LEE and JETPOINT NOMINEES PTY LTD - [2020] WASAT 62

JURISDICTION     :   STATE ADMINISTRATIVE TRIBUNAL
ACT: BUILDING SERVICES (COMPLAINT RESOLUTION AND ADMINISTRATION) ACT 2011 (WA)
CITATION:   LEE and JETPOINT NOMINEES PTY LTD [2020] WASAT 62
MEMBER:   MS D QUINLAN, MEMBER
MR RJ KERSHAW, SESSIONAL MEMBER

HEARD:   6, 13 AND 14 MAY 2020
DELIVERED          :   10 JUNE 2020
FILE NO/S:   CC 1893 of 2019
BETWEEN:   YU LIAN LEE
Applicant
AND
JETPOINT NOMINEES PTY LTD
Respondent

Catchwords:

Preliminary issue - Whether respondent carried out regulated building service - Inferences - Credibility and reliability of witnesses - Agreement made contrary to rights and obligations under legislation - Turns on own facts

Legislation:

Building Services (Complaint Resolution and Administration) Act 2011 (WA), s 3, s 5(1), s 11, s 36, s 38
Building Services (Registration) Act 2011 (WA), s 3, s 7(5), s 17, s 18, s 18(1)(d)
Home Building Contracts Act 1991 (WA), s 3(1)
Interpretation Act 1984 (WA)

Result:

Respondent carried out regulated building service

Category: B

Representation:

Counsel:

Applicant	:	In Person
Respondent	:	Mr S O’Reilly and Mr M Andreou (directors)

Solicitors:

Applicant	:	N/A
Respondent	:	N/A

Case(s) referred to in decision(s):

Australian Securities and Investments Commission v Hellicar [2012] HCA 17; (2012) 247 CLR 345
Chamberlain v The Queen [No 2] (1984) 153 CLR 521
Jones v Dunkel (1959) 101 CLR 298
Luxton v Vines (1952) 85 CLR 352
Shami and Teo [2017] WASAT 73

REASONS FOR DECISION OF THE TRIBUNAL:

Introduction

These particular proceedings arise in the Tribunal pursuant to a referral to the Tribunal by the Building Commissioner on 5 December 2019 under s 11 of the Building Services (Complaint Resolution and Administration) Act 2011 (WA) (the Act).
The applicant, Ms Yu Lian Lee (the applicant or Ms Lee) and her husband Mr H Ling (Mr H Ling) are the owners of both 23B and 23C MacLeod Street, Applecross. The brother of Mr H Ling, Mr Hee Keat Ling, is the owner of 23A MacLeod Street. The respondent in these proceedings is Jetpoint Nominees Pty Ltd trading as ACE Construction (the respondent or Jetpoint).
These proceedings relate to the provision of a regulated building service at 23A, 23B and 23C MacLeod Street, Applecross from around October 2016 to May 2019 (collectively, site or 23 MacLeod Street). The regulated building service included the construction of two substantial three storey dwellings as well as an extensive under-croft garage (at 23A and 23B) and exterior landscaping building work including a tennis court, an arbour, paving and other associated landscaping (at 23C). The Tribunal understands that the overall project at 23 MacLeod Street involved the occupants of both 23A and 23B having access to and utilising the outdoor landscaping at 23C.
Both 23A and 23B are the subject of separate proceedings on foot in the Tribunal which are being heard and determined by a differently constituted Tribunal panel.
The jurisdiction of the Tribunal in the present proceedings concerns a complaint made by Ms Lee under s 5(1) of the Act alleging that nine items of complaint were carried out at 23C by Jetpoint in a manner that was not proper and proficient or faulty or unsatisfactory. In determining the issues in dispute in these proceedings the Tribunal has needed to inform itself of the overall project that occurred at 23 MacLeod Street.
For ease of reference the Tribunal has delineated the description of the regulated building service by numbers 23A, 23B and 23C. Jetpoint submitted that some of the nine items of complaint identified in the complaint as 23C are actually situated on Lots 23A or 23B. Ms Lee agrees that some of the tennis court and associated hard landscaping goes across into Lots 23A and 23B (see landscaping plan at page 476 of the Hearing Book (HB)). Ms Lee stated that she identified the complaint as 23C as that is how the building permit identifies the work (see pages 265-267 of the HB).
Jetpoint submitted further that if the Tribunal finds any of the items of complaint crossed the lot boundaries between the three lots, that item of complaint should be dismissed for not being located on Lot 23C. We find this to be a misconceived submission. The complaint and the items of complaint need only sufficiently identify the alleged regulated building service for the purpose of making the complaint, responding to the complaint and determining the complaint. Moreover, due to the findings later in these reasons as to who carried out the overall building service for the whole project at 23 McLeod Street, the lot boundaries between the three lots are immaterial.
Section 38 of the Act provides relevantly to these proceedings that where the Tribunal is satisfied that the regulated building service that is the subject of the building service complaint has not been carried out in a proper and proficient manner or is faulty and unsatisfactory, the Tribunal may make a building remedy order. Section 36 of the Act provides that a building remedy order can only be made against the person who carried out the regulated building service. The definition of 'person' in the Interpretation Act 1984 (WA) provides that Jetpoint is considered a 'person' in these proceedings under the Act.

Preliminary issue

Jetpoint disputes that it entered into a contract with the applicant, written or oral and that it was not the 'builder' for the purposes of the Act. Therefore, a preliminary issue has arisen for determination in these workmanship proceedings, as to whether Jetpoint 'carried out' the regulated building service at 23 McLeod Street and, more particularly to these proceedings, whether it carried out that work for the nine items of complaint.
If the Tribunal finds that the respondent did carry out a regulated building service at 23 MacLeod Street relevant to the items of complaint, the Tribunal will then go on to determine the items of complaint at a further scheduled hearing day when the expert witnesses can attend to give evidence.

The applicant's case on the preliminary issue

The applicant submitted that Jetpoint, through the actions of Mr Sean O'Reilly and Mr Mario Andreou, carried out all of the regulated building service at 23 MacLeod Street. Particular to these proceedings, the applicant submitted that Jetpoint carried out the regulated building service the subject of the nine items of complaint.
The applicant provided documentary evidence in support of her case and oral evidence from three factual witnesses: Ms Lee, Mr Che Haw Ling (Mr Ling) and Mr Shayne Leroy (designer).

The respondent's case on the preliminary issue

The respondent was represented at the preliminary issue hearing by its two directors, Mr O'Reilly and Mr Andreou.
Jetpoint did not dispute that a regulated building service had been carried out at 23 MacLeod Street. However Jetpoint submitted that the regulated building service was not carried out by Jetpoint. Jetpoint submitted that PJ Holmes contracted with the owners to build 23A and 23B to a 'lock-up' stage of the build and that the regulated building service on 23C was carried out by Ms Lee and Mr H. Ling as an 'owner-builder'.
Jetpoint further submitted that Mr O'Reilly was not a director at the relevant time and was involved in his personal capacity as a friend to Ms Lee and Mr H Ling receiving no remuneration for his assistance. As to Mr Andreou's involvement (it was also submitted being in a personal capacity), Jetpoint made differing submissions and provided varying evidence concerning his role describing him as a site supervisor, an employee and an advisor. Regardless of the role played by Mr Andreou is was common ground that Ms Lee agreed to pay him $300,000 for his involvement in 23 MacLeod Street though Mr Andreou disputed he actually personally received the full payment.
The respondent also provided documentary evidence in support of its case as well as oral evidence from three factual witnesses: Mr O'Reilly, Mr Andreou and Mr Keith Alexander (friend of both Mr O'Reilly and Ms Lee and a labourer during the project).

Legislation and authorities

As to what constitutes a 'building service' and a 'regulated building service' being 'carried out' was recently considered by the Tribunal in Shami and Teo [2017] WASAT 73 (Shami and Teo) . The Tribunal in Shami and Teo set out the legislative framework at [25] to [30] as follows:
25'Regulated building service' is defined in s 3 of the BSCRA Act as meaning any of following types of service or work:
•A 'building service' carried out by a 'registered building service provider' or an 'approved ownerbuilder'. Those terms are all defined in s 3 of the BSCRA Act.
•'Home building work', as defined in the Home Building Contracts Act 1991 (WA) (Home Building Contracts Act), that is carried out by a person for another person under a contract or arrangement for gain or reward, where the person for whom it is carried out is not, in turn, obliged to perform that work under another contract.
•Any other prescribed service or work.
26Regulation 5A of the Building Services (Complaint Resolution and Administration) Regulations 2011 (WA) (BSCRA Regulations) prescribes two categories of work for the purpose of the definition of 'regulated building service':
•'Unauthorised work' within the meaning given in s 51(1) of the Building Act 2011 (WA) (Building Act), which includes building work for which a building licence was required but not obtained under the repealed Builders' Registration Act 1939 (WA) (Builders' Registration Act) or building work which did not comply with such a licence.
•The construction, alteration or demolition of a building by a person who was either a registered builder or held a building licence as an ownerbuilder under the Builders' Registration Act.
27Regulation 5 of the BSCRA Regulations imposes the limitation that only a person whose interests are being or have been adversely affected by the carrying out of a regulated building service may make a building service complaint. That includes a person who purchases a building after it is constructed or a regulated building service has been carried out in respect of it.
28Section 37(1) of the BSCRA Act provides that if the Building Commissioner is satisfied that a regulated building service that is the subject of a building service complaint has not been carried out in a proper and proficient manner or is faulty or unsatisfactory, the Building Commissioner may make a 'building remedy order'.
29Section 38(1) of the BSCRA Act gives the Tribunal an equivalent power to make a 'building remedy order' in respect of a building service complaint which the Building Commissioner refers to the Tribunal to deal with pursuant to s 11(1)(d) of the Act.
30Under s 36(1) of the BSCRA Act, a 'building remedy order' is an order that a person who carried out a regulated building service remedy the building service, or pay to an aggrieved person either the costs of remedying the building service or a sum of money to compensate the aggrieved person for the failure to carry out the building service in a proper and proficient manner or for faulty or unsatisfactory building work (a building remedy order).
Shami and Teo extensively considered what constitutes the proper statutory construction of the phrase 'carried out' at [39] [61]. However, the Tribunal notes that the factual circumstances in Shamiand Teo were somewhat different to the present proceedings.
The Act incorporates s 3(1) of the Home Building Contracts Act 1991 (WA) (HBC Act) for the meaning of 'home building work' as follows:
home building work means the whole or part of the work of
(a)constructing or re constructing a dwelling including an existing dwelling and/or strata titled dwelling; or
(b)placing a dwelling on land; or
(c)altering, improving or repairing a dwelling, including a strata titled dwelling; or
(d)constructing or carrying out any associated work in connection with
(i)any work referred to in paragraph (a) or (b); or
(ii)an existing dwelling, including a strata titled dwelling;
The Act defines a 'registered building service provider' as having the meaning given in s 3 of the Building Services (Registration) Act 2011 (WA) (BSR Act) which provides that it means either a 'building service practitioner' or 'building service contractor' registered under s 17 or s 18 of the BSR Act.
By operation of the BSR Act and the Act only a building service contractor can contract to provide a building service to others. A building service practitioner cannot personally contract to provide a building service to others. Section 18 (1)(d) of the BSR Act provides that a building service contractor must have at least one nominated supervisor for that class of building service contractor.
Jetpoint has not submitted, nor provided any evidence in support of such a submission, that PJ Holmes contracted with Jetpoint for Jetpoint to carry out the regulated building service on behalf of PJ Holmes at 23 MacLeod Street. However, the Tribunal notes s 7(5) of the BSR Act provides that a building service contractor who has entered into a contract to carry out a prescribed building service may enter into a contract with another person for the other person to carry out the building service (or any part) of the contract if the other person is a building service contractor who is entitled to carry out that building service.

The witness evidence

Relevant to the determination of the preliminary issue the Tribunal needs to make specific observations concerning the reliability and credibility of each factual witness. After making these observations, or findings, specific to each witness, the Tribunal will then go on to make findings on the whole of the evidence presented as to what has occurred in order to determine who carried out the relevant regulated building service at 23 Macleod Street and, more specifically, the nine items of complaint.

Ms Lee

For the reasons which follow, in determining the preliminary issue the Tribunal finds that we can rely on the evidence of Ms Lee where we make express findings as such, or if her evidence is corroborated by Mr Leroy, Mr Ling or by documents that we expressly accept.
The following is a summary of the evidence from Ms Lee that the Tribunal accepts and finds it can rely upon:
(a)Ms Lee gave evidence that 23 MacLeod Street was purchased in 2015 and subdivided into 23A, 23B and 23C. Mr Leroy was engaged to prepare plans and submit approvals. The owners obtained quotes from Mr Leroy and also Beaumont Homes which were considered too expensive. Ms Lee shared those quotes with her friend, Mr O'Reilly. Mr O'Reilly told Ms Lee that he and his partner Mr Andreou could do the build quicker, cheaper and better. Mr Andreou could supervise and Mr O'Reilly would oversee the whole project. Mr O'Reilly negotiated an agreement that the owners would pay the builder's costs plus $300,000 in builder's fees. Ms Lee agreed as she trusted Mr O'Reilly fully as a good friend.
(b)Ms Lee gave evidence that Mr O'Reilly printed an offthe-shelf Housing Industry Association contract for the owners to sign with PJ Holmes. Mr O'Reilly said that Mr Holmes was a building associate and friend. They were told to sign with PJ Holmes by Mr O'Reilly as Jetpoint did not have enough indemnity insurance. The first time Ms Lee ever met Mr Holmes was 2½ years later in June 2019 after 23 MacLeod Street was completed when he 'tried to extort money from us'. Mr Holmes never came to site that she was aware of and she only ever dealt with Mr Andreou and Mr O'Reilly.
(c)Ms Lee gave evidence that she was provided with a progress payment schedule (schedule) by Mr Andreou that his email stated had been looked over by Mr O'Reilly. She paid to that schedule as noted by her on the schedule. Ms Lee paid the progress payments to where she was told to at the time either to Mr O'Reilly, Mr Andreou or the joint account: see pages 305 and 308 of the HB and the corresponding dated 'Whatsapp' discussions at pages 248 - 262, 336 365, 393 – 408 and 543 655 of the HB (the Tribunal notes there is duplication of 'Whatsapp' discussions in the HB).
(d)At some stage Mr O'Reilly organised the creation of a working bank account with three joint holders of that account: PJ Holmes, Mr H Ling and Mr Andreou, Ms Lee (on behalf of Mr H Ling) would deposit money for payment of construction work in advance into the joint account before the accounts were due. Mr Andreou or his wife, Janet, controlled the joint account to pay trades. Mr Holmes did not access the account in any way and Ms Lee only deposited money into the account and later cross-checked withdrawals done by Mr or Mrs Andreou against the bundle of quotes/invoices she was later provided by Mr Andreou.
(e)All of the work at 23 MacLeod Street was supervised by Mr O'Reilly and Mr Andreou. They were in full control of the build daytoday as builders for financial gain. From about mid-2016 to mid-2019 all quotes, payments and site operations were controlled by Mr O'Reilly and Mr Andreou: see for instance Exhibit 2, Exhibit 4, Exhibit 5, pages 329 - 331, 619 and 621 of the HB and the 'Whatsapp' discussions noted above.
(f)Ms Lee does not know whether Mr O'Reilly was a director of Jetpoint during this time. However, Mr O'Reilly represented to her that he had a company that could do the work. Throughout the build at 23 MacLeod Street, she understood Mr O'Reilly and Mr Andreou were the builder, they had the authority and right to make decisions as the builder and represented themselves as the builder.
(g)The final progress payment of $15,000 (of the overall $300,000) was paid on 20 May 2019 after Mr Andreou provided the keys to 23 MacLeod Street. After that date, Mr O'Reilly and Mr Andreou refused to return to fix any defects which is why Ms Lee lodged the nine complaint items: see pages 304 and 310 of the HB.
(h)Jetpoint, through the actions of Mr O'Reilly and Mr Andreou were fully in charge of the work the subject of the nine items of complaint.
(i)Jetpoint wished to take on the project for 23 Macleod Street as a means of advertising Jetpoint trading as ACE Construction. Mr O'Reilly would show people through 23 MacLeod Street promoting it as a model house and was using it as a launching pad for the business.
The following is a summary of the evidence from Ms Lee that the Tribunal finds it cannot accept or rely upon:
(a)There were various points in the oral evidence of Ms Lee where the Tribunal finds that Ms Lee was evasive in her evidence. This occurred when questions related to the method of the payment of various monies to various people (cash in hand and/or bank transfer), the circumstances surrounding the reasons to create the joint account, GST issues and the extent of her knowledge of the PJ Holmes fiction (explained later in these reasons). We find we cannot rely upon Ms Lee's explanation regarding the irregular financial transactions (see page 306 of the HB). We also find Ms Lee's evidence of the cost of the overall project in the region of $33.4 million (inclusive of the $300,000 paid in builders fees), in comparison to the quantity surveyors estimate of $5.8 million to be a troubling financial irregularity which affects her credibility.
(b)Even though Mr O'Reilly and Ms Lee, who were once friends, are clearly at odds in these proceedings, we find that Ms Lee and Mr O'Reilly acted in mutual selfinterest to try and divert the Tribunal's attention from the odd and irregular financial transactions between Mr H Ling and Mr O'Reilly. Ms Lee stated that the $100,000 paid by Mr O'Reilly to Mr H Ling on 27 November 2017 was a part repayment for a $1,000,000 loan from her husband to Mr O'Reilly. Ms Lee also stated that the five $20,000 transactions from Mr H Ling back to Mr O'Reilly between May and June 2018 were not related to the $100,000 as they were payments for trades for 23 MacLeod Street using the 'code' descriptions such as 'poker march'. Ms Lee then retracted her use of the word 'code'. Mr O'Reilly admitted in his evidence that coded descriptions were used so that it would not look like income coming into his account. However, he agreed with Ms Lee (in what we find to be mutual self-interest) that the five $20,000 transactions into his account were for him to pay trades for 23 MacLeod Street (see page 306 of the HB). We find that the somewhat incredulous answers by Ms Lee and Mr O'Reilly on this topic adversely affects the overall credibility of the evidence from both Ms Lee and Mr O'Reilly. We find that we cannot accept or rely on any of the answers provided by Ms Lee or Mr O'Reilly to explain these particular irregular transactions.

Finally, despite the fact that we infer and find that Ms Lee knowingly participated in the fiction orchestrated by Mr O'Reilly for the benefit of the owners and Jetpoint, (explained later in these reasons), we also infer and find that Ms Lee always intended to hold Jetpoint trading as ACE Construction to account to remedy any defects if later they were discovered at 23 MacLeod Street.

Mr Ling

The Tribunal found Mr Ling to be an impressive witness who gave honest and forthright answers to questions. We find Mr Ling's evidence is the only witness evidence that we can accept in its entirety. To the extent that the evidence of any witness contradicts the evidence of Mr Ling, we prefer the evidence of Mr Ling.
When Mr Ling was asked about whether he had ever used cash to pay directly for trades, he was honest and forthright in his answer. Mr Ling answered that Ms Lee had asked him to withdraw some cash to pay Mr Andreou, trades and suppliers and that the amount was $50,000.
In particular, relevant to the determination of the preliminary issue, we rely on the evidence of Mr Ling that due to personal health circumstances of Mr H Ling from about the middle of 2018, as a friend of Ms Lee and Mr H Ling he agreed to be their representative on site for the purpose of completing works relating to 23C and the issue arising concerning the exhaust for the under-croft garage. Mr Ling agreed that he coordinated the remedial work done regarding the exhaust for the under-croft garage. Mr Ling did not accept he took on such a role in relation to 23C.
Relevant to the nine items of complaint, we find that Mr Ling was not operating on behalf of Ms Lee and Mr H Ling in the role of ownerbuilder or project manager. He was simply the agent of the owners of 23C (which we understand and accept to mean the owner as client of Jetpoint trading as ACE Construction). Mr Ling continued to consult with and rely on Mr O'Reilly and Mr Andreou in providing a regulated building service for 23C and gave them instructions within the authority he had been given by Ms Lee.

Mr Leroy

Relevant to the determination of the preliminary issue, the Tribunal finds that Mr Leroy was a witness of truth in his evidence. Mr Leroy's evidence was plausible, reasonable and consistent with the documentary evidence which we also accept as accurate (in particular, the quote/invoice documents and 'Whatsapp' discussions).
The only area of Mr Leroy's evidence that we do not accept are his occasional evasive answers concerning the payment of his fees with a number of cashinhand transactions, particularly as to what occurred at the bowling club in around October 2016. However, we do not find that this component of his evidence undermines the truth of his evidence concerning the Tribunal's determination of the preliminary issue.
Mr Leroy gave evidence that he is a registered building designer who designs medium-sized custom homes. Mr Leroy is familiar with the different roles undertaken in a home building project. He has designed approximately 1,000 custom homes. Mr Leroy has also designed and built approximately 30 custom homes for himself and clients.
Throughout the building project at 23 MacLeod Street the only people that Mr Leroy dealt with who he understood to be the builders on the project were Mr O'Reilly and Mr Andreou. Mr Leroy predominantly liaised with Mr O'Reilly throughout the building project at 23 MacLeod Street.
In particular, we rely upon the evidence of Mr Leroy, as the designer of the project who attended site over 40 times that he never heard of or met PJ Holmes in relation to the build until Mr Leroy was involved in the other related proceedings in the Tribunal. Mr Leroy stated that he was flabbergasted that PJ Holmes was the builder. The first time that Mr Leroy physically met Mr Holmes was in November 2019.
Mr Leroy always dealt with Mr O'Reilly and Mr Andreou concerning issues related to the project. We find that this is plausible and logical evidence as is the usual practice of a designer and a builder to interact in this way particularly in a project as extensive as 23 MacLeod Street. Conversely, we find it implausible, if PJ Holmes was the builder that Mr Leroy as the designer who visited the site on so many occasions did not ever interact with Mr Holmes or someone on behalf of PJ Holmes.
Mr Leroy also gave evidence that he was asked by Mr O'Reilly to put the name PJ Holmes on an invoice but to send the invoice to Mr O'Reilly. Mr Leroy also stated that ACE Construction through the actions of Mr O'Reilly represented itself to trades as the builder at 23 MacLeod Street.
Mr Leroy recounted his recollection of the two signs that were put up at 23 MacLeod Street throughout the project. He recalled a small A4 size sign but could not recall what was written on it and later in the build he said a 'shade cloth' ACE Construction sign was erected. Mr Leroy did not mention in his evidence the ACE Construction sign erected on the verge.

Mr O'Reilly

The Tribunal finds we are not impressed with Mr O'Reilly as a witness of truth. In determining the preliminary issue, the Tribunal finds that it cannot rely upon any of the evidence of Mr O'Reilly unless we specifically state we can rely on that evidence or it is corroborated by other oral or documentary evidence that the Tribunal accepts as correct.
It became apparent to the Tribunal throughout the course of the hearing and during the evidence of Mr O'Reilly that the level of detail known about the regulated building service undertaken at 23 MacLeod Street by Mr O'Reilly was more so than any other witness.
On the whole of the evidence, the Tribunal infers and finds that Mr O'Reilly was in effect the project manager for the entire build at 23 Macleod Street. We also find that Mr O'Reilly when acting as project manager did this on behalf of Jetpoint trading as ACE Construction. Whether Mr O'Reilly was personally remunerated or not is immaterial to the first definition of a regulated building service. We also find that Mr O'Reilly orchestrated the entire mutually beneficial arrangement with the owners which included the fiction that PJ Holmes was the builder, the setting up of the joint account and other financial irregularities.
Mr O'Reilly relied upon the commonly agreed fact that in February 2019 he was ordered by Ms Lee to not ever return to 23 Macleod Street. The Tribunal finds this fact also to be immaterial as Mr O'Reilly had already organised or engaged many of the trades for the remaining work at 23C and, regardless, the project was completed by Mr Andreou, a director of Jetpoint, until the keys were handed over to the owners in May 2019.

Mr Andreou

The Tribunal finds we are not impressed with Mr Andreou as a witness of truth. We find that Mr Andreou was predominantly dishonest in his evidence due to his fundamentally misguided participation in the fiction orchestrated by Mr O'Reilly for Jetpoint to attempt to perform a regulated building service contrary to its obligations under the Act. It was apparent to the Tribunal that Mr O'Reilly and Mr Andreou had both operated under the mistaken belief that if there is no written contract with Jetpoint and if Jetpoint was not paid directly, or at all, that Jetpoint cannot be held liable under the Act.
In determining the preliminary issue, the Tribunal finds that it cannot rely upon any of the evidence of Mr Andreou unless we specifically state we can rely on that evidence or it is corroborated by other oral or documentary evidence that the Tribunal accepts as correct.
The Tribunal accepts that when Mr Andreou first met Ms Lee around September 2016 at the bowling club that he was still studying for his 'building ticket' (his registration as a building service practitioner). Mr Andreou became registered as a building service practitioner on 25 November 2016 and the nominated supervisor for Jetpoint on 18 April 2018. Prior to that date, the Tribunal accepts the evidence of Mr Andreou that the nominated supervisor for Jetpoint was Mr Bruno Melia, a former director of Jetpoint: see Exhibit 2, Exhibit 6 and page 482 of the HB.
Throughout the oral evidence of Mr Andreou, the Tribunal finds that occasionally honesty would prevail for Mr Andreou. For instance, Mr Andreou stated that Ms Lee had 'concocted something with [Mr O'Reilly]' and had 'struck the lottery' by saving 30% to 40% or $2 million on the build. Mr Andreou was disgruntled that he was expected by Ms Lee to do work on 23C which was more work than they had originally agreed he would undertake and that he was 'working for free'. We find we can rely on this evidence from Mr Andreou in determining the preliminary issue.
Of significance to note in relation to Mr Andreou's lack of credibility as a witness of truth is his action on 11 September 2019, when he lodged a misleading and false Notice of Cessation with the City of Melville (see pages 471A471D of the HB and Exhibit 9). We find that the Notice of Cessation completed by Mr Andreou is deliberately false in the following respects:
a)The date of cessation was 4 October 2018;
b)The date on which the Notice of Cessation was signed was 4 October 2018 (when it was actually lodged on 11 September 2019 using the approved form which was created on 8 March 2019 as noted at the bottom of the Notice of Cessation); and
c)No work was completed as the contract was awarded to others.
We infer and find that the intention of Mr Andreou can only have been to mislead the City of Melville and seek to mislead the Tribunal in these proceedings in order to perpetuate the ongoing fiction. We infer and find that the fiction was that PJ Holmes carried out the regulated building service at 23A and 23B until lockup and the owners were an owner-builder after that point; when, in fact, Jetpoint trading as ACE Construction through the actions of Mr O'Reilly and Mr Andreou was the true regulated building service provider for the whole of the project at 23 MacLeod Street.

Mr Alexander

It is clear to the Tribunal that Mr Alexander was involved and quite knowledgeable concerning the project at 23 MacLeod Street. Mr Leroy was asked whether he had dealt with anyone else on site who could be considered the builder and he answered 'only [Mr Alexander]' but Mr Leroy then stated he thought Mr Alexander was a labourer on site.
The Tribunal did not find Mr Alexander to be a witness who was wholly reliable or credible. We find that Mr Alexander was on occasion partisan in his evidence and sought to advocate Jetpoint's case. This undermined the extent to which we find we can accept or rely upon Mr Alexander's evidence. In determining the preliminary issue, the Tribunal finds that it cannot rely upon the evidence of Mr Alexander unless we specifically state we can rely on that evidence or it is corroborated by other oral or documentary evidence that the Tribunal accepts as correct.
We accept the evidence of Mr Alexander that he was always paid for his work by Mr O'Reilly (until February 2019). We accept that (until February 2019) Mr Alexander's daily work direction was provided by Mr O'Reilly and he submitted his hours to Mr O'Reilly. We also accept that after Mr O'Reilly was banned from site in February 2019, Mr Alexander was paid by Ms Lee.
In particular, the Tribunal finds that Mr Alexander's explanation concerning the reason for the placement of the ACE Construction sign on the verge upon the grant of the building permit on 4 October 2018 to be inherently implausible. We accept Ms Lee's evidence noted above with regard to the verge sign and the advertising of ACE Construction. Further Mr Alexander's explanation about the verge sign is almost identical to the explanation given by Mr O'Reilly, whose evidence in its entirety we do not find credible. Mr Alexander and Mr O'Reilly provided the implausible explanation that the sign was not to advertise ACE Construction as a builder, but as a developer who could sell a townhouse being built by ACE Construction at another location none of which was alluded to on the sign (see page 108 of the HB).
Other evidence of Mr Alexander that we do accept was that many of the trades on site (including himself who in effect was employed as a labourer) were quite disgruntled at their level of remuneration. We find this evidence to be consistent with the whole of the evidence which supports our inference and finding that Ms Lee drives an exceptionally 'hard bargain'.
However, evidence which we do not accept from Mr Alexander is that it was widely understood that the owners would be bearing the cost of any defects. We find it inherently implausible in circumstances where the owners were actively (even aggressively) seeking to reduce cost that those same owners would then agree to wear the cost of any defects. When Mr Alexander was questioned regarding this inherently implausible evidence, he provided a particular display of his partisan evidence by leaning forward and appearing to start lecturing Mr H Ling and Ms Lee about their apparent agreement to take on the defects.
We also in particular do not accept or rely upon the evidence of Mr Alexander that Mr Holmes himself came to 23 Macleod Street many times. Mr Alexander's evidence is in direct contradiction of the evidence of Mr Leroy and Ms Lee that we do accept regarding the involvement of Mr Holmes and PJ Holmes at 23 MacLeod Street. Mr Alexander's evidence is also in contradiction with the documentary evidence which indicates the extensive involvement of Jetpoint trading as ACE Construction through the actions of Mr O'Reilly and Mr Andreou.

Consideration of the preliminary issue

The standard of proof for the Tribunal to make findings or be satisfied on the evidence in these proceedings is the balance of probabilities, also referred to as the civil standard of proof. When the evidence is circumstantial, an inference can be drawn from the circumstances of the case. An inference can only be found if the inference is more probable in favour of what is alleged based on the evidence as found. It is enough if the circumstances appearing in evidence give rise to a reasonable and definite inference. The inference drawn must be more than conflicting inferences of equal degrees: Luxton v Vines (1952) 85 CLR 352 at 358; Chamberlain v The Queen [No 2] (1984) 153 CLR 521 at 536.
The Tribunal has found all of the witnesses (except Mr Ling) to varying degrees have issues as to their reliability and credibility. However, the Tribunal has found that it can attribute more weight and rely on certain material aspects of the evidence provided by the witnesses called to give evidence for the applicant (including Ms Lee) more so than the witnesses called for Jetpoint.
It is a fundamental principle that the rights granted and obligations imposed under legislation cannot privately be agreed not to apply. Relevant to this Act, a registered building service provider cannot opt out of obligations imposed and a person cannot agree not to exercise his or her rights to make a complaint at some future point when a defect may arise. The Act imposes obligations on registered building service providers and grants rights to persons in relation to a regulated building service to make a complaint alleging that such work has not been carried out in a proper and proficient manner or is faulty and unsatisfactory. Parties cannot enter into a private arrangement to operate outside of the Act where the building service being provided comes within the definition of a regulated building service because that building service is regulated by the Act.
The Tribunal infers and finds that this fundamental misunderstanding of the Act has driven the parties to together attempt to create a fiction. The Tribunal finds that this fiction was orchestrated by Mr O'Reilly in an attempt to avoid obligation and liability under the Act for himself, Mr Andreou and, more particularly relevant to these proceedings, for Jetpoint. In return for participating in the fiction, we infer and find the owners were to receive a significant reduction to the overall cost of the project at 23 MacLeod Street. Regardless of the efforts of Jetpoint to avoid its obligations under the Act and regardless of any apparent agreement by Ms Lee (in exchange for a cheaper build) not to exercise the right to make a complaint, the Tribunal is able to hear and determine that complaint because such an agreement can have no effect on the exercise of any rights or performance of any obligations under the Act.
Both parties produced documentary and oral witness evidence as to what occurred over the whole project at 23 Macleod Street (not just the nine complaint items for 23C). However, neither party called Mr Holmes of PJ Holmes to give evidence. The Tribunal accepts the evidence of Ms Lee that Mr Holmes was introduced to the owners by Mr O'Reilly and that the contracts with PJ Holmes were arranged by Mr O'Reilly.
Neither party reasonably explained why copies of the written contracts were not provided to the Tribunal nor why Mr Holmes was not called to give evidence. The Tribunal finds it is able to make the inference or draw the conclusion that both parties were concerned (for different reasons) that the written contracts, or Mr Holmes in particular, may provide evidence to the Tribunal that was adverse to the case advanced by them in these proceedings. In relation to Jetpoint, we infer and find the concern would be to maintain the fiction orchestrated by Mr O'Reilly. In relation to Ms Lee, we infer and find the concern would be to maintain her claim of limited knowledge or understanding regarding the fiction: see Jones v Dunkel (1959) 101 CLR 298 and Australian Securities and Investments Commission v Hellicar [2012] HCA 17; (2012) 247 CLR 345 at [164] [170].
The Tribunal was provided with the building permits obtained by PJ Holmes for 23A and 23B (see pages 479-481 and Exhibit 7). Whilst the Tribunal was not provided with a copy of the written contracts entered into with PJ Holmes, it was common ground that these written contracts existed. It was also common ground that the amount of the contracts was as stated in the building permits in the estimated value of building work, namely $495,000 for 23A and $795,000 for 23B.
The regulated building service undertaken at 23C included the construction of a tennis court as well as other hard landscaping such as an arbour, paving and timber benching. This work was significantly more than what was described with an estimated (significantly under) value of $18,000 in the application for a building permit lodged by Mr Andreou for Jetpoint which stated ''Front and side boundary walls and infill landscaping including half base for tennis court' (see pages 371 - 375 of the HB). The Tribunal has not been provided with any other building permits for the regulated building service which was carried out for 23C.
We find that the building permit for 23C was applied for by Jetpoint because it was carrying out the regulated building service at 23C and not due to the implausible self-serving explanation given by Mr O'Reilly and Mr Andreou that it was done to help out Mr H Ling and Ms Lee.
The Tribunal was provided with further examples of financial irregularities in relation to 23 MacLeod Street by the vastly differing estimated costs for the overall project:
(a) the estimated amounts in the three building permits totalling only $1.3 million;
(b)Ms Lee stated the overall cost was in the region of $33.4 million inclusive of the $300,000 builder's fees; and
(c)the evidence of RW Quantity Surveyors which estimates the total construction costs of 23 MacLeod Street inclusive of GST to be nearly $5.8 million (see pages 512-526 of HB).
We make no findings as to the overall cost of the project at 23 Macleod Street except to observe that the monetary figures are irregular and that the true cost was clearly significantly more than as estimated on the three building permits we have been provided for 23A, 23B and 23C.

The financial irregularities noted throughout these reasons are outside the jurisdiction of the Tribunal. However, due to the inferences and findings of the Tribunal in relation to the knowledge and involvement of parties and witnesses in these financial irregularities, these inferences and findings serve to undermine the reliability and/or credibility of the evidence presented to the Tribunal by both parties (both documentary and witness evidence).
We infer and find that Ms Lee participated with Mr O'Reilly and Mr Andreou in the fiction that PJ Holmes was the builder until lock-up for 23A and 23B. We infer and find that this fiction was created in order for the owners to save costs and for Jetpoint to advertise ACE Construction as well as seek to avoid any obligations for Jetpoint under the Act. However, we also infer and find that Ms Lee always intended to hold Jetpoint to account to remedy any defects at 23 MacLeod Street. In any event, this fiction and the extent of participation of Ms Lee in the fiction, is ultimately immaterial to the Tribunal's findings on the preliminary issue as parties cannot privately contract out of rights and obligations provided under the Act.
We infer and find, in addition to the simple large canvas sign which was present throughout the project, the verge sign for ACE Construction was ordered upon applying for the building permit on 31 August 2018 and placed on the verge immediately upon the grant of the building permit. The glossy ACE Construction sign then remained on the verge for at least six months. Of note in comparison was the sign for PJ Holmes which was small and not as visible as the ACE Construction sign (see pages 108 and 471C of the HB).
We infer and find that Jetpoint trading as ACE Construction through the actions of Mr O'Reilly and Mr Andreou, did enter an arrangement to carry out home building work for gain or reward. Part of that gain or reward to Jetpoint was the payment of $300,000 to one of its directors, Mr Andreou. Mr Andreou gave evidence, which we accept, that he did not receive all of that amount but did not (or would not) say who the remaining money was paid to. The Tribunal also accepts the evidence by Ms Lee and Mr H Ling that all of the $300,000 was paid. The Tribunal draws the inference that the remainder somehow was provided to Mr O'Reilly (who had an ongoing interest in Jetpoint at the time as his wife was a director). We make this conclusion contrary to Mr O'Reilly's evidence (which we do not accept as credible) that he did all this work for three years as a friend for no remuneration. We also note the vague evidence given by Ms Lee concerning an apparent loan of $1,000,000 from Mr H Ling to Mr O'Reilly and a part repayment of $100,000 by Mr O'Reilly on 27 November 2017 as further possible evidence of gain or reward to Jetpoint (see p 306 of the HB). An additional gain or reward obtained by Jetpoint was the advertising of ACE Construction at 23 McLeod Street by the large canvas sign and the verge sign as well as the implicit permission from Ms Lee for Mr O'Reilly to take interested parties through 23 McLeod Street. The additional gain or reward for Jetpoint was the joint venture occurring in Como between Mr and Mrs O'Reilly as well as Ms Lee and Mr H Ling for a four townhouse project where Jetpoint is the appointed builder.
Jetpoint was first registered as a building service contractor on 23 February 2015. Since 21 April 2015 Jetpoint has owned the business known as ACE Construction. Both Jetpoint and ACE Construction operate from the same address at 26A Fraser Road, Applecross. The two current directors for Jetpoint are Mr Andreou and Mr O'Reilly. Therefore, during the carrying out of the regulated building service at 23 MacLeod Street, Jetpoint was registered as a building service contractor and met the definition of registered building service provider in s 3 of the Act (see Exhibit 5, Exhibit 6 and pages 30-32 of the HB).
The definition of a regulated building service in s 3 of the Act provides that it means any of the three definitions. Thus a registered building service provider who carries out a building service is providing a regulated building service regardless of any gain or reward. We find that Jetpoint carried out the regulated building service at 23 MacLeod Street.
The Tribunal also finds that Jetpoint at 23 MacLeod Street carried out 'home building work' at 23 Macleod Street as defined under the HBC Act as it was associated work in connection with constructing dwellings at 23A and 23B.
Therefore, we find that Jetpoint trading as ACE Construction through the actions of Mr O'Reilly and Mr Andreou not only satisfies definition (a) of regulated building service in s 3 of the Act but also definition (b).
The documentary record provided to the Tribunal regarding the quote, invoice and payment for the nine items of complaint is incomplete. We find this lack of complete records to be expected in the circumstances of the fiction created to the mutual benefit of the parties which indicate a number of financial irregularities for all involved. Even in the absence of complete records, with the documentary evidence and witness evidence that the Tribunal has accepted and relied upon we are satisfied that Jetpoint trading as ACE Construction carried out the relevant regulated building service.
Therefore, the Tribunal finds on the whole of the evidence that Jetpoint (trading as ACE Construction through the actions of Mr O'Reilly and Mr Andreou) carried out the regulated building service at 23 Macleod Street from around October 2016 to the handover of keys by Mr Andreou in May 2019.

Tribunal's findings regarding the nine items of complaint

In addition to the finding made by the Tribunal above that Jetpoint carried out the regulated building service for the whole project at 23 MacLeod Street, we are satisfied that we can make the following additional and specific findings in relation to 23C and each of the nine items of complaint, namely that Jetpoint carried out the regulated building service for each of the nine items of complaint.
These findings in relation to each of the nine items of complaint are made in accordance with our finding above as to 23 MacLeod Street, our reliance upon the evidence of witnesses and also specifically on the basis of the following further evidence that we accept and rely upon:
(a)Complaint items 1, 2, 5, 8 and 9: exterior tiled areas and complaint item 6: water ingress into basement carpark through suspended slab. We accept the evidence of Ms Lee and Mr Ling and find that this regulated building service was arranged and carried out by Jetpoint trading as ACE Construction through the actions of Mr O'Reilly and Mr Andreou who engaged and supervised Garry Dunk from Riverglow Pty Ltd: see Exhibits 2 and 4 and pages 280, 329-331, 619 and 621 of the HB.
(b)Complaint item 3: seal to tennis net post installation. We accept the evidence of Ms Lee and Mr Ling and find that this regulated building service was arranged and carried out by Jetpoint trading as ACE Construction through the actions of Mr O'Reilly and Mr Andreou who engaged the contractor and supervised the installation of the tennis court.
(c)Complaint item 4: North side timber benches. We accept the evidence of Ms Lee and Mr Ling and find that this regulated building service was arranged and carried out by Jetpoint trading as ACE Construction through the actions of Mr O'Reilly and Mr Andreou arranging the quotes, engaging the contractor and supervising the work to be done: see also page 279 of the HB.
(d)Complaint Item 7: vertical cracking to eastern side brickwall. We find that this item relates to the overall build at 23 Macleod Street which we have found above was a regulated building service carried out by Jetpoint trading as ACE Construction through the actions of Mr O'Reilly and Mr Andreou.

Second part of the final hearing

The Tribunal has already heard three days of evidence in relation to the preliminary issue. At the directions hearing conducted on 21 April 2020, Jetpoint advised the Tribunal that Jetpoint did not substantively contest that the nine items of complaint had not been carried out in a manner that was proper or proficient or were faulty or unsatisfactory.
Both parties have lodged all of their evidence which was made exhibits as part of the hearing of the preliminary issue. That three days of hearing is part of the final hearing in these proceedings. Therefore, any further hearing time in comparison should be relatively short and we consider it can be completed in one further day of hearing.

Orders

Accordingly, the Tribunal orders as follows:
1.The finding on the preliminary issue is the respondent carried out the regulated building service the subject of the nine items of complaint.
2.The proceeding is listed for the second part of its final hearing on 22 June 2020 for one day with the parties and their expert witnesses to attend the Tribunal in person.
3.By 17 June 2020, the parties may request in writing to the Tribunal to reschedule the final hearing on the basis that a party or its expert witness/es are unavailable on 22 June 2020. If a party makes such a request, the second part of the final hearing on 22 June 2020 will be converted to a directions hearing in order to re-list the hearing to another date in late June or early July 2020 with the parties to attend that directions hearing by telephone.

I certify that the preceding paragraph(s) comprise the reasons for decision of the State Administrative Tribunal.
MS D QUINLAN, MEMBER
10 JUNE 2020