FORMBY and RED ROO HOMES (WA) PTY LTD
[2006] WASAT 300
•29 SEPTEMBER 2006
FORMBY and RED ROO HOMES (WA) PTY LTD [2006] WASAT 300
| STATE ADMINISTRATIVE TRIBUNAL | Citation No: | [2006] WASAT 300 | |
| BUILDERS' REGISTRATION ACT 1939 (WA) | |||
| Case No: | VR:207/2005 | 11 JULY 2006 | |
| Coram: | MR C RAYMOND (SENIOR MEMBER) | 29/09/06 | |
| 7 | Judgment Part: | 1 of 1 | |
| Result: | Application granted. | ||
| B | |||
| PDF Version |
| Parties: | V FORMBY RED ROO HOMES (WA) PTY LTD |
Catchwords: | Application for leave to review decision of Building Disputes Tribunal – Whether decision wrong or attended with sufficient doubt – Whether substantial injustice would result if decision is left unreversed |
Legislation: | Builders' Registration Act 1939 (WA), s 12A, s 12A(1a), s 12A(1)(a)(b), s 41 Home Building Contracts Act 1990 (WA) State Administrative Tribunal Act 2004 (WA), s 27, s 31, s 31(3) |
Case References: | Bellgrove v Eldridge (1954) 90 CLR 613 Tangent Nominees Pty Ltd and Edwards [2005] WASAT 119 Hunter v West Coast Building Service Pty Ltd (2003) 31 SR (WA) 219 Kelly v Norrish (2003) 31(SR) 379 Palm Bridge Pty Ltd v Miles [2001] WASCA 334 |
Orders | 1. The applicant is granted leave to review the decision of the Building Disputes Tribunal made on 16 March 2006 |
JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL STREAM : COMMERCIAL & CIVIL ACT : BUILDERS' REGISTRATION ACT 1939 (WA) CITATION : FORMBY and RED ROO HOMES (WA) PTY LTD [2006] WASAT 300 MEMBER : MR C RAYMOND (SENIOR MEMBER) HEARD : 11 JULY 2006 DELIVERED : 29 SEPTEMBER 2006 FILE NO/S : VR 207 of 2005 BETWEEN : V FORMBY
- Applicant
AND
RED ROO HOMES (WA) PTY LTD
Respondent
Catchwords:
Application for leave to review decision of Building Disputes Tribunal – Whether decision wrong or attended with sufficient doubt – Whether substantial injustice would result if decision is left unreversed
Legislation:
Builders' Registration Act 1939 (WA), s 12A, s 12A(1a), s 12A(1)(a)(b), s 41
Home Building Contracts Act 1990 (WA)
State Administrative Tribunal Act 2004 (WA), s 27, s 31, s 31(3)
(Page 2)
Result:
Application granted.
Category: B
Representation:
Counsel:
Applicant : Mr R Shaw
Respondent : Ms P Cahill
Solicitors:
Applicant : Lavan Legal
Respondent : Jackson MacDonald
Case(s) referred to in decision(s):
Bellgrove v Eldridge (1954) 90 CLR 613
Tangent Nominees Pty Ltd and Edwards [2005] WASAT 119
Case(s) also cited:
Hunter v West Coast Building Service Pty Ltd (2003) 31 SR (WA) 219
Kelly v Norrish (2003) 31(SR) 379
Palm Bridge Pty Ltd v Miles [2001] WASCA 334
(Page 3)
Summary of Tribunal's decision
1 The applicant applied for leave to review a decision of the Building Disputes Tribunal that although the respondent had constructed a garage to dimensions which were not in accordance with the building plans and specifications, the only claim which could be advanced was for breach of contract for diminution in value of the property.
2 The matter was referred back to the Disputes Tribunal which was invited, pursuant to s 31 of the State Administrative Tribunal Act 2004 (WA) to reconsider its decision. The Disputes Tribunal reconsidered the matter and subsequently issued further reasons for decision, in which it acknowledged that it was wrong to have concluded that a claim could be advanced for breach of contract, because the contract sum for the building works exceeded the upper limit described under the Home Building Contracts Act 1991 (WA). The claim in respect of the garage was dismissed because the Disputes Tribunal considered that no claim lay under s 12A of the Builders' Registration Act 1939 (WA).
3 The State Administrative Tribunal rejected the respondent's submission that the applicant was not entitled to a review of the later decision because the Disputes Tribunal had done no more than uphold its original order. The Tribunal held that the Disputes Tribunal had varied the original decision in relation to the garage and therefore, pursuant to s 31(3) of the State Administrative Tribunal Act 2004 the new decision became the decision under review.
4 The Tribunal also accepted the applicant's submissions that having found that the garage had not been constructed in accordance with the contractual plans and specifications, it was open to the Disputes Tribunal to award compensation under s 12A(1a) of the Builders' Registration Act 1939. As the Disputes Tribunal had erred in failing to deal with the matter under that section, the Tribunal concluded that a substantial justice would result if leave was not granted to review the decision and it ordered accordingly.
History of application and the decision under proposed review
5 An application for leave to review the decision of the Building Disputes Tribunal (Disputes Tribunal) reflected in Order to Pay no 114/2004-05, insofar as it related to costs, and a further order, both made on 8 February 2005, is dealt with in reasons for decision published
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- simultaneously with these reasons, in respect of matter no VR 186 of 2005 in which the respondent herein, is the applicant and the applicant herein, is the respondent. Reference is made to the history as set out in that decision.
6 In this matter, the applicant applies for leave to review the decision of the Disputes Tribunal insofar as it relates to the determination of an issue concerning the length of the carport or garage.
7 As outlined in the related decision, the Disputes Tribunal was invited under s 31 of the State Administrative Tribunal Act 2004 (WA) (the SAT Act) to reconsider its decision. In the original decision, the Disputes Tribunal found that the carport had been constructed in accordance with s 12A of the Builders' Registration Act 1939 (WA) (the BR Act). By that we understand that the Disputes Tribunal intended to convey that the works in question were not faulty or unsatisfactory. The Disputes Tribunal found that the length of the carport should have been 5500 centimetres but was in fact 4920 centimetres. The conclusion was stated "there is a breach of the contract in that the building was not constructed in accordance with the plans". The Disputes Tribunal stated that:
"the only option open to the owner is to ascertain whether there is any diminution in value of the property and to claim on the builder. We have jurisdiction to hear such a claim. Otherwise the claim has to be taken to the Courts and a writ for damages for negligence for which we do not have jurisdiction."
8 Immediately prior to stating the above conclusions, the Disputes Tribunal referred to the seminal authority of Bellgrove v Eldridge (1954) 90 CLR 613 in which the High Court held that the usual measure for damages in respect of breach of contract in a building matter was the cost of achieving conformity with the contract, but qualified that by stating that the remedial works to be undertaken must be necessary to produce conformity and must be a reasonable course to adopt. The Disputes Tribunal expressed the view that it would be an unreasonable course to carry out the remedial work proposed by the applicant:
"given that it is only a certain vintage of motor vehicle which cannot be accommodated in the garage."
9 When reconsidering the decision pursuant to the invitation made under s 31 of the SAT Act, the Disputes Tribunal acknowledged that it had been wrong to state that it would have jurisdiction to deal with any
(Page 5)
- contractual claim. That was because the contract sum was $232 000 whereas the limit of jurisdiction imposed under the Home Building Contracts Act 1990 (WA) was $200 000.
10 Having acknowledged the above, the Disputes Tribunal went on to state that the only issue, therefore, in the matter, is:
"as to whether the garage can or cannot be extended under the permission of the City Council, which has now been obtained by the complainant. It is noted that Council approval took place well after the original contract had been commenced and would therefore have required some sort of variation order to adjust the amounts payable."
11 The Disputes Tribunal then went on to state that the issue was "whether the builder has somehow been in breach of s 12A by not agreeing to the changes".
12 The Disputes Tribunal reiterated, as it had stated in the original decision, that it had regarded the work as having been properly built, hence its rationalisation, that if any claim was to be advanced, it could be advanced before it only under contract. Having recognised that its earlier conclusion was wrong in that regard, the Disputes Tribunal made an order that the claim of the owner in relation to the extension of the garage was dismissed.
Considerations
13 The respondent contends that, inasmuch as the Disputes Tribunal did no more than to uphold its original order, it is not open to the applicant to seek review of the subsequent order made on 16 March 2006. That submission is based on s 31(3) of the SAT Act which provides that if the decision-maker varies the decision or sets it aside and substitutes a new decision, unless the proceeding for a review is withdrawn, it is taken to be the review of the decision as varied or the substituted decision.
14 The respondent's submission is not accepted. Firstly, the rationale of the decision has been changed, as has the order, which has been varied from one granting liberty to apply for the assessment of damages for the diminution in value, to one dismissing the claim. Pursuant to directions made by the Tribunal, the applicant filed an amended application setting out the orders sought, which relate to the later decision made on 16 March 2006.
(Page 6)
15 In lieu of the order dismissing the claim in respect of the garage, the applicant seeks an order that the respondent pay the applicant the cost of making the garage conform to the contract drawing. The grounds for the orders sought assert that the Disputes Tribunal erred in finding that it had no jurisdiction under s 12A of the BR Act, when it did indeed have jurisdiction under s 12A(1a) of the BR Act. The further ground stated is that the Disputes Tribunal failed to apply the principles of Bellgrove v Eldridge, at least by analogy, under s 12A(1)(a)(b) of the BR Act in determining the appropriate remedy of the applicant.
16 Section 12A(1a) of the BR Act provides that where on a complaint being made to it by a person for whom building work has been carried out, the Disputes Tribunal is satisfied that in some respect (other than its being faulty or unsatisfactory) the building work has not been carried out in a proper and workmanlike manner, the Disputes Tribunal may, having regard to the extent of the failure to carry out the building work in a proper and workmanlike manner in relation to the whole of the building work, order the person who carried out the building work to either remedy the building work, or to pay to the owner for whom the building work was carried out, that had not been carried out in a proper and workmanlike manner, such sum of money as the Disputes Tribunal considers reasonable to compensate in respect thereof.
17 The Tribunal accepts the submissions made on behalf of the applicant, that s 12A(1a) is intended to provide a remedy in circumstances in which building work has been carried out not in accordance with the contractual plans and specifications. The respondent has endeavoured through its submissions to argue that what has been constructed is in accordance with the contractual plans and variations to the contract agreed by the parties. The Tribunal makes no findings in that regard. It is noted that there was an assertion by the applicant, which the Disputes Tribunal appears to have accepted, that there were specific discussions between the parties as to the purpose of the garage, and that the applicant's motor vehicle was specifically measured, so that the respondent could ensure that the garage was of a sufficient length for the vehicle.
18 The issue therefore which the Disputes Tribunal should have considered, but did not, was whether or not, in these circumstances, the respondent may have breached s 12A(1a) of the BR Act. For the Tribunal to have expressed the view that there had been a breach of contract, suggests that it would have found, if it had considered the issue, that a remedy could be granted under a foregoing section. The Tribunal erred in failing to consider this question, and as it relates to one of the more
(Page 7)
- significant, if not the most significant, issue in dispute between the parties, there would be a substantial injustice if leave were not to be granted and the decision not reversed, if the applicant's case is made out. In accordance with the principles expressed in Tangent Nominees Pty Ltd and Edwards [2005] WASAT 119, the applicant should be granted leave to review the decision of the Disputes Tribunal.
19 Given that the Disputes Tribunal has already expressed the view that, on the principles expressed in Bellgrove v Eldridge, it would not be appropriate to award the cost of remedial work in order to obtain conformity with the contract, it is preferable not to refer the matter back to the Disputes Tribunal. The matter will be dealt with by way of a hearing day de novo before this Tribunal when consideration may be given to the appropriate remedy, by way of either a remedial order or compensation, if it is established that a claim lied under s 12A(1a) of the BR Act. A directions hearing will be convened shortly in order to program the matter and the related proceedings in VR 186/2005 to a final hearing.
Order
1. The applicant is granted leave to review the decision of the Building Disputes Tribunal made on 16 March 2006.
I certify that this and the preceding [19] paragraphs comprise the reasons for decision of the State Administrative Tribunal.
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MR C RAYMOND, SENIOR MEMBER
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