Does NCAT Have Authority to Direct to Whom a Civil Penalty Issued Under s 247A of the SSMA 2015 is Paid?

According to the recent case of The Owners – Strata Plan No. 61285 v Taylor (No. 3) [2023] NSWCATCD 1, the answer is yes.

Background

The Owners Corporation originally brought proceedings against Mr Taylor to obtain an order that he remove various personal property from the common property, remove unauthorised building work and make good damage to the common property. The NSW Civil and Administrative Tribunal (NCAT) made orders to this effect, requiring Mr Taylor to complete specified works.

Mr Taylor appealed the decision, however leave to appeal was refused and the application dismissed.

The Owners Corporation subsequently initiated penalty proceedings for contravention of an order in response to Mr Taylor failing to undertake the works ordered by NCAT.

The Deputy President found that a contravention was established and subsequently ordered that Mr Taylor pay a penalty. Orders were also made that the Commissioner of Fair Trading receive a copy of the orders and reasons to consider whether the Minister or Commissioner wishes to intervene and make submissions about to whom a civil penalty imposed under s 247A of the SSMA 2015 should be paid.

Outcome

After considering the submissions of the Commissioner of Fair Trading, the Senior Member found the following:

1. NCAT has the power to direct to whom a penalty is paid. This power is implied under s 247 of the SSMA 2015 because it is necessary to give effect to NCAT’s power to impose a civil penalty (per the principle in Transport Workers’ Union of New South Wales v Australian Industrial Relations Commission (2008) 166 FCR 108).
2. Alternatively, the power to specify to whom a civil penalty is paid is derived from s 229 of the SSMA 2015 or s 29(2)(a) of the Civil and Administrative Tribunal Act 2013 (NCAT Act). Both sections permit NCAT to make orders regarding ancillary or consequential matters.
3. The power to direct to whom a civil penalty is paid involves discretion. The recipient is not limited to the State or relevant government agency. This is because s 248 of the SSMA 2015 states that a penalty may be paid to an owners corporation.
4. Although there are no specified limitations on whom payment of a civil penalty can be made, NCAT’s discretion must be “exercised judicially and in a manner that does justice between the parties and is consistent with the grant of power and its purpose”. This purpose is “to provide deterrence and assist in obtaining compliance by the person on whom a notice to comply is served or against whom an order is made by the Tribunal” (Australian Building and Construction Commissioner v Pattinson [2022] HCA 13 at [14]-[15]).
5. When exercising its discretion, NCAT must consider the following:

•  A civil penalty should usually be payable to the Commissioner of Fair Trading, being the delegate performing various regulatory functions under s 256 of the SSMA 2015.
•  A civil penalty may be paid to an owners corporation where such payment is properly categorised as compensation to the owners corporation for performing a regulatory role.
•  There is no presumption that a civil penalty is to be paid to an owners corporation applicant in respect of a penalty imposed under s 247A of the SSMA 2015.
•  A civil penalty may be paid to an individual or an owners corporation where the applicant for penalty has suffered loss or damage, other than costs of bringing proceedings which are regulated by the NCAT Act, or where it is appropriate in the circumstances of the case to make such an order.
• A civil penalty should not be directed to be paid to an owners corporation or other applicant where it is properly seen as a windfall or as a form of retribution favouring the applicant.

6. In imposing a civil penalty, NCAT should specify by order the person to whom the penalty is to be paid and when it is to be paid.

Applying these principles to the case, the Senior Member directed the civil penalty be paid to the Commissioner of Fair Trading as the Owners Corporation failed to produce sufficient evidence of loss or damage to warrant deviating from the general principle that civil penalties are a debt to the crown.

This is general information and should not be considered to be legal advice. You should obtain legal advice specific to your individual situation.

Authors: Ashley Howard & Jasmin H.Singh