Bridges and Anor v Housing Guarantee Fund Ltd
[2001] VSCA 229
•14 December 2001
SUPREME COURT OF VICTORIA
COURT OF APPEAL
No. 4954 of 2000
| JOHN J. BRIDGES & ANOR. | |
| Appellants | |
| v. | |
| HOUSING GUARANTEE FUND LTD | Respondent |
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JUDGES: | WINNEKE, P., BUCHANAN and VINCENT, JJ.A. | |
WHERE HELD: | MELBOURNE | |
DATE OF HEARING: | 19 November 2001 | |
DATE OF JUDGMENT: | 14 December 2001 | |
MEDIUM NEUTRAL CITATION: | [2001] VSCA 229 | |
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Courts – Jurisdiction – House Contracts Guarantee Act – Costs of successful claims – Jurisdiction to determine costs conferred exclusively on appeals committee.
House Contracts Guarantee Act 1987, ss.15, 16.
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| APPEARANCES: | Counsel | Solicitors |
| For the Appellants | Mr S.E. Marantelli | Irlicht & Broberg |
For the Respondent | Mr G.H. Golvan, Q.C. | Minter Ellison |
WINNEKE, P.:
I agree with Buchanan, J.A.
BUCHANAN, J.A.:
The respondent is the approved guarantor for the purposes of the House Contracts Guarantee Act 1987 (“the Act”). The respondent guaranteed, inter alia, the work by an owner-builder of constructing a dwelling-house that was sold by the owner-builder (s.6(1)(c)). Such a guarantee was one to the purchaser of the dwelling house of the workmanship of the owner-builder in relation to the construction of the dwelling house (s.7(2)) and, subject to certain restrictions set out in s.9 of the Act, the liability of the respondent was one to make good loss or damage suffered by the purchaser on account of defects caused by bad workmanship (s.7(3)).
The appellants purchased a dwelling-house situated at 22 Kennedy’s Lane, Graytown, from a couple who were owner-builders. On 13 June 1991 the appellants made a claim upon the respondent for the cost of repairing 33 itemised defects in the house which they contended were due to faulty workmanship. By letter dated 29 August 1991 the respondent rejected the claim. In September 1991 another claim was made by a building consultant on behalf of the appellants. The claim consisted of 41 items, the majority of which were a re-statement of the items in the claim which had earlier been rejected. On 27 May 1992 the respondent wrote to the appellants accepting the claim for a number of items. On 30 November 1994 the appellants and the respondent signed a release and guarantee which recorded that the respondent would pay and the appellants would accept payment of the sum of $15,265 in settlement of their claim.
The appellants requested payment by the respondent of the costs they had incurred for legal, architectural and building expert services in respect of their claim. By letter dated 13 December 1995 the respondent offered to pay $1,011.05 for the
architect and the legal costs to be assessed on a party and party basis. On 22 December 1997 the appellants instituted a proceeding in the Magistrates' Court to recover the costs they had incurred for architectural and building expert services. The claim was made pursuant to s.15 of the Act, which provided:
“15.The approved guarantor must reimburse a person in whose favour a guarantee is given under this Act for any costs incurred by that person in respect of a successful claim under the guarantee, if the costs were incurred at any time after -
(a)the expiration of three months after the claim was made; or
(b)a rejection by the approved guarantor of the claim -
whichever occurs first.”
The relevance of the expiration of three months after the making of the claim is that if, within three months of making a claim, the claim has not been decided, the claim is deemed to have been rejected (s.16(2)).
By reason of the provisions of s.100(2) of the Magistrates' Court Act 1989 the Magistrates' Court did not have jurisdiction to entertain the action, and it was transferred to the County Court. On 26 May 2000 a County Court judge dismissed the proceedings on the ground that the Court had no jurisdiction. Her Honour held that s.16 of the Act vested exclusive jurisdiction to determine claims and costs under the Act in the appeals committee established under the respondent’s rules. The section provided, so far as is presently relevant:
“16. (1) A person -
(a)whose claim to the approved guarantor for loss or damage the approved guarantor has decided to reject; or
(b)being a claimant, to whom the approved guarantor has decided to make an offer with which the claimant is not satisfied;
...
may, within 60 days after the decision is made and on payment to the approved guarantor of the prescribed fee (if any), appeal to the appeals committee established by the approved guarantor under its rules.”
The appellants have now appealed to this Court against the dismissal of their action. They contend that the jurisdiction of the appeals committee is limited to determining claims for the cost of making good deficiencies in the work of builders of dwelling houses. It is submitted that under paragraph (a) of s.16(1) the appeals committee could only entertain a claim for loss and damage, a term which described the cost of repairing or completing building work. Although the expression “loss and damage” does not appear in paragraph (b) of s.16(1), the appellants submit that the claim referred to in the paragraph is limited to a claim for loss and damage in that sense.
The somewhat startling consequence of the appellants' submissions is that the appeals committee, which determines disputed claims for loss and damage, cannot determine a dispute as to the costs of a claim, leaving a successful claimant to commence separate proceedings for his costs in another tribunal which, unlike the appeals committee, has no first-hand knowledge of the circumstances of the claim. In my view we should only be driven to such a conclusion if it clearly appears that the appeals committee was not to have the power to determine costs relating to claims under s.16.[1]
[1]Cf. Cooper Brookes (Wollongong) Pty Ltd v. Commissioner of Taxation (1981) 147 C.L.R. 297; Burton v. The Acting Commissioner of Stamps Duties [1913] A.C. 747 at 759.
It appears to me, on the contrary, that the appeals committee did have jurisdiction to determine a successful applicant’s entitlement to costs under s.15 of the Act. In the present case the respondent made an offer as to costs with which the appellants were not satisfied. The dispute fell literally within the terms of s.16(1)(b). I can see no warrant for reading additional words into the paragraph to narrow the meaning of the word “claim”. As Lord Mersey said in Thompson v. Goold & Co.[2]:
“It is a strong thing to read into an Act of Parliament words which are not there, and in the absence of clear necessity it is a wrong thing to do.”
[2][1910] A.C. 409 at 420.
In any event I am of the opinion that the expression “loss and damage” in s.16(1)(a) includes the costs incurred in respect of a successful claim. The loss and damage is that referred to in s.7(3) of the Act, which provides that the liability of the respondent under a guarantee of domestic building work is “the liability to make good loss or damage suffered by ... the purchaser ... on account of ... the failure of the builder to fulfil the builder’s obligations under the contract or ... in any case a defect caused by bad workmanship that appears in the building during the guarantee period.” In my view the loss and damage suffered by a purchaser on account of the breach by the builder includes costs incurred in obtaining redress pursuant to the Act.
If, as I think, the appeals committee did have jurisdiction to determine liability for costs pursuant to s.15 of the Act, in my view it follows that the County Court did not have jurisdiction to entertain a claim for those costs. The entitlement to costs was one created by the Act, which went on to provide a new and special manner of enforcing it. In Josephson v. Walker[3] Isaacs, J. said:
“Prima facie, where the same Statute creates a new right and specifies the remedy, that remedy is exclusive. The natural presumption to begin with is that Parliament in creating the novel right attaches to it the particular mode of enforcement as part of its statutory scheme. To that extent the enactment is a code.”[4]
In my view there is nothing in the Act to displace the prima facie rule. I would not read s.15 as standing apart from the procedure prescribed in s.16. I consider that the legislature intended that all claims for costs arising from defective building work covered by the guarantees provided by the Act, whether the costs were the price of making good the defective work or the costs of prosecuting a successful claim, should be determined by the appeals committee .[5]
[3](1914) 18 C.L.R. 691.
[4]Above at 701. See also Houston v. Dewi Thomas Pty Ltd [1967] V.R. 300 at 304-306 per Starke, J.
[5]And thus the Act meets the description in s.37(1)(a) of the County Court Act of “any other Act” excluding suits from the jurisdiction of the County Court.
For the foregoing reason I would dismiss the appeal.
VINCENT, J.A.:
I agree that this appeal should be dismissed for the reasons advanced by Buchanan, J.A. in his judgment which I have had the opportunity of reading in draft form.
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