JENNINGS and HOWITT
[2019] WASAT 133
•12 DECEMBER 2019
JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL
ACT: BUILDING SERVICES (COMPLAINT RESOLUTION AND ADMINISTRATION) ACT 2011 (WA)
CITATION: JENNINGS and HOWITT [2019] WASAT 133
MEMBER: MS C WALLACE, SENIOR MEMBER
HEARD: 9 OCTOBER 2019
DELIVERED : 12 DECEMBER 2019
FILE NO/S: CC 971 of 2019
BETWEEN: JEFFERY THOMAS JENNINGS
Applicant
AND
NEIL ALEXANDER HOWITT
First Respondent
JUSTINE SASCHA CANNING
Second Respondent
Catchwords:
Building Services (Complaint Resolution and Administration) Act 2011 (WA) - Application for leave to apply for internal review under s 58(2) - Criteria on application for leave - Proper exercise of the Tribunal's discretion in respect of nature of building remedy order - Whether a failure to build according to the provisions of a home building work contract constitutes building work not carried out in a proper and proficient manner - Whether substantial injustice will be suffered if decision left unreversed
Legislation:
Building Regulations 2012 (WA), Sch 4, cl 2
Building Services (Complaint Resolution and Administration) Act 2011 (WA), s 5(1), s 11(1)(d), s 36, s 36(1), s 36(1)(a), s 36(1)(b), s 36(1)(c), s 38, s 38(1), s 58(2)
Home Building Contracts Act 1991 (WA), s 3(1)
Home Building Contracts Regulations 1992 (WA), reg 2A(b)
Planning and Development Act 2005 (WA), s 214(2)
Result:
Partly successful
Category: B
Representation:
Counsel:
| Applicant | : | Mr M Lang |
| First Respondent | : | In Person |
| Second Respondent | : | In Person |
Solicitors:
| Applicant | : | Jackson McDonald |
| First Respondent | : | N/A |
| Second Respondent | : | N/A |
Case(s) referred to in decision(s):
Dumbreck and Tangent Nominees Pty Ltd [2017] WASAT 88
Filimon and Rimmer [2013] WASAT 13
Gemmill Homes Pty Ltd v Sanders [2018] WASC 179
Lewis and Waco Ltd [2016] WASAT 127
Myran Holdings Pty Ltd and Bombak [2013] WASAT 20
Waldron and Afra Construction Pty Ltd [2013] WASAT 207
REASONS FOR DECISION OF THE TRIBUNAL:
The application for leave to review
On 28 June 2017 the Building Commissioner received a complaint lodged by the respondents in this proceeding, Mr Neil Howitt and Ms Justine Canning, against the applicant in this proceeding, Mr Jeffery Jennings, pursuant to s 5(1) of the Building Services (Complaint Resolution and Administration) Act 2011 (WA) (BSCRA Act). The application alleged that the applicant had carried out a regulated building service, being the construction of a residential property in the suburb of Kalgan, in the City of Albany, Western Australia, which was faulty or unsatisfactory and/or which had not been carried out in a proper and proficient manner.
The complaint was referred to the Tribunal on or about 24 November 2017 pursuant to s 11(1)(d) of the BSCRA Act. The complaint became proceeding CC 2414 of 2017.
The respondents then lodged a further application with the Building Commissioner on 13 June 2018 raising additional complaints pursuant to s 5(1) of the BSCRA Act against the applicant. That application was also referred to the Tribunal pursuant to s 11(1)(d) of the BSCRA Act in October 2018 and became proceeding CC 1236 of 2018.
Both sets of proceedings were listed for final hearing concurrently for a duration of three days during 21 23 May 2019 with the panel constituted by Member Le Miere, Senior Sessional Member Affleck (being a civil and structural engineer) and Sessional Member Kershaw (being a registered builder) (the original Tribunal).
Member Le Miere delivered oral reasons on behalf of the panel on 24 May and on 27 May 2019 made a number of final orders which included the following order:
1.Pursuant to s 36(1)b of the Building Services (Complaint Resolution and Administration) Act 2011 (WA), the respondent shall pay to the applicants the sum of $154,875 within 30 days of the date of this order.
On 3 July 2019 the applicant filed an application pursuant to s 58(2) of the BSCRA Act seeking leave to review the decision of the original Tribunal.
The applicant also sought provision of written reasons from the original Tribunal which was provided on 11 July 2019 by way of the transcript.
The question of leave was listed by the Tribunal for hearing on 9 October 2019 during which the Tribunal received oral submissions from the parties. At the conclusion of the hearing the Tribunal reserved its decision on the question as to whether leave to review ought to be granted to the applicant.
For the purpose of determining the question of leave the Tribunal also had the benefit of the following documentation:
1)the transcript of the hearing before the original Tribunal during 21 23 May 2019;
2)the transcript of the oral reasons of the original Tribunal dated 24 May 2019;
3)the exhibits which were before the original Tribunal;
4)written submissions filed on behalf of the applicant dated 20 September and 11 November 2019; and
5)written submissions filed by the respondents dated 28 October 2019.
The proposed grounds of review
The following sets out the grounds of review in summary form:
1)Ground 1 the original Tribunal misconstrued s 38 of the BSCRA Act in that the original Tribunal interpreted it as entitling the respondents to elect the remedy which the Tribunal would make pursuant to s 36(1) of the BSCRA Act in circumstances where s 38 provides for no such election;
2)Ground 2 the original Tribunal erred in fact and law by ordering the payment of monies under s 36(1)(b) of the BSCRA Act and failed to exercise its discretion as to the appropriate type of building remedy order to be made;
3)Ground 3 inadequate reasons (no reasons) were given for the decision to order the payment of monies under s 36(1)(b) of the BSCRA Act, as opposed to an order to remedy the works;
4)Ground 4 in ordering the payment of monies under s 36(1)(b) of the BSCRA Act, the original Tribunal erred in fact and law by not giving adequate weight (or any) to the fact that the usual order that follows a finding of faulty or unsatisfactory work is an order requiring the party who performed the regulated building service to remedy their own work;
5)Ground 5 the original Tribunal erred in fact and law in finding that the use of the Weathertex cladding in place of Jarrah weatherboard constituted unsatisfactory building work and building work not carried out in a proper and proficient manner;
6)Ground 6 the original Tribunal erred in fact and law in finding that the alteration of a portion of the roof to a spandrel roof type constituted unsatisfactory building work and building work not carried out in a proper and proficient manner;
7)Ground 7 inadequate reasons for the decision were given which failed to explain the actual path of reasoning as to how the amount ordered to be paid by the applicant was calculated, including the scope of the required remedial works and the time and cost of such works; and
8)Ground 8 the original Tribunal erred in fact and law by ordering the payment of monies by the applicant to the respondents in respect of the building permit, planning approval and home indemnity insurance, which were not required in respect of remedial works.
The criteria for the grant of leave
In Myran Holdings Pty Ltd and Bombak [2013] WASAT 20 at [8], the Tribunal set out the following criteria to be considered when deciding whether to grant leave for review and which were adopted from a consideration of that matter in the earlier decision of Filimon and Rimmer [2013] WASAT 13:
1)It is necessary to show that the decision of the original Tribunal was wrong or attended with sufficient doubt.
2)It must be shown that if leave were not to be granted, the applicant would suffer a substantial injustice.
3)It will normally not be sufficient that the decision appealed from is apparently wrong or attended with doubt. Something more will need to be shown, such as that there is a significant question of law to be considered, or some other feature, which requires the consideration of the Tribunal to avoid a substantial injustice of leave were not to be granted.
4)The decisions of the original Tribunal are not to be read minutely and finely with an eye keenly attuned to the perception of error.
5)A broad view should be taken of all the material before the original Tribunal, and this Tribunal should be slow to grant leave to review 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.
6)Leave may be granted in respect of only some and not other grounds of the proposed review.
7)Having regard to the objects of the Tribunal, and because any review is by way of a hearing de novo, there is all the more reason to be particularly discerning about whether sufficient doubt exists to open the possibility of leave being granted.
8) In considering challenges to the weight of evidence, regard must be given to the expertise of the members of the original Tribunal.
The above criteria of course is not exhaustive and the Tribunal is able to consider other relevant matters.
Findings made by original Tribunal
By way of background, it is useful to set out in summary form the findings made by the original Tribunal.
The original Tribunal in its oral reasons addressed only those issues which remained in contention between the parties as at the conclusion of the final hearing. In this regard, a particularly contentious item between the parties was complaint item 24 in respect of a carport which was alleged to have been built without a building licence and within the setback and fire zone. The respondents claimed the costs of demolition of the carport and its reinstatement in a different location.
The original Tribunal found that the applicant, by commencing a regulated building service, namely, the construction of the carport, in the belief that there was a building licence, without knowing what plans had been approved and what conditions there may have been on the building licence and without resolving issues in relation to insurance, did not carry out the regulated building service in a proper and proficient manner (ts 7 and 8, 24 May 2019). The original Tribunal also found that the carport was not able to be reinstated in a different location and therefore awarded the respondents the costs of demolition of the carport and making good.
The applicant also disputed liability in respect to complaint items 29 and 29(a) which alleged that the applicant had installed the wrong cladding material contrary to the contractual specifications. The respondents claimed the costs of removal of the cladding and replacement with Jarrah wall cladding including sarking.
In respect of this complaint item the original Tribunal found that the specification schedule to the relevant home building work contract (Exhibit 5) identified that the external wall cladding was to be recycled Jarrah weatherboard in the outdoor living area. The original Tribunal determined that the applicant, by failing to use the correct cladding in an area which had a significant visual effect, constituted unsatisfactory building work and building work which had not been carried out in a proper and proficient manner (ts 9, 24 May 2019).
The remaining contentious issue between the parties in respect of the question of liability was in relation to complaint item 27, wherein the respondents alleged that the corner of the veranda had a spandrel roof instead of a hip roof. Although the applicant submitted to the original Tribunal that there was an oral variation agreed by the parties, this was not accepted and ultimately the original Tribunal found that making such an alteration in the absence of an agreed variation constituted building work which had not been carried out in a proper and proficient manner or which was faulty and unsatisfactory (ts 10, 24 May 2019).
The original Tribunal also made various findings in relation to the scope of works required to remedy particular complaint items and the reasonable costs which would be incurred by a third party in performing those works. It is unnecessary for the purpose of this decision to set out the original Tribunal's reasons and decision in that regard.
Finally, and of relevance, the original Tribunal found that part of the costs of performing the remedial work, which ought to be borne by the applicant, included costs in respect of obtaining a building permit, planning approval and home indemnity insurance. This is in circumstances where, on 26 July 2017, the City of Albany issued a stop work order under the Planning and Development Act 2005 (WA) (PD Act) alleging various breaches (ts 3, 24 May 2019). The building permit in respect of the construction of the residential property expired following the issuing of the stop work order. The applicant therefore cancelled the home indemnity insurance given that he was not in control of the site (page 278 of Exhibit 1).
The original Tribunal in its reasons noted that 'it was agreed by the parties that a new development approval and a new building licence would need to be obtained for any further work to now be done on the house' (ts 3, 24 May 2019). The original Tribunal therefore awarded the costs in favour of the respondents which would be incurred in respect of a new building permit, planning approval and home indemnity insurance (ts 15, 24 May 2019).
Consideration of review grounds
Grounds 1 4 order under s 36 of the BSCRA Act
It is appropriate to group the first four grounds of review together in considering the question of leave. Essentially the applicant seeks leave to review the decision of the original Tribunal on the question as to the nature of the building remedy order which ought to be made.
Section 38(1) of the BSCRA Act confers a discretion on the Tribunal as to whether to make a building remedy order in favour of an applicant, and if so, s 36(1) of the BSCRA Act confers a discretion as to the nature of the building remedy order. Pursuant to s 36(1)(a) the building remedy order may specify work to be performed or pursuant to s 36(1)(b) of the BSCRA Act the building remedy order can require a sum of money to be paid by a respondent to the applicant.
The exercise of the discretion by the Tribunal cannot be fettered by simply adopting an applicant's election as to their preferred building remedy order; per Smith AJ as her Honour then was in Gemmill Homes Pty Ltd v Sanders [2018] WASC 179 at [131] and [135] [140].
It appears clear to this Tribunal that the original Tribunal did not properly exercise its discretion and rather, adopted the respondents' election of a monetary order pursuant to s 36(1)(b) of the BSCRA Act. This position is clear from a review of the original Tribunal's reasons for decision and also from a review of the transcript of the final hearing itself, during which the parties were informed that any final order made by the original Tribunal would be in monetary terms; ts 128 and 132, 23 May 2019.
Therefore in the Tribunal's view ground 2 of the review application is made out, in that the original Tribunal failed to exercise its discretion as to the appropriate type of building remedy order to be made. Given that ground 2 has established that an error of law has been made, it is unnecessary for the Tribunal to address grounds 1, 3 and pursuant to s 36(1) of the BSCRA Act.
However, establishing that the original Tribunal has fallen into error is not in and of itself a sufficient basis on which leave to review should be granted. The applicant must also establish that if leave were not granted and the decision at first instance was left unreversed, that the applicant would suffer a substantial injustice.
It is common cause that when considering whether a substantial injustice will be suffered, the Tribunal considers whether a rehearing could result in a different outcome being reached, thus justifying the parties incurring additional costs, delay, inconvenience and the often experienced emotional turmoil associated with re-litigating the dispute.
The Tribunal accepts the applicant's contention that if the Tribunal made an order pursuant to s 36(1)(a) of the BSCRA Act requiring the applicant to perform specified remedial work, that the adverse impact on the applicant from a financial perspective would be far less severe. Thus, if there were prospects of such an order being made pursuant to s 36(1)(a) of the BSCRA Act, then leave to review ought to be granted in relation to the exercise of the Tribunal's discretion.
The applicant submitted to the Tribunal that there are a number of factors which would have swayed the original Tribunal, if it had exercised its discretion, to make an order pursuant to s 36(1)(a) of the BSCRA Act as follows:
a)There had been no 'irretrievable breakdown' of the relationship between the parties. The relationship is a difficult one given that the parties are involved in extended litigation but that is not a unique situation in respect to any dispute agitated through courts and tribunals;
b)The respondents do not currently live in the property and therefore if the applicant returned to undertake remedial works, the parties would not need to come into contact with each other on a regular basis;
c)The intention of the legislature in the drafting of the BSCRA Act was that the primary position would be that a builder should be permitted to return and remedy defective works and this is why an order to remedy the regulated building service is reflected in the first subsection of s 36 of the BSCRA Act;
d)There are advantages afforded to both an owner and a builder by a remedial work order which are not afforded to them by the making of a monetary order;
e)The applicant has the required skills, experience and proficiency to carry out the remedial works as specified by the original Tribunal and he has always been willing and able to do so; and
f)Mr Whittle, the respondent's expert before the original Tribunal, repeatedly gave evidence that the applicant should be required to remedy the deficiencies complained of.
The matters raised by the applicant do have some bearing on the exercise of the Tribunal's discretion in respect of the appropriate building remedy order to be made. However, in this Tribunal's view, from a review of all of the evidence which was before the original Tribunal, a number of matters relevant to the exercise of the discretion strongly support the position that the applicant ought not be ordered to perform remedial work. These matters include the following:
a)The respondents have expressed their strong preference for the applicant not to perform any further building work at their property;
b)The respondent's evidence before the original Tribunal supports a finding that there has been an irretrievable breakdown of the relationship between the parties. This includes a witness statement of the respondents which, in addition to other matters, provides details of an alleged incident of trespass by the applicant which resulted in the respondents making a police report; pages 219 224 of Exhibit 1;
c)Given the irretrievable breakdown of the relationship between the parties there is a real likelihood that if the applicant was ordered to return and perform further building work there would be no finality to the litigation and further agitation and disputation between the parties would arise;
d)The home building work contract entered into between the parties was terminated on 30 July 2018 (pages 283 284 of Exhibit 1) on the basis that a default notice issued to the applicant had not been complied with (pages 280 282 of Exhibit 1); and
e)The evidence before the original Tribunal raised serious concerns in relation to the proficiency and competency of the applicant given the nature and extent of the complaints, which supports the reasonableness of the respondents' loss of trust in the applicant. This is highlighted by the below examples:
i)The applicant undertook to build a carport without the appropriate approvals in place:
LE MIERE MS: So is it acceptable building practice for a registered builder to commence building without seeing the building permit?
WITNESS JENNINGS: Probably not. I I believe I believe the applicant …
…
KERSHAW MR: And how does this affect your indemnity insurance on the property? It's not a standalone structure. It's attached to yours.
WITNESS JENNINGS: Well, it would have had to have been probably changed, I suppose.
LE MIERE MS: Well was it?
WITNESS JENNINGS: No. Because well, it wasn't thought of at the time. No.
LE MIERE MS: So you're asking the Tribunal to accept that as a registered builder you accepted that the owners would obtain a building permit in their own names, submitting to council drawings that you have not seen, because you don't know what went in, and that you were prepared to whilst you considered it a variation to the contract, you didn't consider it a variation to the building licence, and you wanted to you were prepared to build under somebody else's licence without having seen the plans and without addressing the issue of insurance.
…
LE MIERE MS: … you didn't know what the building licence said.
JENNINGS MR: No. I didn't. No.
LE MIERE MS: You don't know what conditions were on the building licence.
JENNINGS MR I don't, and I was remiss of that.
(ts 178 180, 21 May 2019)
ii)In respect of the verandah roof framing Senior Sessional Member Affleck made the following observations in respect of which the respondent's expert witness agreed:
AFFLECK MR: … I'm not supporting you, Mr Whittle, because I'm not here to support you, but going on from the problem with the drawing is that it is probable, in my view, that what should have been roof framing done in the normal, proper manner has been well and truly bastardised to accommodate this funny change of angle and the fact the two veranda roofs can't they're not in the same plane when they meet along that line.
(ts 264, 22 May 2019)
iii)In addition, in respect of the verandah roof both parties experts agreed that what had been drawn could not be constructed:
AFFLECK MR: … What caused this problem?
WITNESS WHITTLE: The it was built to this detail. This was the only detail in the whole set of plans.
AFFLECK MR: Well, it was not quite built to this detail, because in this detail the roof sheeting is shown sitting on battens all the way through.
WITNESS WHITTLE: It isn't an accurate detail.
AFFLECK MR: Thank you. So the drawing is wrong.
WITNESS WHITTLE: That's what I have written, yes.
AFFLECK MR: Yes. So is it true then to say that the cause of – the root cause of this problem is that what was drawn could not be built?
WITNESS WHITTLE: Yes.
AFFLECK MR: Thank you.
LE MIERE MS: Now, just to confirm that I understand your evidence, Mr Rees-Mogg, you didn't inspect, but you now have looked at what Mr Whittle has inspected, and I think Mr Mexsom might have as well, and you've heard what they've said, and you accept that having done it this way is not proper and proficient?
WITNESS REES-MOGG: I do.
(ts 222, 22 May 2019)
iv)The applicant had to be pressed a number of times by the original Tribunal to accept that the drawings he contended were 'as constructed' were in fact inaccurate in relation to the roof:
AFFLECK MR: Mr Jennings, the size of the rafters, do you now accept they are 70 x 35 bannisters – batons, as per Mr Whittle's evidence?
JENNINGS MR: Yes sir.
LE MIERE MS: Thank you. So do you now accept that the drawing you made of 'as constructed' is not accurate?
JENNINGS MR: Obviously.
(ts 5 and 6, 23 May 2019)
v)The respondents were issued with a stop work order pursuant to s 214(2) of the PD Act by the City of Albany due to a number of contraventions which included that the residential property was not being constructed in accordance with the stamped approved plans in that it exceeded a height of 7.5 metres above the predevelopment natural ground level and did not have the minimum 20 metre wide building protection zone around it (pages 268 and 269 of Exhibit 1). This was raised with the applicant during the course of the hearing before the original Tribunal as follows:
LE MIERE MS: … the house wasn't built in accordance with the design plans that were submitted to the City of Albany and my understanding is that the reason new plans had to be put in was because you didn't build according to those plans and so they needed a plan which reflected what work had been done.
JENNINGS MR: Yes.
(ts 90 and 91, 23 May 2019)
Thus in this Tribunal's view, the factors relevant to the exercise of the Tribunal's discretion as to the nature of the building remedy order which ought to be made, substantively support an order being made pursuant to s 36(1)(b) of the BSCRA Act. Therefore it cannot be established that there would be a substantial injustice suffered by the applicant if the decision of the original Tribunal in this regard was left unreversed. On that basis the Tribunal will not grant leave to review in respect of grounds 1 4.
Grounds 5 and 6 contractual complaints (no jurisdiction)
The applicant alleges that the Tribunal made orders in the absence of jurisdiction in respect of complaint items 27, in relation to a modification of the roof from a spandrel type roof to a hip roof and item 29, where it was alleged that the applicant installed Weathertex cladding in the place of Jarrah weatherboard.
The Tribunal's jurisdiction to determine home building work contract complaints (HBWC complaints) is limited by a prescribed upper contractual amount of $500,000; s 3(1) of the Home Building Contracts Act 1991 (WA) and reg 2A(b) of the Home Building Contracts Regulations 1992 (WA). The home building work contract entered into between the parties was for a contractual price above the prescribed jurisdictional limit. Thus the original Tribunal only had jurisdiction to determine building service complaints and could not determine a HBWC complaint.
Prior to the publication of the decision in Dumbreck and Tangent Nominees Pty Ltd [2017]WASAT88 (Dumbreck) the Tribunal's position was that a failure to comply with contractual drawings and specifications constituted a regulated building service which had not been carried out in a proper and proficient manner and thus could be brought as a building service complaint pursuant to s 5(1) of the BSCRA Act; Waldron and Afra Construction Pty Ltd [2013] WASAT 207 at [14] and [15] and Lewis and Waco Ltd [2016] WASAT 127 at [14] and [15].
However, in Dumbreck the Tribunal found as follows:
31Section 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.
32In 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.
…
34It 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.
35In 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.
I respectfully concur with the position as set out in Dumbreck. That is, a complaint which merely alleges a failure to comply with a contractual provision can only be brought as a HBWC complaint and does not in and of itself constitute a failure to carry out the regulated building service in a proper and proficient manner. To be held otherwise effectively allows any complaint of breach of contract to be brought as a building service complaint and therefore bypass the jurisdictional threshold the legislature has imposed.
Both complaints 27 and 29 appear to allege breach of the home building work contract by the applicant. In respect of complaint 27 the respondents alleged that the applicant departed from the contractual drawings by building a spandrel roof instead of a hip roof, in the absence of an agreed variation to the contract. In respect of complaint 29 the respondents alleged that the applicant departed from the contractual specifications when installing a different cladding material, again without any formal variation having been agreed by the parties. In their terms both complaints therefore appear to allege breaches by the applicant of the home building work contract.
Given that the original Tribunal did not have jurisdiction in respect to HBWC complaints, it therefore did not have the power to make a building remedy order in respect to complaint items 27 and 29. By making a building remedy order outside of its jurisdiction, the original Tribunal fell into error.
As to whether a substantial injustice will be suffered by the applicant, if that part of the decision of the original Tribunal was left unreversed, this Tribunal finds that there would be a substantial injustice suffered. This is because the original Tribunal awarded, in respect of complaint item 27, the amount of $4,355 and in respect of complaint item 29 the amount of $9,805 (ts 14, 24 May 2019). To those amounts the original Tribunal added an overhead of 25%, a regional loading of 15% and GST in the amount of 10% (ts 15, 23 May 2019). In this Tribunal's view the amount in contention is significant and thus leave ought to be granted on the basis that if the decision was left unreversed the applicant would suffer a substantial injustice. Therefore grounds 5 and 6 are successful.
Grounds 7 and 8 quantum issues
The Tribunal notes that following the hearing on 9 October 2019 the applicant notified the Tribunal that he was not pressing ground 7. Therefore the Tribunal will only address ground 8.
Ground 8 contends that the original Tribunal erred in fact and law by ordering the payment of monies by the applicant to the respondents in respect of a building permit, planning approval and home indemnity insurance which were not required in respect of remedial works.
Building permit
The applicant submitted that a building permit would be required for new works but is not required in respect of remedial works. In this regard the applicant refers to cl 2 in Sch 4 of the Building Regulations 2012 (WA) which sets out the kind of building work for which a building permit is not required and which includes renovation, alteration, improvement, repair or maintenance of a building. The applicant submitted that the remedial works constitute repair work and therefore no building permit is necessary.
What the applicant's submissions appear to fail to address, is the circumstances in which any remedial work must be performed. The remedial work cannot be artificially analysed in a vacuum devoid of a consideration of the relevant surrounding facts. In this regard the Tribunal notes that a building permit was issued to the applicant which authorised the applicant to build in accordance with relevant approved plans. The City of Albany found that the applicant was in breach of his building permit and therefore issued a stop work order. As at that time the City of Albany made it clear to the respondents that a new building permit was required or an amendment to the existing permit before any further work could continue; pages 263 and 264 of Exhibit 1. Indeed the need for a new building permit was accepted by both parties' experts and costed during the course of the hearing before the original Tribunal; ts 70, 23 May 2019.
In this Tribunal's view the original Tribunal did not make an error of law or fact in determining that a new building permit was required on the basis of the documentary and oral evidence before it. It was not necessary because of the nature of the work, but rather, was necessary in the context of the stop work order issued by the City of Albany. It was open therefore for the original Tribunal to find on the evidence before it that a building permit was a pre-requisite to the carrying out of any further work at the property, irrespective of its nature.
Planning approval
The applicant submitted that there was no requirement for planning approval in respect of the remedial works required to be performed.
Again it appears to this Tribunal that the applicant is failing to take into consideration the direction issued by the City of Albany which specifically requires a development application to be made; pages 265 and 266 of Exhibit 1. This is a requirement of the City of Albany because the applicant failed to construct the property in compliance with the building permit originally obtained by him.
What became clear to the original Tribunal during the course of the hearing was that the relevant approvals in place did not reflect what had in fact been constructed by the applicant. Thus whilst certain remedial works need to be undertaken, they are substantive in that they are amending underlying building work which does not have the appropriate planning approval. The respondents found themselves in a dire situation at the time that the City of Albany issued its direction. It was the applicant's own actions which placed the respondents in such a position. If the building work had been performed in accordance with the original permit and approvals, these costs may not have been required to be incurred. However because the applicant did not build in accordance with his building permit and the relevant approvals, no further work can be performed whether it be new or remedial work.
Therefore this Tribunal does not accept that the original Tribunal fell into error of either fact or law. There was clearly evidence before the original Tribunal to support the position that planning approval is now required before any remedial work can be performed.
Home indemnity insurance
The applicant submitted that the original Tribunal erred in finding that the applicant was liable for the costs of home indemnity insurance. The applicant submitted that whilst it may be required in the event that a third party performs the requisite remedial works, however, the cost is not directly relevant to those works.
This Tribunal does not accept the submission that the cost is not relevant to the remedial works. The original Tribunal was informed by the respondents, and accepted their evidence, that the original home indemnity insurance had been cancelled; ts 5, 21 May 2019. Thus any third party retained to perform the remedial works will be required to obtain home indemnity insurance and so the cost is clearly incidental and ancillary to the performance of the remedial works. The Tribunal is therefore empowered to order the payment of those costs pursuant to either s 36(1)(b) or s 36(1)(c) of the BSCRA Act.
It should also be noted that it did not appear to be in issue before the original Tribunal that home indemnity insurance would be required for the relevant remedial work to be performed and the only issue was the cost of the home indemnity insurance given that the property was partially constructed; ts 73 and 74, 23 May 2019.
Thus on the basis of the evidence before the original Tribunal, home indemnity insurance was necessary and the original Tribunal had the jurisdiction to order the applicant to pay those costs to the respondents, given that they are costs which must be incurred if the remedial works are to be performed.
Conclusion
Therefore leave to review will be granted to the applicant in respect of grounds 5 and 6 only, with the remaining grounds to be dismissed.
Given that grounds 5 and 6 have effectively been substantively determined in this decision, it appears to be unnecessary for any rehearing and it is open to the Tribunal to simply amend the final order made by the original Tribunal to remove those amounts awarded in respect of complaint items 27 and 29. However, the Tribunal will hear from the parties in respect of how to proceed.
Orders
The Tribunal makes the following orders:
1.The applicant is granted leave to review order 1 made by the original Tribunal on 27 May 2019 in respect of grounds 5 and 6 and otherwise the application seeking leave to review is dismissed.
2.The matter is listed for a directions hearing at 9.30 am on 17 December 2019.
I certify that the preceding paragraph(s) comprise the reasons for decision of the State Administrative Tribunal.
MS C WALLACE, SENIOR MEMBER
12 DECEMBER 2019
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