BGC Constructions Pty Ltd and Vagg & Anor
[2005] WASAT 265
•4 OCTOBER 2005
| JURISDICTION | : STATE ADMINISTRATIVE TRIBUNAL | ||
| STREAM | : VOCATIONAL REGULATION | ||
| ACT |
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| CITATION |
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| MEMBER |
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| HEARD | : 16 JUNE 2005 | ||
| DELIVERED | : 4 OCTOBER 2005 | ||
| FILE NO/S |
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| BETWEEN | : BGC CONSTRUCTIONS PTY LTD |
Applicant
AND
JR VAGG
L ROBERTSRespondents
Catchwords:
Hearing of application for leave and review of decision of Building Disputes
Tribunal - Whether proceedings time-barred - Effect of admission
Legislation:
Builders' Registration Act 1939 (WA), s 41
Home Building Contracts Act 1991 (WA), s 17(2b)
Limitation Act 1935 (WA), s 44(1), s 44(3)
[2005] WASAT 265
Result:
Decision under review affirmed
Category: B
Representation:
Counsel:
| Applicant | : | Mr C Marsh |
| Respondents | : | Self-represented |
Solicitors:
| Applicant | : | N/A |
| Respondents | : | N/A |
Case(s) referred to in decision(s):
Bucknell v Commercial Banking Co of Sydney Ltd (1937) 58 CLR 155
Busch v Stevens (1962) 1 ALL ER 412
Do Carmo v Ford Excavations Pty Ltd (1984)154 CLR 234
Hepburn v McDonnell (1918) 25 CLR 199
Lonsdale Sand and Metal Pty Ltd v Federal Commissioner of Taxation (1998)
162 ALR 220
Case(s) also cited:
Nil
[2005] WASAT 265
REASONS FOR DECISION OF THE TRIBUNAL:
Summary of the Tribunal's decision
1 The applicant applied for leave to review a decision of the Building
Disputes Tribunal (Disputes Tribunal) dated 8 March 2005. The application for leave to review and the review itself were heard together.
2 The Disputes Tribunal had found that an admission had been made
by the applicant builder, the effect of which was that a complaint had been made to the Disputes Tribunal within three years from the time when the cause of action arose as required by s 17(2) of the Home Building Contracts Act 1991 (WA).
3 The respondents' case was that the Disputes Tribunal had determined
the matter on a basis which had not been argued before it, and that the applicant had, therefore, been denied the opportunity to tender documents, which, it was asserted, would have resulted in a different conclusion.
4 As the case was conducted before the Disputes Tribunal, the parties
had concentrated on the date on which practical completion had been achieved as the date on which the cause of action accrued. The claim was for damages for delay in completion of the respondents' dwelling by the applicant. The Disputes Tribunal had found that the running of time had been extended by a written admission made by the applicant. The parties had not been given an opportunity to address this issue.
5 The Tribunal found that the further evidence, which the applicant
indicated it would have adduced, would not have affected the operation of
the subsequent admission relied on by the Disputes Tribunal.6 The Tribunal considered that the limitation issue raised was
sufficiently wide to permit the Disputes Tribunal to decide the matter on the basis which it did. Further, the decision of the Disputes Tribunal was clearly correct as to the effect of the acknowledgment. The Tribunal refused leave to review the decision, and dismissed the application for review.
The application
7 This is an application for an order for leave to review the decision of
the Disputes Tribunal dated 8 March 2005, and if leave be granted, for the
review of that decision.
[2005] WASAT 265
The application is made pursuant to s 41(2) of the Builders' Registration Act 1939 (WA).
The decision under review and background
9 The respondents lodged a complaint against the applicant with the
Disputes Tribunal on 29 March 2004. The claim made was for damages for late completion of building works under a home building contract dated 9 December 1999.
10 The applicant sought the determination of a preliminary issue as to
whether the complaint was time-barred because it had been made outside the three-year period prescribed by s 17(2) of the Home Building Contracts Act 1991 (WA) (HBCA). That section provides that an application cannot be made to the Disputes Tribunal after the expiry of three years from the time when the cause of action arose.
11 The parties disputed when practical completion of the works had
occurred. The concentration on this issue indicated to the Disputes Tribunal that the parties thought that the critical date for the purposes of determining whether the complaint was within time was the date of practical completion. The Tribunal found that, in a claim for late completion, the cause of action arose on the date of breach, namely, when the building works were due to be completed, not the date on which they were completed.
12 At the hearing, the respondents submitted a letter from the applicant
dated 30 March 2001, and a copy of a statement of final account dated 30 March 2001 referred to in that letter, and a copy of Variation Order 10 dated 30 March 2001 referred to in that statement. The letter was signed by the applicant's securities manager, and called for payment of the balance of the contract sum of $22 020 calculated in accordance with the attached statement of final account.
The statement of final account took into account Variation Order 10 under which a credit of $2880 was given to the respondents. The attached variation order shows the calculation of that amount being in respect of 96 working days at $30 per day of liquidated damages calculated from the contractual date for completion, stated to be 5 September 2000. Further, the calculation was based on a delay or overrun period from 6 September 2000 to 23 February 2001, that is, 125 days from which 29 days was deducted in respect of "delays in accordance with clause 10B".
[2005] WASAT 265
14 The Disputes Tribunal went on to find that the effect of the letter of
30 March 2001 and attached documents was to constitute an acknowledgment of the liquidated damages payable to the respondents, which renewed the limitation period from the date of the acknowledgment in accordance with the principles set out in Busch v Stevens [1962] 1 All ER 412.
15 As three years from 30 March 2001 is 29 March 2004, the date on
which the complaint was lodged, the Disputes Tribunal held that the
complaint was not time-barred.
The parties' submissions
16 The abovementioned variation order and statement of account was
based on a contractual completion date of 5 September 2000. However, in an affidavit filed in support of the application, Mr C Marsh swore that the contract terms required the works to be completed by 4 October 2000. The applicant's submission is that the respondents, therefore, had until 4 October 2003 in which to lodge the complaint.
17 Alternatively, the applicant submits that, if the principles set out in
Busch v Stevens (supra) apply, the Disputes Tribunal did not give the applicant an opportunity to address that issue during the course of the hearing. If such an opportunity had been given, it is asserted that the applicant would have tendered two e-mails from the abovementioned securities manager to the secondnamed respondent, which are dated 21 and 22 February 2001. The e-mails were annexed to Mr Marsh's affidavit.
18 Based on these e-mails, the applicant contends that the earliest date
by which the applicant could be said to have acknowledged the breach of the building contract was 21 February 2001. In that event, it is submitted that the Disputes Tribunal should have found that the complaint was, in any event, lodged out of time.
19 The respondents, by their submissions, effectively support the
conclusions of the Disputes Tribunal. Attached to their submissions were a number of other e-mails between them and Ms Deborah Ross of the applicant, which they submit shows that a completion date was still being sought as at 27 March 2001, and that an inspection on-site was arranged for 29 March 2001.
[2005] WASAT 265
Considerations
20 Section 17(2)(b) of the HBCA is a limitation provision. The cause of
action does not cease to exist. It is simply that it cannot be enforced under the HBCA and before the Disputes Tribunal. There would be nothing to prevent a claim for breach of contract being commenced in any court of competent jurisdiction.
21 The doctrines relating to the effect on statutory limitation of
acknowledgment and part payment were developed by the courts in England following the enactment of the Limitation Act (1623) 21 Jac 1 c16 (UK); Halsburys, "The Laws of Australia"\Chapter 7 - Extensions of Postponement of Limitation Periods, para 120.
22 These doctrines were applied in Australia: see Hepburn v McDonnell (1918) 25 CLR 199; Bucknell v Commercial Banking Co of Sydney Ltd (1937) 58 CLR 155 at 164.
Legislation in each of the states reflects the law developed through the courts but with some variation in detail.
24 In Western Australia, unless particular legislation contains specific
provisions, the Limitation Act 1935 (WA) (Limitation Act) will apply. Under the Limitation Act, s 38 prescribes varying time limits depending upon the nature of the particular claim. Section 44 preserves the effect of an acknowledgment or part payment by prescribing in subsection (1) that:
"Except as expressly provided in this Act, nothing in section 38 contained shall take away or lessen the effect of any acknowledgment or promise, or of any acknowledgment by part payment or satisfaction on account of principal or interest due, and except as aforesaid any such acknowledgment or promise shall have the same effect as if this Act had not been passed."
Subsection (3) prescribes:
"In actions in the nature of actions founded upon simple contract, no acknowledgment or promise by words shall be deemed sufficient evidence of any new or continuing contract whereby to take any case out of the operation of section 38, or to deprive any party of the benefit thereof, unless such acknowledgment or promise is made or contained by or in some writing signed by the party chargeable, or by his agent duly authorised; … ."
[2005] WASAT 265
26 In this instance, the building contract is a simple contract but the
six-year limitation under the Limitation Act does not apply, because of the express provisions to the contrary in s 17(2) of the HBCA. Further, s 44(1) of the Limitation Act operates only to avoid the time limits imposed by s 38. The effect of the Limitation Act is to set up applicable time limits, but then to preserve the application of the doctrine relating to acknowledgments and part-payment.
27 As stated in Busch v Stevens (supra), the doctrine infers a promise from the acknowledgment and "continues" or "renews" or "establishes" the original promise such that the new promise corresponds with and is not at variance from or in contradiction of that promise. As stated:
"The right shall be given a notional birthday and on that day, like the phoenix of fable, it rises again in renewed youth - and also like the phoenix, it is still itself."
The doctrine was very simply explained in Bucknell's case in these
terms:
"An express promise in writing by the debtor to pay revives his liability. But the liability is revived only according to the tenor of the promise. If it is so expressed as to be conditional or subject to limitations, the conditions must be fulfilled before the liability becomes enforceable and the limitations must be observed."
29 It follows that the admission made on 30 March 2001 has the effect
that the original cause of action is renewed with effect from that date. Further, any later admission would constitute a new "notional birthday" such that the cause of action would be extended to that new date. The applicant's submission suggesting that an earlier admission would somehow cap the extent of the extension is misconceived. Thus, in Lonsdale Sand and Metal Pty Ltd v Federal Commissioner of Taxation (1998) 162 ALR 220, the recording of a debt in the accounts of the applicant each year constituted a sufficient acknowledgment of the debts and a new agreement to pay the outstanding amount which revived the running of the six-year limitation period, in that case, at each acknowledgment.
30 The further evidence which the applicant would have tendered of
earlier admissions would, therefore, not have impugned the effectiveness of the admission made on 30 March 2001. It, being the last admission made, can be relied upon.
[2005] WASAT 265
31 The consequence of the application of the above doctrines is that the
original promise is renewed only to the extent of the express or implied admission contained therein. In this case, the liability for liquidated damages was admitted to the extent shown in the variation order, thereby entitling the respondents to a credit of $2880.
32 For the above reasons we consider that the Disputes Tribunal has
correctly applied the principles referred to in Busch v Stevens (supra). However, we consider the finding, which led to the application of those principles, is in error. That finding, which was not challenged, was that the cause of action accrues on the date on which the building works are due to be completed.
33 That date, in our view, is the date on which the first element of the
cause of action occurs. But the cause of action consists of the combination of facts which give rise to a right to sue. One of the elements of the claim is damages, and the amount of the damages cannot be known until the date of completion is established. In short, the period of delay must be known, before the cause of action is complete: see Do Carmo v Ford Excavations Pty Ltd (1984)154 CLR 234.
We turn to the complaint that the applicant was denied natural
justice.
35 The Disputes Tribunal is not a court of pleading. In rare cases,
directions will be issued for documents in the nature of a statement of claim or defence to be filed in order to define the issues. In most instances, the parties are not represented by lawyers.
These circumstances can, however, in our view, not excuse a breach of the rules of natural justice.
37 Given the nature of the way in which hearings are conducted, it is
almost inevitable that there will be occasions in which the Disputes Tribunal finds that it is necessary to apply principles which were not ventilated before the parties. In those instances, the parties should be given an opportunity to make further submissions.
However, the further evidence the applicant would have tendered would not have affected the conclusion reached.
39 The issue which we have identified concerning the accrual of the
cause of action is of no consequence. Even if practical completion occurred on 29 March 2001, the claim for delay had to be advanced
[2005] WASAT 265
within three years, that is, by 29 March 2004, and it was not. Consequently, it is still necessary for the respondents to rely on the acknowledgment doctrine, which has been correctly applied by the Disputes Tribunal. No substantial injustice will result from the refusal of leave, and leave should be refused. The decision under review should be affirmed and the application for review dismissed.
Orders
We accordingly order as follows:
1. The application for leave to review the decision of the Disputes Tribunal dated 8 March 2005 is refused. 2. The application for review is dismissed.
I certify that this and the preceding [40] paragraphs comprise the reasons for decision of the State Administrative Tribunal.
___________________________________ MR C RAYMOND, SENIOR MEMBER
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