Geoghan v Wood

[2021] NSWCATCD 141

Civil and Administrative Tribunal

New South Wales

Medium Neutral Citation:

Geoghan v Wood [2021] NSWCATCD 141

Hearing dates:

On the papers

Date of orders:

14 October 2021

Decision date:

08 October 2021

Jurisdiction:

Consumer and Commercial Division

Before:

R C Titterton OAM, Senior Member

Decision:

1. The Tribunal dismisses the application for a separate determination of the issues identified in par [4] of these reasons.

2. The matter will be listed for directions.

Catchwords:

PRACTICE AND PROCEDURE – Determination of a separate issue

Legislation Cited:

Home Building Act 1989 (NSW)

Civil and Administrative Tribunal Act 2013 (NSW)

Cases Cited:

Calderbank v Calderbank [1976] Fam 93 ; [1975] 3 All ER 333

Idoport v National Australia Bank [2000] NSWSC 1215

J & P Olzomer Pty Limited v The Owners of Strata Plan 67534 [2010] NSWSC 965

Metlife Insurance Ltd v RGA Reinsurance Company of Australia Ltd [2016] NSWSC 416

Mitry v Chardnas Pty Ltd [2008] NSWSC 359

Tepko Pty Limited v Water Board [2001] HCA 19

Texts Cited:

Nil

Category:

Procedural rulings

Parties:

Anne Geoghan (Applicant)
Daniel Wood (Respondent)

Representation:

Solicitors:
Lantern Legal (Applicant)
Priest Legal (Respondent)

File Number(s):

HB 21/26686

Publication restriction:

NIL

REASONS FOR DECISION

Summary

1. By application filed 21 June 2021 the applicant (Homeowner) sought an order that the respondent (Builder) undertake rectification works to the approximate value of $64,000. As at the time of these reasons the claimed rectification costs were $152,393.29.

2. At a directions hearing held on 3 September 2021 I gave directions for the parties to file submissions and evidence in relation to the Tribunal's power to hear and determine the Homeowner's claims (given a claimed date of completion of the relevant building works of 24 April 2019).

3. These directions were made at the Builder’s request.

4. The short issue is whether or not there should be an interlocutory hearing to determine:

• what is the date of practical completion of the works under the subject Contract for the purposes of s 3B of the Home Building Act 1989 (NSW) (the HB Act);

• what is the warranty period applicable to each claimed defect; and

• in relation to each claimed defect, have these proceedings been commenced within the time prescribed by s 18E of the Act?

Respondent’s Submissions

5. The Builder’s submissions may be summarised as follows.

6. For the purposes of s 3B of the HB Act the Builder says that the date of practical completion is 23 April 2019. The basis of that asserted completion date is:

• HIA HBCF Notice of Practical Completion dated 23 April 2019.

• the Builder handed over possession of the works on or before 23 April 2019;

• the Builder has not attended the site to carry out any works under the contract since 17 April 2019, except to rectify defects claimed by the Homeowner, at the Homeowners request.

7. The Builder has attended the site after 23 April 2019 after being engaged to carry out separate and discrete works which were outside the scope of the contract, namely construction of a concrete slab at the front of the property; and assembly of a "dumb waiter” from panels constructed by the Homeowner.

8. The Builder completed those separate works:

• in late April 2019, in the case of the slab; and

• on 11 June 2019, in the case of the dumb waiter.

9. There is no variation to the Contract to provide for those works.

10. Attendance on site to carry out separate work does not amend the practical completion date of works under the Contract.

11. The Notice of Practical Completion strongly indicates that practical completion occurred 23 April 2019.

12. There is a strong prima facie case that practical completion occurred 23 April 2019, or in the alternative, on some other date prior to 11 June 2019.

13. Subject to a determination on the nature of the defects claimed (as minor or major defects), there is a prima facie case that the application is made out of the time prescribed by s18E of the HB Act.

14. The Builder also submits that the Homeowner does not particularise whether any of the claimed defects are major defects for the purposes of the HB Act, and that only two of the clamed defects relate in any way to a “major element” that could constitute a major defect, namely:

• item 5 of the Scott Schedule dated 26 July 2021 relating to waterproofing of the ensuite; and

• item 23 of the Scott Schedule dated 26 July 2021 related to joist hangers.

15. As it does not seem likely on the Homeowner's own evidence that either of those potential defects are likely to cause the destruction or imminent collapse of the building, it is the Builder’s submission that none of the defects claimed constitute major defects for the purposes of s 18E.

16. If that is the case then the relevant warranty period under s 18E is 2 years.

17. Thus the Builder submits that there is a genuine question to be answered as to whether the application has been made within the warranty period and time for commencement of proceedings prescribed by s 18E of the HB Act. That question it submits is fundamental to establishing the jurisdiction of the Tribunal to hear the matter for the purposes of s 48K(7) of the HB Act.

18. He submits that there is prima facie evidence that the application has been made after the end of the period within which proceedings for a breach of the statutory warranty must be commenced (as provided by s 18E), and, if that is the case, the application must be dismissed.

19. The Builder submits that if the matter runs to a full hearing without preliminary determination of the jurisdictional issue, it will incur significant costs in responding to the claim.

20. In support of its application the Builder invokes ss 36 of the Civil and Administrative Tribunal Act 2013 (NSW) (NCAT Act).

21. In summary, the Builder submits that:

• proceeding to hearing without resolution of that issue will result in both parties incurring significant costs that may ultimately be thrown away if jurisdiction is not established and

• in the event that jurisdiction is established, determination of the date of practical completion may assist in the further conduct of the proceedings by narrowing the issues in dispute. Any narrowing of the issues can only serve to expedite any final hearing and reduce the costs to the parties.

22. A procedural approach that requires the parties to unnecessarily incur costs in the case of the Builder costs in the order of $20,000.00, where the matter may not be able to proceed does not appear to be in keeping with the guiding principle in favour of just, quick and cheap resolution of the issues.

23. Requiring the Builder to address the claim in full, including to put on expert evidence at significant cost, in circumstances where the jurisdiction of the Tribunal to hear the matter is not established is unduly prejudicial, imposes costs that are disproportionate to the true value and complexity of the matters in dispute, and does not facilitate the just quick and cheap resolution of the issues.

Homeowner’s submissions

24. The Homeowner denies the application was lodged out of time and says the evidence will demonstrate “completion” of the works occurred, at the earliest, when the applicant paid the Builder’s final invoice on 24 June 2019, in accordance with the Contract.

25. The Homeowner submits that the Builder relies upon a document entitled 'builder project completion advice', wherein the Builder set out a date of 'practical completion' dated 23 April 2018. The Homeowner says that that document appears to be between an insurer and the Builder and was not provided to the Homeowner.

26. In the alternative, if the Tribunal does accept the date of practical completion as 23 April 2019, the Homeowner submits the Tribunal needs to hear the experts' evidence to determine which defects are “minor” or “major”, since any major defects will still fall within the statutory warranty period within s.18E of the Act.

27. The Homeowner submits that in order to determine the jurisdictional point, the Tribunal will need to hear expert and lay evidence and so a separate preliminary hearing will only incur unnecessary additional cost to the parties.

Power to make order sought

28. There was no dispute between the parties whether the Tribunal had the power to determine separately determine issues in a proceeding.

29. Rule 28.2 of the Uniform Civil Procedure Rules provide that the Court may make orders for the decision of any question separately from any other question, whether before, at or after any trial or further trial in the proceedings.

30. There is no such power in the NCAT Act or the Civil and Administrative Tribunal Rules 2014.

31. My view is that s 38(1) of the NCAT Act is sufficiently broad to allow the Tribunal to do so. That section provides that the Tribunal may determine its own procedure in relation to any matter for which this Act or the procedural rules do not otherwise make provision.

Consideration

32. As was noted by Kirby and Callinan JJ in Tepko Pty Limited v Water Board [2001] HCA 19 at [168] (with whom Gaudron agreed at [52]:

168 … The attractions of trials of issues rather than of cases in their totality, are often more chimerical than real.  Common experience demonstrates that savings in time and expense are often illusory, particularly when the parties have, as here, had the necessity of making full preparation and the factual matters relevant to one issue are relevant to others, and they all overlap.

169 The second and related comment is this.  A party whose whole case is knocked out on a trial of a preliminary or single issue, may suspect, however unjustifiably, that an abbreviated course was adopted and a decision reached in the court's, rather than the parties', interests.

170 Thirdly, there is an additional potential for further appeals to which the course of the trial on separate issues may give rise.  Indeed, that could occur here were this appeal to be allowed and a retrial had in which the remaining issues of causation and damages were decided.  Single-issue trials should, in our opinion, only be embarked upon when their utility, economy, and fairness to the parties are beyond question.

33. This passage has been referred to with approval by the Supreme Court lon many occasions. For instance see Metlife Insurance Ltd v RGA Reinsurance Company of Australia Ltd [2016] NSWSC 416; J & P Olzomer Pty Limited v The Owners of Strata Plan 67534 [2010] NSWSC 965; Mitry v Chardnas Pty Ltd [2008] NSWSC 359 to name but three.

34. The relevant principles about determining separate issues were summarised in Idoport v National Australia Bank [2000] NSWSC 1215 by the late Justice Einstein at [7] which I paraphrase as follows (omitting authorities):

1. the power of the Court (here the Tribunal) to order the separate determination of an issue is a discretionary power which must be exercised judicially, but cannot otherwise be fettered;

2. the Court (here the Tribunal) must facilitate the just, quick and cheap resolution of the real issues in the proceedings and cannot be stated in a more confined way;

3. it is ordinarily appropriate that all issues in a proceeding should be disposed of at the one time;

4. it is for the party who wishes to have a question separately determined to show that it is desirable for that to occur;

5. without being exhaustive, the separate determination of an issue may prove to be an appropriate procedure in at least the following sets of circumstances:

1. where the resolution of that separate issue will have the effect of resolving the entirety of the litigious controversies or of substantially narrowing the field of litigious controversy;

2. where the resolution of that separate issue carries with it a strong prospect that the parties will thereafter be able to resolve their dispute themselves and thus avoid further litigation;

3. where there is a clear demarcation between that issue and all other issues in the case, including issues going to the credit of witnesses;

6. Conversely, the separate determination of an issue will rarely be an appropriate procedure where:

1. there are intertwined issues of fact or law between the separated question and the other questions such that the determination of the separate question will not have any substantial effect upon the width of the field of litigious controversy or the prospect of the settlement of the balance of the litigation;

2. where there is a commonality of witnesses and issues of credit as between the separate issue and other issues in the case which will or may necessitate a ruling on the credit of one or more of the common witness, thus possibly precluding that same judicial officer from again dealing with the matters going to the credit of the common witness;

3. there is a possibility that the resolution of the separate issue will not finally determine the issue but will merely result in an appeal from that decision in relation to that separate issue, creating a multiplicity of proceedings, interruption to the court and undesirable fragmentation of the proceedings.

35. It is ordinarily appropriate that all issues in a proceeding should be disposed of at the one time. In my view the factors which favour separate determination of the issues in par [4] are outweighed by the factors which do not. It appears to me that there are very real questions about the date of practical completion, as well as what are major defects. If the Tribunal decided the practical completion date in favour of the Homeowner, the determination of what are major defects go to the core of the controversy between the parties. If the Tribunal determines that that some matters are in fact major defects, then there has to be a later hearing about the rectification required and the associated costs. I think therefore that having a separate determination of the issues as sought is a false economy.

36. In addition, there will be a commonality of witnesses and issues of credit as between the separate issue (namely what is a major defect) and other issues (such as what is the rectification required and the cost thereof) which will or may necessitate a ruling on the credit of one or more of the common witnesses. This may lead to practical difficulties.

37. Finally, I do not think that the guiding principle can be called in aid of the Builder’s application. This is because I consider that the holding of the separate hearing may in fact increase costs.

38. In all the circumstances, I consider that a separate interlocutory hearing should not be held on the matters sought. If the Builder wishes to protect himself in relation to his costs, appropriate offers of compromise and Calderbank offers (Calderbank v Calderbank [1976] Fam 93 ; [1975] 3 All ER 333) may be made.

Orders

39. The Tribunal makes the following orders:

1. The Tribunal dismisses the application for a separate determination of the issues identified in par [4] of these reasons.

2. The matter will be listed for directions.

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I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales.

Registrar

Decision last updated: 15 February 2022