Fair Trading Administration Corporation v Owners Corporation, SP 43551

[2002] NSWSC 624

CITATION:	Fair Trading Administration Corporation v Owners Corporation, SP 43551 [2002] NSWSC 624
CURRENT JURISDICTION:	Equity Division Technology and Construction List
FILE NUMBER(S):	SC 55006/02
HEARING DATE(S):	30, 31 May 2002
JUDGMENT DATE:	12 July 2002
PARTIES :	Fair Trading Administration Corporation (P) Owners Corporation, Strata Plan 43551 (D1) Fair Trading Tribunal of New South Wales (D2)
JUDGMENT OF:	Burchett AJ

COUNSEL :	J J Graves SC and T Lynch (P) F C Corsaro SC and J Young (D1) I V Knight (D2 - Submitting appearance)
SOLICITORS:	D Catt (P) Andreones Lawyers (D1)
CATCHWORDS:	TECHNOLOGY AND CONSTRUCTION- Comprehensive Insurance Scheme under Building Services Corporation Regulation- Time limits for claim- Meaning of clause 7 of the Scheme- Meaning of "major structural defects"- Scope of power in clause 7 to extend times- Whether defects have to be pervasive throughout a building to be major structural defects- Meaning of "element", "substantial", "functional", "habitability" and "structure" in clause 31 of the Building Services Corporation Regulation 1990- Effect of the inclusion of examples in a regulation- Principle of construction that the unit of language is the sentence rather than individual words- Whether an element of a building that provides an essential supporting structure within clause 31(a) may also be a substantial functional element essential to habitability within clause 31(b)- Effect of pre-trial proceedings in the Fair Trading Tribunal.
LEGISLATION CITED:	Acts Interpretation Act 1901 (Cwlth) s 15AD Building Services Corporation Regulation 1990 Fair Trading Tribunal Act 1998, s 61 Interpretation Act 1987
CASES CITED:	Collector of Customs v Agfa-Gevaert Ltd (1996) 186 CLR 389 The Commonwealth of Australia v Verwayen (1990) 170 CLR 394 The King v Wilson; Ex parte Kisch (1934) 52 CLR 234 R v Brown [1996] 1 AC 543 SS Hontestroom v SS Sagaporack [1927] AC 37
DECISION:	Plaintiff's proceeding dismissed with costs.

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
TECHNOLOGY AND CONSTRUCTION LIST

BURCHETT AJ

Friday 12 July 2002

55006/02 - FAIR TRADING ADMINISTRATION CORPORATION v OWNERS CORPORATION, STRATA PLAN 43551 & ANOR

JUDGMENT

1 HIS HONOUR: This is an appeal "on a question of law" under s 61 of the Fair Trading Tribunal Act 1998, against a decision of the Fair Trading Tribunal of New South Wales, which has been joined as the second defendant and has filed an appropriate submitting appearance. I shall refer to the first defendant, which has appeared to oppose the plaintiff's appeal, as "the defendant". There is no dispute that the defendant, as successor in title to the owner of land on which certain residential building work was done, has, since 30 March 1993, been a "beneficiary" entitled to claim pursuant to the Comprehensive Insurance Scheme set up under the Building Services Corporation Regulation 1990. It is with certain defects in this residential building work, being the erection of 52 residential units and other work comprising a building of 11 storeys at 17-25 Spring Street, Bondi Junction, construction of which commenced in December 1991, that the present proceeding is concerned.

2 A claim under clause 5 of the Scheme was declined by the Fair Trading Administration Corporation (the plaintiff) on 15 January 1999, and from that decision an appeal was taken to the Fair Trading Tribunal constituted by Mr P H Molony, Senior Member. The defects in the building work, the subject of the claim, related to the condition of the tiles and mortar of balconies; the condition of terra-cotta paving at level 3 and of the water-proof membrane beneath it; water entry through windows and doors on the south face of the building; and hazardous balcony balustrades.

3 The primary issue before the Tribunal was whether the defendant's claim was barred by a time limitation under clause 7 of the Scheme which is set out in Form 4 in Schedule 1 of the Building Services Corporation Regulation 1990, pursuant to a prescription in clause 33 of that regulation authorized by s 91 of the then Building Services Corporation Act 1989 (the title of which was later changed to the Home Building Act 1989 by s 3 and Schedule 5 clause 2 of the Building Services Corporation Legislation Amendment Act 1996). Clause 7 of the Scheme relevantly provides:

" Time limitations
7.(1) Subject to subclause (2), to qualify for the benefits under this Scheme, the beneficiaries must notify the Corporation in writing of the matters that could give rise to the losses referred to in clause 5 or 5A within the following times:
…
(b) for loss relating to heads of claim in clause 5(1)(d) or (e) incurred in rectifying major structural defects or in repairing damage to the dwelling that has occurred in consequence of major structural defects – within 6 months after the beneficiary first becomes aware of the defect, but not later than 7 years from:
(i) the commencement of insured building work which is not also insured owner-builder work; or
(ii) the date of issue of the owner-builder permit for insured owner-builder work;
(c) for loss relating to heads of claim in clause 5(1)(d) or (e) other than those referred to in paragraph (b) – within 6 months after the beneficiary first becomes aware of the defect, but not later than 3 years from:
(i) the commencement of insured building work which is not also insured owner-builder work; or
(ii) the date of issue of the owner-builder permit for insured owner-builder work; or
…
(2) The Corporation may extend the times specified in subclause (1) if it is satisfied that the delay in notification was due to circumstances outside the control of the beneficiary."

The expression "major structural defect" used in the Schedule to the Regulation is defined, for the purposes of the Regulation (and thus, in my opinion, for the Schedule which is part of the Regulation) in clause 31, as follows:

"' major structural defect ' means an inherent or damage-induced defect:
(a) in an element that provides essential supporting structure to the whole or any part of a dwelling (for example, a footing, beam, column or a suspended slab) which renders the element inadequate for its structural purpose; or
(b) in a substantial functional element essential to the habitability of a dwelling (for example, a panel wall, masonry veneer wall or slab on ground) which is of such a kind that the element itself does not have adequate structure for its purposes."

It will be observed that this definition uses the expression "damage-induced defect". That expression is itself defined in the same clause of the Regulation:

"' damage-induced defect ' means a defect in an element of a dwelling, or part of a dwelling, caused when the element was damaged:
(a) by the holder of a licence, or the holder's employee or agent, in doing residential building work in connection with that dwelling; or
(b) as a consequence of such work having been done defectively".

4 The first issue before the Tribunal was whether the defects in respect of which the claims were made were "major structural defects", so as to attract a time limit of 7 years under clause 7(1)(b) of the Scheme, rather than the time limit of 3 years applicable to other defects (commonly referred to, I understand, as "general defects", although this is not a term used in the Regulation). The Tribunal held that all the defects in question were major structural defects, and the question before me is whether it erred in law in doing so. So far as its conclusion was one of fact, I have, of course, no jurisdiction to reconsider it.

5 If the Tribunal was not entitled to find that the defects, or any of them, fell within the description "major structural defects", it was accepted by the defendant that it could not bring itself within the time limit of 3 years specified in clause 7(1)(c), but would be compelled to rely upon the power of extension contained in subclause (2). In its submission, the question whether this power should be exercised would, in that case, require to be referred back to the Tribunal (which may exercise the powers of the Corporation). The plaintiff, on the other hand, contends that subclause (2) does not apply to the periods of 7 years and 3 years mentioned in paragraphs (b) and (c), but only to the periods of 6 months also referred to in those paragraphs. I have been unable to understand this submission. It seems to me that when subclause (2) refers to "the times specified in subclause (1)", it must be referring back to the words in the opening portion of subclause (1) "within the following times", which themselves can only sensibly be read as embracing both the periods of 6 months and the periods of 7 years and 3 years thereafter specified in paragraphs (b) and (c), as well as the other times specified in other paragraphs of subclause (1). I do not think it is necessary to go outside the boundaries of clause 7 to reach this conclusion. However, if more be needed, I think the language of s 56 of the Act, which is referred to in clause 29 of the Regulation, confirms an intention that, in special circumstances, complaints may be made about defective work outside the periods of 7 years for major structural defects and 3 years for other defects from the date of commencement of the work. This, of course, is not the same question, but the symmetry of the Act and the Regulation would suggest that the time limits in the one case should correspond with those in the other.

6 The point is a practical one, for I do not think cl 7(2) would apply only in such rare cases that it would lack utility, as might appear at first sight. Careful reading shows that the provision applies, not on the sole basis that timely notification was outside the control of the beneficiary, but on the basis that the delay in notification was due to circumstances that were outside the control of the beneficiary. In the present case, the circumstances incontrovertibly included the fact that the beneficiary did not exist at the date the 3 years began to run. Whether this, or any other feature of the case outside the control of the beneficiary, was a circumstance to which the delay in notification beyond the 3 years was due would be a question of fact for the Tribunal.

7 In order to determine whether a defect fell within the definition of a major structural defect, it was necessary for the Tribunal first to make findings as to the nature of the defect. That, of course, was a fact-finding function from which no appeal lies. Although the Tribunal rejected some interpretations which Associate Professor Marosszeky placed upon the relevant definition in clause 31, it gave general acceptance to his evidence as to the nature of the defects, which may conveniently be grouped under headings as follows:

Balcony tiling

The balcony tiles are 200 x 200mm terra-cotta tiles laid in a bed of mortar. These tiles have been subject to movement producing quite substantial and increasing areas of drummy tiles. There is a special problem in relation to "the perimeter tiles on each circular balcony and the tiles adjacent to them. The circular geometry of the outer row of tiles creates an 'arch' of tiles in the horizontal plane. When a curved arch expands it grows in radius. The forces required to cause disruption in such a geometry are smaller than in a rectangular pattern as the expansive forces tend to move the tiles outwards in a direction where there is no restraint. This has resulted in the outer row of tiles spreading out, and they overhang the concrete by up to two centimetres in the worst instance." The Associate Professor noted "that some pieces of mortar bedding have dislodged in the past, falling to the ground." He commented: "Luckily they have not hit any pedestrians, however the current situation represents a serious hazard". Large patches of tiles have also been replaced. (One may comment that, with an eleven storey building, an even greater hazard than the falling pieces of mortar may well be the loose tiles which the patching demonstrates must become detached from time to time on elevated balconies.)

8 The reason for this situation, the Associate Professor pointed out, is "both a design and construction practice issue". The defects are "a result of insufficient movement joints being provided at the time of construction", such joints being required to allow for expansion of the tiles which arises in two ways. In the first place, it is "a well understood phenomenon that clay products, such as bricks and tiles, absorb moisture and unfired kaolin particles in the body of the product cause it to grow". In the second place, thermal expansion occurs as the tiles heat up and cool down daily. As a result of these two factors, a failure to provide sufficient movement joints leads to the development of problems of the kind occurring here. The problems, as the Associate Professor pointed out "are not obvious at the time of purchase"; but "they become apparent with time as the tiles grow and repetitive expansion and contraction take place".

Level 3 paving

The level 3 paving consists of 300 x 300mm terra-cotta paving on a cement mortar bed with a Fortecon membrane under the bed to provide water-proofing. This paving also requires movement joints, at regular intervals, that pass through the tiling and the bedding to allow for tile growth and for thermal movement. The joints provided in this case "are insufficient to cope with the expansive forces in the paving and do not comply with the relevant Australian standard". As a result, significant damage has been suffered by the paved areas, which has tilted a swimming pool fence, caused dislodgement of tiles, and produced changes to falls and large drummy patches, as well as significant damage to the pool which is included in the complex. Specifically referring to the waterproof membrane, the Associate Professor commented that "the detail appears unsatisfactory".

Leaking windows and doors

All south facing windows, on inspection, revealed signs of leaking on the sills. The problem, the Associate Professor reported, "is that the windows used are not adequately storm rated for the exposure of the building", which "may be the result of specification error or product defect".

Balustrades

The glass in the balustrades is fixed in an aluminium channel shaped bracket, with no spacer between the metal and the glass. A number of panels have broken during storms and have fallen to the courtyard below. The Associate Professor considered the "fixing of the glass panels is clearly insufficient for its purpose and the situation needs to be urgently remedied as it represents a hazard to pedestrians who walk under the balconies". He considered the "balcony handrail system as installed does not support the glass panels adequately".

9 It was not contended, either before the Tribunal or at the hearing of the appeal, that any of the defects in question here fell within para (a) of the definition of major structural defect. The contention was that all the defects fell within para (b). The Tribunal upheld that contention.

10 The Tribunal discussed the balcony and level 3 tiling together. It drew attention to the widespread nature of the problem in what was a large building. As to this, I should point out that clause 7 of the Scheme refers to "the matters that could give rise to the losses referred to in clause 5 or 5A", and in para (b) to "loss relating to heads of claim in clause 5(1)(d) or (e)" and to "the defect". The words "matters", "losses", "loss", and "defect" are not qualified by any such word as "large" or "extensive". Clause 5(1)(d) and (e) do not contain qualifications of this kind either, but simply refer to "losses in rectifying defects" and "losses in repairing … damage". The only flavour of extensiveness in clause 7(1)(b) suggested by any of the language used in it must be derived from the word "major" in the expression "major structural defects". But this is a defined expression, the definition of which makes it clear that the word "major" relates to the nature of the thing in which the defect is present, not to how pervasive that thing may be in the building, and to the severity of the defect itself only in so far as it may render an essential supporting structure to the whole or any part of a dwelling "inadequate for its structural purpose" or cause a substantial functional element essential to the habitability of a dwelling not to "have adequate structure for its purposes". In the latter case, the example given of "a panel wall" shows clearly enough that there do not have to be many walls, provided this wall is a "substantial functional element essential to the habitability of a dwelling" and a defect is "of such a kind that the element itself does not have adequate structure for its purposes".

11 But I do not understand the Tribunal to be saying that the multiplicity of balconies involved made the defect in their construction a major structural defect within the definition; rather, it seemed to be distinguishing a case where a defective condition confined to only one or two balconies might be regarded as insufficient. Although I think a close examination of clause 7 and of the definition shows that such an approach to the postulated case of one or two defective balconies would involve a misinterpretation of the Scheme, and thus an error of law, I do not think any error of law infected, in this respect, the Tribunal's consideration of the present case. It did not invert the point, so as to make a major structural defect out of the mere number of balconies involved. Rather, it considered the function that the floor of a balcony, or, particularly, its tiling, performs, and the nature of the defect that was present.

12 Every decision, of course, must be understood in the light of the arguments presented to the particular Tribunal. In this case, the plaintiff's argument was that the tiling should be regarded as "merely a finish". The Tribunal pointed out that the "balconies were designed and built with tiling which is meant to provide an even walking and wearing surface, and not to impede the fulfilment by the balustrade rails of their functions. A satisfactory walking and wearing surface is essential to the habitability of the dwellings". On this basis, the Tribunal thought the tiling was "a substantial functional element essential to the habitability of a dwelling". As the defect both destroyed the even walking and wearing surface and created a further hazard by impeding the fulfilment by the balustrade rails of their functions, by "causing [them] to deflect", the Tribunal concluded the defect was "of such a kind that the element itself does not have adequate structure for its purposes".

13 The Tribunal then turned to the balustrades. Not only were they deflected by the expansion of the tiles; they were in themselves defective because "the glass panels on the balcony balustrades are not adequately fixed". The evidence the Tribunal accepted showed that the inadequacy had two independent causes; on the one hand, the fixing of the glass within the aluminium channel shaped brackets was defective; and on the other hand, the deflection of the rails because of the expansion of the tiles distorted them. In different parts of the Tribunal's reasons, each of these matters is stated. But the first question for the purpose of the definition of "major structural defect" is whether the balcony railing was "a substantial functional element essential to the habitability of a dwelling". The Tribunal concluded there was "no doubt" of that, and it is difficult to see how, in the case of a multi-storey building, the contrary could seriously be maintained. The Tribunal's conclusion that the defect was "of such a kind that the element itself does not have adequate structure for its purposes" seems equally unassailable.

14 The Tribunal turned to the waterproofing membrane, the function of which is to prevent water penetrating the slab. It commented that "stopping water penetration is essential to habitability". It had no hesitation in seeing such a membrane as a substantial functional element of a building of this type, and the failure of the membrane to prevent water penetration seemed to demonstrate that indeed it did not have adequate structure for its purposes.

15 The final matter was the windows and the doors. Again, the Tribunal made an unnecessary statement suggesting that its decision might have been different had the number of windows affected been less. But it held that the windows and doors on the south side of this building did constitute a substantial functional element essential to the habitability of the dwelling. It seems to me that this finding cannot possibly involve error of law. It must be open to the Tribunal to regard windows and doors which exclude the weather, while permitting of light and ventilation, as fulfilling very precisely the requirements of para (b) of the definition. Plainly, as these windows and doors let in water they did not have adequate structure for their purposes, and the Tribunal committed no error of law in so holding.

16 As much of the Tribunal's reasoning depends directly on the true construction of the definition of "major structural defect" in cl 31, it is desirable to discuss that definition more closely. It refers to two kinds of "elements" of a dwelling, defects in which could be major structural defects as defined. The use of the word "element" has provoked argument, but Chambers Science and Technology Dictionary (1988) shows that, in various technologies, the word simply means a unit of an assembly, a component or a constituent. These meanings are in keeping with the general use of the word in English, as is shown by the New Shorter Oxford English Dictionary (1993), where the meanings given include "[c]omponent part" and "[a] component part of a structure or device". In the definition in cl 31, it is apparent that the word is used in the sense conveyed by these meanings. In para (a), the element must be a component part that "provides essential supporting structure" to at least a part of a dwelling; in para (b), it must be a "substantial functional" component part "essential to the habitability of [the] dwelling". There would be no point to the narrowing down of the scope of the "element" comprehended by (b) to one that is "substantial", "functional", and "essential to the habitability of a dwelling", unless the word "element" itself had an expansive meaning. But here it is narrowed to a component part having those qualities.

17 Some assistance is to be gained from the examples of a panel wall, masonry veneer wall and slab on ground. But the assistance is limited. The examples show that the language must be understood in a sense wide enough to cover these things. However, just because they are only examples, they cannot have a narrowing effect, so as to exclude other things that fall fairly within the language of the provision. Cf s 15AD of the Acts Interpretation Act 1901 (Cwlth), which has not been adopted in the New South Wales Interpretation Act 1987, but appears merely to confirm the approach the ordinary principles of construction would generally require a court to take.

18 There is a danger in analysing a complex of words into its constituents, unless it is kept firmly in mind that the object is to understand the full collocation of words as they stand, not to identify the meanings particular words could have, if they stood alone, and then to add those meanings together as a computer might do. When words are put together, the whole conveys a unique message, for which each word was chosen, not alone, but in association with the others. In Collector of Customs v Agfa-Gevaert Ltd (1996) 186 CLR 389 at 397, Brnnan CJ, Dawson, Toohey, Gaudron and McHugh JJ cited Lord Hoffmann's observation in R v Brown [1996] 1 AC 543 at 561:

"The unit of communication by means of language is the sentence and not the parts of which it is composed. The significance of individual words is affected by other words and the syntax of the whole."

In the same way, Dixon J, in The King v Wilson; Ex parte Kisch (1934) 52 CLR 234 at 244 did not ascertain whether the object of inquiry fell within a statutory expression "by attaching to that expression a meaning which [was] arrived at by disintegrating the phrase into its component words", and asking – was it this? and then, was it that? His Honour said:

"The rules of interpretation require us to take expressions in their context, and to construe them with proper regard to the subject matter with which the instrument deals and the objects it seeks to achieve, so as to arrive at the meaning attached to them by those who use them. To ascertain this meaning the compound expression must be taken and not its disintegrated parts."

19 Looking at para (b) as a whole, it seems to me it is referring to a component part of a dwelling that is substantial and that has a function which makes it essential to the habitability of the dwelling. Grammatically, there is some difficulty in this reading, since the order of the words makes the adjective "functional" describe the noun "element" and the phrase "essential to the habitability of a dwelling" also appears to relate to "element". But merely to say that the element must be functional is to say very little, since every element in a building that is a dwelling is apt to have a function, or it would not be there: even a pilaster has a function of improving appearance. The word "functional" looks forward to the one kind of function that is required – it must be "essential to the habitability". The word "substantial" raises a different sort of difficulty. It is awkward to pile two adjectives together, as in "substantial functional element", and the awkwardness is scarcely lessened, though it is perhaps explained, by relating the second adjective, not to the noun "element", but to the following phrase. However, the word is "substantial", not "substantially", so it is not an adverb qualifying "functional"; it must describe "element" – the element of which the paragraph speaks is substantial. It is to be distinguished from minor features of a dwelling, even if they can be regarded as essential to its habitability. Perhaps some of the things mentioned in cl 4 of the Regulation were in contemplation when para (b) was drafted.

20 What does the expression "essential to the habitability of a dwelling" convey? Bearing in mind that this is beneficial legislation, intended to meet the mischief of uninsured liability for defectively built dwellings, the appropriate meaning of "habitability" here is the quality involved in the first meaning given for "habitable" in the New Shorter Oxford English Dictionary, "[f]it or suitable for habitation", not that conveyed by the stricter alternative, "that can be inhabited". So if the element has a function, such as keeping out the wind and rain, or letting in light and air, which the Tribunal sees as essential for the suitability or fitness of the dwelling for habitation, this part of para (b) is satisfied.

21 Paragraph (b) goes on to specify a requirement for the defect: it must be "of such a kind that the element itself does not have adequate structure for its purposes". The paragraph does not say "for each and every one of its purposes", but simply "for its purposes". So, if it has two purposes and is rendered inadequate for one, that may be enough. The test of adequacy is not, I think, difficult; it is related to the purposes. The word "structure", in this context, does not have the same meaning that it has in the expression "supporting structure" in para (a). Here, it does not refer so much to what is built, as to its "composition, make-up, form" and the "[m]anner of building or construction; the way in which an edifice, machine, implement, etc [here, the element], is constructed". Both meanings are given in the New Shorter Oxford English Dictionary, but that the defect has left the element in a state in which its composition or manner of construction is inadequate for it to perform its purposes seems to me to be the meaning demanded by the context.

22 There is a further question about the relationship of para (a) and para (b) which does not arise directly in this case, but does affect a broad understanding of the definition. Can a particular element of a building come within both para (a) and (b)? I can see no reason why it cannot. Para (a) is concerned only with a "structural purpose", but para (b) is concerned with "purposes", and an element which has a structural purpose may have other purposes also, one or some of which may come within the terms of para (b). If that is so, there is nothing in para (b) to exclude the particular element. An example might be a suspended slab, which is expressly included in para (a), but might provide a floor essential to habitability within para (b).

23 This examination of the definition of "major structural defect" reveals no error affecting the conclusions of the Tribunal in the present case.

24 I turn to the plaintiff's other point. Assuming that the Tribunal was entitled to find the defects were major structural defects, as defined, the plaintiff contended that, within cl 7(1) of the Scheme, "the matters that could give rise to the losses" were not notified in writing by the beneficiary (the defendant) to the Building Services Corporation "within 6 months after the beneficiary first [became] aware of the defect". It is important to note that the 6 months is measured from the first awareness by the beneficiary (not someone else) of "the defect", although what must be notified is described as "matters that could give rise to the losses", not the actual defects that, in a precise sense, are the causes of those matters. A degree of imprecision in a notice seems to be contemplated by a provision so framed.

25 The Tribunal examined the "matters", being the problems with the balcony and level 3 tiling, the balustrades, the waterproof membrane and the windows and doors which leaked. It considered evidence of communications in writing between the defendant and the Corporation. It considered evidence which indicated, directly or by inference, the sources of advice to the defendant of occurrences that may have revealed these matters, although not necessarily the defects giving rise to them (for instance, detached tiles may not have led early to knowledge of the absence of expansion joints). In the course of this consideration, numerous primary findings of fact were made. Finally, the Tribunal concluded:

"I am therefore satisfied that all the defects the subject of this appeal are major structural defects and that the matters giving rise to the losses associated with them were notified to the [Corporation] within the prescribed time."

This general finding followed, as I have indicated, a series of specific findings, such as the finding about the windows and doors:

"I am also satisfied that the applicant advised the respondent of this within 6 months of becoming aware of the matter concerning the windows and doors of the building".

I have no jurisdiction, as I stated at the outset, to reconsider findings of fact. If it could be said that there was no evidence upon which a finding could be made, that would be an error of law; but merely to make a wrong finding (and I am not suggesting the Tribunal made any wrong finding) would not be to make an error of law. Although the late stage, at which the point was taken about whether or not notice had been given within 6 months, may have led to a blurring of the issues in the evidence, there was clearly evidence before the Tribunal on which it could find, as a matter of inference at least, that the matters in question were notified within 6 months of the beneficiary first becoming aware of the relevant defects.

26 In arguing to the contrary, counsel for the plaintiff suggested that the Tribunal was bound to identify each date when the beneficiary became aware of a relevant defect, so that it was an error of law to fail to do so. There is nothing in the Regulation to that effect. What is necessary is a conclusion that each matter was notified in writing by the beneficiary to the Corporation within 6 months after the beneficiary first became aware of the defect. There is no logic which demands that the precise date of awareness must be ascertained before a conclusion can be reached, perhaps as a matter of inference, that this date (whatever it was) was within the necessary period of 6 months. The Tribunal appears to me to have carried out its task with care, and in some detail, and its findings on this matter are pure findings of fact.

27 Although the Tribunal made the findings of fact to which I have referred, it also expressed the conclusion that the issue whether notification was given within the six months period was not raised until after the hearing had commenced, and no notice of it was given to the defendant (the applicant at the hearing before the Tribunal) until the second day of the hearing. The Tribunal stated the position as follows:

"It needs to be understood that throughout the pre-trial process, which in this case [was] lengthy, the Tribunal endeavours to ensure that the parties refine the issues for determination so that the Tribunal can deal with its case load efficiently and expeditiously in accordance with its statutory objectives. This is done in the absence of pleadings. Those issues which are not in issue are taken as admitted. At the commencement of this hearing both the applicant's representatives and I were operating on the understanding that if defects were:
(a) found to be major structural defects, then there would be no issue as to time; and
(b) found not to be major structural defects, then the issue was whether or not the defects were notified within 3 years of the date of commencement, and, if not, whether time should be extended pursuant to clause 7(2) of the Scheme.
In those circumstances, in my view, it would be a severe injustice to the applicant to allow the respondent, so late in the proceedings, to raise an issue of which it did not give prior notice. Irrespective of this view, I have in any case come to the conclusion that the respondent was notified in writing of 'the matters which could give rise to the losses' within time."

28 Having regard to the role of case management in the orderly determination of disputes, which seems to me as applicable to the Tribunal as it is to the ordinary courts, the considerations mentioned by the Tribunal seem to me plainly to be open to it. Furthermore, the view of the facts in connection with the procedures in question taken by the Tribunal corresponds closely to the views expressed in the High Court of Australia concerning the circumstances involved in The Commonwealth of Australia v Verwayen (1990) 170 CLR 394. If the Commonwealth was there estopped, as Deane and Dawson JJ held it was, from disputing its liability to the plaintiff, it was open to the Tribunal in the present case, on the view of the facts it took, to hold the present plaintiff estopped from taking the point that the 6 months period had in all or any cases been exceeded. In substance, that is what the Tribunal found. However, it made it clear that it did not confine itself to that ground of decision, but proceeded to consider the point on the merits and, as I have indicated, to dispose of it on the merits.

29 The plaintiff sought to avoid this conclusion on two bases:

(1) that the onus was on the beneficiary to show notification in time because of the words "to qualify" in cl 7(1);

(2) that the Tribunal should have recognized the beneficiary had itself recently changed its position on the issue of major structural defects, so it was not unfair of the plaintiff to do likewise on the 6 months issue.

30 As to the first point, it raises a difficult matter of construction of the Regulation, since cl 5 expressly makes the beneficiary's claim subject to clauses 6, 8 and 9, but not to cl 7, which is headed "Time limitations". However, I do not think this question needs to be resolved here, because the Tribunal's view of the conduct of the proceeding does not depend on any question of onus; plainly, the onus on liability lay on the plaintiff in Verwayen, but that was why an estoppel was required to be shown – it did not prevent it being shown. Indeed, if the onus was on the beneficiary, the unfairness and detriment involved were the more apparent.

31 As to the second point, the Tribunal's view of the conduct of the case was a view about the facts and the particular circumstances which had evolved in oral exchanges before it. Everything that Lord Sumner said about ordinary findings of fact, based on oral evidence, in SS Hontestroom v SS Sagaporack [1927] AC 37, is equally applicable here. This Court could not reassess the facts of the conduct of the matter, even if an appeal on questions of fact were open. It does not have a transcript of the pre-trial proceedings involved, but if it did, it could never recapture the advantage of the Tribunal which participated in those proceedings and absorbed their atmosphere. The Tribunal's conclusions on those questions should, in Lord Sumner's words (at 47), "be let alone".

32 For these reasons, the plaintiff's proceeding is dismissed with costs.

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Last Modified: 07/15/2002