HIA Insurance v CTTT and 2 Ors

[2004] NSWSC 82

CITATION:

HIA Insurance v CTTT & 2 Ors [2004] NSWSC 82

HEARING DATE(S):

18 February 2004

JUDGMENT DATE:

24 February 2004

JURISDICTION:

Common Law - Administrative Law List

JUDGMENT OF:

Master Harrison

DECISION:

(1) The decision of Tribunal Member Dr Stephen Smith dated 11 November 2002 is affirmed; (2) The appeal is dismissed; (3) The plaintiff's summons filed 21 January 2003 is dismissed; (4) The plaintiff is to pay the defendants' costs as agreed or assessed.

CATCHWORDS:

Appeal decision of CTTT - building contract - preliminary issue

LEGISLATION CITED:

Consumer, Trader & Tenancy Act (NSW) - s 67
Fair Trading Regulations 1999 - Reg 27(1) & (2)
Home Building Act 1989 (NSW) - ss 92, 94(4)
Home Building Regulation 1997 - Reg 49
Insurance Contracts Act 1984 (Cth)

CASES CITED:

Debis v Allied Bellambi Collieries [2000] NSWCA 274
Gallo v Dawson (1990) 64 ALJR 458
Hall v Nominal Defendant (1966) CLR 423
Jakamarra v Krakouer (1998) 153 CLR 276
Pace v Read [2000] NSWSC 823
R v Cheng (1999) 48 NSWLR 616
Southern Cross Exploration Nl v Fire & All Risks Insurance Co Ltd (No 3) (1990) 21 NSWLR 200

PARTIES :

HIA Insurance Services Pty Ltd
(Plaintiff)

Consumer Trader Tenancy Tribunal
(First Defendant)

Robyn Bryden
(Second Defendant)

Alan David Baldwin
(Third Defendant)

FILE NUMBER(S):

SC 30006/2003

COUNSEL:

Mr S Jacobs
(Plaintiff)

Mr P J Bambagiotti
(Second Defendant)

Mr J Hyde
(Third Defendant)

SOLICITORS:

Mr A Phung,
Sparke Helmore
(Plaintiff)

Submitting Appearance
(First Defendant)

Mr Simon Palmer,
Brydens Law Office
(Second Defendant)

Macedone Christie Willis
(Third Defendant)

LOWER COURTJURISDICTION:	CTTT
LOWER COURT FILE NUMBER(S):	HB00/70113
LOWER COURT JUDICIAL OFFICER :	Dr Stephen Smith

- 9 -

IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION
ADMINISTRATIVE LAW LIST

MASTER HARRISON

TUSDAY, 24 FEBRUARY 2003

30006/2003 - HIA INSURANCE SERVICES PTY LTD v
CONSUMER TRADER & TENANCY
TRIBUNAL & 2 ORS
JUDGMENT (Appeal decision of CTTT - building
contract – preliminary issue)

1 MASTER: By summons filed 21 January 2003 the plaintiff seeks firstly an order that the decision of Tribunal Member Dr Stephen Smith dated 11 November 2002 be set aside; secondly, a declaration that the works the subject of the building contract are uninsured within the meaning of the Home Building Act 1989 (NSW) thirdly, an order that the court extend the time to institute an appeal against the decision of the Tribunal heard on 13 August 2001 and delivered ex tempore on 13 August 2001; fourthly, an order that the decision of the Tribunal dated 13 August 2001 be set aside; fifthly, a declaration that the Tribunal’s decision to join the plaintiff to the proceedings was ultra vires; and sixthly, a declaration that the plaintiff does not have a sufficient interest in resolving the dispute as it existed in the Tribunal prior to its joinder. The plaintiff relied on the affidavit of Dino Liistro sworn 26 February 2003. This matter has been referred by a List Judge to a Master for hearing.

2 The plaintiff is HIA Insurance Services Pty Ltd (HIA). The first defendant is the Consumer Trader & Tenancy Tribunal (CTTT) who has filed a submitting appearance. The second defendant is Robyn Bryden (the owner). The third defendant is Alan David Baldwin (the builder).

3 The position of the second defendant, the owner, is somewhat unusual. She takes the view that whether the outcome of the decision is right or wrong, she makes no submission as to whether the contract is in force or not. Her counsel then sought to raise errors of law by way of submission late in the hearing of this appeal. The third defendant was caught by surprise.

Grounds of appeal

4 The plaintiff pleaded that the Tribunal Member erred firstly, in assuming that the policy is presumptively binding on the parties; secondly, in failing to make any finding as to the documents comprising the contract of insurance; thirdly, in failing to make any finding as to the terms of any contract of insurance; fourthly, in failing to find that there was no contract of insurance within the meaning of s 94(4) of the Home Building Act 1989 (NSW) (HBA); fifthly, in finding that regulation 49 of the Home Building Regulation 1997 was relevant to the question and “cured” the inaccurate representations made by the builder in the proposal. Furthermore, the plaintiff pleaded that the Tribunal Member erred in failing to decide the following agreed questions for determination: (a) If the certificate of insurance was obtained as a result of the builder’s intentional or reckless misstatement and/or non-disclosure, is it voidable? and (b) Whether the owner, by virtue of its duty of good faith to the insurers is precluded from relying on the certificate of insurance in the circumstances in which it was obtained.

5 Section 67 of the Consumer, Trader and Tenancy Act (NSW) (the Act) allows for an appeal to be made to this court on a question of law. A reference to a matter of law includes a reference to a matter relating to the jurisdiction of the Tribunal. The onus lies on the plaintiff to demonstrate that there has been an error of law. Section 67(3) of the Act provides that after deciding the question of the subject of an appeal the court may, unless it affirms the decision of the Tribunal on the question that should have been made by the Tribunal, remit its decision on the question to the Tribunal and order a rehearing of the proceedings before the Tribunal.

Background

6 On 7 April 1998 a building contract was entered into between the owner and the builder. The contract was for alterations to the owner’s property located at 23 Gold Street, Blakehurst. On 15 December 1999 the owner commenced proceedings in the CTTT against the builder alleging that she had suffered damage as a result of the builder’s breach of a design and construct contract (the building contract). One of the issues before the Tribunal Member was whether the building works carried out under the building contract was insured building work for the purposes of s 94 of the HBA.

7 It was common ground before the Tribunal Member that firstly, at the date of the contract there was no policy of home owners warranty insurance as required by s 92 of the HBA in force; secondly, no certificate of such insurance was annexed to the contract; thirdly, work had commenced on the site pursuant to the building contract; fourthly, some payments were made by the owner for works done under the contract; fifthly, a dispute arose between the parties as a result of which the owner purported to terminate the contract in June 1999. In December 1999 the builder applied for home owners warranty insurance with HIA and a certificate of insurance was issued by HIA to the builder in respect of works carried out at the owner’s property. Critically, on the document entitled “project application for insurance” (the application) question 9 has been answered in the following way:

9. Estimated state and completion date	(start)	/	1	2	/	9	9
(completion)	0	4	/	0	4	/	0	0

8 However, the actual work ceased to be carried out by the builder on 20 May 1999. This statement recorded in the document above does not accord with work ceasing on 20 May 1999.

9 In March 2001, after hearing submissions from the applicant and respondent the Tribunal Member joined the insurer HIA Insurance Pty Ltd as second respondent. On 10 August 2001, submissions were made by the plaintiff contending that the Tribunal was not vested with jurisdiction to determine the insurance question. The Tribunal Member gave an ex-tempore decision that the Tribunal has such jurisdiction. On 11 November 2002 the Tribunal Member made a determination in relation to a preliminary issue. HIA put on evidence and made submissions in relation to that issue. HIA now asserts that it should not have been joined as a party in the first place and appealed that decision. Regulation 27(1) and (2) of the Fair Trading Regulations 1999 empowers the Tribunal Member to join parties.

10 Early in the judgment the Tribunal Member recorded:

“In March, 2001 after hearing submissions from the applicant and respondent I joined the insurer HIA as 2nd respondent. Apart from any other considerations there were suggestions that the policy procured by the builder might be tainted and unenforceable. For example, the insurer might not be obliged to meet any claim made under the policy if the fact that the building contract was terminated on the grounds of alleged breach by the builder had not be disclosed. And of course there was an associated legal minefield touching a raft of issues such as whether or not the policy was subject to the Insurance Contract Act (C’th) and if it did what were the rights of the insurer under, for example, s.28 of that Act.”

11 A document entitled “Outline of Allegation and Facts in accordance with directions of Dr Smith on 26 February 2003” appears at Tab DL8, which is exhibited to the affidavit of Dino Liistro sworn 26 February 2003. The first subheading is “Questions for Determination” and at paragraph 1.1 to 1.6 questions are posed. The Tribunal Member referred to this document in his judgment where he stated:

“The Hearing

In deciding the question I had the benefit of oral submissions made on behalf of all parties, an outline of allegations and facts prepared by the 1st respondent, an affidavit of Robert Loney and chronology from the solicitors for the 2nd respondent.”

It is not clear what role this document had in the refining of the preliminary issue for determination.

12 The Tribunal Member does not go on to determine the issues described in the document but rather described the issue for determination in this way:

“Interlocutory Application

Some time ago it became clear the issue of insurance was one of the major questions in the case and that, although a certificate of insurance had been issued, the worth of the insurance cover behind that certificate was a live, and for some purposes a threshold, issue. As a result I agreed to a hearing on the preliminary matter of the insurance cover evidenced by the certificate issued by the 2nd respondent in December, 1999. It was not actually put this way, but the consequence of a finding that the insurance cover was nugatory would be that the cross claim at least in its present form would be ill founded and liable to be struck out.”

13 Hence, the issue for the Tribunal Member’s preliminary determination seems to be confined to the effect of insurance cover as evidenced by the certificate issued by the second respondent in December 1999. The preliminary question posed this way does not canvass the effect of s 28 of the Insurance Contracts Act 1984 (Cth).

14 The Tribunal Member in his reasons for judgment concluded:

“I conclude that the policy evidenced by the certificate is presumptively binding on the parties and satisfies the statutory requirements of the Home Building Act. A consequence of this finding is that the 1St respondent is entitled to bring a cross claim which must be considered on its merits.”

15 The Tribunal Member made an order that the application to strike out the cross claim be refused.

Extension of time to appeal

16 Although the time limits prescribed by the Rules may be extended, a case for such extension must be made. An extension of the time provided for appealing or seeking leave to appeal is not to be had merely for the asking. The decision to grant or refuse such an extension involves the exercise of a discretion. The fact of delay is a relevant consideration in this regard. Time limits for appeal are fixed for good reasons. The purpose for such time limits has been described as follows:

"They are not prescribed for the purpose of implementing what Roscoe Pound referred to more than 90 years ago as the 'sporting theory of justice'. They are prescribed as aides to the attainment of justice" ( Jakamarra v Krakouer (1998) 153 ALR 276 at 284 per Gummow and Hayne JJ).

17 Prima facie a party is required to adhere to the time limits prescribed by the Rules. However, where there is a power to extend such time and there is good reason in the interests of justice to do so, the time limits may be extended. It is for the party seeking the extension to persuade the Court that it is in the interests of justice that it should be granted. Such persuasion will usually depend on the provision of an acceptable or satisfactory explanation as to why the time limits were not complied with. (Jakamarra v Krakouer, supra at 294 per Kirby J).

18 In Gallo v Dawson (1990) 64 ALJR 458, McHugh J considered an application for an extension of time in which to file a notice of appeal in a matter in which there would have been an appeal as of right had the notice of appeal been filed within time. In refusing an extension of time McHugh J stressed:

1. The grant of extension of time is not automatic;

2. The discretion to extend time is given for the sole purpose of enabling the Court to do justice between the parties;

3. The discretion to extend time should only be exercised in favour of an applicant upon proof that strict compliance of the Rules will work an injustice.

4. In order to determine whether there would be an injustice it is necessary to have regard to 'the history of the proceedings, the conduct of the parties, the nature of the litigation and the consequences for the parties of the grant or refusal of the application for the extension of time' and, where the application is for an extension of time in which to lodge an appeal 'the prospects of the applicant succeeding on the appeal'.

19 McHugh J in Gallo also stressed that it was:

"necessary to bear in mind in such an application that, upon the expiry of the time for appealing, the respondent has 'a vested right to retain the judgment' ..." (supra at p 459).

20 See also the authorities collected in Pace v Read [2000] NSWSC 823; Supreme Court, unreported 18 August 2000.

21 The summons was filed on 21 January 2003. The appeal should have been filed by 9 December 2002. No reason whatsoever has been proffered by the plaintiff to explain the delay in commencing proceedings. No explanation for delay per se is a compelling reason to refuse an extension of time.

22 Further, it is my view that this appeal is premature. The Tribunal Member has made a preliminary decision, namely to refuse the application to strike out the cross claim. The plaintiff is seeking to appeal an interlocutory decision. In Hall v Nominal Defendant (1966) CLR 423 at 442-5 Windeyer J stated that the question to ask is “does [the order] finally determine the rights of the parties in a principal cause pending between them”, whether (at 444) “it results in a final determination of that action” or (at 445) “is the effect of the order to [establish] finally or otherwise the rights of the disputant parties – does it put an end to an existing dispute or existing action?” – see also Southern Cross Exploration NL v Fire & All Risks Insurance Co Ltd (No 3) (1990) 21 NSWLR 200, 216; Debis v Allied Bellambi Collieries [2000] NSWCA 274. The relevant test of an interlocutory judgment is on the legal effect rather than practicality – see R v Cheng (1999) 48 NSWLR 616 at 618 per Spigelman CJ. The legal effect of the Tribunal Member’s decision does not finally determine the rights of the parties nor does it put an end to an existing action. This appeal is premature and no reasons have been proffered as to the delay in bringing the appeal. For these reasons the appeal should be dismissed.

23 Costs are discretionary. Costs usually follow the event. The plaintiff is to pay the defendants’ costs as agreed or assessed.

24 The court orders that:

(1) The decision of Tribunal Member Dr Stephen Smith dated 11 November 2002 is affirmed.

(2) The appeal is dismissed.

(3) The plaintiff’s summons filed 21 January 2003 is dismissed.

(4) The plaintiff is to pay the defendants’ costs as agreed or assessed.
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Last Modified: 02/27/2004