JJ Built This PL t/as JJJ Constructions v Department of Customer Service & Ensor

[2024] NSWCATCD 68

Civil and Administrative Tribunal

New South Wales

Medium Neutral Citation:

JJ Built This PL t/as JJJ Constructions v Department of Customer Service & Ensor [2024] NSWCATCD 68

Hearing dates:

5 December 2024

Date of orders:

18 December 2024

Decision date:

18 December 2024

Jurisdiction:

Consumer and Commercial Division

Before:

G K Burton SC, Senior Member

Decision:

(1)   Grant leave (to the extent that it has not already been granted) to all parties to be legally represented.

(2)   Application dismissed.

(3)   Order as follows in respect of costs:

(a)   Any application for costs with submissions and any further evidence in respect of costs (including any application for a further hearing on costs) is to be filed and served on or before 10 February 2025.

(b)   Any submissions and further evidence in response in respect of costs is to be filed and served on or before 24 February 2025.

Catchwords:

BUILDING and CONSTRUCTION – HOME BUILDING – jurisdiction of Tribunal - whether builder entitled to apply for determination of an owner’s claim – whether such is a building claim – Home Building Act 1989 (NSW) ss 48A, 48I, 49D

Legislation Cited:

Civil and Administrative Tribunal Act 2013 (NSW)

Civil and Administrative Tribunal Rules 2014 (NSW)

Home Building Act 1989 (NSW)

Home Building Regulation 2014 (NSW)

Interpretation Act 1987 (NSW)

Cases Cited:

Albecz v Bloom [2024] NSWCA 166

Dank v Cronulla Sutherland DRLFC Ltd [2014] NSWCA 288

Nominal Defendant v GLG Australia PL [2006] HCA 11, 228 CLR 529

Parkview Constructions PL v Owners SP 90018 [2023] NSWCA 66

Project Blue Sky v Australian Broadcasting Authority (1998) 194 CLR 355

SZTAL v Minister for Immigration and Border Protection (2017) 262 CLR 362

Category:

Principal judgment

Parties:

JJ Built This PL t/as JJJ Constructions (applicant)
Secretary, Department of Customer Service (first respondent)
Jason Ensor (second respondent)
Rana Ensor (third respondent)

Representation:

Counsel:
Mr M Davis (applicant)
Mr C Lambert (first respondent)
Mr P Horobin (second and third respondents)
Solicitors:
Lyon Legal (applicant)
Secretary, NSW Department of Legal Services (first respondent)
Kells Lawyers (second and third respondents)

File Number(s):

2024/00135450

Publication restriction:

Nil

DECISION

Outcome of proceedings

1. I have found that the application should be dismissed for absence of jurisdiction.

2. I have made provision for written submissions and any further evidence on costs including any application for a further hearing on costs.

Background, procedure, issues

3. These proceedings, filed on 11 April 2024, concern jurisdictional issues arising out of controversies concerning an extension to a house in Dundas, a suburb in north-west Sydney, NSW, that was undertaken by the applicant builder under a written contract dated 30 November 2020 with the second and third respondent owners. The works commenced on about 11 January 2021 and were completed in about November 2021. On 25 January 2024 the owners lodged a complaint with the NSW Building Commissioner alleging that water ingress and mould growth in the rumpus room and guest room situated at the rear ground floor arose from the builder’s defective work and seeking a rectification order.

4. The first respondent, who was originally the only respondent, is the NSW Department of Customer Service within which is the statutory office of the NSW Building Commissioner.

5. The application, which was said to concern an amount exceeding $30,000, originally sought a stay (under s 48O) of a Fair Trading (FT) rectification order 11204896 dated 13 March 2024 issued under Pt 3A of the Home Building Act 1989 (NSW) (HBA), or dismissal or withdrawal of the order under HBA s 49D in Pt 3B, leave for legal representation, costs and leave to amend the application if it was found to be deficient. The rectification order said that there was defective work in the form of water penetration around concrete upstands on the rear ground floor and/or an inadequate drainage system. The rectification date ordered of 10 May 2024 passed without such work being done.

6. The builder said that the matters the subject of complaint were not completed by it, there was no contract, variation or contractor authorisation that covered them, other contractors engaged directly by the owners carried out the allegedly defective works (being a concrete ramp and retaining wall) and that the FT building inspector who issued the report and the order had acted and decided without regard to evidence and without procedural fairness.

7. At a directions hearing on 1 May 2024 the owners were joined as parties and a short stay of the rectification order was said to have been put in place under HBA s 48O so that the matter could be considered by a Senior Member at a subsequent directions hearing. Application for legal representation was adjourned to that hearing. It was noted that there was no appeal against an FT rectification order, in contrast to a rectification order issued under HBA Pt 3B by the Building Commissioner in respect of which s 49D provided a right of appeal. It was also pointed out that the definition of “building claim” in s 48A referred to a claim “for” supply of specified building services.

8. In early July 2024 the respondents complained that there was no power for the Tribunal to stay FT rectification orders.

9. On 11 July 2024 a notice of hearing set the next directions hearing for 17 July 2024. On 10 July 2024 the Tribunal issued directions for the builder to document the orders sought, against whom and on what legal basis.

10. The builder sought to appeal those procedural orders on 16 July 2024 with an attendant short stay, on the basis that it needed more time for compliance. The application was refused ex parte since leave to appeal had not been sought and was unlikely to be granted to appeal procedural orders that did not affect substantive rights or outcome; rather, an adjournment or extension of time should have been sought, citing Albecz v Bloom [2024] NSWCA 166 at [7]-[8], citing Dank v Cronulla Sutherland DRLFC Ltd [2014] NSWCA 288 at [73].

11. On 17 July 2024 directions extended compliance time for the points of claim to 26 July 2024, to include precise orders sought and the jurisdictional basis contended for, and adjourned the proceedings to 30 August 2024.

12. A second application for leave to appeal with a stay to challenge those orders was filed on 24 July 2024. The stay pending appeal was extended and the directions hearing was adjourned pending disposition of the appeal.

13. On 30 August 2024 the Appeal Panel refused leave in both appeals, refused both stay applications and dismissed the appeals, finding at [52] special circumstances that justified a costs order against the builder. The Appeal Panel found that the bringing of the appeals was “fundamentally contrary” to the guiding principle in s 36 of the Civil and Administrative Tribunal Act 2013 (NSW), was misconceived in evidence and submissions and unnecessarily delayed and frustrated progress of the matter.

14. A directions hearing set for 4 September 2024 was adjourned to 18 September 2024 to determine whether there should be a separate hearing on jurisdiction of the Tribunal to hear and determine the builder’s application or whether the proceedings should be transferred to the Supreme Court.

15. On 13 September 2024 access and copy access were granted to documents produced on a summons to the owners issued on 28 August 2024 on the builder’s application.

16. The builder’s document titled “Points of Claim” considered on 18 September 2024 recited the owners’ lodged complaint to the Building Commissioner, denied “the allegations that the Builder has carried out defective works or that the works carried out by the Builder are causative of the water ingress and mould growth as claimed by the owners” and sought “that the Tribunal determine the claim alleged by the Homeowner”.

17. At 18 September 2024 and at the date of hearing of the jurisdiction issue the owners had not initiated proceedings in the Tribunal concerning the alleged defective works. There was on the record and in evidence only communications in which the owners alleged the defects, the owners’ complaint to the Building Commissioner and the Fair Trading rectification order.

18. The builder said that the owners’ complaint was for a supply of building services being rectification works. This constituted a “building claim” within the meaning of the definition in HBA s 48A(1). Any person could under s 48I bring a building claim before the Tribunal, not just the complainant.

19. On 18 September 2024 the Tribunal ordered a separate hearing on whether it had jurisdiction to hear and determine the builder’s application and directed a list of issues and filing of documents for the separate question hearing.

20. I cannot find a record that leave for legal representation was granted to all parties. Given the nature of the issues and the constant representation of all parties it is appropriate to do so, to the extent that it has not already been given.

21. There was no evidence that the builder was not at time of the works and at present appropriately licensed. The subject of the building contract was residential building work as defined in Home Building Act 1989 (NSW) Sch 1 paras 2(1)(b), (c), 2(3)(a) and 3(1) with Home Building Regulation 2014 (NSW) reg 12. The building contract required homeowners’ warranty HBCF insurance since it apparently exceeded $20,000 in the reasonable market cost of labour and materials involved: HBA ss 7(2)(f1), 92, 94; Home Building Regulation 2014 (NSW) reg 53. There was no dispute raised in these proceedings that the project was appropriately insured under the original building contract. On the evidence the amount of any claim by the owners would be within the monetary limit for the Tribunal’s jurisdiction under HBA s 48K(1) and at this point was within time to bring under HBA s 18E with s 48K(7).

22. No application was made after I disclosed that I had from memory previously heard and determined a matter involving the builder but had no recall of detail. I therefore proceeded to hear the jurisdiction application.

Applicant’s contentions

23. The builder’s argument centred on HBA s 48I:

48I   Application for determination of building claim

(1)  Any person may apply to the Tribunal for the determination of a building claim.

(2)  A building claim may be withdrawn by the claimant at any time.

(3)  If, immediately before a building claim was made, the claimant was subject to the requirements of a rectification order under Division 2, the building claim may not be withdrawn except with the leave of the Tribunal.

(4)  When granting leave to the withdrawal of a building claim referred to in subsection (3), the Tribunal may restore the rectification order referred to in that subsection.

24. The builder contended that the words “Any person” in HBA s 48I(1) ought to be given their ordinary meaning. The words must be given their meaning in their legislative context that thereby takes into account the object and purpose of the statute, but there was nothing in the context to justify departure from the ordinary meaning: Project Blue Sky v Australian Broadcasting Authority (1998) 194 CLR 355 esp at [78] and later authority such as SZTAL v Minister for Immigration and Border Protection (2017) 262 CLR 362 at 368, 374.

25. It was permissible to use extrinsic materials to confirm the meaning of the legislative text and such materials did so because the second reading speech introducing the relevant provisions referred to the introduced process as enabling the contractor or the consumer to “appeal” against an FT inspector’s assessment of the complaint and issue of an FT rectification order.

26. Accordingly, the builder was a person and one of the class of “any person”. Further, the reference to “determination” of a building claim removed the person seeking such determination from having to be the claimant.

27. The builder contended that the usage of these broad words was to be contrasted with the focus on the claimant in the balance of HBA s 48I. The words were not just words of extension as the respondents contended; if that had been intended then the language would have been in terms of “Any person may claim” rather than the present wording.

28. The builder also contended that its interpretation was consistent with the guiding principle in s 36 of the NCAT Act because the real issues would be progressed more broadly than under an application to the Supreme Court for judicial review of the rectification order (in the absence of a right of appeal). It accepted that an applicant other than the claimant would have to accept the claimant enlarging the scope of the claim.

29. The builder also relied on the relevant definitions in HBA s 48A:

building claim means a claim for—

(a)  the payment of a specified sum of money, or

(b)  the supply of specified services, or

(c)  relief from payment of a specified sum of money, or

(d)  the delivery, return or replacement of specified goods or goods of a specified description, or

(e)  a combination of two or more of the remedies referred to in paragraphs (a)–(d),

that arises from a supply of building goods or services whether under a contract or not, or that arises under a contract that is collateral to a contract for the supply of building goods or services, but does not include a claim that the regulations declare not to be a building claim.

building goods or services means goods or services supplied for or in connection with the carrying out of residential building work or specialist work, being goods or services—

(a)  supplied by the person who contracts to do, or otherwise does, that work, or

(b)  supplied in any circumstances prescribed by the regulations to the person who contracts to do that work.

30. The builder submitted that the owners’ communications of complaint with the builder, and/or the owners’ complaint to the Building Commissioner, constituted claims for the supply of specified remedial services that arose from the original supply under the original building contract. Such were within the ordinary meaning of “claim” as a demand, assertion or requirement.

31. Accordingly, those complaints could be the subject of an application by the builder for their determination by the Tribunal.

Respondents’ contentions

32. The respondents, who adopted each others’ submissions which were congruent but with differences of emphasis, submitted that the width of “Any person” was used at the outset of the empowering provision to indicate expressly that there was no class or category of person (such as, for example, a corporation) that was excluded per se from lodging a building claim. Once that was made express, the appropriate language was to refer to the claimant. There was no other indication in the provision that anyone but the claimant had control over initiating and progressing the claim. Indeed, the balance of s 48I emphasised that point. The looser language in the second reading speech could not be permissibly used to achieve a different interpretation.

33. Further, the language and structure of Pt 3A indicated that the Tribunal processes for hearing and determination were required to be initiated by the person aggrieved by an aspect of the relevant building work. “Claim” and “claimant” were used only in connection with initiation and maintenance of Tribunal processes, in contrast to the use of “complainant” and “complaint” for a “building dispute” that invoked the inspection and rectification powers of Fair Trading. This had the consequence that the stage that the present contentions had reached were insufficient to constitute a complaint, which required formal invocation of the Tribunal processes. There was nothing of which a “determination” was required.

34. It would be impermissible to read HBA s 48I as in effect permitting an appeal from an FT rectification order when the legislature had, when introducing Pt 3B (Building Commissioner rectification orders), provided a right of appeal but left the existing FT rectification orders without such right. This emphasised the distinction in the legislation between the processes of complaint mechanisms and claims.

35. The builder’s application, although seeking to have the Tribunal determine the owners’ claim “for” supply of services or other relief, was in itself not “for” supply of such services, as required by the definition of “building claim” in HBA s 48A(1), because it was opposing the basis for such supply.

Consideration and conclusion

36. The builder’s argument was skilfully and cogently presented, as were the other parties’ arguments.

37. Ultimately, I am not persuaded by the builder’s submissions and I accept the force of the respondents’ submissions, which I do not repeat. I am particularly persuaded by the respondents’ submissions on the meaning of “Any person” in HBA s 48I(1), the dichotomy between the way in which “complaints” and “claims” are legislated and the importance of “for” in the definition of “building claim” in s 48A(1).

38. The language of the second reading speech, which is arguably the high point of the builder’s argument, is loosely phrased and by its reference to “appeal” contrary to the actual language in the legislative provision rather than confirmatory of it. It cannot be used to support an interpretation that is contrary to the legislative text in its context: Nominal Defendant v GLG Australia PL [2006] HCA 11, 228 CLR 529 at [82]-[84], [86]; Interpretation Act 1987 (NSW), s 34. No right to appeal was enacted for one type of rectification order when the other, newly-introduced type was given such right.

39. The builder’s interpretation would force a party into litigating a claim, could shorten limitation periods and could prejudice evidence preparation. Including earlier stages of complaint could lead to applications to the Tribunal at any time any form of complaint was raised. This would be inefficient and disruptive. It could prejudice an owner’s ability to raise all claims which is required under the principles reviewed in Parkview Constructions PL v Owners SP 90018 [2023] NSWCA 66 that there is one cause of action for breach of one contract unless the statutory carve-out in s 18E(2) applies or the other potential matters there raised apply.

40. The application is dismissed for absence of jurisdiction.

Orders

41. I make the following orders:

1. Grant leave (to the extent that it has not already been granted) to all parties to be legally represented.

2. Application dismissed.

3. Order as follows in respect of costs:

1. Any application for costs with submissions and any further evidence in respect of costs (including any application for a further hearing on costs) is to be filed and served on or before 10 February 2025.

2. Any submissions and further evidence in response in respect of costs is to be filed and served on or before 24 February 2025.

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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: 09 May 2025