CARLIN and SOUTHERN BUILT HOMES PTY LTD - [2025] WASAT 100

JURISDICTION     :   STATE ADMINISTRATIVE TRIBUNAL
ACT: BUILDING SERVICES (COMPLAINT RESOLUTION AND ADMINISTRATION) ACT 2011 (WA)
CITATION:   CARLIN and SOUTHERN BUILT HOMES PTY LTD [2025] WASAT 100
MEMBER:   MR E CADE, MEMBER
HEARD:   26 MAY 2025
DELIVERED          :   18 SEPTEMBER 2025
FILE NO/S:   CC 473 of 2024
BETWEEN:   PATRICK JOSEPH MARTIN CARLIN
First Applicant
ELLEN RUTH CARLIN
Second Applicant
AND
SOUTHERN BUILT HOMES PTY LTD
Respondent

Catchwords:

Home Building Works Contract - Dispute under the contract between owner and builder - Arbitration clause - Application for stay of proceeding - Whether one party to a Home Building Works Contract can require arbitration of a dispute under the contract - Proper approach to construction of an arbitration agreement - Proper approach to construction of s 28 of Home Building Contracts Act 1991 (WA)

Legislation:

Building Services (Complaint Resolution and Administration) Act 2011 (WA)
Commercial Arbitration Act 1985 (WA)
Commercial Arbitration Act 2012 (WA), s 7(1), s 7(2), s 8(1), s 43(1)(b)
Home Building Contracts Act 1991 (WA), s 3, s 17(a)(i), s 28(1)
Home Building Contracts Regulations 1992 (WA), reg 2A
State Administrative Tribunal Act 2004 (WA), s 47(1)(a)

Result:

The preliminary issue is answered by the Tribunal determining:

(1)(a) - Is clause 18(a) of the Contract between the parties an arbitration agreement for the purposes of s 7(1) of the Commercial Arbitration Act 2012 (WA)?

Answer: Yes

(1)(b) - If the answer to question (a) is yes:

- Is the proceeding before the Tribunal 'a matter which is the subject of an arbitration agreement' for the purposes of s 8(1) of the Commercial Arbitration Act 2012 (WA)?

Answer: No

- Is clause 18(a) of the Contract null and void, inoperative or incapable of being performed for the purposes of s 8(1) of the Commercial Arbitration Act 2012 (WA) because it allows the parties to contract out of their statutory rights under the Building Services (Complaint Resolution and Administration) Act 2011 (WA) or for any other reason?

Answer: As the answer to (b)(i) is 'No', the Tribunal is not required to answer this question. However, had the answer to (b)(i) been 'Yes', then the answer to this question would then be 'Yes'.

(1)(c) - In all the circumstances, is the Tribunal required to refer the parties to arbitration pursuant to s 8(1) of the Commercial Arbitration Act 2012 (WA)?

Answer: No

Category: B

Representation:

Counsel:

First Applicant	:	In Person
Second Applicant	:	In Person
Respondent	:	Mr W Vogt
Amicus Curiae	:	Mr S J Cobbett

Solicitors:

First Applicant	:	N/A
Second Applicant	:	N/A
Respondent	:	Vogt Legal
Amicus Curiae	:	State Solicitor's Office

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

C & J Clark Ltd v Inland Revenue Commissioners [1973] 2 All ER 513
Caltex Oil (Australia) Pty Ltd v Best [1990] HCA 53
Deshmukh and Distinctive Building Services Pty Ltd [2024] WASAT 15
Felmeri Builders and Developers Pty Ltd v Tonway Pty Ltd [2023] SASC 54
Henderson and Aintree Holdings Pty Ltd [2021] WASAT 113
Jones v Metropolitan Meat Industry…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2025] WASAT 100
Decision Date: 18 SEPTEMBER 2025

CaseChat Overview and Summary

Carlin and Southern Built Homes Pty Ltd involved a dispute under a Home Building Works Contract, with the builder seeking to enforce an arbitration clause against the owners. The dispute arose from a variation order issued by the builder which the owners claimed was signed under duress. The owners filed a complaint with the Building Commissioner seeking a refund of the variation amount, while the builder sought to have the complaint stayed and the matter referred to arbitration. The key legal issues in this case were whether a party to a Home Building Works Contract could unilaterally enforce an arbitration clause against the other party, and the proper approach to interpreting both the arbitration agreement and relevant statutory provisions.

The court considered the principles of contract construction and statutory interpretation, noting that contracts should be interpreted in a businesslike manner and that arbitration agreements should be construed broadly to favour arbitration. The court also noted the importance of statutory purpose in interpreting legislation. In applying these principles, the court found that the arbitration clause was clear and unambiguous, and that the builder was entitled to enforce it against the owners. The court also found that the statutory provisions governing home building contracts did not preclude the enforcement of arbitration agreements.

The court held that the builder could enforce the arbitration clause against the owners, and that the complaint should be stayed and the matter referred to arbitration. The court also noted that the owners' complaint appeared to be misconceived and lacking in substance, but did not make a final determination on this issue as it was not necessary to do so given its finding on the arbitration clause.

The final orders of the court were that the complaint be stayed, the matter referred to arbitration, and that the owners pay the builder's costs of the application.

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

In Electricity Generation and Retail Corporation t/as Synergy v EIT Kwinana Partner Pty Ltd the Court of Appeal stated these principles at [230], which in summary are:(1)The construction of a contract involves a determination of the meaning of the words of the contract by reference to its text, context and purpose;(2)Ascertaining the meaning of terms in an instrument requires a determination of what a reasonable person would have understood those terms to mean; and (3)The general principle applicable to the construction of commercial contracts is that they should be given a businesslike interpretation. In addition, some special principles apply to the construction of a contractual arbitration agreement. In Pipeline Services WA Pty Ltd v ATCO Gas Australia Pty Ltd,[2] his Honour Martin CJ said:44Nevertheless, in construing the language used by the parties in relation to an arbitration agreement, reference can and should be made to the authorities in Australia and in other comparable jurisdictions which establish that generally courts should adopt a broad, liberal and flexible approach to the construction of such agreements and should favour a construction which provides a single forum for the adjudication of all disputes arising from or in connection with that agreement. His Honour also observed in Pipeline Services WA Pty Ltd v ATCO Gas Australia Pty Ltd:[3]19Second, at least since the enactment of the 2012 Act, the object and purpose evinced by the legislation of this State relating to commercial arbitration accords with that evinced in the legislation of the Commonwealth relating to commercial arbitration (International Arbitration Act), and requires the courts to support and enforce arbitration agreements …[3] Pipeline Services WA Pty Ltd v ATCO Gas Australia Pty Ltd [2014] WASC 10 (S) [19]. The principles that apply to the construction of statutes are also well settled. In Mohammadi v Bethune the Court of Appeal stated these principles at [31] to [36] which in summary are:[4](1)Statutory construction requires attention to the text, context and purpose of the Act. So as to construe the relevant provision so that it is consistent with the language and purpose of all the provisions of the statute;(2)The objective discernment of the statutory purpose is integral to contextual construction;(3)Discernment of statutory purpose is particularly significant in cases, commonly encountered, where the constructional choice presented is from a range of potential meanings;(4)The material provisions of the Act must be understood, if possible, as parts of a coherent whole; and (5)Statutory texts enacted by the same legislature are to be construed, so far as possible, to operate in harmony and not in conflict.[4] Mohammadi v Bethune [2018] WASCA 98 [31] - [36]. The following facts and issues are not in dispute in this hearing of the preliminary issue:(1)On 22 June 2021, the parties entered into a binding Home Building Work Contract in the form of a standard Housing Industry Association (HIA) 'WA HBCA Lump Sum Building Contract (Form 16K - June 2019)' (the contract), for the construction of a single storey residence at a Lot at Quinninup, (the Lot). The contract price (exclusive of variations) is $382,641.05. (2)As a consequence of the contract price being under $500,000 the contract is a 'home building work contract': s 3 of the HBC Act and reg 2A of the Home Building Contracts Regulations 1992 (WA).(3)On 19 May 2022, the builder issued 'variation 8' to the owners (VO8). VO8 claimed a price increase of $19,000. Shortly after receiving VO8 the owners signed the variation and then transferred $19,000 to the builder.(4)On 30 August 2022, the home reached practical completion and the owners have been residing at the home since about that date.(5)On 17 June 2024, the owners lodged a Home Building Work Contract complaint (HBWC complaint) with the Building Commissioner. This HBWC complaint comprised one item of complaint alleging the builder is in breach of the contract under clause 12(b)(ii) of the contract and that the owners signed VO8 'under duress'. The remedy sought by the owners is an order requiring the builder repay them $19,000. (6)Clause 12(b) of the contract is in the following terms:[5][5] Clause 12(b) of the contract reflects s 8 of the HBC Act.The Builder shall be entitled to vary all or any of the Works or Contract Documents made necessary by:(i)any written direction lawfully given by a building surveyor or other person acting under a written law; or(ii)circumstances that could not reasonably have been foreseen by the Builder at the time when this Contract was entered into if the Builder gives to the Owner, within the time specified in Clause 12(c), a statement setting out the reason for, and the cost to be incurred on account of, the variation and a copy of any direction referred to in Clause 12(b)(i) PROVIDED THAT Clause 12(b)(ii) shall not enable the Builder to make any variation by reason only of an increase in the costs of labour (including related overhead expenses) or materials or both, to be incurred by the Builder.(7)On 15 July 2024, the builder through its solicitors, wrote to the Building Commissioner contending the complaint is outside of the jurisdiction of the Building Commission due to the builder's election to refer this dispute to arbitration under clause 18(a). The builder's solicitor requested the Building Commission make an order staying the complaint proceeding and referring the parties to arbitration. (8)On 18 July 2024 the Building Commissioner referred the complaint to this Tribunal for determination, as it considered it had no power to refer a complaint to arbitration. (9)On 2 September 2024 the builder through its solicitors lodged an 'Application for Determination of Preliminary Issue' with the Tribunal. The preliminary issue is stated in this application as:(a)whether the Complaint should be stayed and referred to Arbitration pursuant to s 8 of the Commercial Arbitration Act 2012 (CA Act); or, (b)dismissed pursuant to s 47(1)(a) or s 47(1)(b) of the State Administrative Tribunal Act 2004 (WA), on the basis that the proceeding is misconceived or lacking in substance, or being used for an improper purpose, alternatively, the Tribunal has no jurisdiction to hear and determine the Complaint.(10)On 12 February 2025, as observed above, Senior Member Le Miere made an order this Tribunal is to determine a certain preliminary issue.(11)On 11 April 2025 the Attorney General for Western Australia was given leave to appear in this proceeding as an amicus curiae.