DUMBRECK and TANGENT NOMINEES PTY LTD
[2017] WASAT 88
•22 JUNE 2017
DUMBRECK and TANGENT NOMINEES PTY LTD [2017] WASAT 88
| STATE ADMINISTRATIVE TRIBUNAL | Citation No: | [2017] WASAT 88 | |
| BUILDING SERVICES (COMPLAINT RESOLUTION and ADMINISTRATION) ACT 2011 (WA) | |||
| Case No: | CC:2006/2016 | 15 MARCH 2017 | |
| Coram: | MR C RAYMOND (SENIOR SESSIONAL MEMBER) | 22/06/17 | |
| 23 | Judgment Part: | 1 of 1 | |
| Result: | Application for leave to review granted in part Decision under review that compensation could not be awarded for stress and inconvenience set aside and substituted with order for payment | ||
| B | |||
| PDF Version |
| Parties: | KIM ANDREW DUMBRECK LINA LOH TANGENT NOMINEES PTY LTD |
Catchwords: | Building Services (Complaint Resolution and Administration) Act 2011 (WA) Application for leave to review and review heard together Whether original Tribunal erred in finding compensation for faulty or unsatisfactory building work or building work not carried out in proper and proficient manner did not include compensation for stress and inconvenience Whether compensation claim could include stress suffered by applicants' children Whether original Tribunal erred in not transferring claim for compensation for stress and inconvenience to Magistrates Court Effect of Civil Liability Act 2002 (WA) Criteria for grant of leave |
Legislation: | Builders Registration Act 1939 (WA), s 12A Building Services (Complaint Resolution and Administration) Act 2011 (WA), s 5, s 6(3)(c), s 36, s 38, s 41(2), s 41(2)(d), s 43, s 55, s 58 Civil Liability Act 2002 (WA), s 3, s 5(c), s 7 Home Building Contracts Act 1991 (WA), s 17, s 17(4)(c), Pt 2 Industrial Relations Act 1979 (WA), s 23A Interpretation Act 1984 (WA), s 19 State Administrative Tribunal Act 2004 (WA), s 27 Workplace Relations Act 1996 (Cth), s 170CH |
Case References: | Collings Construction Co Pty Ltd v Australian Competition and Consumer Commission [1998] 43 NSWLR 131 Dumbreck and Tangent Nominees Pty Ltd [2016] WASAT 138 Filimon and Rimmer [2013] WASAT 13 Holman and W&D Moffatt Pty Ltd [2016] WASAT 105 KBE Contracting Pty Ltd and Mawer & Anor [2007] WASAT 210 Lewis and Waco Pty Ltd [2016] WASAT 127 Mustac v Medical Board of Western Australia [2007] WASCA 128 Nouvelle Homes Pty Ltd v Smargiassi [2008] WASC 127 Owners of Strata Plan 52843 and Psaros Builders Pty Ltd [2013] WASAT 46 Waldron and Afra Construction Pty Ltd [2013] WASAT 207 Western Australian Planning Commission v Dungey [2010] WASC 52 |
Orders | 1. Leave to review the decision of the Tribunal dated 14 November 2016 that s 36(1)(c) of the Building Services (Disputes Resolution and Administration) Act 2011 (WA) does not include claims for stress and inconvenience is granted (the decision under review) but the application for leave to review the decision not to transfer the claim for stress and inconvenience to the Magistrates Court is dismissed.,2. The decision under review is set aside and substituted by the order set out in 3 below.,3. The applicants are each awarded the sum of $15,000 as compensation for stress and inconvenience pursuant to s 36(1)(c) of the Building Services (Disputes Resolution and Administration) Act 2011 (WA).,4. The respondent must on or before 19 July 2017 pay to each of the applicants the sum of $15,000. |
Summary | The applicants applied for leave to review a decision of the Tribunal, as originally constituted that compensation could not be awarded for stress and inconvenience under s 36(1)(c) of the Building Services(Complaint Resolution and Administration) Act 2011 (WA) and declining to transfer that aspect of the dispute to the Magistrates Court.,The application for leave and the review hearing were heard together. The review Tribunal granted leave only in respect of the power to award stress and inconvenience and otherwise dismissed the application for leave. On review, the review Tribunal set aside the decision under review and substituted a decision awarding the applicants $15,000 each for stress and inconvenience |
JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL ACT : BUILDING SERVICES (COMPLAINT RESOLUTION and ADMINISTRATION) ACT 2011 (WA) CITATION : DUMBRECK and TANGENT NOMINEES PTY LTD [2017] WASAT 88 MEMBER : MR C RAYMOND (SENIOR SESSIONAL MEMBER) HEARD : 15 MARCH 2017 DELIVERED : 22 JUNE 2017 FILE NO/S : CC 2006 of 2016 BETWEEN : KIM ANDREW DUMBRECK
- LINA LOH
Applicants
AND
TANGENT NOMINEES PTY LTD
Respondent
Catchwords:
Building Services (Complaint Resolution and Administration) Act 2011 (WA) - Application for leave to review and review heard together - Whether original Tribunal erred in finding compensation for faulty or unsatisfactory building work or building work not carried out in proper and proficient manner did not include compensation for stress and inconvenience - Whether compensation claim could include stress suffered by applicants' children - Whether original Tribunal erred in not transferring claim for compensation for stress and inconvenience to Magistrates Court - Effect of Civil Liability Act 2002 (WA) - Criteria for grant of leave
Legislation:
Builders Registration Act 1939 (WA), s 12A
Building Services (Complaint Resolution and Administration) Act 2011 (WA), s 5, s 6(3)(c), s 36, s 38, s 41(2), s 41(2)(d), s 43, s 55, s 58
Civil Liability Act 2002 (WA), s 3, s 5(c), s 7
Home Building Contracts Act 1991 (WA), s 17, s 17(4)(c), Pt 2
Industrial Relations Act 1979 (WA), s 23A
Interpretation Act 1984 (WA), s 19
State Administrative Tribunal Act 2004 (WA), s 27
Workplace Relations Act 1996 (Cth), s 170CH
Result:
Application for leave to review granted in part
Decision under review that compensation could not be awarded for stress and inconvenience set aside and substituted with order for payment
Summary of Tribunal's decision:
The applicants applied for leave to review a decision of the Tribunal, as originally constituted that compensation could not be awarded for stress and inconvenience under s 36(1)(c) of the Building Services(Complaint Resolution and Administration) Act 2011 (WA) and declining to transfer that aspect of the dispute to the Magistrates Court.
The application for leave and the review hearing were heard together. The review Tribunal granted leave only in respect of the power to award stress and inconvenience and otherwise dismissed the application for leave. On review, the review Tribunal set aside the decision under review and substituted a decision awarding the applicants $15,000 each for stress and inconvenience
Category: B
Representation:
Counsel:
Applicants : Mr W Vogt
Respondent : Mr C Slater
Solicitors:
Applicants : Vogt Graham Lawyers
Respondent : Morgan Alteruthemeyer Lawyers
Case(s) referred to in decision(s):
Collings Construction Co Pty Ltd v Australian Competition and Consumer Commission [1998] 43 NSWLR 131
Dumbreck and Tangent Nominees Pty Ltd [2016] WASAT 138
Filimon and Rimmer [2013] WASAT 13
Holman and W&D Moffatt Pty Ltd [2016] WASAT 105
KBE Contracting Pty Ltd and Mawer & Anor [2007] WASAT 210
Lewis and Waco Pty Ltd [2016] WASAT 127
Mustac v Medical Board of Western Australia [2007] WASCA 128
Nouvelle Homes Pty Ltd v Smargiassi [2008] WASC 127
Owners of Strata Plan 52843 and Psaros Builders Pty Ltd [2013] WASAT 46
Waldron and Afra Construction Pty Ltd [2013] WASAT 207
Western Australian Planning Commission v Dungey [2010] WASC 52
Introduction
1 The applicants, Kim Andrew Dumbreck and his partner Lina Loh (referred to either jointly as the owners or severally as Mr Dumbreck and Ms Loh) contracted with the respondent, Tangent Nominees Pty Ltd trading as Summit Homes (the builder) for the construction of a house at 88 Stafford Road, Kenwick.
2 A dispute arose between the parties resulting in a complaint being made to the Building Commissioner under s 5(1) and s 5(2) of the Building Services (Complaint Resolution and Administration) Act 2011 (WA) (BSCRA Act). Hereafter, all references to sections or parts of legislation are to the BSCRA Act unless otherwise stated, or the context requires reference to the legislation. The matter was duly referred to the Tribunal (the original Tribunal) for determination. The original Tribunal published its decision in Dumbreck and Tangent Nominees Pty Ltd [2016] WASAT 138 (the Original Decision). The Owners apply in these proceedings for leave to review and to review the Original Decision.
3 There is no factual dispute between the parties. The facts set out below appear from the documentation filed by the parties in these proceedings, the hearing books prepared for the initial hearing and as outlined in the Original Decision.
4 The contract between the parties is governed by the Home Building Contracts Act 1991 (WA) (HBC Act). The construction was completed on 13 May 2009. Cracking of the concrete slab was noted by Mr Dumbreck on 12 May 2009 and subsequently was observed in the walls of the house to an increasing extent through to December 2014. Various attempts were made to repair the cracks on 13 days spread from 31 March 2014 to 13 November 2014. In 2011, repairs were carried out over a four month period from March 2011, to address movement in one of the walls of the garage.
5 Prior to April 2014, many of the repaired cracks had reoccurred. The builder advised Mr Dumbreck that this was not right, advice would be sought from an engineer and the applicants were not being abandoned. While further repairs were carried out, cracks in a number of areas were not addressed and became part of the complaint made to the Building Commissioner.
6 Prior to the complaint to the Building Commissioner, the owners obtained an engineer's report and had Xray scanning of the slab, which showed that the slab had not been constructed in accordance with the engineering specifications of the engineer engaged by the builder and forming part of the contract, by reason that internal slab thickening had been omitted. The owners' engineer recommended that perimeter and internal underpinning of the slab be carried out.
7 The complaint sought by way of remedies that underpinning be carried out, the repair of all cracking, consequential damages associated with carrying out the underpinning, furniture removal and hotel accommodation costs, expert costs and unspecified damages for inconvenience, stress and suffering, particulars of which would be provided in due course. Prior to the hearing, the owners specified that the amount of compensation claimed was $15,000 for each of the owners and $5,000 for each of the owners' three children, a total of $45,000. In the notice of proposed complaint, which was attached to and formed part of the complaint, the owners' solicitor specifically called for the builder to agree to indemnify the owners in respect of the underpinning work and 'for all loss and damage arising from its breach of the Contract'. It is clear the claim for inconvenience and stress was advanced as a contractual claim.
8 The Building Commissioner refused to accept the complaint, which was lodged on 12 May 2015, to the extent that it was for breach of contract, on the basis that it was out of time. Section 6(3)(c) of the BSCRA Act requires a home building works contract complaint to be made within three years after the contract was entered into or the breach first occurred.
9 In a letter to the Building Commissioner dated 10 June 2015, the owners' solicitor advanced submissions why the contractual claim should be accepted, but in the alternative submitted that the claim could be compensated for under s 36(1)(c) of the BSCRA Act arising from the builder's failure to satisfactorily carry out the work. It was on this basis, that the matter was considered by the original Tribunal. In their written submissions filed on the last day of the two day hearing, the owners raised for the first time that if the original Tribunal found that it had no jurisdiction to award compensation for stress and inconvenience, the Tribunal should transfer the matter to the Magistrates Court pursuant to its power under s 55 of the BSCRA Act.
10 During, and at the conclusion of the hearing, the builder accepted liability for all claims save the claim for stress and inconvenience, for which it continued to deny liability, and agreed the scope of work required for the admitted claims. Alternatively, the builder asserted a remedy could not be granted for stress and inconvenience by virtue of the operation of s 7 of the Civil Liability Act 2002 (WA) (CL Act). The builder also submitted that in any event no compensation could be awarded for alleged inconvenience and stress suffered by the owners' children, who were not parties to the proceedings. The original Tribunal's reasons, disclose its understanding that the claim for compensation was based on the owners suffering stress and inconvenience arising from the physical attributes of home building work, not carried out in a proper and proficient manner or being faulty or unsatisfactory.
11 The original Tribunal found that the BSCRA Act did not reflect any intention to allow for a claim for inconvenience and stress arising from the physical attributes of home building work, not being carried out in a proper and proficient manner or being faulty or unsatisfactory. The original Tribunal stated that it made no findings as to the effect of the CL Act, submissions made by the builder relating to the need for medical evidence to support a claim for stress and inconvenience and whether any compensation order could apply to the children. The original Tribunal declined to entertain the submission that the proceedings relating to the claim for stress and inconvenience be transferred to the Magistrates Court if it found, as it did, that it did not have jurisdiction to make an award of compensation for that claim, on the basis that there had been no application before it to do so.
The issues
12 In the application for leave to review and for the review of the Original Decision, the parties have ventilated the identical issues as were raised before the original Tribunal. The parties have filed written submissions, which in the case of the owners are particularly extensive. While all submissions have been considered, they are effectively subsumed within the following issues which will be determinative of the proceedings.
1) Did the original Tribunal err by failing to find that the power to award compensation under s 36(1)(c) allows compensation to be awarded for suffering inconvenience and stress and in particular having regard to whether such a claim can be made under s 5(1) by reason that the regulated building service:
a) has not been carried out in a proper and proficient manner; or
b) is faulty or unsatisfactory?
2) If there is no power under s 36(1)(c) of the BSCRA Act to allow compensation to be awarded for suffering inconvenience and stress did the original Tribunal err in failing to transfer that claim to the Magistrates Court?
3) Does the CL Act preclude or limit any award by the Tribunal of compensation for suffering inconvenience and stress?
4) Has the criteria for the grant of leave to review been met generally but also having regard to the builder's submissions that:
a) compensation cannot be awarded for suffering inconvenience and stress in the absence of expert medical evidence supporting the existence of a recognisable medical condition; and
b) no compensation can be awarded for stress and inconvenience suffered by the owners' children as they are not parties to the proceedings?
5) If the answer to issue 4 above is in the affirmative what is the appropriate disposition of the review?
13 Each of the above issues will be separately addressed but it is appropriate first to set out the criteria for the grant of leave to review.
The criteria for the grant of leave
14 Section 58 of the BSCRA Act provides for an internal review of a decision involving the exercise of jurisdiction under s 38 or s 43. The order made in the decision sought to be reviewed was made in exercise of jurisdiction under s 38 of the BSCRA Act.
15 The criteria for the grant of leave are set out in Filimon and Rimmer [2013] WASAT 13 and may be summarised as follows:
1) It is necessary to show that the decision of the original Tribunal was wrong or attended with sufficient doubt, such that if leave were not to be granted, the applicant would suffer a substantial injustice. The Tribunal has abroad discretion to have regard to other features which might require consideration on review in order to avoid asubstantial injustice.
2) It will not normally be sufficient that the decision sought to be reviewed is apparently wrong or attended with doubt. Something more will need to be shown. It may well be that in some cases it will be sufficient to show that there is a significant question of law to be considered. In others, it may be possible to point to some other feature which requires the consideration of theTribunal to avoid a substantial injustice if leave is not granted.
3) A broad view should be taken of all of the material before the original Tribunal, and the review Tribunal should be slow to grant leave or to allow reviews except in cases where clearly there is no discernible basis for the decision or, for example, where fundamental rules of natural justice have been breached by preventing a party adequately being heard.
4) It does not matter that evidence might, on close examination, have been qualified to any degree or even, ifit was the case, that the weight of evidence was to the contrary because the original Tribunal constituted by the inclusion of appropriate expert sessional members had its own expertise to assess the evidence.
5) The Tribunal may grant leave in respect of only some and not other grounds. If leave is granted, the hearing is ahearing de novo (s 27 of the State Administrative Tribunal Act 2004 (WA) (SAT Act)). Consequently, there is all the more reason to be particularly discerning about whether sufficient doubt exists to open the possibility of leave being granted. It is inconsistent with the Tribunal's objects to contemplate the grant of leave simply because a ground of review is arguable and therefore some doubt about the correctness of the decision proposed to be reviewed is established. Whatwill be a sufficient doubt to justify leave will depend on each case.
6) The reasons of the original Tribunal are not properly orfairly to be read minutely and finely with an eye keenly attuned to the perception of error.
1) Did the original Tribunal err in its construction of s 36(1)(c) of the BSCRA Act?
16 The owners' counsel has provided very detailed written submissions setting out authorities for accepted principles of statutory construction. There is no contest between the parties as to those principles to which the submissions refer. The applicable principles are conveniently set out in Western Australian Planning Commission v Dungey [2010] WASC 52 (Dungey)by Beech J at [27] [32] which are incorporated in these reasons by reference. The submissions then refer to particular authorities to assert that the original Tribunal erred in some respect, in the application of one or other principle of statutory construction. There is no merit in any of these submissions. Reference was made to Owners of Strata Plan 52843 and Psaros Builders Pty Ltd [2013] WASAT 46 (Psaros) as authority that compensation as referred to in s 36(1)(c) of the BSCRA Act was wide enough to cover money paid to third parties for rectifying defective work. But that is not the issue, which is whether compensation allows an award for stress and inconvenience. The submission following that, for reasons of comity and consistency, the original Tribunal was obliged to follow Psaros is partially misconceived as comity and precedent have no application to an administrative tribunal: Mustac v Medical Board of Western Australia [2007] WASCA 128 at [37] and following. It is, however, correct that for reasons of consistency in administrative decisionmaking, prior decisions of the Tribunal should be followed unless considered clearly to be wrong.
17 The original Tribunal correctly applied the primary task of analysing the language of the legislation to ascertain its purpose and with particular reference to the owners' submission, that the reference to 'related matters' in the long title of the BSCRA Act, supported a construction of s 36(1)(c) permitting compensation to be awarded for stress and inconvenience. The original Tribunal was correct in finding that the term 'related matters' did not assist the interpretation of the section. The term conveys no more than that the BSCRA Act provides for matters related to the other specified matters stated in the long title. Many examples can be readily pointed out, such as provisions empowering authorised persons to carry out inspections and investigations in support of the dispute resolution and disciplinary procedures provided for under the legislation.
18 The original Tribunal then had regard to the context of the legislation relative to the former dispute resolution scheme in force, prior to the BSCRA Act coming into effect (at paragraph 52 of the Original Decision where the reference to the BSCRA Act is obviously intended to be a reference to the HBC Act). The original Tribunal noted the difference in language used in comparing the remedies now available under the BSCRA Act for defective workmanship under s 5(1), compared to breach of a home building contract under s 5(2) of the BSCRA Act, to justify its conclusion (at paragraph 53 of the Original Decision) that it is not necessary to read s 36(1)(c) of the BSCRA Act as including compensation for suffering stress and inconvenience.
19 I find that the original Tribunal did not err in the process of statutory construction.
20 The real issue is whether the original Tribunal erred in its conclusion as the owners submit it did. In my view, for the reasons which follow, the original Tribunal did so err and should have found that s 36(1)(c) of the BSCRA Act permits an award to be made of compensation for stress and inconvenience.
21 The BSCRA Act governs the process by which both, what may be described as defective workmanship complaints and complaints for breach of home building contracts and formal statutory requirements of the HBC Act may be made under s 5(2) of the BSCRA Act, and how such claims are to be processed and determined. The HBC Act and the BSCRA Act are therefore to be regarded as cognate legislation and should be interpreted in a consistent manner as far as is permitted. It is necessary to consider both pieces of legislation in order to understand and properly construe either Act.
22 Section 41(2) of the BSCRA Act contains the identical provisions to those which were contained in s 17(4)(c) of the HBC Act prior to the BSCRA Act coming into effect:
A HBWC remedy order in respect of a complaint by an owner or builder under a home building work contract referred to in the Home Building Contracts Act 1991 section17 (other than a complaint about a breach of section15 of that Act) consists of one or more of the following
(a) an order
(i) restraining any specified action in breach of the contract or of a provision in the Home Building Contracts Act 1991 Part 2;
(ii) requiring any specified work to be done in the performance of the contract;
(iii) requiring any specified work to be done to ensure compliance with a provision of the Home Building Contracts Act 1991 Part 2;
(iv) requiring any specified work to be done to remedy a breach of the contract or of a provision of the Home Building Contracts Act 1991 Part 2;
(b) an order that a person pay a specified amount payable under the contract;
(c) an order declaring that a specified amount is not payable to a person under the contract and, if already paid, an order that the builder or owner repay that amount;
(d) an order that a person pay specified compensation for loss or damage
(i) caused by any breach of the contract or of a provision of the Home Building Contracts Act 1991 Part 2; or
(ii) referred to in the Home Building Contracts Act 1991 Schedule 1;
(e) an order declaring that a specified amount of money claimed or money claimed for specified work is not payable by a person.
(Emphasis added)
23 It has previously been determined that an award of compensation may be made for stress and inconvenience, in respect of a breach of a statutory requirement of the HBC Act, on the basis that such constituted loss and damage as referred to in s 17(4)(c) of the HBC Act (as it then read and is now provided in s 41(2)(d) of the BSCRA Act): KBE Contracting Pty Ltd and Mawer & Anor [2007] WASAT 210 (KBE Contracting).
24 Section 36 of the BSCRA Act, sets out the remedies which may be given in respect of a complaint under s 5(2) of the BSCRA Act, that a regulated building service has not been carried out in a proper and proficient manner or which is faulty or unsatisfactory (referred to for convenience, unless the context otherwise requires, as a defective workmanship complaint). It provides as follows:
(1) A building remedy order consists of one of the following
(a) an order that a person who carried out a regulated building service remedy the building service as specified in the order;
(b) an order that a person who carried out a regulated building service pay to an aggrieved person such costs of remedying the building service as the Building Commissioner or State Administrative Tribunal, as the case requires, considers reasonable and specifies in the order;
(c) an order that a person who carried out a regulated building service pay to an aggrieved person a sum of money specified in the order to compensate the aggrieved person for the failure to carry out the building service in a proper and proficient manner or for faulty or unsatisfactory building work[.]
(Emphasis added)
25 The term 'compensate' according to the Oxford Dictionary Online (2017) as reflected in a hard copy print out provided by the owners, means to 'give something, typically money, in recognition of loss, suffering, or injury incurred'.
26 The owners also provided a hardcopy print out of the definition of the term 'compensation' as set out in The Law Dictionary (Black's Law Dictionary Online 2nd ed), which includes an act which a court orders to be done, or money which a court orders to be paid, by a person whose acts or omissions have caused loss or injury to another, in order that the person damnified may receive equal value for his loss, or be made whole in respect of his injury.
27 It is necessary to determine what the legislature intended by providing the Tribunal with the power to compensate for the failure to carry out a regulated building service in a proper and proficient manner or for faulty or unsatisfactory building work.
28 It is helpful to consider the interaction between the HBC Act and the BSCRA Act, insofar as the HBC Act specifies which complaints can be advanced as a defective workmanship complaint under s 5(1) of the BSCRA Act (which can be the subject of a compensation order under s 36 of the BSCRA Act) and which complaints may be advanced under s 5(2) of the BSCRA Act as a breach of a home building contract (which can be the subject of an order under s 38 of the BSCRA Act).
29 Section 17 of the HBC Act provides:
Breach of contract or Part 2, or entitlement to compensation, procedure in case of
If an owner or builder under a contract claims that
(a) there has been a breach of
(i) the contract, not being a breach in respect of which a building remedy order may be made under the Building Services (Complaint Resolution and Administration) Act 2011; or
(ii) a provision in Part 2;
or
(b) the owner or builder is entitled to compensation under Schedule 1,
then, subject to the Building Services (Complaint Resolution and Administration) Act 2011, the owner or builder may make a complaint under section 5(2) of that Act.
30 Section 5 of the BSCRA Act provides:
Making complaint about building service or home building work contract matter
(1) Subject to the regulations, a person may make a complaint to the Building Commissioner about a regulated building service not being carried out in a proper and proficient manner or being faulty or unsatisfactory.
(2) An owner or builder under a home building work contract may make a complaint to the Building Commissioner about a matter referred to in the Home Building Contracts Act 1991 section 17 or 20 or Schedule 1 clause 5[.]
31 Section 17 of the HBC Act clearly prevents any complaint capable of being advanced as a defective workmanship complaint from being advanced as a breach of contract complaint. The issue arises as to what claims remain to be advanced as a breach of contract complaint. Many standard building contracts expressly provide, and if they do not, it would almost invariably be implied that the building work be carried out in a proper and workmanlike manner; see the discussion in Waldron and Afra Construction Pty Ltd [2013] WASAT 207 (Waldron). A complaint based on a breach of that contractual obligation is the most common example of the type of complaint which must be advanced as a s 5(1) of the BSCRA Act defective workmanship complaint. In Waldron, the Tribunal concluded that a claim could be made under s 5(1) of the BSCRA Act that work had not been carried out in a proper and proficient manner, by reason of a failure to comply with contractual drawings and specifications. Further, the term proper and proficient, was held to require an advanced level of skill and knowledge to be provided.
32 In Lewis and Waco Pty Ltd [2016] WASAT 127 (Waco), the Tribunal approved and followed Waldron and addressed complaints made by a subsequent purchaser of a property, based on a builder's failure to comply with various aspects of the building contract entered into with the person who had sold the property to the complainant. In a number of complaints, no defect had materialised, the works were not considered faulty or unsatisfactory but it was accepted that the complainant could contend that the building work had not been carried out in a proper and proficient manner because the builder had failed to comply with the contract.
33 Could the legislature have intended that by requiring a complaint which could constitute a breach of contract and which on the reasoning set out in KBE Contracting, could justify an award of compensation for stress and inconvenience be stripped of that potential remedy because the claim must be made as a defective workmanship claim?
34 It raises also whether perhaps Waldron and Waco have erred in the application of what might constitute a claim based on building works not being carried out in a proper and proficient manner, in the context of both the BSCRA Act and the HBC Act read as a whole. After careful consideration, I have concluded that both decisions are wrong in this respect so that neither of the decisions should be followed insofar as they suggest that a failure to comply with any contractual provision constitutes a failure to carry out the building work in a proper and proficient manner. If the decisions were correct, it would leave s 5(2)(a) of the BSCRA Act almost devoid of any operation other than in respect of a breach of the formal statutory requirements set out in Pt 2 of the HBC Act. Even a complaint for damages for delay could be construed as a claim that the delay was caused by the builder failing to carry out the works in a proper and proficient manner, for example, by not coordinating trades properly, failing to supervise the works or not ordering materials in good time.
35 In my view, in the context of a complaint under s 5(1) of the BSCRA Act, the term 'proper and proficient' should be constrained to refer only to the actual manner in which physical work is carried out. This construction leaves s 5(2)(a) of the BSCRA Act with a scope of operation which I consider is more likely to have been intended by the legislature and which is more consistent with the scheme that operated under s 12A of the former Builders Registration Act 1939 (WA) and the HBC Act as it then stood.
36 This conclusion still leaves for determination whether a defective workmanship complaint based on the work being faulty or unsatisfactory, or the work being physically not carried out in a proper and proficient manner, in the sense discussed above, can be remedied by compensation for stress and inconvenience.
37 As made plain in Dungey the task of construction must start with the text itself.
38 The words of the section are clear that the Tribunal may compensate for the failure to carry out the building service in a proper and proficient manner or for faulty or unsatisfactory building work.
39 This requires consideration of a common sense state of causation, and of the consequences caused by the proscribed conduct: see, although in a different context, the discussion in Collings Construction Co Pty Ltd v Australian Competition and Consumer Commission [1998] 43 NSWLR 131.
40 What are the consequences contemplated by s 36(1)(c) of the BSCRA Act of failing to carry out a regulated building service in a proper and proficient manner or which is faulty or unsatisfactory? Clearly, an obligation to carry out remedial work or to bear the cost of the remedial work being carried out, are not contemplated as they are the remedies provided by s 36(1)(a) and s 36(1)(b) of the BSCRA Act. Section 36(1)(c) of the BSCRA Act allows other compensation. It would appear obvious, that compensation might be awarded for the costs of furniture removal and alternative accommodation, if that is necessary for remedial work to be carried out. In short, any loss or damage foreseeably flowing from a failure to carry out building work in a proper and proficient manner (in the sense discussed above), or as a result of the building work being faulty or unsatisfactory, should be compensable.
41 The most common building complaint coming before the Tribunal, the Building Commission, and under the previous building disputes resolution regime, before the Building Disputes Tribunal, based on my experience, is for defective workmanship. The stress and inconvenience suffered by owners in building disputes including disputes of this nature is very much in evidence in many, if not most cases. The entry into a contract for the construction of a dwelling, is usually the most costly undertaking in which an owner is likely to be personally involved and a person perceiving (whether or not with justification) that performance by the builder is defective, may be easily inclined to anxiety leading to stress. The remedying of defective work can itself give rise to stress, particularly if, ineffectively carried out and if the owner is in occupation, or occupation is delayed because of remedial work being carried out and may result in inconvenience.
42 In my view, there can be no doubt that it is foreseeable by both a builder and an owner that the carrying out of defective building work may cause stress and inconvenience. In fact a degree of stress and inconvenience, is in my view, often suffered by an owner even when the carrying out of the building work is not open to justified criticism. This is so much so, that I consider that it is necessary for the Tribunal to be satisfied that compensation should cover only that stress and inconvenience over and above what might be experienced as a normal, or not reasonably unexpected, incident of the building process. A similar approach has been adopted by industrial tribunals in awarding compensation for loss and injury for stress and inconvenience in unfair dismissal matters over and above that which would normally be suffered by a dismissed employee: see s 23A Industrial Relations Act 1979 (WA) and Amanda Anne Brinklow v JRM Financial Consultants Luke Mirca [2004] WAIRComm 11136(21 January 2004); s 170CH Workplace Relations Act 1996 (Cth) discussed in K Wheelright, 'Remedies for Unfair Dismissal under the Workplace Relations Act 1996 A Fair Go All Round' (2001) 1 Macquarie Law Journal 173
43 A conclusion that compensation may be awarded for stress and inconvenience under s 36(1)(c) of the BSCRA Act, is consistent with the ordinary meaning of the language of the section and a common sense judgment of the consequences of defective workmanship (in the sense discussed). That conclusion is also supported by the interaction between the HBC Act and BSCRA Act and the availability of such a remedy for breach of contract under the HBC Act, as well as the requirement that a complaint not be made as a contractual complaint under s 5(2) of the BSCRA Act if capable of being made as a complaint under s 5(1) of the BSCRA Act, as discussed above.
44 Recourse to extrinsic material as permitted by s 19 of the Interpretation Act 1984 (WA) is of little assistance to confirm the above interpretation. The second reading speech makes no reference to this matter Western Australia, ParliamentaryDebates, Legislative Assembly, 10 November 2010 (WR Marmion, Minister for Commerce). The Explanatory Memorandum for the Building Services (Complaint Resolution and Administration) Bill 2010 (WA), gives two examples of orders which might be made under s 36(1)(c) of the BSCRA Act, being compensation for consequential damage payable to a neighbour or compensation payable (to an aggrieved party) for nonconformance with adequate standards. The first example is at least consistent with the construction found by the Tribunal.
45 Counsel for the builder submitted that it was necessary to consider first the scope of the Tribunal's jurisdiction under s 5(1) and s 5(2) of the BSCRA Act, which limits the enquiry of the Tribunal and then construe the effect of s 36(1)(c) of the BSCRA Act. On that basis, it is contended that any claim for stress and inconvenience is to be regarded as an expectation loss because a contracting party does not receive what it contracted to receive, which arises from, and should be confined to a claim, made under s 5(2) of the BSCRA Act as a breach of contract. For the reasons given above those submissions are not accepted.
46 Issue 1 above, is therefore answered in the affirmative that the original Tribunal did err in concluding that s 36(1)(c) of the BSCRA Act does not permit compensation for stress and inconvenience.
2) If there is no power under s 36(1)(c) of the BSCRA Act to allow compensation to be awarded for suffering inconvenience and stress, did the original Tribunal err in failing to transfer that claim to the Magistrates Court?
47 In view of the conclusion reached in respect of issue 1 above, it is not necessary to determine whether the original Tribunal erred in not transferring the proceedings, insofar as it related to the complaint for stress and inconvenience to the Magistrates Court. However, I do not consider the original Tribunal erred in this respect.
48 The matter was raised in the owners' closing submissions filed on the last day of the hearing without any forewarning. No reference was made of any intention to apply for such an order in the owners' opening address on the first day of the hearing. It would have constituted a failure to afford due process to the builder, to have treated the submission as an application by the owners and was in any event tantamount to requiring the original Tribunal to give an advisory opinion on the issue.
3) Does the CL Act preclude or limit any award by the Tribunal of compensation for suffering inconvenience and stress?
49 The builder submitted in closing submissions in the original hearing that the CL Act affected the original Tribunal's power to award compensation. At the leave and review hearing, the issue was not pressed once the Tribunal pointed out that under the definition of 'personal injury damages' (s 3 of the CL Act) and s 5C of the CL Act fault must be a necessary condition of the harm which is not the case under s 5(2) of the BSCRA Act: see Holman and W&D Moffatt Pty Ltd [2016] WASAT 105.
50 I accordingly find that the CL Act does not apply to and affect the Tribunal's power to award compensation for stress and inconvenience under s 5(2) of the BSCRA Act.
4) Have the criteria for the grant of leave to review been met generally but also having regard to the builder's submissions that:
a) compensation cannot be awarded for suffering inconvenience and stress in the absence of expert medical evidence supporting the existence of a recognisable medical condition; and
b) no compensation can be awarded for stress and inconvenience suffered by the owners' children as they are not parties to the proceedings?
51 The owners have succeeded in establishing that the original Tribunal erred in respect of issue 1 but if the builder is correct in its submission set out in (a) above, the claim could not succeed as there is no medical evidence to support a recognisable medical condition.
52 In KBE Contracting, although dealing with a claim for stress and inconvenience which under the present dispute regime could only be advanced as a s 5(2) of the BSCRA Act claim, the Tribunal addressed the same argument and concluded that such medical evidence was not necessary. On parity of the reasoning in that matter, there is no reason in my view, why such medical evidence is to be required.
53 In relation to the claim advanced in respect of the owners' children, the owners submit that Nouvelle Homes Pty Ltd v Smargiassi [2008] WASC 127 (Smargiassi) is authority for the proposition that parents can be awarded compensation in an amount which compensates for stress and inconvenience suffered by their children, although not joined as parties. I do not accept this submission. Smargiassi was an application for leave to appeal the decision of an arbitrator. The arbitrator had allowed $25,000 for the parents and $7,000 for the two children for distress and inconvenience in making an award of $32,000 to the parents. Justice Beech referred to text book authority to the effect that it was open to take into account distress and anxiety of the parents arising from the distress and inconvenience suffered by their children. All this means, is that the parents' claim may include a component for their suffering because of the observed effect on their children. His Honour declined to grant leave on this issue, however, because his Honour was not satisfied that an appeal in respect of the $7,000 awarded substantially affected the rights of the parties (being a statutory requirement for the grant of leave) in the context of the total amount awarded in respect of all matters in issue. The total amount awarded was based on the arbitrator finding that the parents were entitled to an amount of $190,686.65 and the builder to an amount of $79,101.60 which resulted in the parents (owners) being entitled to $190,686.65 and the builder being entitled to $79,101.60.
54 I find the owners are not entitled to compensation for the stress and inconvenience suffered by their children but each of the owners may be entitled to compensation in respect of the extent to which either of them suffered because of the observed stress suffered by the children.
55 While this must inevitably result in any assessment of compensation being reduced compared to what might have been assessed had a different conclusion been reached on this issue, the reduction cannot be greater than the total claimed for the children of $15,000. The evidence of suffering by the owners has not been challenged and shows on any measure a considerable degree of stress and inconvenience well beyond what might be regarded as that which might be expected as part of the construction of a dwelling and carrying out building repairs.
56 I conclude, that the error of the original Tribunal in finding that it did not have power to award compensation for stress and inconvenience, is such as would result in a substantial injustice, if leave to review the decision on this issue were not to be granted. The application for leave to review the decision not to transfer the claim for stress and inconvenience should be dismissed.
5) What is the appropriate disposition of the review?
57 The evidence of both owners is set out in written witness statements and has not been challenged in any way.
58 The evidence shows:
• Practical completion was accepted on 13 May 2009 but cracking of the slab had been noted. Cracking of walls and ceilings occurred within the following two years. A wall in the garage showed movement resulting in demolition and installation of piles over the period May to August 2011 when numerous other cracks to walls and ceilings were repaired. Cracking reoccurred and new cracks developed with repairs being carried out through to February 2015, since then no further repairs have been carried out.
• Both owners took time off work and were inconvenienced in having to arrange and meet workers attending to complete repairs.
• During the demolition and reconstruction of the garage wall over a period of four months the home was akin to a building site, household goods had to be relocated and stored in the house. The house required constant sweeping and dusting.
• Internal repairs to walls required furniture to be moved by the owners and resulted in the owners having to dust and clean.
• Ms Loh's evidence is that she suffered the workmen working in their work boots inside the house, bringing tools with them and that the repairs were very noisy.
• Mr Dumbreck describes that his middle son is asthmatic and he was affected (by the dust) over a six year period. (It can be inferred Ms Loh also observed this effect on her son although she does not specifically refer to it in her statement).
• Ms Loh has been alarmed by cracking sounds from 2011 to the time of her statement (27 September 2016) which has made her scared. Mr Dumbreck describes sleepless nights when large cracks appeared in the wall of his youngest son's room.
• Ms Loh has been concerned since 2011 about the amount of insects crawling through cracks into the home and has been anxious about them crawling onto her children during the night as well as having the inconvenience of having to clear away dead insects.
• Mr Dumbreck is particularly concerned about large cracks in the kitchen ceiling as he is worried the ceiling could collapse which is a dangerous situation.
• Mr Dumbreck, who is an engineer, describes terrible cracking noises audible at night which have caused the children to be afraid and who have expressed that fear to him.
59 As a result of the builder's admission of liability in relation to the defects in the slab and existing cracking within the dwelling and acceptance of the manner of remediation recommended by the owners' engineer, agreement was reached and orders were made by consent by the original Tribunal for payment of $30,167 for removalists and accommodation costs and requiring the builder to commence and complete all remedial work required between 23 January 2017 and 23 August 2017, a period of seven months. The owners will suffer the inconvenience of having to move out of their home and live in temporary accommodation during this period.
60 The owners' experience has been quite extraordinary. It is now eight years since they took occupation of the dwelling and since early 2011 to the date of hearing, the owners have had to live in the circumstances described above.
61 There is no suggestion that the repairs to cracks to walls and ceilings were in themselves faulty. But, to the extent that the same cracks reoccurred, the repairs were ineffective for the obvious reason, as appears from the decision of the original Tribunal, albeit with hindsight, that the slab was defective resulting in continuing movement in the slab. These repairs were therefore unsatisfactory and stress and inconvenience suffered by the owners as a result is compensable. All new cracks, not the subject of any remedial work, and inconvenience and stress related to that cracking, flows directly as a result of the slab having been constructed in a manner which is faulty and unsatisfactory, and is also compensable.
62 Both owners have shown in their evidence, that each of them suffered stress as a result of the anxiety and inconvenience suffered by their children and it must therefore be taken that the compensation claimed by each of them takes this into account. Accordingly, no part of the $15,000 compensation claimed in respect of the children can be effectively added to the owners' compensation.
63 In my view, the amount claimed of $15,000 for each of the owners is reasonable compensation for the stress and inconvenience each has suffered without allowing for some deduction which might be made for repairs considered to be normal, or not unreasonably to be expected, as an incident of the building work carried out. I consider that the extent of repairs carried out and still required are such that they cannot be considered as being normal or to be reasonably expected.
64 An order will be made upholding the review and awarding compensation accordingly of $15,000 in favour of each owner, a total sum of $30,000.
Order
For the reasons given above the Tribunal will cause an order to issue in the following terms:
1. Leave to review the decision of the Tribunal dated 14 November 2016 that s 36(1)(c) of the Building Services (Disputes Resolution and Administration) Act 2011 (WA) does not include claims for stress and inconvenience is granted (the decision under review) but the application for leave to review the decision not to transfer the claim for stress and inconvenience to the Magistrates Court is dismissed.
2. The decision under review is set aside and substituted by the order set out in 3 below.
3. The applicants are each awarded the sum of $15,000 as compensation for stress and inconvenience pursuant to s 36(1)(c) of the Building Services (Disputes Resolution and Administration) Act 2011 (WA).
4. The respondent must on or before 19 July 2017 pay to each of the applicants the sum of $15,000.
I certify that this and the preceding [64] paragraphs comprise the reasons for decision of the State Administrative Tribunal.
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MR C RAYMOND, SENIOR MEMBER
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