Knud Alex Hansen v Farahangiz Zare No. SCGRG 96/1508 Judgment No. 5750 Number of Pages 4 Builders Licensing Act

[1996] SASC 5750

COURT IN THE SUPREME COURT OF SOUTH AUSTRALIA PERRY J

CWDS
Builders Licensing Act - illegal deposit - the appellant, a builder, received a payment of $1,500 as a deposit on a proposed house to be constructed on an allotment - subsequent failure to agree on the plans and no building work was done - the decision of the Commercial Tribunal that the money was recoverable as an illegal deposit upheld on appeal. BuildersLicensing Act 1986 ss25 and 33; Commercial Tribunal Act 1982 s20, referred to.

HRNG ADELAIDE, 12 August 1996 #DATE 12:8:1996 #ADD 17:9:1996

Appellant in person

Counsel for respondent:     Mr S Morris

Solicitors for respondent: Piper Alderman

ORDER
Appeal dismissed.

JUDGE1 PERRY J The appellant appeals against a decision of the Commercial Tribunal given on 4 April 1996.

2. The appellant and his wife, Julie Hansen, were the respondents to an application to the Tribunal for the return of $1,500 paid to them with respect to a house property to be constructed at lot 147 Quaila Avenue, Hallet Cove. It appears from the evidence before the Tribunal that the $1,500 was paid on 20 October 1994 by the respondent to the appellants who gave a receipt signed by the appellant for the monies in the following terms:
    "Received $1,500 for deposit on proposed house at Lot 147
    Quailo (sic) Av, H Cove to pay for plans, engineer report,
    contour plan, home owners warranty and council fee. And is
    not connected to cost of house."

3. S25(1) of the Builders Licensing Act 1986 as it then was, it having since been repealed, provides in part:
    "(1) No person shall demand or require that any payment be
    made under a domestic building work contract or preliminary
    work contract by the person for whom work is to be performed
    under the contract unless the payment-
    (a) constitutes a genuine progress payment in respect of
    work already performed; or
    (b) is of a kind authorised under the regulations.
    Penalty: $2,000"

4. The section defines the expression preliminary work contract" as follows:
    "(4) 'preliminary work contract' means a contract -
    (a) that is collateral to or otherwise related to an
    existing contemplated domestic building work contract; and
    (b) that provides for the performance of work that is
    preliminary or ancillary to the domestic building work that
    is or would be required to be performed under such
    contract."

5. In the Builders Licensing Act a distinction is drawn between domestic building work and minor domestic building work. The definition of both expressions appears in s4(1) "domestic building work" includes constructing, erecting, repairing, improving or demolishing a house, and excavating or filling a site for any of those purposes. "Minor domestic building work" means domestic building work performed or to be performed under a domestic building work contract at a cost to the building owner that is less than the prescribed sum, namely, $5,000.

6. Put shortly, the contention of the appellants, both before the Commercial Tribunal and before me, was that the payment in question was a payment with respect to a minor domestic building work contract and accordingly was not a payment proscribed by s25.

7. The findings of the Tribunal were given more or less extempore and followed the giving of evidence by the respondent and by the male appellant. The Chairman Mr Cannon SM pronounced the findings of the Tribunal, which relevantly were as follows:
    "There were meetings, probably three, between these parties
    to discuss the building of a house. It was orally agreed
    that the house could be built for $66,000. The block of
    land was identified. The design of the house in general
    terms was identified. The Tribunal finds that that was with
    sufficient particularity to be regarded as a domestic
    building contract as defined by the Builders Licensing Act
    (1986). The builder took a sum of $1,500 said to be a
    deposit on the proposed house which was to pay for plans,
    engineering report, contour plan, home owners warranty and
    council fees. Section 23 of the Act says that in relation
    to a domestic building work contract - and we had an oral
    domestic building work contract here - the contract must be
    in writing and so there was a breach of that section and
importantly section 25 makes is absolutely clear that it is
    illegal to require any payment to be made under a domestic
    building work contract or preliminary work contract by the
    person by whom the work is to be performed under the
    contract unless the payment constitutes a genuine progress
    payment in respect of work already performed or is of a kind
    authorised by regulation. The penalty for that is $2,000.
    The regulations allow a payment to a third party for
    engineering or professional services, building indemnity
    insurance and of not more than $500 as a deposit or in
    respect of approval, permission or consent required under an
    Act.So those payments are authorised. That is under
    regulation 13. It is clear here that that regulation does
    not authorise the taking of $1,500 before any work is done.
    Quite simply, therefore, when Mr Hansen required the Zares
    to pay $1,500 that was a payment that was illegal under the
    Act."

8. Regulation 13 reads:
"For the purposes of section 25(1)(b), a payment-
    (a) to a third party for engineering, drawing, surveying or
    other professional services;
    (b) in respect of building indemnity insurance;
    (c) of not more than $500 as a deposit;or
    (d) in respect of any approval, permission or consent
    required by or under an Act,is an authorized payment."

9. One of the central questions in the case is as to whether or not, at the time the payment was made, the parties had in fact entered into a domestic building work contract or whether the entry into such contract was contemplated by them. In my opinion it clearly must have been one or the other.

10. Mr Hansen joins issue with the finding that in fact there was an oral contract. But the view that there was such a contract gains some support from the terms of the letter written by the appellants to Piper Alderman dated 9 August 1995, which was before the Tribunal. In the second paragraph of that letter Mr Hansen says: "I was of the opinion that the price was accepted by Mrs Zare as she returned to pay the amount of $1,500 as set out in the said invoice."Furthermore, the receipt refers to the amount in question as having been paid as a deposit on "proposed house".

11. It is true that the parties subsequently fell out over the content of the plans, Mr Hansen maintaining that he could not build the house according to the requirements of the Zares for the amount agreed and that it could only be done on the basis of the revised plans. Be that as it may, in my opinion the payment must clearly be characterised as one either with respect to a domestic building work contract or a contemplated domestic building work contract.

12. It could not properly be characterised as a payment pursuant to a minor domestic building work contract because it was never contemplated that only minor domestic building work for less than $5,000 would be performed. In any event, I am unable to see that the work of the kind referred to in the receipt, that is preparation of plans, engineering report and so on, is work which comes within the definition of "minor domestic building work". It follows that the view reached by the Tribunal as to the illegality of the payment must be upheld.

13. The Tribunal went on to hold that s33 of the Builders Licensing Act conferred a jurisdiction on the Tribunal to give relief in the form of order for repayment of the sum of $1,500. I have some hesitation in accepting the proposition that s33 can be extended in such a situation as this to authorise an order for repayment. But this has not been challenged by the appellant, who presented his case in person. He expressly eschewed any argument that the Tribunal did not have jurisdiction to order repayment, although I put the matter to him directly at the outset of the case in order to determine whether that was a question which required attention on the hearing of the appeal.

14. It follows then that the appeal does not raise for consideration the question whether or not it was proper to take the view that the jurisdiction conferred by s33 extends to authorise the making of the order which is the subject of the appeal.

15. I mention that the appeal was lodged out of time, but that I was disposed to make an order extending the time for the lodgment of the appeal nunc pro tunc. I mention also that I am not unmindful of the fact that an appeal of this kind may only be brought as of right if, within the meaning of s20 of the Commercial Tribunal Act, the appeal involves a question of law. It is sometimes difficult to distinguish between questions of law and fact. Certainly at best this case involves a mixed question of law and fact. However at the outset of the appeal I intimated to Mr Morris of counsel for the respondent that in the circumstances I would proceed on the footing that the appeal is of right and that I would address the merits of the appeal. That seemed to be the most practical course to follow.

16. In the result the appeal is dismissed and I affirm the order of the Tribunal which is the subject of the appeal.