BGC RESIDENTIAL PTY LTD and CAMPEANU - [2007] WASAT 47

JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL

STREAM: COMMERCIAL & CIVIL

ACT: BUILDERS' REGISTRATION ACT 1939 (WA)

CITATION: BGC RESIDENTIAL PTY LTD and CAMPEANU [2007] WASAT 47

MEMBER: MR C RAYMOND (SENIOR MEMBER)
MS J HAWKINS (MEMBER)

HEARD: 18 SEPTEMBER 2006

DELIVERED : 20 FEBRUARY 2007

FILE NO/S: CC 3652 of 2005

BETWEEN: BGC RESIDENTIAL PTY LTD
Applicant
AND
CARMEN CAMPEANU
Respondent

Catchwords:

Home Building Contracts Act 1991 - Proper construction of extension of time clause - Whether clause unconscionable

Legislation:

Home Building Contracts Act 1991 (WA), s 7, s 8, s 15, s 15(1)(a), s 15(1)(b), s 15(5)
Home Building Contracts Regulations 1992 (WA), Sch 2, Sch 3
State Administrative Tribunal Act 2004 (WA), s 31
Trade Practices Act 1974 (Cth), s 51AA, s 51AB

Result:

The application for leave granted
The decision under review substituted in part and otherwise affirmed

Category: B

Representation:

Counsel:

Applicant: Mr S Pentony
Respondent: Self-represented

Solicitors:

Applicant: Hotchkin Hanley
Respondent: Self-represented

Case(s) referred to in decision(s):

Australian Competition and Consumer Commission v CG Berbatis Holdings Pty Ltd & Ors [2003] 197 ALR 153
Australian Competition and Consumer Commission v CG Berbatis Holdings Pty Ltd & Ors [2003] HCA 18
BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266
Codelfa Construction Pty Ltd v State Railway Authority of NSW (1981) 149 CLR 337
Commonwealth v Verwayen (1990) 170 CLR 394
Edmonds v James Construction Pty Ltd (Unreported, Building Disputes Tribunal; 6 March 1998)
J‑Corp Pty Ltd v Casey (1993) 10 SR (WA) 43
Orohoe v Jaxon Constructions Pty Ltd (2002) 31 SR (WA) 212
Walton Stores (Interstate) Ltd v Maher (1988) 164 CLR 387

REASONS FOR DECISION OF THE TRIBUNAL:

Summary of Tribunal's decision

The applicant applied for leave to review, and for the review of, a decision of the Building Disputes Tribunal made on 1 November 2005. The applications were heard together.
The Tribunal had to determine two principal issues. The first was whether on the proper construction of a clause in the building contract, entered into between the parties, the builder was entitled to give notice of any claims extending the date for practical completion only after practical completion had been achieved. If, as held by the Building Disputes Tribunal, the clause related only to a claim for an extension of time in respect of a delay occurring shortly before practical completion, the second issue did not arise. The second issue, was whether or not the extension of time clause was unconscionable and therefore in breach of s 15 of the Home Building Contracts Act 1991 (WA).
The Tribunal found that the clause was unambiguous and provided that notice could be given of all claims for an extension of time after practical completion had been achieved. In considering the second issue, the Tribunal applied the ordinary grammatical meaning of "unconscionability" rather than the more restrictive, equitable meaning requiring that a party be at a serious disadvantage. The Tribunal concluded that the clause was prejudicial to the other party and went further than was reasonably necessary to protect legitimate interests of the applicant, to such an extent that it was unconscionable and in breach of s 15 of the Home Building Contracts Act 1991 (WA).
As it was demonstrated that the decision under review was in error in relation to the construction of the contract, leave to review the decision was granted and the Tribunal's decision varying the terms of the contract between the parties was substituted. However, as the effect of the decision was that the liquidated damages ordered to be paid to the respondent remained unchanged, the decision under review was affirmed to that effect and the application for review was dismissed.

Introduction

The Tribunal gave oral reasons for decision in this matter at the conclusion of the hearing on 18 September 2006. The reasons for decision below have been prepared from a transcript of the record which has been edited to correct minor errors in the transcript and to improve clarity of expression without altering the substance of the oral reasons.

The history of the application

In this matter, the applicant applied to the Tribunal, by an application lodged on 25 November 2005, for leave to review, and to review, the decision of the Building Disputes Tribunal reflected in its reason for decision and orders dated 1 November 2005.
At a directions hearing on 12 January 2006, the Tribunal gave short reasons for concluding why it thought that there was a reasonable argument, in relation to the point raised on the proposed review, which related to the construction of the building contract (the contract) entered into between the parties. The interpretation issue related to cl 11(c) of the building contract entered into by the parties, which contained a provision to the effect that the builder could give notice no later than 21 days from the date of practical completion, setting out all extensions of time and their causes claimed by the builder, under what was there referred to as "sub‑clause 4(b)", but it is common cause should have been a reference to cl 11(b) of the contract.
Because of that view of the matter, and because the Disputes Tribunal had raised in its reasons for decision that it had considered that at face value cl 11 might be in breach of s 15 of the Home Building Contracts Act 1991 (WA) (HBC Act), which refers to clauses that are unconscionable, the matter was referred back to the Disputes Tribunal, under s 31 of the State Administrative Tribunal Act2004 (WA), with an invitation for the Disputes Tribunal to reconsider its decision.
On 8 August 2006, the Disputes Tribunal provided further written reasons for decision, in effect, maintaining the interpretation which it had placed on cl 11(c) of the contract, but going on to consider a claim that was advanced by the respondents in these proceedings, based on s 15 of the HBC Act. The Disputes Tribunal, firstly, considered whether or not the conduct of the builder might be unconscionable, harsh or oppressive under s 15(1)(a) of the HBC Act and concluded that issue in favour of the applicant builder.
The Disputes Tribunal then proceeded to deal with the issue of whether there was a contravention of s 15(1)(b), which is to the effect that a builder must not enter into a contract that contains any provision that is unconscionable, harsh or oppressive. Having maintained its interpretation of the contract, the Disputes Tribunal did not have to make a positive finding in relation to that issue, but it did in its reasons for decision say that, had the clause actually meant what the applicant contended it means, namely, that the builder was free of any obligation to give notice to the owner of all delays until the 21st day after practical completion, then there could be no doubt that it would be unconscionable, and that it was allowing the builder to conceal all its actions, or inactions, until long after the event occurred.
Because of that conclusion, the applicant amended its proposed grounds of review to include a further order sought, and a ground, that the Disputes Tribunal had erred in finding that, on its proper construction, cl 11(c) of the contract was unconscionable. In fact, that ground is probably not aptly worded because the Disputes Tribunal did not find, on a proper construction, that the clause was unconscionable.
Nevertheless, there was no misunderstanding in the way in which the case was conducted, and that was that the Disputes Tribunal maintained its interpretation of the clause but if that interpretation was wrong considered that the sub‑clause in question would have operated in a way which would have been in breach of s 15(1)(b) of the HBC Act.
On that basis, the matter was referred to a hearing on 18 September 2006 of both the application for leave and the review itself.

The issues for determination

There are only two issues which require to be determined ‑ firstly, the proper interpretation of cl 11(c) of the contract, and secondly, if the applicant's interpretation of that sub‑clause is correct, whether or not it is a provision which is in breach of s 15 of the HBC Act.

The proper construction

We turn therefore to deal firstly with the question of construction. Clause 11(c) states:
"The builder shall as far as reasonably practical give the proprietor notice in writing no later than 21 days from the date of practical completion setting out all extensions of time and their causes claimed by the builder under sub clause 4(b)."
As already pointed out, the reference to cl 4(b) should be a reference to cl 11(b). The applicant's contention is that, on a proper construction of that clause, at the very least, the builder has until a date 21 days from the date of actual practical completion, to give a notice setting out in one document all claims for extensions of time and their causes. In fact, it is also the applicant's argument that, if the circumstances justified it, so that it could be shown that it was reasonably practical for it to have taken longer than 21 days to give that notice, then the builder would be entitled to take such further time as was reasonably practicable.
The Disputes Tribunal, as already indicated, did not accept that interpretation. At par 2.5.2 of the reasons for decision dated 1 November 2005, the Disputes Tribunal said:
"Sub‑clause 11(c) can be read in two ways. Either it means what the builder claims – i.e. that the assessment can take place AFTER the construction period has been completed, or the words 'no later than 21 days from the date of practical completion' are merely a final date for any claim for a particular delay that has recently occurred. In that case the main part reads 'the builder shall so far as reasonably practical give the proprietor notice in writing ... setting out all extensions of time and their causes ...' Such a reading sits clearly within the meaning of the clause as a whole – i.e. that every aspect is intended to be covered within the construction period. The meaning claimed by the builder is at variance with the general intent of the clause and accordingly is incorrect."
The Disputes Tribunal then proceeds in the remaining part of that paragraph and in the following paragraphs to motivate why it came to that conclusion. Firstly, it says that cl 11(i) states that:
"... once practical completion has been achieved, the builder is relieved and discharged from its obligations under the contract, other than its obligations under the contract in respect of the defects liability period."
This, the Disputes Tribunal says, would be inconsistent with the interpretation contended for by the applicant. In our view, that is not the case and cl 11(i) is capable of being interpreted in a way which operates consistent with the meaning of cl 11(c), as contended by the applicant.
It is true that cl 11(i) says that the builder will be relieved and discharged from its obligations under the contract, other than its obligations in respect of defects liability, if practical completion is deemed to have taken place pursuant to cl 11(e)(i) or cl 11(e)(iii). Clause 11(e)(i) relates to whether works are completed, except for any omissions or defects which do not prevent the works from being reasonably capable of being used for its intended purpose, and cl 11(e)(iii) deals with the circumstance where the builder has handed the keys of the works to the proprietor.
Firstly, we do not consider that cl 11(i) should be read as referring to the release of obligations other than those directly concerning the construction of the works. A release or limitation clause must be restrictively construed. But, even if that is not so, the release would operate in respect of the more usual type of notice claiming extension of time. Such a clause usually requires notice to be given within a stated period of the cause of delay occurring. So, if a delay occurred shortly before practical completion, the builder would be released from any requirement to give notice. Clause 11(ii), therefore, gives no basis for rejecting the builder's interpretation.
The Disputes Tribunal then goes on in par 2.5.3 to make the point that:
"The Builder's interpretation does not allow the Owner any opportunity to question the cause of delay ..."
That is an issue which, in the Tribunal's view, is relevant to whether or not there is compliance with s 15 of the HBC Act, but it is not a matter which is relevant to the interpretation of the contract, unless it can be found that the clause is ambiguous.
The Disputes Tribunal considered that cl 11(c) was ambiguous because it might mean, as it found, that "no later than 21 days from the date of practical completion" governs only any claim for a delay recently occurred. That has the result that there is then no provision for notice to be given of earlier delays – a peculiar result, particularly as the notice must "set out all extensions of time and their causes claimed by the Builder".
In par 2.6 of its reasons for decision, the Disputes Tribunal referred to the period within which a builder should notify the owners of a delay. The Disputes Tribunal stated that notice of delay must be given within a reasonable time, and proceeds, it seems, to motivate that, having regard to other clauses in the contract. The Disputes Tribunal concluded that a reasonable time in which to give such notice would be within a period of 10 working days. In our view, this reflects an error in the approach of the Disputes Tribunal.
The principles for the implication of terms are well established in the High Court decision of Codelfa Construction Pty Ltd v State Railway Authority of NSW (1981) 149 CLR 337. That decision makes it clear that a court should be slow to imply a term when the parties have entered into a detailed written contract which appears to have incorporated all of the terms agreed between the parties.
In this case, the contract is a detailed written contract which occupies some 12 pages of relatively small print. It states that the contract includes the drawings, plans and specifications, and in addition, cl (8)(e) states that:
"The contract document signed by the parties shall constitute the entire contract between the parties."
In those circumstances, there is very little room to commence an attempt to interpret or to imply other terms into the contract. Further, there was no attempt by the Disputes Tribunal to address the criteria set out in BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266 for the implication of a term. Because of our view that the clause is unambiguous, we see no merit in having to imply a term to support the interpretation found by the Disputes Tribunal when the need to imply a term does not arise when the ordinary grammatical meaning is given to cl 11(c).
There is, then, a further ground referred to in par 2.7 which relates to the form of notice which the Disputes Tribunal considered needed to be given. This involves, or was relevant to, a question of statutory interpretation, particularly of s 7 and s 8 of the HBC Act, but on the face of it does not refer to or deal with the provisions of the contract.
In order to determine what form of notice was required under the contract, we did raise the potential effect of s 7 and s 8 of the HBC Act with counsel for the applicant, and he indicated that if need be he would seek the Tribunal's indulgence to put further written submissions before the Tribunal. That proved unnecessary because the Tribunal came to the conclusion that it was able to decide the matter without relying on what may be the true construction of s 7 and s 8 of the HBC Act.
In our view, as already intimated, cl 11(c) is a provision which is clearly expressed and cannot be said to be ambiguous. It says very clearly that, as far as reasonably practicable, the builder shall give the proprietor notice in writing by no later than 21 days from the date of practical completion setting out all (our underlining for emphasis) extensions of time and their causes claimed by the builder under the relevant sub‑clause. In our view, the Disputes Tribunal has erred in its decision in that regard. In view of this conclusion, there would be a substantial injustice if the applicant did not have the opportunity for that decision to be reviewed, so that, on the question of leave, our finding is that the applicant is entitled to leave to review the decision of the Disputes Tribunal.

The effect of s 15 of the HBC Act

It is common cause that subject to the question of compliance with s 15 of the HBC Act, if the review were to succeed, the applicant seeks that the matter be sent back to the Disputes Tribunal for the assessment of other claims for extensions of time, which were rejected by the Disputes Tribunal based on its construction of cl 11(c). The outcome of the review will, therefore, depend on the effect of s 15 of the HBC Act in relation to cl 11(c).
Counsel for the applicant conceded that the appropriate approach for the Tribunal to take was for it to apply the ordinary dictionary definition to the words "unconscionable, harsh or oppressive", as referred to in that section. The criteria for what constitutes unconscionable, harsh or oppressive conduct, or which would result in a contract being considered unconscionable, harsh or oppressive, have not been authoritatively established.
We were referred by counsel for the applicant to two decisions on the point. The first is a decision of the District Court, in J‑Corp Pty Ltd v Casey (1993) 10 SR (WA) 43. In that decision, Viol J was also dealing with whether or not a provision in a contract was unconscionable, harsh or oppressive. He dealt, firstly, with the question of the ordinary dictionary definition of those words and concluded that there was nothing in the conduct of the builder, nor in the wording of the particular provision in question, which came within that definition, with particular reference to the word "unconscionable".
Viol J then went on to consider what he referred to as "section 52A of the Trade Practices Act 1974 (Commonwealth)", which may have been intended to be a reference to s 51AA of that legislation. His Honour considered those cases, which, in effect, set out the principle that to constitute unconscionable conduct, the conduct had to be such as to result in one of the parties being at a serious disadvantage, such that a remedy, in equity, would be available.
Again, His Honour looked at those criteria and found that neither by reason of conduct, nor the provisions of the particular clause, was unconscionable conduct established, or indeed, that the provision was unconscionable. The decision, as such, is not authority for the correct criteria to be applied because, in effect, the Court examined both possible approaches ‑ either the dictionary definition, or "the meaning in equity" approach.
The other decision which we were referred to was a decision of the Disputes Tribunal, constituted by Chairman Marsh, sitting alone, in the matter of Orohoe v Jaxon Constructions Pty Ltd (2002) 31 SR (WA) 212. In that decision, Chairman Marsh referred to the J‑Corp v Casey decision, and also to an earlier decision of the Disputes Tribunal, differently constituted and in which I was the presiding member, namely Edmonds v James Construction Pty Ltd (Unreported, Building Disputes Tribunal; 6 March 1998).
Mr Marsh came to the conclusion that both the Edmonds decision and the J‑Corp v Casey decision supported the use of the ordinary grammatical meaning approach. In the text by Miller, Miller's Annotated Trade Practices Act 26th ed commencing at page 439, the author comments on a number of provisions of the Trade Practices Act 1974 which refer to unconscionable conduct. In relation to s 51AA, which, as we have indicated, may be the section to which Viol J intended to refer, the section provides that:
"A corporation must not, in trade or commerce, engage in conduct that is unconscionable within the meaning of the unwritten law, from time to time, of the States and Territories".

The discussion which follows, and the authorities referred to, show that section is regarded as bringing into play what may be labelled the "equitable principles to determine what constitutes unconscionable conduct" ‑ namely, that one of the parties is demonstrated to be at a serious disadvantage.
In relation to s 51AB, the author comments that a different result may flow. In that section, it is provided, in effect, that a corporation is not to engage in conduct that is in all the circumstances unconscionable. There is no reference to unconscionability within the meaning of the unwritten law of the states, and it is because of that difference that the author says:
"As a consequence, it has been suggested that, in this section, the term is capable of a wider meaning than in section 51AA"
and reference is made to a number of High Court and other court decisions, including Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387, Commonwealth v Verwayen (1990) 170 CLR 394, and more recently, the Australian Competition and Consumer Commission v CG Berbatis Holdings Pty Ltd & Ors [2003] HCA 18, also reported as Australian Competition and Consumer Commission v CG Berbatis Holdings Pty Ltd & Ors [2003] 197 ALR 153. In those circumstances, we consider that the concession made by counsel for the applicant was properly made, and we will proceed on the basis that it is the dictionary definition which must be applied.
In the Edmonds decision, and also in Miller, at page 441, reference is made to the Macquarie Dictionary (2nd ed) 1991, which defines "unconscionable" as:
"(1) unreasonably excessive; (2) not in accordance with what is just or reasonable, unconscionable behaviour; (3) not guided by conscience, unscrupulous."
It is that meaning and those criteria which we will apply, therefore, in determining the matter. The applicant's argument is, centrally, simply this: that the effect of cl 11(c) does not in any way prejudice, or remove any rights, of the respondents. That is motivated more fully at par 22 of the written Statement of Issues, Facts and Contentions filed on behalf of the applicant, and we take into account all of those submissions.
We conclude that there is no limit to the circumstances which might be relevant to a consideration of an alleged breach of s 15(1)(b) of the HBC Act. That relevance must be determined, finally, on the facts of each case. As the matter has been argued before us, there are two principal areas which have been identified as being relevant. The first is whether or not the respondents have been prejudiced by the clause in question. The second is whether or not the clause goes further than necessary to protect the legitimate interests of the builder.
If the answer to the first question is in the negative, it would remain relevant to consider the second question. If the answer to that is also in the negative, it would result in a conclusion that the clause withstands scrutiny under that section. On the other hand, if the answer to either, or both of those questions, is in the affirmative, the extent of prejudice, or to which the clause goes further than necessary to protect the builder's interests, would have to be weighed to determine whether or not, finally, there is a breach of the section.
We will turn, therefore, to deal, firstly, with the question of prejudice: there are two particular concerns in this regard. The first is that, in our view, the owners have no opportunity to investigate the circumstances giving rise to a claim for an extension of time while those circumstances are current. There can be many examples of this. One would simply be the question of unavailability of material or labour.
It has to be recognised that if a claim is made promptly by a builder when the circumstances are current, it can result in an owner investigating the claim and concluding that it is a claim well made ‑ that, therefore, adds certainty to the situation. But even if the investigation shows that, as far as the owner is concerned, the claim is not well made, the owner has an opportunity to commence assimilating evidence in order to be able to deal with that issue at a later stage.
It was common cause during argument, as a result of exchanges between the Tribunal and counsel for the applicant, that most standard building contracts make provisions for claims for extensions of time, in circumstances which have not been foreseen by the builder, in terms which require that the builder give notice, either when he is aware, or should reasonably have become aware, of the circumstances giving rise to a claim.
Again, there are some examples which can be given of this. Section 15 of the HBC Act, and in particular s 15(5), provides that:
"Forms of contract for various kinds of home building work may be prescribed which are to be taken to comply with all the requirements of this Act."
That effectively gives builders a choice ‑ if they use a prescribed contract, it cannot be attacked as being unconscionable. The Home Building Contracts Regulations 1992 (HBC Regulations) therefore reflect the type of contractual provisions which the Legislature has contemplated would meet the requirements of the section. Schedule 2 to the HBC Regulations is one example of that. That contains the Housing Industry Association Lump Sum Building Contract. Clause 9 deals with time for performance and the circumstances in which a builder is entitled to an extension of the time for practical completion. Clause 9(c) provides:
"Upon the happening of any of the events aforesaid the Builder shall be entitled to seek or make a variation by way of extension of the time for completion of the Works in accordance with the provisions of clause 12(b) or (d)."
When one then goes to cl 12, it deals with variations to either the works or the contract documents. That distinction is one which again was debated with counsel for the applicant, although specifically with reference to s 7 and s 8 of the HBC Act, but it was generally acknowledged that it is possible to vary either the contract or the works and that the concept of variation may cover either of those aspects.
In any event, cl 12(b) goes on to provide that:
"The Builder shall be entitled to vary all or any of the Works and/or the Contract Documents ..."
by following a particular course as set out in cl 12(b). In effect, that requires a written notice to be given within 14 days of when the builder became aware, or should reasonably have become aware, of the circumstances giving rise to the entitlement to an extension of time.
A further example is found in the form of contract set out in Sch 3 to the HBC Regulations, where cl 6(b), read with cl 9, is to much the same effect.
The above in our view has some relevance because it is an indication of what the Parliament considered was a proper balancing of the rights and obligations between the parties, and as we have already indicated, it was established during the exchanges between the Tribunal and counsel for the applicant that many standard form contracts follow that structure. Of course, it does not necessarily follow that, because a common form is not followed, the clause is unconscionable, but it is a factor to be taken into account.
The second point of concern on the prejudice issue is that it results in a greater level of uncertainty than would be the case if the common forms of procedures were followed.
The owner, under this particular contract, has no idea of what his or her entitlements are, or indeed, the extent of any dispute which may have to be dealt with at a later stage. There is no doubt that the construction of a home, particularly during the time of a boom in the building industry, can be a stressful period. We can, we think, take notice of the fact that the time for completion of dwellings has become significantly increased as a result of that boom.
Any addition to the uncertainty to which owners are subjected is, in our view, prejudicial. Regard should be had in that context to the second reading speech when the HBC Act was introduced. The second reading in the Legislative Assembly is reported in Hansard on 9 May 1991, at page 1646. The Minister for Consumer Affairs, there stated, amongst other things, with reference to the Bill:
"It also fulfils a commitment to the home building industry to ensure certainty and equity in home building contracts, with a view to restoring and maintaining consumer confidence in the industry."
In our view, this clause, in the context of prejudice to an owner, goes against that principle.
We then turn to the second issue which was identified, and that was whether the clause went further than was necessary to protect the legitimate interest of the applicant. The applicant's counsel had some difficulty in addressing this issue when it was raised by the Tribunal. Perhaps that is not surprising, given that, as already indicated, the common forms used in the industry are different and, in our view, they are different because the common clauses reflect a balancing of the interests of the parties by requiring notice within a short period of the delay occurring, so that an owner can investigate a claim for an extension of time when it is current.
Indeed, in many standard contracts, the clause can operate as a condition, non-compliance of which results in the builder losing the right to make a claim for an extension of time. The effect of this clause is to protect the applicant from the risk of its own poor administration to the detriment of the owner. In our view, if a builder takes on more work than it has the administrative capacity to handle, it should bear any risk which may flow from that situation. We find that cl 11(c) goes further than is necessary to protect the builder's legitimate interests.
When we take these two factors together, our conclusion is that cl 11(c) constitutes a breach of s 15(1)(b) of the HBC Act, because it can be said ‑ and we find that it is ‑ firstly, unreasonably excessive, and secondly, because it is not in accordance with what is just or reasonable, and thirdly, it is not guided by conscience. For those reasons, our conclusion is that cl 11(c) is in breach of the HBC Act.
It is common cause that the result of the above conclusions is that the owner remains entitled to the same amount of liquidated damages as assessed by the Disputes Tribunal, an amount of $4650, which remains unpaid.
In order, further, to avoid any possibility that there are remaining claims which would be left uncertain, which the applicant's counsel informed the Tribunal was a possibility, we will also add an order, based on the mechanism set out in Sch 2 to the HBC Regulations, which will, in effect, modify the contract so as to include a new cl 11(c) which will require, if the builder wishes to make a claim in respect of any of the events referred to in sub‑para (b), that a written notice must be given within 14 days of the date when the builder became aware, or should reasonably have become aware, of the circumstances giving rise to the claim, which notice must include a statement setting out the reasons for, and the cost of, or to be incurred, on account of the proposed change to the date of practical completion.

Order

The Tribunal accordingly ordered as follows:
1.Leave to review the Building Disputes Tribunal decisions dated 1 November 2005 and 8 August 2006 be granted.
2.The Tribunal varies the decision under review by substituting its own decision for that of the Building Disputes Tribunal as follows:
(a)it is declared that cl 11(c) of the Building Contract entered into between the parties on 25 October 2003 (the building contract) is in breach of s 15(1)(b) of the Home Building Contracts Act 1991 (WA) and is void from the beginning;
(b)the building contract is modified:
(i)by inserting at the commencement of cl 11(b) "Subject to (c) below" and altering capital letter "T" in the following word "The" to lower case small "t";
(ii)substituting the following cl 11(c):

"11(c)(i)the builder must give to the proprietor within the time specified in clause (ii) below, a statement setting out the reason for and the cost to be incurred on account of the proposed extension of time and a copy of any order or direction referred to in clause 11(b)(ix);
(ii)the builder shall give the statement referred to in clause (i) to the proprietor within 14 days after the builder:
(a)received notice of the direction or order under clause 11(b)(ix); or
(b)became aware or reasonably became aware of circumstances otherwise referred to in clause 11(b), as the case may be."

3.The decision of the Building Disputes Tribunal that the applicant pay the respondent the sum of $4650 is affirmed and the date for payment is extended to 3 October 2006.
4.The application for review is accordingly dismissed.

I certify that this and the preceding [63] paragraphs comprise the reasons for decision of the State Administrative Tribunal.
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MR C RAYMOND, SENIOR MEMBER