Ross v Cochran t/as Cochran Homes

[2024] NSWCATCD 5

Civil and Administrative Tribunal

New South Wales

Medium Neutral Citation:

Ross v Cochran t/as Cochran Homes [2024] NSWCATCD 5

Hearing dates:

12 July 2024

Date of orders:

15 July 2024

Decision date:

15 July 2024

Jurisdiction:

Consumer and Commercial Division

Before:

Graham Ellis SC, Senior Member

Decision:

1   The application is dismissed.

2   Any submissions (not exceeding five pages) and any evidence in support of an application for costs are to be filed and served by 29 July 2024.

3   Any submissions (not exceeding five pages) and any evidence in response are to be filed and served on or before 12 August 2024.

4   Any submissions (not exceeding two pages) and any evidence in reply are to be filed and served on or before 19 August 2024.

5 Any such submissions are to include an indication of whether an order should be made, under s 50(2) of the Civil and Administrative Tribunal Act 2013 (NSW), to dispense with a hearing as to costs.

Catchwords:

CIVIL PROCEDURE – Time – extension of time

BUILDING AND CONSTRUCTION – Renewal application – defects claim

Legislation Cited:

Civil and Administrative Tribunal Act 2013 (NSW)

Home Building Act 1989 (NSW)

Cases Cited:

Bondarek v NSW Land and Housing Corporation [2018] NSWCATAP 299

Brisbane South Regional Health Authority v Taylor [1996] HCA 25; 186 CLR 541

Jackson v NSW Land and Housing Corporation [2014] NSWCATAP 22

Kay v 3D Design & Build Pty Ltd [2016] NSWCATAP 68

Minifie v Maxwell [2020] NSWCATAP 30

Owners of Strata Plan No 76700 v Trentelman [2021] NSWCATAP 205

Prince Alfred College Inc v ADC [2016] HCA 37

Stephens v Australian Postal Corporation [2010] FMCA 1012

TC Industrial Plant Pty Ltd v Robert’s Queensland Pty Ltd [1963] HCA 57

The Owners Strata Plan No 79642 v Five D Pty Ltd [2020] NSWCATAP 110

Tomlinson v Ramsey Food Processing Pty Ltd [2015] HCA 28

Texts Cited:

None cited

Category:

Principal judgment

Parties:

Applicants – Graham Ross and Louise Ross
Respondent – Glenn Cochran t/as Cochran Homes

Representation:

Counsel:
Applicants – J Horowitz
Respondent – A Wilson

File Number(s):

2024/00070944

Publication restriction:

Nil

REASONS FOR DECISION

Outline

1. A work order having been made by consent on 28 April 2021, the owners of a property in McMasters Beach (the applicants) lodged a renewal application against the builder (the respondent) on 14 February 2024. That application was listed for hearing of the preliminary issue of whether the time for that application to be lodged should be extended.

2. After considering the evidence and the submissions, both written and oral, the Tribunal determined that the 12-month period for the lodging of a renewal application should not be extended from 1 September 2022 to 14 February 2024, a period of more than 17 months. As a result, the application was dismissed, and provision was made for submissions as to the costs of the renewal application.

Jurisdiction

3. As the Tribunal had jurisdiction to consider the earlier application, which bore the reference HB 19/51052, the Tribunal clearly has jurisdiction in respect of this renewal application.

History of the proceedings

4. Directions having been made at a hearing on 20 March 2024, documents were filed and served for the applicants then for the respondent. Despite an extension of time for the provision of documents in reply, those documents were not filed until two days prior to the hearing.

The hearing

5. Both parties were represented by counsel. The documents upon which the parties relied were either admitted as evidence or marked for identification as set out below:

Exhibit A	Statement of Graham ROSS, dated 26 April 2024
Exhibit B	Report of Gregory JAMES, dated 11 October 2020
Exhibit C	Report of Gregory JAMES, dated 11 May 2022
Exhibit D	Statement of Graham ROSS, dated 26 April 2024
Exhibit 1	Affidavit of Glenn COCHRAN, dated 24 May 2024
MFI 1	Applicants’ submissions
MFI 2	Respondent’s submissions
MFI 3	Submissions in reply

6. As there was no cross-examination, it only remained to provide an opportunity for supplementary oral submissions, following the usual sequence of applicants then respondent then applicants in reply so that each party was able to speak in support of their case and to reply to the case of the other party.

Relevant law

7. The provision in the Civil and Administrative Tribunal Act 2013 (CATA) which allows proceedings to be renewed is clause 8 of Schedule 4 which provides:

1. If the Tribunal makes an order in the exercise of a Division function in proceedings, the Tribunal may, when the order is made or later give leave to the person in whose favour the order is made to renew the proceedings if the order made is not complied within the period specified by the Tribunal.

2. If an order has not been complied with within the period specified by the

Tribunal the person in whose favour the order was made may renew the proceedings to which the order relates by lodging a notice with the Tribunal, within 12 months after the end of the period, stating that the order has not been complied with.

1. The provisions of this Act apply to a notice lodged in accordance with subclause (2) as if the notice were a new application made in accordance with this Act.

2. When proceedings have been renewed in accordance with this clause, the Tribunal:

(a)   May make any other appropriate order under this Act or enabling legislation as it could have made when the matter was originally determined, or

(b)   May refuse to make such an order.

1. This clause does not apply if:

(a)   The operation of an order has been suspended, or

(b)   The order is or has been the subject of an appeal.

8. The words quoted above have been considered in earlier decisions which establish principles that can be applied to this case. In Bondarek v NSW Land and Housing Corporation [2018] NSWCATAP 299 at [44-45], it was noted that a renewal hearing does not involve a re-hearing of the initial application but instead requires a consideration of what to do next when there has been non-compliance with the earlier order. Minifie v Maxwell [2020] NSWCATAP 30 was an appeal from a decision made in renewal proceedings relating to a dividing fence. The principles set out in Minifie at [37-41] were summarised in The Owners Strata Plan No 79642 v Five D Pty Ltd [2020] NSWCATAP 110 as follows:

1. Renewal proceedings are a simple and practical method of enforcing and promoting compliance with Tribunal orders.

2. Jurisdiction arises if a party in “whose favour” an order has been made brings proceedings within 1 year of the date compliance with the order was due; and proves that order has not been fully complied with.

3. If the order has not been fully complied with (or not complied with at all), the Tribunal must focus upon what, if any, appropriate orders should be made to do justice between the parties, with reference to the original order made and all subsequent circumstances.

4. A renewal hearing is not a re-hearing of the original dispute, or a re-consideration of the merits of the original dispute; but to consider what to do next given the non-compliance with the original order.

5. In appropriate circumstances, in a renewal application the Tribunal may

consider causes of action and remedies which were not available in the original proceedings.

9. Simply stated, renewal proceedings are a way for the Tribunal to deal with non-compliance with an earlier order by putting a party in the same position as if there had been compliance with that order.

10. Section 41 of the CATA, which deals with extensions of time, is quoted below:

1. The Tribunal may, of its own motion or on the application by any person,

extend the period of time for the doing of anything under any legislation in respect of which the Tribunal has jurisdiction despite anything to the contrary under that legislation.

1. Such an application may be made even though the relevant period of time has expired.

   11. As s 41 commences with the words “The Tribunal may …”, the Tribunal is required to exercise its discretion whether to grant an extension of time. The relevant considerations for the exercise of that discretion were set out in Jackson v NSW Land and Housing Corporation [2014] NSWCATAP 22 (Jackson) at [22]. Although the issue in that case was whether to extend time for a notice of appeal to be lodged, those considerations are commonly applied whenever a party seeks to rely on s 41. The considerations listed in that paragraph are quoted below, with case citations omitted.

2. The discretion can only be exercised in favour of an applicant upon proof that strict compliance with the rules will work an injustice upon the appellant;

3. The discretion is to be exercised in the light of the fact that the respondent (to the appeal) has already obtained a decision in its favour and, once the period for appeal has expired, can be thought of as having a "vested right" to retain the benefit of that decision and, in particular, where the right of appeal has gone (because of the expiration of the appeal period) the time for appealing should not be extended unless the proposed appeal has some prospects of success;

4. Generally, in an application for an extension of time to appeal the Appeal Panel will be required to consider:

(a)   The length of the delay;

(b)   The reason for the delay;

(c)   The appellant's prospects of success, that is usually whether the applicant has a fairly arguable case; and

(d)   The extent of any prejudice suffered by the respondent (to the appeal); and

1. It may be appropriate to go further into the merits of an appeal if the explanation for the delay is less than satisfactory or if the opponent has a substantial case of prejudice and, in such a case, it may be relevant whether the appellant seeking an extension of time can show that his or her case has more substantial merit than merely being fairly arguable.

   12. The position may be summarised by saying that s 41 cannot be used to provide the Tribunal with jurisdiction but can be used if the Tribunal has jurisdiction. For example, s 41 cannot aid a claim caught by s 48K(3) of the Home Building Act 1989 (NSW) (the HBA) because that section only provides jurisdiction if a claim is made within time. However, since the Tribunal does have jurisdiction in relation to this application, the applicants can rely on s 41. Kay v 3D Design & Build Pty Ltd [2016] NSWCATAP 68 at [78] provides support for that view.

Applicants’ evidence

13. The first statement of Mr Ross (Exhibit A) set out details of events between 28 April 2021 and 14 February 2024 and annexed copies of documents relating to those events.

Respondent’s evidence

14. Mr Cochran’s affidavit (Exhibit 1) outlined events which commenced with the relevant building contract that was dated 24 June 2016 and concluded on 15 October 2021, being the date when he contended the work required by the consent order was completed.

Evidence in reply

15. The applicants relied on two reports from Mr James, a building consultant. His 11 October 2020 report (Exhibit B) was the report upon which the applicants relied in the original proceedings. Accordingly, its inclusion in evidence in reply did not cause a difficulty for the respondent because it had been first served well before this hearing. A second report from Mr James, dated 1 May 2022 (Exhibit C), was a colour copy of the report annexed to the statement of Mr Ross (A170, ie from page 170 in Exhibit A). Hence, its late service also did not cause a problem for the respondent.

16. A second statement of Mr Ross (Exhibit D) referred to the issues of structural steel, the polished concrete floor, and mould in the garage. There were 33 pages of photos annexed to this statement.

Applicants’ submissions

17. Written submissions for the applicants (MFI 1) suggested that there were three reasons for the delay, not attributable to the owners: (1) representative error, being a reference to the conduct of the applicants’ former solicitor, (2) the Christmas – New Year break period, and (3) corresponding with Law Cover, said to be consequential upon that representative error.

18. In support of the first of those reasons, reference was made to Stephens v Australian Postal Corporation [2010] FMCA 1012 at [21] in support of the proposition that the fault of a solicitor should not be treated as if it were the fault of the client. A passage from the 28 November 2022 letter from the applicants’ former solicitor (A54), which referred to a 17 September 2022 email, was quoted. The submissions made in relation to the third reason included reference to a 24 November 2023 letter from Lawcover (A330) which raised the failure to make the application to extend time which has now been made.

19. In relation to the applicants’ prospects of success, reference was made to the additional period from 1 September to 15 October in 2021 that the respondent required to complete the work, and to each of the clauses numbered 1 to 10.

20. Prejudice to the applicants was said to arise from clause 5 of the deed which operated to release the builder save for renewal proceedings.

21. It was contended that “At all material times [the applicants] pursued their rights diligently and in a timely manner.” Further, that this application was desired to obtain answers to three questions: (1) whether s 41 permits the Tribunal to extend time in relation to a renewal application; (2) whether the Tribunal would have extended time until 28 November 2022 or December 2022, and (3) whether an extension of time to 14 February 2024 can be obtained.

22. Oral submissions began by indicating dates in relation to the earlier proceedings. After referring to the issues of the structural steel and the polished concrete floor, further reference was made to the events between 28 November 2022 and 14 February 2024. There was also reference to the time limit for claims under the HBA based on defective work, namely six years for major defects and two years for other defects, as distinct for the 28 days period for lodging a notice of appeal. Two minor defects, namely cladding and a compliance certificate in relation to waterproofing, were also mentioned. It was said that rust on the structural steel was becoming apparent and that a crack in the floor was getting worse.

Respondent’s submissions

23. Written submissions for the respondent (MFI 2) noted that the original proceedings were finalised by (1) consent orders, (2) heads of agreement, and (3) a deed. It was contended there had been compliance by the respondent.

24. The application to extend time was opposed for reasons which may be summarised as (1) the conduct of the applicants, (2) the conduct of their expert, Mr James, (3) substantial delay, (4) inadequate explanation for that delay, and (5) significant prejudice to the respondent if time is extended.

25. Reference was made to Jackson at [21], Brisbane South Regional Health Authority v Taylor [1996] HCA 25; 186 CLR 541 at 543-544, and Prince Alfred College Inc v ADC [2016] HCA 37 at [99]-[100] in support of a submission that time limits impose a rule that should be generally enforced, provisions such as s 41 provide an exception to that rule, and such provisions should not be given a standing equal to or greater than an enacted time limit.

26. It was also contended that the power conferred by s 41 should not ignore the Tribunal’s guiding principle of the just, quick and cheap resolution of the real issues in the proceedings, as set by s 36 of the CATA.

27. Reliance was also placed on what was said in Owners of Strata Plan No 76700 v Trentelman [2021] NSWCATAP 205 at [38], to the effect that a party seeking to have a discretion exercised in its favour should not only act in good faith but also bring to attention the circumstances said to support the application so that they may be weighed against the delay.

28. A submission was also made that doctrines of abuse of process and estoppel may be relevant to the present application, by reference to what was said in Tomlinson v Ramsey Food Processing Pty Ltd [2015] HCA 28 at [24]-[26].

29. It was further contended that the applicants’ former solicitor had provided advice they did not have a claim in relation to the structural steel works (A314).

30. Also, it was noted that the applicants had not responded to the issues raised by the 28 November 2022 letter from the respondent’s solicitor (A56 or A278). In particular, the conduct of Mr James was called into question in relation to what occurred during the critical stage inspections, a matter raised in that letter.

31. After noting issues which Mr James said were generally carried out as per the consent orders, reference was made to the polished concrete slab, and the structural steel.

32. A delay was well over a year was noted, as was the fact that it was open to the applicants to seek an extension of time at any time from 16 October 2022. A period from that date to 28 November 2022 was accepted to involve representative error. Delays were said to have included (1) delay in advising the respondent of the alleged defects, (2) delay in obtaining the report of Mr James, and (3) delay in providing that report to the respondent. It was contended that it was not until 9 February 2024 that the applicants’ new solicitor sent an email to the respondent’s solicitor (A338), which email did not respond to the matters raised in the letter from the respondent’s solicitor dated 28 November 2022 (A56 or A278).

33. The respondent’s case on the question of delay may be summarised as (1) the delay has not been explained, either adequately or at all, and (2) the applicants made a forensic decision to pursue a claim against Lawcover whose opposition to that claim prompted this application.

34. Prejudice to the respondent was said to arise from the fact that he had not been on site since 15 October 2021 and that, since then, “Any number of things may have occurred that might impact on the works.”

35. In oral submissions, it was suggested that the absence of further building work by others was not a sufficient answer. As to the structural steel, it was noted that the builder was to do painting work as part of the work order and to make a payment to compensate the owners for further painting and that any complaint in relation to the structural steel must relate to work covered by the work order.

36. Further, it was noted that Mr James had not provided evidence of what happened during the critical stage inspections with the contended result that the Tribunal only had the uncontested evidence of Mr Cochran on that aspect. There was said to be no evidence that any of the issues raised in the new report of Mr James were ever raised with the respondent during either the course of the work or the inspections as part of the compliance with that work order.

37. Criticisms were also made as to the claim now made in relation to the polished concrete floor and to the raising of a crack in that floor.

38. Prejudice to the respondent was said to include the significant cost increase in building work between 2021 and 2024. The respondent’s case was that this application should not be permitted to progress by reason of (1) the delay, (2) the failure to adequately explain that delay, (3) the deficiencies in the evidence of Mr James, (4) the attempt to “double-dip” in relation to the structural steel, and (5) the addition of a claim for a crack in the polished concrete floor.

39. It was also noted that any evidence of Mr Ross was not that of an expert, and that there was no indication of causation. A submission was made that any presence of rust did not mean there had been a failure to comply with the work order. Further, that the claim for a crack in the concrete was an abuse of process because rectification of a crack was not part of the consent work order.

Submissions in reply

40. Written submissions in reply (MFI 3) referred to Item V of the consent work order in relation to the structural steel and to the 2022 report of Mr James at [94]-[97]. The issue of the role of Mr James in critical stage inspections was said to be a matter for the final hearing. It was accepted that the two significant items of defective work are the painting of the structural steels and the polished concrete slab. As to that slab, reference was made to the 2022 report of Mr James at [90]. Repetitive submissions were made as to the delay, but it was accepted that the applicants made a forensic decision to pursue a claim against Lawcover.

40. Finally, it was contended that nothing had occurred that might impact the work such as to cause prejudice to the builder.

41. An additional matter raised in oral submissions was a reference to photos at D4-11 compared to D34-36, said to be ‘before and after’ photos despite the statement of Mr Ross (D2) only referring to those photos as having been taken on 1 July 2024 and there being no date on any of those photos. There was a suggestion that the respondents failed to provide any expert evidence in response but that overlooks the fact that this was not a final hearing of the renewal application, but a hearing on the preliminary point of whether to grant an extension of time, with the result that the Tribunal’s concern is confined to whether the applicants have an arguable case and whether that case has substantial merit.

42. It was agreed there had been significant cost increases since the work order expired but it was suggested that could be addressed by using earlier versions of Cordells or Rawlinsons than the current versions to remove the impact of cost increases. There was also a suggestion that, even if the cracking in the polished concrete floor was a new defect, it would be addressed by the remedial work that was otherwise required in relation to that floor.

Consideration

44. From a consideration of the evidence, the Tribunal makes the following findings of fact:

1. On 24 June 2016 the respondent contracted with the applicants to undertake residential building work (1/2, ie from page 2 in Exhibit 1).

2. On 15 December 2017 that work was completed (applicants’ submissions).

3. On 28 October 2019 the original application was lodged (applicants’ submissions).

4. On 27 April 2021 the parties reached an agreement that was recorded in Heads of Agreement (1/74).

5. On 28 April 2021 a work order was made by consent (A14-20).

6. The work order did not include any reference to a crack in the polished concrete floor.

7. In May 2021 the parties executed a deed (A21 or 1/78).

8. The builder was due to complete the rectification work set out in the work order by 1 September 2021 (A15 at [2]).

9. The builder completed that work on 15 October 2021 (1/3 at [23]).

10. On 29 April 2022 one of the applicants (Mrs Ross) asked their then solicitor if there was a time limit in relation to that completed work (A34).

11. On or shortly after 11 May 2022 the applicants received an expert’s report from Mr James (C1).

12. The time for the commencement of renewal proceedings expired on 1 September 2022 (CATA, Sch 4, cl 8).

13. On 17 September 2022 the applicants’ former solicitor advised them, by email, of the difficulties he had encountered from his wife, who was also his administrative assistant and practice manager, becoming gravely ill (A43).

14. On 28 November 2022 the applicants’ former solicitor advised them that the time limit for a renewal application had been missed but they may still be able to bring renewal proceedings by reason of s 41 of the CATA (A54).

15. On 28 November 2022 the respondent’s solicitor wrote to the applicants’ former solicitor, raising matters in relation to the claims now made (A56 or A278).

16. On 1 December 2022 the applicants engaged their current solicitors (A6 at [36]).

17. The first step taken by those solicitors was not to lodge a renewal application but to issue a notice to the respondent, on 23 January 2023 (A165).

18. After a 28 February 2023 response (A275), which raised the lack of a response to the letter dated 28 November 2022 (A56 or A278), it was not until 28 April 2023 that the applicants’ current solicitor advised their former solicitor of a “prospective claim” (A281).

19. On 28 September 2023 Lawcover wrote to the applicants’ current solicitors, referring to the letter dated 28 November 2022 (A314).

20. On 24 November 2023 Lawcover replied to the applicants’ claim, noting the failure to seek an extension of time under s 41 of the CATA (A330).

21. On 14 February 2024 a renewal application was lodged (Tribunal’s file).

45. The Tribunal’s assessment of the matters considered to be relevant to the exercise of its discretion are set out below.

46. Length of the delay. The renewal application should have been lodged within 12 months of 1 September 2021. It was lodged 29 months and 13 days later, on 14 April 2024. The length of the delay is therefore more than 17 months. Noting that the consent orders specifically said that cl 16 of the contract would apply (A15 at [5]), being a clause that deals with variations (1/19), it could be said that the renewal application only had to be lodged by 15 October 2022. However, if so, the length of the delay would still be 16 months.

47. Reasons for the delay. Three explanations were provided for the delay. The first was representative error, was said to cover the period to 1 December 2022 (MFI 1, heading on page 5). In oral submissions, the respondent conceded such an error covered the period from 16 October to 28 November in 2022. However, the respondent’s written submissions (MFI 2 at [68]-[70]) raised three valid points: (1) the delay in bringing the alleged defects to the attention of the respondent, which should have occurred during the inspection regime, (2) the delay, of almost seven months, in obtaining the report of Mr James, from 15 October 2021 to 11 May 2022, and (3) the delay in failing to provide a copy of that report to the respondent until close to three months later, on 2 August 2022.

48. Secondly, the Christmas – New Year break was said to cover the period from 1 December 2022 to 22 January 2023. The applicants and their new solicitor were clearly on notice of the situation by reason of the expiry of the time limit and the availability of s 41 being noted in writing by the applicants’ former solicitor. A renewal application only requires the completion of a form. From the applicants’ experience of the original application, and from the experience of their new solicitors, it was clear to them that a directions hearing would be held after a renewal application was lodged, with the result that it was not necessary to lodge evidence with that form. In any event, the applicants already had the May 2022 report from Mr James. In such circumstances, it is difficult to see why a renewal application was not lodged during December 2022, before the commencement of the Christmas – New Year break. Neither that break at the end of 2022 or at the end of 2023 is considered a sufficient explanation for the delay.

49. Thirdly, the pursuit of a claim against the applicants’ former solicitor. The primary aspect of this reason was the time taken by Lawcover to consider that claim. However, there was no explanation of why such a claim prevented the applicants from lodging a renewal application. Indeed, when Lawcover did respond, on 24 November 2023 (A330), one of the matters raised was the ability to lodge a renewal application and seek an extension of time.

50. It should not have been necessary for that matter to prompt action because, in relation to their claim against their former solicitor, the applicants had a duty to mitigate their loss: TC Industrial Plant Pty Ltd v Robert’s Queensland Pty Ltd [1963] HCA 57. The applicants could and should have lodged a renewal application at any time during the period they were seeking redress from Lawcover in relation to the conduct of their former solicitor. Neither their pursuit of a claim against their former solicitor nor the time taken by Lawcover to provide a response is a satisfactory explanation for the delay.

51. Even if it could somehow be said that the period to the date of the 24 November 2023 communication from Lawcover provided an adequate explanation, the Christmas – New Year break does not provide sufficient explanation for the period of 82 days from that date until the renewal application was lodged on 14 February 2024 as there was about a month before and about a month after such a break during which a renewal application could have been lodged.

52. The focus on a Lawcover claim involved the applicants, figuratively speaking, turning their backs on the Tribunal and only returning to the Tribunal when prompted to do so by Lawcover. Support for that view that this application is motivated by the Lawcover claim is found in the written submissions for the applicant which said (MFI1 at [33]):

… due to Law Cover’s assertion that the [applicants] did not mitigate their loss by filing an application to extend time (on 28 November 2022), this application has become necessary to establish a finding as to:

a.   whether s 41 of the [CATA] confers jurisdiction on the Tribunal to extend

time to an owner to file a renewal application;

b.   whether, in the circumstances, the Tribunal would have extended time until 28 November 2022 or December 2022; and

c.   whether, in the circumstances, the Tribunal will extend time until 14 February 2024.

53. It is to be noted that (1) Mrs Ross was asking about time limits as early as 29 April 2022 (A34): “Is there a time limit we have to be concerned with …”., (2) a detailed report from Mr James (C1) was obtained on 11 May 2022, and (3) s 41 of the CATA was raised by the former solicitor on 28 November 2022 (A54).

54. The submission that “At all material times [the applicants] pursued their rights diligently and in a timely manner” (MFI1 at [32]) must be rejected. In relation to the period from 28 November 2022 to 14 February 2024, the Tribunal resists the temptation to add an adjective to the word unsatisfactory to describe the applicants’ explanations for the delay in submitting a renewal application.

55. Prospects of success. The applicants’ case was expressed by reference to the ten items listed in annexure A to the work order (A18). Reliance was placed on the May 2022 report of Mr James (C1). In relation to items numbered 1-3, 6-8, and 10, Mr James said “the works had generally been carried out as per NCAT Consent Orders”. Those seven items do not, either individually or collectively, add strength to the applicants’ case. As a result, it is only necessary to consider the items numbered 4, 5 and 9 which respectively relate to a polished concrete floor in the lobby, the coating of structural steel, and internal plasterboard.

56. In the report of Mr James (C317-319), the plasterboard issue included only three photos, and appears to only to raise minor matters. That may explain why neither the written nor the oral submissions appear to have addressed that item. The 28 November 2022 letter (A56 or A278) from the respondent’s solicitor, to which there has been no response, suggests a defence to this claim. While the Tribunal is prepared to assume this item has merit, it cannot be said that a claim based on the plasterboard (item 10) involves substantial merit.

57. A crack in that polished concrete floor was raised. However, the Tribunal has not been able to find reference to that crack in the work order and neither the written nor oral submissions appear to have indicated any such reference. In such circumstances, that is a matter that should not have been raised as a renewal application is only concerned with compliance with the work order. There appeared to be an element of retreat in the applicants’ case in that oral submissions in reply suggested that this issue would be addressed if remedial work was carried out in relation to the polished concrete floor.

58. Mr Ross raised a question of mould but that was not until evidence in reply and was non-expert evidence. That claim does not add weight the applicants’ case.

59. In relation to items 4 and 5, it is noted that the Tribunal is not now required to decide those claims: the only questions being whether they are arguable and whether they have substantial merit.

60. As to the polished concrete floor (item 4) and the structural steel (item 5), the visual evidence suggests they are arguable claims. However, there was no evidence of any response to the matters raised in the 28 November 2022 from the respondent’s solicitor, notably no evidence from Mr James as to what occurred during the critical stage inspections, especially his post-completion inspection of the work of the respondent. That is a significant matter because the consent work order (A16 at [8]) required consultation between Mr James, an engineer and the builder as to compliance with that work order.

61. In relation to item 4, the allegation of defective work appears to be only based on a guide, namely the NSW Fair Trading Guide to Standards and Tolerances 2017. Rebuttal evidence appears to be available in the DM Terrazo Installation Report (C368) and the Boral Concrete Decorative Concrete Selection Guide 2019 (C359).

62. In relation to item 5, there is clearly an issue as to whether this claim can be maintained in view of the deed and the money order which were components of the settlement agreed in addition to the work order.

63. While the potential defences of the respondent weigh against the applicants’ prospects of success in relation to these two items, they plainly have an arguable case. However, the defences raised by the respondent provide an impediment to a finding that the claims relating to the polished concrete floor and structural steel have substantial merit.

64. Prejudice to the respondent. It is now more than two and a half years since the builder was on site. The question of the state of the work in October 2021, what is the state of the work now, and the reason(s) for any difference are likely issues if the renewal application were to proceed.

65. There would also be a substantially higher cost of rectification now, compared to October 2021. While it was suggested that a costs guide, such as Rawlinsons or Cordells could be used to remove any price increase, that can only be done if a money order is made. If a work order were to be made, the respondent would be subject to higher costs due to the delay of the applicants.

66. Prejudice to the applicants. Adopting the words used in Jackson, would refusing the extension of time work an injustice to the applicants? Plainly, if an extension of time is not granted, the applicants will not be able to pursue any claim against the builder and will be left to their claim against their former solicitor.

Conclusion

67. To justify an exception to a statutory time limit, an applicant needs to (1) provide an adequate explanation for the delay, and (2) establish an arguable case. Satisfying the first test is necessary to warrant an exception to the rule imposed by the time limit. Satisfying the second test is necessary to show that there is utility in extending time since there is plainly nothing to be gained by extending time in a case that is doomed to fail. Consistent with what was said in Jackson, at [22](4), the practical reality is that a weak case in relation to one test may be overcome by a strong case in relation to the other test, in the absence of there being substantial prejudice to the respondent if time is extended.

68. In this case, there will be prejudice to the respondent if an extension of time is granted and there will be prejudice to the applicants if an extension of time is refused. Those two, competing considerations do not ‘tip the scales’ in favour of the applicants, bearing in mind that the starting point must be that the specified limitation period applies.

69. As the explanation provided for the significant delay in this instance is insufficient, an application for an extension of time could only be justified if the applicant’s case had substantial merit. Since that is not the case, the application for an extension of time must be rejected.

70. As the work covered by the work order should have been completed by 1 September 2021 and was completed by 15 October 2021, had this application been made on or shortly after 28 November 2022, the extension of time sought would only have been either just under three months or just over six weeks in relation to a limitation period of twelve months. Plainly, in such a case the prospects of obtaining an extension of time would have been greater. However, it is not for the Tribunal to answer questions posed due to a Lawcover claim or to answer hypothetical questions. Accordingly, the Tribunal’s answers to the three questions posed in the applicants’ written submissions (quoted at [53] above) are (a) yes, (b) does not require determination, and (c) no.

Orders

71. Noting that the applicants raised the question of costs (MFI 1 at [34]), the following orders are made for the reasons set out above:

1. The application is dismissed.

2. Any submissions (not exceeding five pages) and any evidence in support of an application for costs are to be filed and served by 29 July 2024.

3. Any submissions (not exceeding five pages) and any evidence in response are to be filed and served on or before 12 August 2024.

4. Any submissions (not exceeding two pages) and any evidence in reply are to be filed and served on or before 19 August 2024.

5. Any such submissions are to include an indication of whether an order should be made, under s 50(2) of the Civil and Administrative Tribunal Act 2013 (NSW), to dispense with a hearing as to costs.

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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: 02 August 2024