphold a wholly technical position of distinguishing between two identical applications. Accordingly, it would seem that the Tribunal places significant important on procedural soundness in conducting itself which implies some acceptance that “technicalities or legal forms” are themselves possible instruments towards “equity, good conscience” and “natural justice”.

Thus, from this decision the important takeaways for both lay applicants and practitioners alike in respect of lodging a NCAT application to extend time:

1. if making an application to NCAT to preserve time, this should be made express and unambiguous.
2. if the application is rejected, an appeal must be lodged within 28 days.
3. merely following instructions of the Registrar and acting honestly is not likely to cure any time deficiencies or satisfy NCAT to extend time.
4. although the Tribunal may be willing to extend time in certain circumstance, if the risk can be averted, it is preferrable to not rely on the chance of an extension being granted.