Rainbow Pty Ltd and HAWKINS and Anor
[2007] WASAT 216
•28 AUGUST 2007
JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL
STREAM: COMMERCIAL & CIVIL
ACT: BUILDERS' REGISTRATION ACT 1939 (WA)
CITATION: RAINBOW PTY LTD and HAWKINS & ANOR [2007] WASAT 216
MEMBER: MR C RAYMOND (SENIOR MEMBER)
MS J HAWKINS (MEMBER)
HEARD: 30 MAY 2007
DELIVERED : 28 AUGUST 2007
FILE NO/S: CC 1566 of 2006
BETWEEN: RAINBOW PTY LTD
Applicant
AND
GARRY HAWKINS
SARAH-JANE HAWKINS
Respondents
Catchwords:
Builders' Registration Act 1939 (WA) - Whether application to Building Disputes Tribunal out of time by reason that application was not accompanied by prescribed fee - Whether compliance with preliminary notice requirements
Legislation:
Legal Profession Act 1987 (NSW), s 203
Builders' Registration Act 1939 (WA), s 12A, s 12A(2), s 34A, s 36, s 36(5), s 45A
Result:
Application for review dismissed
Decision under review affirmed
Category: B
Representation:
Counsel:
Applicant: Ms K Whitehead
Respondents : Mr G Maddy
Solicitors:
Applicant: Godfrey Virtue & Co
Respondents : Great Southern Legal Pty Ltd
Case(s) referred to in decision(s):
Brierley v Reeves [2001] NSWCA 189
Project Blue Sky Inc & Anor v Australian Broadcasting Authority (1998) 194 CLR 355
Tangent Nominees Pty Ltd and Edwards & Anor [2005] WASAT 119
Tangent Nominees Pty Ltd and Edwards & Anor [2006] WASAT 243
Well Holdings Pty Ltd v Agostino [2001] WADC 174
REASONS FOR DECISION OF THE TRIBUNAL:
Summary of Tribunal's decision
The applicant was granted leave to review a decision of the Building Disputes Tribunal on limited grounds. At the hearing of the review, it became common cause that there were only two issues which required to be determined.
In relation to the first issue, the Tribunal concluded that on a proper construction of the Builders' Registration Act 1939 (WA), the legislature did not intend that a failure to ensure that the prescribed fee accompany an application or complaint had the effect of invalidating the proceedings.
The second issue for determination related to whether a preliminary notice had to be given at some reasonable time prior to lodging a complaint form. The Tribunal concluded there was no such requirement, and that the giving of a preliminary notice prior to lodging the complaint is all that the legislation prescribes.
The application for review
The applicant (the builder) and the respondents (the owners) entered into a written building contract in April 1998 for the construction of a dwelling house in Gordon Street, Albany.
On 15 September 2004, the Building Disputes Tribunal (the Disputes Tribunal) received a complaint via facsimile from the owners. Two days later, the Disputes Tribunal received a cheque for the sum of $25 being the prescribed fee for the application.
In the proceedings before the Disputes Tribunal, the builder contended that the Disputes Tribunal did not have jurisdiction to hear the complaint on two grounds. Firstly, that the complaint had not been made before the expiration of six years from the time when the building work was completed. Secondly, it was contended that the owners had not complied with the requirement to give a preliminary notice to the builder. On 15 September 2006, the Disputes Tribunal published written reasons for its decision, in which it determined that it had jurisdiction.
On 11 April 2007, the Tribunal granted the builder leave to review the decision of the Disputes Tribunal in relation to particular proposed grounds of review. Rather than set out the precise terms of the grounds for review, we shall state the two main issues for determination, adopted by both parties, which they accept encompass the grounds in respect of which leave was granted. Those two issues are:
1)Whether it is mandatory for a prescribed fee to be paid to the Disputes Tribunal under s 34A of the Builders' Registration Act 1939 (WA) (BR Act) before a complaint can be properly made; and
2)Whether the preliminary notice issued by the owners complied with s 12A of the BR Act.
Material facts and statutory provisions
The following facts are common cause.
1)The owners signed the Disputes Tribunal complaint form on 15 September 2004 and that complaint, which was allocated Complaint No 015711, was received by the Disputes Tribunal by facsimile on that date.
2)The prescribed fee in respect of the application was received by the Disputes Tribunal on 17 September 2004.
3)The complaint fee was processed on 20 September 2004.
4)On 13 September 2004, the owners caused their solicitors to serve a letter on the builder which the owners contend constitutes a preliminary notice as required by s 12A(2) of the BR Act.
5)The builder had received earlier correspondence from the owners.
The letter of 13 September 2004 is addressed to the Directors, Rainbow Homes Pty Ltd. The heading of the letter is "Defective construction: 18 Gordon Street, Littlegrove, Albany ('the property')". The letter proceeds to advise that the solicitors act on behalf of the owners and reference was made to a letter from the builder to the owners, dated 28 July 2004. It then states "[a]s per your request, we itemise the structural defects of the residence erected by your company upon the Property". There is then set out a number of complaints under four headings, the detail of which is not relevant.
The letter calls for the provision to the owners of a copy of a structural engineers report (which the context reflects it was assumed the builder had obtained). The penultimate paragraph of the letter then states:
"We are instructed that our clients require a written undertaking from you by no later than 4 pm on 14 September 2004 that you will, at your own cost, repair all the defects listed above. If your written undertaking is not received by the specified time, then we expect to receive our clients' instructions to make an application to the Building Disputes Tribunal and to commence court proceedings to recover the loss our clients have suffered as a consequence of the defective works."
Although the terms of the grant of leave to review the decision of the Disputes Tribunal included a ground raising whether the Disputes Tribunal had wrongly determined that the date of practical completion of the works was 16 September 1998, no attempt was made on the review to establish any other date of practical completion. Indeed, counsel for the builder advised that this date of practical completion was accepted.
The following provisions of the BR Act are relevant.
"12A. Order to remedy unsatisfactory building work
(1)Where on complaint being made to it by any person, including the Board, the Disputes Tribunal is satisfied that any building work has not been carried out in a proper and workmanlike manner by reason that the building work is faulty or unsatisfactory the Disputes Tribunal may by order in writing served on the person who carried out the building work order him to ‑
(a)remedy the faulty or unsatisfactory building work within such reasonable time as is specified in the order; or
(b)pay to the owner of the building such costs of remedying the building work that is faulty or unsatisfactory as the Disputes Tribunal considers reasonable in which case any costs so ordered by the Disputes Tribunal constitute a debt to the owner and are recoverable by him in a court of competent jurisdiction.
(1a) ...
(1aa)The Disputes Tribunal shall not have power to make an order under this section in respect of any building work following a complaint in respect of that work, unless such complaint is made before the expiration of 6 years from the time when the building work was completed; and for the purposes of this subsection, building work is completed when the building to which the work relates becomes fit for occupation in a free and uninterrupted manner.
(1b) ...
(1c) ...
(2)A complaint under subsection (1) ... cannot be made before the complainant has given to the other party a preliminary notice under subsection (3).
(3)A preliminary notice is a notice in writing in the prescribed form setting out the matters of which the intending complainant complains and calling on the other party to —
(a)rectify them; or
(b)otherwise attempt to settle any matters that are in dispute.
...
34A. Disputes Tribunal fees
A complaint or application made to the Disputes Tribunal by any person other than the Board shall be accompanied by the prescribed fee."
The effect of payment of the prescribed fee having been made only on 17 September 2004
The builder contends that s 34A is mandatory and that consequently, unless the complaint or application is accompanied by the prescribed fee, "the application is not properly made". Reliance is placed on Brierley v Reeves [2001] NSWCA 189.
Brierley v Reeves's case was one in which the New South Wales Court of Appeal had to consider the effect of whether an application for assessment for a bill of costs had to be accompanied by a prescribed fee. It is to be noted that s 203 of the Legal Profession Act 1987 (NSW) then provided that:
"(1)An application for assessment is to be made in the form prescribed by the regulations and is ... to be accompanied by the fee prescribed by the regulations."
The Court held that on a proper construction of the statute, there is a requirement for the way in which the application "is to be made" and of the fee by which it is to be accompanied, so that the absence of the fee resulted in the conclusion "that no application has been made" [48].
The effect of the builder's submissions is that as the fee was only received on 17 September 2004, the application was not made until that date which is one day after expiry of the statutory six year period.
The owners have referred to a number authorities, but in the view of the Tribunal, none of them are of any particular assistance. They turn on the particular statutory provisions under consideration in each instance.
We consider that the correct approach to be taken is in accordance with the principles set out in Project Blue Sky Inc & Anor v Australian Broadcasting Authority (1998) 194 CLR 355. The High Court held that the traditional test for determining whether the exercise of a statutory power was valid by determining whether the legislative provision in question was mandatory or directory should not be used, as it may focus attention on the wrong factors. Instead, a better test for determining the validity of the exercise of a statutory power is to ask whether it was a purpose of the legislation that an act done in breach of the provision should be invalid.
One of the stated purposes of the BR Act, as reflected in its short title, was for the establishment of a tribunal with jurisdiction in respect of certain building disputes. Section 36 of the BR Act provides that the Disputes Tribunal:
"[S]hall act according to equity, good conscience, and the substantial merits of the case and without regard to technicalities and legal forms, and shall not be bound by the rules of evidence but may inform itself on any matter in such manner as it thinks fit."
By s 36(5) thereof except to the extent prescribed by the BR Act or the Regulations, the Disputes Tribunal shall determine its own procedures. Section 45A of the BR Act provides that except in stated circumstances, each party must present his own case and may not be represented by another party.
It is readily apparent that the Disputes Tribunal is intended to operate free of the technicality and formality applying to court proceedings. There are numerous cases in which it has been held that the BR Act reflects an intention that the Disputes Tribunal is to provide a relatively speedy and inexpensive remedy in building disputes: see Well Holdings Pty Ltd v Agostino [2001] WADC 174; Tangent Nominees Pty Ltd and Edwards & Anor [2005] WASAT 119 at [41].
Clearly, the BR Act encourages aggrieved persons, entitled to apply for relief, to do so without legal representation and to conduct its proceedings with less formality than would be expected within the court system. That intended informality, does not sit comfortably with the builder's submissions that invalidity be visited upon an application lodged without the prescribed fee. That discomfort becomes all the more apparent when regard is had to s 12A(2) which in the clearest language states that a complaint "cannot be made" before preliminary notice has been given. It is also to be noted that s 34A refers to a complaint or application "made" unlike the provisions of the legislation considered in Brierley v Reeves's case which prescribed that an application "is to be made". This language suggests that the application has been made, even if received without the fee. If the legislature had intended that an application could not be made without the fee being paid, it could have used language as clear as that used in s 12A(2) of the BR Act.
For the above reasons, we do not accept that a complaint or application is rendered invalid, if not accompanied by the prescribed fee.
Preliminary notice
The builder, in our view, quite properly does not attack the effect of the letter of 13 September 2004 simply because it is not in the prescribed form: see Tangent Nominees Pty Ltd and Edwards & Anor [2006] WASAT 243. Instead, the builder's submission is that the letter is ineffective as a preliminary notice because "unreasonable notice was given ... to rectify the alleged workmanship issues and no notice was given as to the urgency of a response because of the close expiry of the limitation period to bring claim".
The preliminary notice requirements of the legislation were considered in Tangent Nominees Pty Ltd and Edwards & Anor [2006] WASAT 243 to which we refer. We concur that Parliament intended that the parties make some attempt to resolve the dispute prior to a complaint being referred to the Disputes Tribunal. It must, however, be observed that as submitted for the owners, the legislation does not prescribe that the notice be received any specific period prior to the lodging of a complaint. Clearly, the purpose is to give the builder an opportunity to resolve the matter, but that opportunity does not dissolve simply because the complaint is lodged. There is nothing to prevent a builder taking up the invitation to remedy the works or otherwise attempt to settle any matters that are in dispute. It is also noted that the prescribed preliminary notice form enjoins the complainant in terms only that a complaint cannot be made until the preliminary notice has been given.
Even where a preliminary notice is given very late in the day, it serves the very useful purpose of identifying what the complainant requires to be done, in order to resolve the matter, or at least identifies the matters in dispute which the complainant requires the builder to settle. The legislation does not insist upon any formalised pre‑litigation dispute resolution process. The door therefore remains open to the builder to resolve the matter at an early stage before the resources of the Disputes Tribunal have to be used to any great extent, by way of the holding of inspections, compiling of building reports or any formal hearing.
Complainants have an obvious interest in encouraging a builder to resolve a dispute in accordance with the stipulations of the preliminary notice, or as a result of some compromise on those issues. Ordinarily, one would therefore expect that a complainant would give the notice some reasonable time prior to the lodging of a complaint form, to allow any settlement process to be completed. However, the legislature has not seen fit to legislate in terms which require such a course. To do so, would require that in every case there would have to be an investigation as to whether the notice was reasonable in all the circumstances, which would do no more than to add a level of complexity, to a dispute process which is intended to be simplified in nature.
We are unable to accept the builder's submission requiring that the preliminary notice be given some reasonable time prior to the lodging of the complaint. We find that the legislation requires only that the preliminary notice be given prior to lodging the complaint.
Orders
It follows from our above conclusions that the application for review falls to be dismissed.
Both parties foreshadowed in their respective statement of issues, facts and contentions that costs would be sought from the other party. Given the starting point in this Tribunal that each party should bear their own costs, the Tribunal will need to be persuaded that it should exercise the discretion which it has to order costs, having regard to the particular circumstances in this matter. Accordingly, any party who may wish to apply for costs, will be afforded a limited time within which to do so.
We will accordingly issue orders in the following terms.
1.The application for review is dismissed.
2.The decision under review is affirmed.
3.The parties are granted leave to apply for costs, subject to compliance with the following orders:
(a)Any application for costs is to be made in writing detailing the amount of costs claimed and the basis on which costs have been computed, and is to be accompanied by an outline of written submissions as to why such costs should be awarded;
(b)The documents referred to in (a) must be filed with the Tribunal and served on the other party on or before 21 September 2007.
4.On or before 28 September 2007 any party wishing to oppose an application for costs made by the other must file and serve an outline of written submissions as to why such costs should not be awarded.
5.Unless the Tribunal directs otherwise, any such application for costs shall be determined on the documents.
I certify that this and the preceding [31] paragraphs comprise the reasons for decision of the State Administrative Tribunal.
___________________________________
MR C RAYMOND, SENIOR MEMBER
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