SP 95221 v Lane Cove Council

[2025] NSWSC 172

Supreme Court

New South Wales

• Amendment notes

Medium Neutral Citation:

SP 95221 v Lane Cove Council [2025] NSWSC 172

Hearing dates:

14 October 2024

Date of orders:

10 March 2025

Decision date:

10 March 2025

Jurisdiction:

Equity

Before:

Slattery J

Decision:

Relief granted under Supreme Court Act 1970, s 69. First defendant ordered to pay the plaintiff’s costs.

Catchwords:

ADMINISTRATIVE LAW – review for denial of procedural fairness – review on the grounds of irrelevant and relevant considerations – remedies – discretionary factors – delay – plaintiff is the Owners Corporation of a multi-residential apartment building erected in suburban Sydney – the second defendant is the New South Wales Civil and Administrative Tribunal (“NCAT”) – the first defendant is a Council constituted under the Local Government Act 1993 (“the Council”), and the developer of the complex – after the building work is completed and the building is occupied, the plaintiff sought to file an application with the Registrar of NCAT against the Council and others for breach of the statutory warranties provided under the Home Building Act 1989 – application is rejected by the Registrar – NCAT files a submitting appearance in these proceedings – Council defends NCAT’s rejection of the application – whether the Registrar of NCAT denied the plaintiff procedural fairness in rejecting the application – whether the Registrar took into account irrelevant considerations or failed to take into account relevant considerations in rejecting the application – whether prerogative relief under Supreme Court Act 1970, s 69 should be refused on discretionary grounds due to the delay of the plaintiff in bringing these proceedings.

Legislation Cited:

Civil and Administrative Tribunal Act 2013, s 26

Civil Procedure Act 2005 Part 6.

Design Practitioners Act 2020.

Home Building Act 1989

Strata Schemes Management Act 2015

Strata schemes development Act 2015

Supreme Court Act 1970

Uniform Civil Procedure Rules 2005, r 59.2

Home Building Act 1989

Supreme Court Act 1970, s 69

Cases Cited:

Dyldam Developments Pty Ltd v the Owners – Strata Plan 85305 [2020] NSWCA

El-Hanania v Vella [2019] NSWCA 167

K & H Atkins Pty Ltd v Cunningham (1981) 2 NSWLR 288

R v Australian Broadcasting Tribunal; ex parte Fowler (1980) 31 ALR 565

R v Transport Regulation Board; ex parte Maine Carrying Co Pty Ltd [1940] VLR 19

Texts Cited:

N/A

Category:

Principal judgment

Parties:

Plaintiff: The Owners – Strata Plan No. 95221
First Defendant: Lane Cove Council
Second Defendant: NSW Civil and Administrative Tribunal
Third Defendant: W N Developments Pty Ltd

Representation:

Counsel:
Plaintiff: M Pesman SC; T Davie
First Defendant: D Moujalli
Third Defendant: S Baron Levi

Solicitors:
Plaintiff: Bannermans Lawyers
First Defendant: McCulloch & Buggy
Second Defendant: (Submitting appearance)
Third Defendant: United ACL

File Number(s):

2024/196019

Publication restriction:

N/A

JUDGMENT

1. The plaintiff, the Owners of Strata Plan 95221 (“the Owners Corporation”), brings these proceedings under Supreme Court Act 1970, s 69 for orders in the nature of prerogative relief to review a decision of the Principal Registrar (“the Registrar”) of the second defendant, the New South Wales Civil and Administrative Tribunal (“NCAT”), to refuse to accept the plaintiff’s application commence proceedings in NCAT (being NCAT file number RC 18/54380) made to the Registrar on 22 December 2018.

2. The Owners Corporation’s application on 22 December 2018 (“the December 2018 application”) to the Registrar advanced a “building claim” within the meaning of the Home Building Act 1989 (“HB Act”) against the first defendant, the Lane Cove Council (“the Council”), in respect of the Council’s development of a multi–residential building in Lane Cove, a suburb of Sydney. The building had been constructed by the third defendant, WN Developments Pty Ltd (“WN Developments”), when it was an “unlicensed contractor” within the HB Act.

3. The Registrar’s refusal to accept the Owners Corporation’s December 2018 application has prevented the Owners Corporation from pursuing proceedings under the HB Act in NCAT against the Council and against WN Developments (or the fund to compensate persons for dealings with unlicensed contractors) in respect of non-major defects to the building.

4. The Owners Corporation contends that the Registrar’s decision to refuse to accept the 22 December 2018 application failed to take into account relevant considerations, namely a procedural direction of the President of NCAT which allowed soon to expire claims – such as the non-major defects component of the Owners Corporation’s claim - to be accepted without the completion of a statutory preliminary investigation under the HB Act. The Owners Corporation also contends Registrar took into account irrelevant considerations and denied the Owners Corporation procedural fairness and that as a result, an order for mandamus should be made requiring Registrar to accept the December 2018 application.

5. The Registrar has filed a submitting appearance. WN Developments has not appeared in the proceedings. The present contest was argued between the Owners Corporation and the Council.

6. The Council contends that the Registrar’s decision was not defective as alleged. The Council also contends the Owners Corporation is guilty of unwarranted delay in bringing the present application for relief, which should be rejected on that ground, even if a case for mandamus is made out.

7. The proceedings were argued in one day, 14 October 2024. Mr M. Pesman SC appeared for the Owners Corporation instructed by Bannermans Lawyers (“Bannermans”) and was assisted by written submissions by Mr T Davie. Mr D. Moujalli of counsel instructed by McCulloch & Buggy Lawyers (“MBL”) appeared for the Council. Dr Baron Levi appeared for WN Developments instructed by United ACL.

Multi-Residential Construction in Lane Cove

8. The present contest arises out of alleged defects in building work executed during the construction of the Owners Corporation’s building.

9. The building was constructed on land owned by the Council. The building is a multilevel residential complex comprising some 58 residential apartments with basement car parking for residents, public car parking, and with some space owned and used by the Council for various Council related purposes including community rooms, Council car parking and other Council facilities. The site was originally a car park owned by the Council. A residential building was erected on top of the car park and the car park area was partly converted into retail and commercial space.

10. Construction of the building substantially took place in 2015 and 2016 pursuant to a development application issued by the Council (DA 90/12) which was varied several times in 2014 and 2015. The Council issued an interim occupation certificate for the building upon DA 90/12 on 23 December 2016. Council issued a final occupation certificate on 11 April 2017. Relevant features of the interim and final occupation certificates are discussed in more detail later in these reasons.

The 2018 NCAT Application

11. Upon completion of the building, the Owners Corporation contended that the building work undertaken on the building was defective in various respects. The defect allegations included both “major defects” and other defects which for convenience in these reasons will be referred to as “non-major defects” or “other defects”.

12. The Owners Corporation decided to commence proceedings for all these defects in NCAT for relief under the HB Act. On 22 December 2018, the Strata Manager for the Owners Corporation, Wellman Strata filed an NCAT application which was allocated file number BRC 18/54380 (“NCAT Application”). Mr Luke Derwent, an employee of Wellman Strata, lodged the NCAT application through an online portal maintained by NCAT.

13. The NCAT Application incorrectly named the applicant as, Mr Derwent, rather than the Owners Corporation. The respondents to the application were the Council, WN Developments and Trinity.

14. The NCAT application was lodged on an NCAT – Consumer & Commercial Division Application form. The first page of the form provides headings for the "Applicant Details" and "Respondent Details" to provide identification of the parties to the application. All the corporate respondents are fully described. The error in the name of the applicant in the “Applicant Details” is not in any way misleading, when the full NCAT Application is read in context. The NCAT application describes Luke Derwent as “c/o Wellman Strata", a strata manager at an address in Kent Street, Sydney which is not the address of the Owners Corporation’s building. A section of the NCAT application form dealing with "Reasons for the Order/s" makes clear the Owners Corporation, "the Owners – Strata plan No. 95221" is the applicant. The "Reasons for the Orders described "the Applicant" as follows:

"the Applicant is a body corporate constituted under Section 8 (1) of the Strata Schemes Management Act 2015 under the name "The Owners – Strata plan No. 95221 and is capable of taking proceedings and that name". The NCAT Application in its "reasons for the orders" section claims loss or damage, rectification costs and cost for various alleged breaches of statutory warranties implied under HB Act s 18B and s 18C.

15. Up until the registration of Strata plan No. 95221, the Council was the registered proprietor of the land on which building comprising the strata plan was erected.

16. The detailed contentions in the NCAT Application are not material to the present dispute. But in short it contends that Trinity was the Builder of the building who held a contractor license issued under the HB Act, or alternatively, was required to hold such a licence before entering into a contract to undertake the residential building work on the building.

17. The NCAT Application alleged in brief that:

1. The Owners Corporation became the registered proprietor of the common property in the land the subject of Strata Plan No. 95221 (“SP 95221) upon registration of that strata plan;

2. Trinity Constructions (Aust) Pty Ltd (“Trinity”) undertook “residential building works” within the HB Act for the construction of the common property and held a contractor licence under the HB Act, or alternatively, was required to hold such a licence;

3. Until immediately before the registration of SP 95221, the Council was the registered proprietor of the land the subject of SP 95221;

4. The “residential building works” within the HB Act for the construction of the common property was done by or on behalf of Trinity as the builder;

5. WN Developments sub-contracted residential building work on the land the subject of SP 95221 to Trinity;

6. Three alternative bases of liability are alleged under the contract:

1. the residential building work was done under a contract between Trinity (as builder) and the Council (as developer) within HB Act s 18B;

2. the residential building work was done pursuant to a contract between Trinity (as builder), WN Developments, and the Council was a “non-contracting owner” in relation to that contract within HB Act s 18D(1A); or

3. the residential building work was done pursuant to a contract between WN Developments (as Principal Contractor pursuant to HB Act, s 18B(2)) and Trinity (as subcontractor within HB Act, s 18B(2)) and the Council was a “non-contracting owner” in relation to the subcontract.

7. By reason of these alternatively pleaded legal relationships, the Owners Corporation alleged the statutory warranties:

1. Were implied into the alleged contract and subcontract; and

2. By HB Act, S 18C and 18D, the Owners Corporation as successor in title to the Council (as Developer) has the same rights against Trinity (as builder) that the Council had (as Developer) against Trinity with respect to the common property.

18. The NCAT Application claims the work done under contract contained “other defects”, or non-compliant work which amounted to breaches of the statutory warranties. The breaches were detailed in, Annexure C to the NCAT Application. The applicant claimed to have suffered loss and damage and that the respondents were jointly and severally liable for that loss or damage. The loss and damage claimed the cost of identifying and determining a method of rectification for the breaches. The NCAT Application attached a Defect Report by RHM Consultants Pty Limited dated 25 September 2018 ("RHM Report"). The NCAT Application also alleged there was defective and non-complying work in locations in the building other than what had been identified in the RHM Report.

19. The NCAT Application form then contained a section headed "Special Needs". This section appears to have been directed to invite attention to personal vulnerabilities of applicants or obstacles to communication between applicants and NCAT. Underneath that heading, the NCAT Application was filled out as follows:

"Unavailability Dates: 22 - Dec - 2018 to then 15 - Feb - 2019"

20. This seems to communicate that Mr Derwent was not available for contact by NCAT until 15 February 2019. Mr Derwent verified the accuracy of the information contained in the NCAT Application.

21. Under the heading "Notice of Hearing” the standard form of this NCAT application stated:

"This application has not been listed. Your notice of hearing will be sent to you as soon as possible. If you have not received a notice of hearing within five working days, please contact the Tribunal on 1300 135 399."

22. 22 December 2018 was a Saturday. On Monday 24 December 2018, the next ordinary business day, NCAT sent an email to Mr Derwent drawing his attention to some attached correspondence and stating "it is important that you review this material immediately".

23. The attached correspondence was a letter from "E Zhu" on behalf of the Registrar to Mr Derwent dated 24 December 2018. The relevant text of the 24 December 2018 letter was as set out below:

On 22/12/2018 the Registrar received your application for an order.

If you have attempted to resolve your dispute with the assistance of NSW Fair Trading, documentary evidence must be provided. The documentary evidence provided must concern the dispute which is the subject of your application. Section 48J of the Home Building Act 1989 requires NSW Fair Trading to have investigated any building dispute otherwise the Registrar must not accept an application to the Tribunal for determination of a building claim.

If you do not provide the documentary evidence by 14/1/2019 the Registrar must not accept your application and your file will be closed.

If you have difficulty supplying this information, you should contact NSW Fair Trading on 133 220. The following information is required:

If you are making an application against an organisation you must provide NCAT with the correct name of the business or company, their registered address, and their ABN or ACN. You must also provide NCAT with a copy of a recent ASIC company extract or business name extract. Extracts can be purchased online at the ASIC website ASIC website free Summary Information is not sufficient as it does not include address details for the respondent.

Providing the correct name and registered address for a business or company allows NCAT to serve the respondent with the Notice of Hearing and to make legally enforceable orders.

Refer to NCAT's website for further information about how to obtain a business and company name search.

The documentation should be provided on or before 14/1/2019.

E Zhu

for the Registrar

24/12/18

24. NCAT’s 24 December 2018 letter seems to have been a standard letter, as the requests for information contained within it were not specific for this NCAT Application lodged for the Owners Corporation. At first glance NCAT’s 24 December 2018 letter was asking for three categories of documents:

1. documentary evidence of attempts to resolve the dispute with the assistance of NSW Fair Trading, if the services of NSW Fair Trading had been used,

2. documentary evidence of investigations of the building dispute by NSW Fair Trading performed pursuant to HB Act s 48J, and

3. if the application is against an organisation such as a corporate entity, documentary evidence to show that the correct name and registered address of the company had been used in the application, by a recent ASIC company extract for that company, to allow NCAT then to serve the company.

25. The distinction between (1) and (2) is a little puzzling, because, as will be seen below, HB Act Part 3A, Division 2 deals with investigations and the making of rectification and money orders by inspectors and does not deal with resolving the dispute in the sense that that term is used to describe alternative dispute resolution – a guided consensual process to bring the dispute to an end. So, the Court interprets NCAT’s 24 December letter as really asking for category (2) documents.

26. Mr Derwent did not reply to the Registrar's letter of 24 December 2018. This is not surprising. It may be inferred from the statement that he had made under the heading "Special Needs" in the NCAT form that he was uncontactable at that time, as was Wellman Strata.

27. NCAT’s 24 December 2018 letter required documentation to be provided before 14 January 2019. NCAT’s email was sent over the holiday period, when the Wellman Strata offices were closed. The evidence establishes that at that time Wellman Strata’s email system would have automatically generated an out of office reply email to NCAT, which relevantly provided advice to NCAT in the following terms:

"Please note that the offices of Wellman Strata will be closed from Thursday, 20 December 2018 and will reopen Monday, 7 January 2019."

28. Whilst the balance of the Wellman Strata out of office email was apt to deal with queries made by Owners Corporations to which Wellman Strata was providing Strata Management services, such as advice about after-hours emergency services, the out of office email would nevertheless have reinforced to NCAT that the Owners Corporation’s agents were unavailable before 7 January 2019.

29. NCAT received no response from Mr Derwent. So, it emailed Mr Derwent again on 15 January 2019:

"Please find attached correspondence relating to the above-mentioned matter.

It is important that you review this material immediately."

30. Another letter written on behalf of the Registrar dated 15 January 2019 was attached to this email:

On 22-DEC-2018 the Registrar received your application for an order.

If you have attempted to resolve your dispute with the assistance of NSW Fair Trading, documentary evidence must be provided. The documentary evidence provided must concern the dispute which is the subject of your application. Section 48J of the Home Building Act 1989 requires NSW Fair Trading to have investigated any building dispute otherwise the Registrar must not accept an application to the Tribunal for determination of a building claim.

If you do not provide the documentary evidence by 18-JAN-2019 the Registrar must not accept your application, and your file will be closed.

If you have difficulty supplying this information, you should contact NSW Fair Trading on 133 220.

L Crisp

for the Registrar

15/01/19

31. This letter dropped one of the three documentary requirements in NCAT’s email of 24 December 2018. It did not press documentary request (3) for ASIC information, presumably because that it was by then available or was not needed because the address is applied were obviously correct. Requests for documents in categories (1) and (2) were still being sought. But as earlier indicated they should really be interpreted as a request for one category of documents, namely documents concerning any investigation of the dispute that had taken place under HB Act Part 3A, Division 2.

32. It is to be inferred from this 15 January 2019 letter that NCAT would decide soon after the 18 January 2019 deadline, whether to accept the December 2018 Application based on the materials the Owners Corporation had supplied up to that 18 January 2019.

31. Once again consistent with the December 2018 Application and the previous out of office response, there was no response from Mr Derwent to this letter.

32. NCAT wrote to Mr Derwent again by email on Monday 21 January 2019, drawing attention to an attached letter in similar terms to the previous emails and communicating that a decision had now been made. The 21 January 2019 NCAT letter stated:

On 15-JAN-2019 the Registrar requested documentary evidence of the attempted dispute resolution in relation to your application.

Section 48J of the Home Building Act 1989 states that the Registrar must not accept an application for an order unless satisfied that dispute resolution has been attempted with the assistance of the NSW Fair Trading.

As the documentary evidence has not been provided, your application cannot be accepted, and the file has now been closed.

You may consider lodging a fresh application after you have attempted to resolve your dispute.

35. This letter is somewhat difficult to follow. It expressly mentions “dispute resolution”. But once again “dispute resolution” here should be interpreted as a reference to the process authorised under HB Act Part 3A, Division 2.

36. This letter prompted an immediate response from Bannermans, the solicitors now acting on behalf of the Owners Corporation, on 22 January 2019. Bannermans addressed the issue which the Owners Corporation argues in these proceedings. Bannermans wrote:

“I now act for The Owners – Strata Plan No. 95221.

I refer to your letter to Luke Derwent dated 21 January 2019.

Application HB18/54380 was lodged online by the Owners Corporation itself on22 December 2018.

I advise that the time limit for my client to lodge a claim pursuant to part 2C and Section 18E of the Home Building Act (NSW) 1989 being the 2 year warranty period for general building defects was due to expire within three months, being on 23 December 2018 as the Interim Occupancy Certificate was issued on 23 December 2016 (see copy attached).

In accordance with the NCAT Procedural Direction 5 dated 1 August 2017 for the Consumer and Commercial Division, the Divisional Registrar must accept claims that have not been investigated by an inspector where the time for lodging a claim is due to expire within 3 months.

I would be grateful if the Registry could process my client's application as a matter of urgency and not close the file.”

37. Bannermans 22 January 2019 letter attached a copy of the Interim Occupancy Certificate issued on 23 December 2016. Bannermans also identified that the correct applicant was the Owners Corporation rather than Mr Derwent and requested that the name of the applicant be amended. The letter acknowledged that there had been an error in naming the applicant in the application which was “most likely caused by the Application being filed online”.

38. An Acting Team Leader at NCAT responded on 23 January 2019 confirming that NCAT had decided not to accept the December 2018 Application:

Dear Craig,

I refer to your below email.

Please be advised that this matter has been finalised due to failure of compliance with NCAT procedural standards. Under s48J(a) of the Home Building Act 1989:

• Proof of Fair-Trading NSW investigation provided

As this was not presented to NCAT within the allocated timeframe, namely 15-JAN-2019, your application was dismissed.

You may wish to lodge a new application with appropriate documentation. Alternatively, you may wish to seek your own independent legal advice.

Please refer to the attached document "Getting Help" for your review.

Regards,

Lauren Crisp I Acting Team Leader

39. The attached “Getting help” document enclosed with NCAT’s 23 January 2019 letter was a general information document which summarises the range of pro bono legal assistance, community legal centres, advocacy services and other referral services that an applicant before NCAT might wish to consult. It did not deal with the Owners Corporation’s individual circumstances. Whatever had been the previous ambiguity in the correspondence, this letter made clear that the documents said to be missing were proof of an investigation into the dispute by NSW Fair Trading under HB Act Part 3A Division 2.

40. Bannermans wrote to NCAT in reply on 29 January 2019, setting out in some detail arguments that have been substantially deployed in the present litigation. For the following reasons.

Lauren Crisp

Acting Team Leader

I refer to my letter of 22 January and your email in response of 23 January 2019 and reply as follows:

1. The Owners Corporation cannot lodge a new NCAT application as suggested by you as the two year warranty period expired on 23 December 2018 being 2 years after the issue of the Interim Occupancy Certificate dated 23 December 2016 (copy attached to my previous letter).

2. My letter and the Interim Occupancy Certificate dated 23 December 2016 is sufficient evidence to satisfy Para 4(b) of the NCAT Procedural Direction No. 5 dated 1 August 2017 namely that the time for lodging the claim was due to expire in less than 3 months of the filing of the Application.

3. The issue preventing the Application being accepted and the file being re-opened therefore appears to be that you claim that the requested information was not provided by 15 January 2019 as requested by the registry.

In relation to this issue I submit that:

a. NCAT Procedural Direction 5 does not specify a time by which the information under Para 4(d) needs to be provided and therefore the time frame of 15 January 2019 imposed by the Registry was arbitrary only, and is not imposed by either the Procedural Direction or the Civil and Administrative Tribunal Act 2013 or the Home Building Act. As a result there is no restriction on the NCAT Registry accepting the evidence after 15 January 2019 and accepting the filed Application and relisting the proceedings;

b. Given the NCAT Application was filed on 22 December 2018, being the weekend before Christmas and the NCAT request for the information to be provided by 15 January 2019, was by email on Monday 24 December 2018 being sent:

(i) over the Christmas/New Year holiday period, when postage services are often delayed and;

(ii) given the Wellman Strata office was closed from 20 December 2018 to 7 January 2019 external emails sent to Wellman Strata Management were responded to by Auto-reply as per the email message below;

[Wellman Strata auto reply set out here]

The time frame for a response and NCAT’s strict adherence to this timeframe over the Christmas/New Year period is I submit unreasonable and a degree of leniency and flexibility should be allowed in the circumstances of this matter given the above.

Attached also are the ASIC searches for the First and Third Respondents showing that they are registered in NSW. I note that the Second Respondent is a NSW statutory entity.

I therefore again request that in accordance with NCAT Procedural Direction No. 5, and in order to prevent irreparable disadvantage to the Owners Corp that would otherwise arise if the Application filed on 22 December 2018 is not accepted, that the NCAT Registry accept the Application filed on 22 December 2018.

41. NCAT was unmoved. By letter dated 31 January 2019, NCAT replied:

"The file was not accepted because the information was not provided by the due date. You may lodge a new application and request an extension of time to lodge."

42. This communication did not engage with the issues raised in Mr Bannerman's letter of 29 January.

Overview of Communications between January 2019 and November 2022

43. The Council contends that even if the Owners Corporation makes out a case for a mandamus order under Supreme Court Act s 69, that relief should not be granted due to the Owners Corporation’s delay of almost four years before commencing proceedings for such relief in November 2022. Evaluation of that issue requires short analysis of events during those four years.

44. Despite NCAT’s rejection of the December 2018 Application, in January 2019 meetings and correspondence continued to be held between the Council and the Owners Corporation in relation to alleged defects found in the Owners Corporation's common property. For example, meetings were held in May 2020 between representatives of the of the Council, the Owners Corporation, Wellman Strata, and others to attempt to define any necessary repairs in relation defects to ensure fire safety in the building. The fire safety related work that was agreed to be carried out is set out in letter from the Council to the Owners Corporation dated 5 June 2020. It records an agreement that identified fire safety works should be "completed without delay".

45. Bannermans wrote to the Council on 7 July 2020 concerning the fire safety defects and other defects in the common property which were said to breaches of the statutory warranties under HB Act, s 18B. Bannermans threatened the commencement of proceedings either in NCAT or the Supreme Court in respect of these defects.

46. The correspondence continued thereafter. The Council engaged lawyers (not their present lawyers) no later than August 2020. On 7 August 2020, the Council’s lawyers took the position that the WN Developments had responsibility as Developer, not the Council, to take all necessary action to rectify the fire safety defects, the general defects, as well as defects in individual departments. The Council the client to enter into a proposed draft settlement agreement in relation to rectification of defects including fire safety defects because that was “a matter for the developer and the builder” and because of indemnities available to the Council from the purchasers of individual apartments in the building.

47. This posture taken by the Council seems at least arguably to have been at odds with the Owners Corporation’s rights as a subsequent registered proprietor of the land on which the common property stands, to step into Council’s shoes under HB Act s 18D.

48. Further correspondence of the same character continued to pass between the parties. On 24 December 2020 Bannerman’s wrote to Trinity and the solicitors for the Council. Throughout this correspondence to Bannermans attempted to have the Council and Trinity admit liability and commence to undertake remedial work to rectify the building without the need for litigation. The Owners Corporation foreshadowed an intention to submit the matter to the NSW Building Commissioner for his consideration and action, as was foreshadowed in Bannermans letter on 24 December 2020. The Owners Corporation reemphasised that giving both Trinity and the Council an opportunity to rectify the fire defects on fair and reasonable terms accorded with its obligations under HB Act s 48MA, which requires building owners to provide such an opportunity before commencing litigation.

49. The focus shifted somewhat in 2021, with Bannermans accusing the Council of failing to comply the model litigant policy by not dealing with the Owners Corporation's claim promptly, not paying legitimate claims without litigation, taking advantage of the Owners Corporation's lack of resources to litigate, and not providing reasonable assistance to the Owners Corporation by cooperating in identifying the proper defendant.

50. The Court is not readily able to judge the correctness of all these contentions on the available materials, but two things can safely be said. Bannermans were seeking to avoid expensive litigation if they could, on behalf of their client, a not unreasonable approach on their part. The correspondence on behalf of the Council by previous lawyers was relatively uncooperative.

51. Another important vector of activity during 2021 into 2022 was the attempts by the Owners Corporation, with the full knowledge of Council, to organise NSW Fair Trading to undertake inspections of the common property. These efforts were reasonable and were directed to resolving the dispute without litigation.

52. Further disruption was added when Trinity was placed into external administration on 1 September 2021. This in turn required the Owners Corporation to recalibrate the advancing of its claims for relief. Eventually the Technology and Construction List Summons was filed in November 2022.

Proceedings are commenced – November 2022

53. The Owners Corporation first commenced proceedings in the Technology and Construction List of this Court on 4 November 2022 (“the November 2022 proceedings”). The November 2022 proceedings sought relief against the Council and WN Developments based on, the HB Act and the Design and Building Practitioners Act 2020. The proceedings alleged breaches of the warranties provided by HB Act s 18E in respect of both major defects and non-major defects. It is not in issue that the November 2022 proceedings were commenced within the six-year period permitted by HB Act s 18E(1)(b) and (c) for major defects. Nor is it in issue that the November 2022 proceedings were commenced outside the two-year period for commencing proceedings for non-major defects. Only the December 2018 application to NCAT can fill that gap.

54. The November 2022 proceedings also sought an order for mandamus under Supreme Court Act, s 69 that the NCAT proceedings be reinstated and be transferred to the Supreme Court. In its Technology and Construction List Statement, the Owners Corporation contended that the Registrar had acted unlawfully in not accepting the application filed on 22 December 2018.

55. The legal representatives of the Council issued a Notice to Produce in the November 2022 proceedings to the Owners Corporation's legal representatives seeking “all documents in the Owners Corporations possession relating to the NCAT proceedings”. On 4 July 2023, the Owners Corporation’s solicitors, Bannermans Lawyers (“Bannermans”), produced the December 2018 Application dated 22 December 2018 and the “HM Defects report” dated 25 September 2018 that was filed with the application.

56. During the case management of the November 2022 proceedings, on 15 November 2023 the Council filed a Motion seeking Summary Judgment, or alternatively, for separate determination of the Owners Corporation's claim for mandamus relief. The 15 November 2023 Motion came on for hearing before Ball J in the Technology & Construction List on Friday, 15 March 2024.

57. Counsel argued before Ball J that the mandamus claim should be dismissed under Uniform Civil Procedure Rules, r 13.4(1) on the grounds that it could not be established that the Registrar's decision was in any way unlawful. Alternatively, the Council requested that the Court should separately determine the entitlement to mandamus relief, so the parties knew whether the relevant commencement date of the proceeding was 22 December 2018 when the NCAT application was filed or 4 November 2022 when the Summons was filed, to avoid wasted costs.

58. Ball J concluded on 15 March 2024 that ordering a separate question or separate proceedings was the preferred manner for dealing with the mandamus claim rather than striking it out. His Honour struck out the relevant paragraphs of the List Statement and the prayer for relief (4) in the Summons seeking mandamus, on the basis that he was giving leave to the Owners Corporation to commence fresh proceedings in the Technology & Construction List with costs being reserved.

59. A fresh Summons was filed in these proceedings on 27 May 2024 seeking the mandamus relief also in the Technology & Construction List as Ball J had contemplated. The Council joined issue on 3 July 2024 filing a Technology & Construction List Response. W N Developments filed its response on 25 July 2024. Shortly afterwards, the matter was set down for the hearing on 14 October 24.

60. Bannermans wrote to the Court appointed liquidator of Trinity referring to these proceedings informing Trinity that it had not been included in these proceedings as it was in liquidation and requested an indication as to whether Trinity’s liquidator wished for it to be joined as a defendant in these proceedings. The Owners Corporation claims to be a creditor of Trinity and also sought advice from the liquidator about the status of the liquidation. Trinity was not joined as a defendant.

61. An Amended Summons was filed on 5 August 2024 amending the names of the defendants; joining the Council as the first defendant and NCAT as the second defendant in these proceedings. An Amended Technology and Construction List Statement was filed the same day. On 17 September 2024, NCAT filed a Submitting Appearance in the proceedings.

Procedural Direction 5

62. The President of NCAT is empowered by this State’s Civil and Administrative Tribunal Act 2013, s 26 (“NCAT Act”) to give “procedural directions” relating to the practice and procedure to be followed in proceedings in the NCAT, which provides as follows,

s 26 Procedural directions

(1) The President may give directions ("procedural directions" ) relating to the practice and procedures to be followed in, and to the actual conduct of, proceedings in the Tribunal.

(2) The procedural directions must be--

(a) publicly available, and

(b) consistent with this Act, enabling legislation and the procedural rules.

(3) Without limiting subsection (2)(a), it is sufficient compliance with that paragraph if procedural directions are published on the website of the Tribunal.

(4) Each member, and the parties to proceedings and their representatives, must comply with any applicable procedural directions.

63. On 1 August 2017 the President of the NCAT issued a procedural direction under NCAT Act, s 26, entitled “Acceptance of Home Building Claims”, which applies to the procedural steps taken in this case, namely NCAT Procedural Direction 5 (“Direction 5”).

64. Direction 5 recites that it is a direction under HB Act, s 48J(b) issued under NCAT Act, s 26 and it recites the terms of HB Act, s 48J. Direction 5 then provides as follows:

4. I direct the Principal Registrar to accept building claims in the categories set out below even if the Principal Registrar is not satisfied that the subject matter of the claim has been investigated under Div 2 of Pt 3A of the HB Act:

(a)   claims that are appeals against the decision of an insurer under a contract of insurance required to be entered into under the Act;

(b)   claims for recovery of the debt by a contractor;

(c)   cross claims;

(d)   claims where the time for lodging a claim is due to expire within three months;

(e)   claims involving unlicensed contractors;

(f)   claims by a trader against the subcontractor regarding defective work;

(g)   claims against owner-builders regarding defective work;

(h)   claims against companies that have been deregistered;

(i)   claims against companies or individuals who have gone into administration, liquidation or bankruptcy.

65. Direction 5 then goes onto explain that it does not preclude the President from giving a direction for the purposes of HB Act, s 48J(b) “in respect of a particular building claim or another category of building claims, if it appears to the president that it is appropriate to do so.” Finally, Direction 5 votes a previous direction of the President covering a similar subject matter.

The Statutory Framework - The Home Building Act 1989 (“the HB Act”)

66. The HB Act introduces statutory warranties in relation to general building work and certain specialist building work in the residential building industry, supported by an insurance scheme. Its statutory warranty provisions address a range of building structures and building work, including the building work that created the plaintiff’s building. The HB Act’s remedial provisions give jurisdiction for aggrieved parties to bring their disputes to NCAT. Several of the HB Act’s provisions are integral to the resolution of the issues joined between these parties.

67. Part 1 – Preliminary of the HB Act, provides a range of definitions of terms used within the HB Act, which includes HB Act, s 3C as follows:

“3C Date of completion of new buildings in strata schemes

(1) This section applies to residential building work comprising the construction of a new building in a strata scheme (within the meaning of the Strata Schemes Management Act 2015) where the issue of an occupation certificate is required to authorise commencement of the use or occupation of the building.

Note--: Section 3B provides for the date of completion of other residential building work.

(2) The completion of residential building work to which this section applies occurs on--

(a) the date of issue of an occupation certificate that authorises the occupation and use of the whole of the building, unless paragraph (b) applies, or

(b) the occurrence of some other event that is prescribed by the regulations as constituting completion of the work.

(3) If a contract to do residential building work (the "primary contract") comprises the construction of 2 or more separate buildings, the date of completion of that work is to be determined as if there were a separate contract for each separate building (with each contract on the same terms as the primary contract) so that the work for each building will have a separate completion date. For the purposes of this section, a building is "separate" if it is reasonably capable of being used and occupied separately from any other building.

Note--: Separate buildings can still have the same completion date if they are completed at the same time.

(4) This section applies for the purpose of determining when completion of residential building work occurs for the purposes of any provision of this Act, the regulations or a contract of insurance under Part 6.

(5) In this section--

"building" means any structure that, as a new building, requires the issue of an occupation certificate to authorise its use and occupation.

"occupation certificate" means an occupation certificate under the Environmental Planning and Assessment Act 1979 .

Note--: A swimming pool, tennis court or detached garage can be a building for the purposes of this section if an occupation certificate is required to authorise its use and occupation. If a structure in a strata scheme does not require an occupation certificate, section 3B will apply to it instead of section 3C.

68. Neither party submitted that any regulations made under s 3C(2)(b) were relevant to the issues between the parties. As its name suggests, HB Act, Part 2 of the Regulation of residential building work and specialist work, provides a range of statutory constraints upon various kinds of conduct by persons engaged in the building industry on making contracts for that industry. These provisions include in Division 1 – Contracting for Work: prohibitions on unlicensed contracting (HB Act, s 4); prohibitions on seeking work for unlicensed persons (HB Act, s 5); restrictions on the form and content of contracts in the building industry (HB Act, s 7, 7AAA, 7AA, 7A, 7B, 7C, 7D, 7E); restrictions on deposits, progress payments, marketing via exhibition homes, and contract enforceability (HB Act, s 7, 7AAA, 7AA, 7A, 7B, 7C, 7D, 7E); and restrictions on the enforceability of contracts if these statutory requirements are contravened (HB Act, s 10). And Division 2 – Restrictions on who may do certain work, includes restrictions on the conduct of unlicensed or unqualified work building.

69. Part 2B of the HB Act regulates conduct associated with the supply of kit homes to members of the public.

70. HB Act, Part 2C “Statutory warranties”, provides a range of statutory warranties by holders of contractor licenses and moulds the duties on building contractors and remedies surrounding those statutory warranties. These provisions include:

• warranties as to residential building work (HB Act s 18B);

• duties of mitigation on persons having the benefit of a statutory warranty (HB Act s 18BA);

• warranties as to work by others (HB Act s 18C); and,

• the extension of statutory warranties to successors in title and other persons (HB Act s 18D).

71. Finally in HB Act Part 2C, s 18E provides for the taking of proceedings for breach of warranty, as follows:

s 18E Proceedings for breach of warranty

(1) Proceedings for a breach of a statutory warranty must be commenced in accordance with the following provisions--

(a) proceedings must be commenced before the end of the warranty period for the breach,

(b) the warranty period is 6 years for a breach that results in a major defect in residential building work or 2 years in any other case,

(c) the warranty period starts on completion of the work to which it relates (but this does not prevent proceedings from being commenced before completion of the work),

(d) if the work is not completed, the warranty period starts on--

(i) the date the contract is terminated, or

(ii) if the contract is not terminated--the date on which work under the contract ceased, or

(iii) if the contract is not terminated and work under the contract was not commenced--the date of the contract,

(e) if the breach of warranty becomes apparent within the last 6 months of the warranty period, proceedings may be commenced within a further 6 months after the end of the warranty period,

(f) a breach of warranty "becomes apparent" when any person entitled to the benefit of the warranty first becomes aware (or ought reasonably to have become aware) of the breach.

(1A) If a building bond has been lodged for building work under Part 11 of the Strata Schemes Management Act 2015, the period of 2 years specified for commencing proceedings for a breach of a statutory warranty for that work is extended until the end of 90 days after the end of the period within which a final inspection report on the building work under that Part is required.

(1B) Subsection (1A) does not limit any other law that permits the period for commencement of proceedings to be extended.

(2) The fact that a person entitled to the benefit of a statutory warranty specified in paragraph (a), (b), (c), (e) or (f) of section 18B has enforced the warranty in relation to a particular deficiency in the work does not prevent the person from enforcing the same warranty for a deficiency of a different kind in the work ("the other deficiency" ) if--

(a) the other deficiency was in existence when the work to which the warranty relates was completed, and

(b) the person did not know, and could not reasonably be expected to have known, of the existence of the other deficiency when the warranty was previously enforced, and

(c) the proceedings to enforce the warranty in relation to the other deficiency are brought within the period referred to in subsection (1).

(3) The regulations may prescribe defects in a building that are not (despite any other provision of this section) a major defect.

(4) In this section--

"major defect" means--

(a) a defect in a major element of a building that is attributable to defective design, defective or faulty workmanship, defective materials, or a failure to comply with the structural performance requirements of the National Construction Code (or any combination of these), and that causes, or is likely to cause--

(i) the inability to inhabit or use the building (or part of the building) for its intended purpose, or

(ii) the destruction of the building or any part of the building, or

(iii) a threat of collapse of the building or any part of the building, or

(b) a defect of a kind that is prescribed by the regulations as a major defect, or

(c) the use of a building product (within the meaning of the Building Products (Safety) Act 2017) in contravention of that Act.

Note--: The definition of "major defect" also applies for the purposes of section 103B (Period of cover).               

"major element" of a building means--

(a) an internal or external load-bearing component of a building that is essential to the stability of the building, or any part of it (including but not limited to foundations and footings, floors, walls, roofs, columns and beams), or

(b) a fire safety system, or

(c) waterproofing, or

(d) any other element that is prescribed by the regulations as a major element of a building.

72. The defects alleged in this case are both “major” defects and “other” defects with HB Act, s 18E.

73. HB Act, s 18F provides for certain statutory defences to HB Act, s 18E claims that might otherwise not be available in an action for breach of contract at common law. And HB Act, s 18G voids attempts to exclude the Part 2C statutory warranties.

74. HB Act Part 3 provides for the grant, supervision and cancellation of a range of contractor licenses for the purposes of the HB Act.

75. HB Act Part 3A – “Resolving building disputes and building claims”, Division 2, “Dealing with a building dispute” address the subject matters to which their titles refer. Within HB Act, Part 3A, Division 2, s 48C provides:

s 48C Notification of building dispute

(1) Any person may notify the Secretary, in such manner as the Secretary may approve, that the person has a dispute with--

(a) the holder of a contractor licence with respect to residential building work or specialist work done by the contractor, or

(b) a kit home supplier with respect to the supply of a kit home by that person.

76. HB Act, Schedule 1 provides several definitions of terms. Relevantly Schedule 1, provides that “Department" means “the department in which this Act is administered” and "Secretary" means the Secretary of the Department. "Tribunal" means the Civil and Administrative Tribunal established by the NCAT Act.

77. HB Act s 48D provides for the investigation of a dispute. After the Secretary us notified of a dispute under S 48C, the Secretary may appoint an employee of the Department of Finance Services and Innovation (“the Department”) to investigate any matter which has given rise to building dispute, and after completing an investigation an inspector must cause a written report to be prepared on the results of the investigation and cause copies to be given to the complainant and the person with whom the complainant is in dispute: Specific provisions (s 48D (3)-(4)) apply to the conduct of investigations in relation to the common property of a strata scheme (within the meaning of the Strata Schemes Management Act 2015) enabling an inspector to enter the common property at the request of an owner of a lot and for the Owners Corporation to enable inspection to take place.

78. HB Act s 48E provides that if the inspector is satisfied after completing an investigation under s 45D that building work is defective or incomplete or has occasioned damage to a structure, the inspector may serve a written order on the contractor “requiring the contractor to take such steps as are specified in the order to ensure the work is completed, or the defect or damage rectified, as the case requires”. The rectification order under HB Act, s 48E may impose conditions, including for the payment of money by the complainant and must specify a date by which the rectification order should be carried out.

79. A rectification order “does not give rise to any rights or obligations except as provided for by HB Act s 51: HB Act s 48F(1). A rectification order ceases to have effect if the matter giving rise to the order becomes the subject of a “building claim”: HB Act s 48F(2).

80. Within Part 3A, Division 3 – Making an application for determination of a building claim, HB Act s 48I regulates the procedures for applications to the Tribunal for the determination of a building claim and building claim, including the interrelationship between making a building claim and the fate of a rectification order:

48I Application for determination of building claim

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

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

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

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

81. But certain applications are to be rejected by the Tribunal. HB Act s 48J provides:

s 48J Certain applications to be rejected

The principal Registrar of the Tribunal must reject any application to the Tribunal for the determination of a building claim unless--

(a) the principal Registrar is satisfied that the subject-matter of the building claim has been investigated under Division 2, or

(b) the President of the Tribunal directs that the building claim be accepted without such an investigation having been made.

82. The apparent purpose of s 48J is the efficiency and good management of the resources of the Tribunal. The provision ensures that if building claims can be resolved by investigators, the opportunity to end them that way is not bypassed. The provision ensures the Tribunal does not become burdened by claims that can be resolved at the inspector level.

83. Part 3A, Division 4 – Jurisdiction in relation to building claims, deals with the jurisdiction of the Tribunal to hear and determine any building claim brought before it in accordance with Part 3A. The jurisdiction to adjudicate upon building claims is limited to claims under $500,000, which do not relate to building goods or services, and which do not relate to a building cover contract more than 10 years old: HB Act s 48K(1) – (6). HB Act s 48K(7) provides:

(7) The Tribunal does not have jurisdiction in respect of a building claim arising from a breach of a statutory warranty implied under Part 2C if the date on which the claim is lodged is after the end of the period within which proceedings for a breach of the statutory warranty must be commenced (as provided by section 18E).

84. The Tribunal is chiefly responsible for resolving building claims: s 48MA. But courts of competent jurisdiction should deal with actions against the refusal of insurance claims, which should be dealt with by a court of competent jurisdiction: s 48M. The legislation emphasises that in determining building claims the principle is “that rectification of the defective work by the responsible party is the preferred outcome”: s 48MA.

85. Part 3A, Division 5 – Powers of the Tribunal confers a range of powers and functions upon NCAT as a specialist Tribunal determining building claims in a context where the Department authorises inspections. These include, having regard to inspectors’ building reports (s 48N), ordering the payment or refund of money or the performance of work (s 48O), and informing the Secretary of any order made and whether not there has been compliance with Tribunal orders made (ss 48S – 48T).

86. Part 3B, Investigation of Defects establishes a system by which the Secretary may authorise inspectors to investigate “residential building work” under the HB Act. It is not in question in these proceedings that the work in question qualifies as “residential building work”.

87. The statutory warranties created by the HB Act are funded by a statutory insurance scheme operated under HB Act Part 6 – Insurance. The terms of this scheme are not material for present purposes. It is sufficient to know that residential building work must be insured (s 92) and developers may not sell land unless a certificate of insurance indicating insurance has been obtained under s 92 is available with the contract for sale. HB Act Part 6, Division 3 governs the contents of insurance contracts and premiums. Parts 6 – 6C of the HB Act deal with the structure of this statutory insurance scheme which attracts the functions of the State Insurance Regulatory Authority (“the Authority”). But exceptions to these insurance requirements are available for multistorey buildings (that is over four storeys), such as this one: Home Building Regulation r 56. This lack of insurance becomes of importance in considering the Owners Corporation’s present position.

88. Finally, HB Act, Part 8 confers broad powers to ensure that inspections of premises can be undertaken, the relevant authorities are given required insurance information, there is a register of rectification orders is created, and the Supreme Court can enjoin conduct constituting offences under the HB Act or persistent entry into contracts in contravention of requirements of the HB Act. The Secretary keeps a register of information to facilitate the efficiency and public access of information held under HB Act, s 120.

Consideration

89. The issues in this case may be resolved by analysis of HB Act s 48J, Direction 5 and the short course of dealings between the owners corporation and NCAT between 22 December 2018 and 31 January 2019. The Court sets out its analysis below. This analysis is based upon the submissions of the Owners Corporation which the Court has found persuasive. The analysis discusses the submissions from Council which the Court has found less persuasive.

90. HB Act s 48J, Directive 5 and the December 2018 Application. The provisions of HB Act s 48J control acceptance of the owners corporation’s application. HB Act s 48J requires rejection of an application to the Tribunal unless one of two elements is satisfied: either (1) the principal registrar is satisfied that the “subject matter of the building claim has been investigated under Division 2”, or (2) the President of the Tribunal “directs that the building claim be accepted without such an investigation being made”.

91. Although the Owners Corporation had been in contact with the Department and the Building Commissioner, it is not established that an investigation under Division 2 had taken place by 22 December 2018. Thus, the only available gateway for acceptance of the Owners Corporation’s application was the existence of a direction under HB Act s 48J(b) from the President of NCAT.

92. Direction 5 is crafted to be a HB Act s 48J(b) direction. Direction 5 addresses classes of applications to NCAT. It was plainly impracticable for the President to make directions in respect of individual applications to NCAT. Direction 5 addresses several practical problems which it may readily be inferred NCAT had encountered with various classes of applications advancing building claims. Direction 5 gives a general direction commanding the Principal Registrar “to accept building claims in the categories set out below”. This acceptance is commanded “even if the Principal Registrar is not satisfied that the subject matter of the claim has been investigated” under Division 2, as was the case here.

93. One of the “categories” set out in Direction 5 at (4)(d) is “claims where the time for lodging a claim is due to expire within three months”. Such a category is necessary because it is not difficult to foresee that for HB Act s18E(1)(b) defects that are not major defects, attracting a two-year warranty period starting on completion of the work (HB Act s18E(1)(c)) that the commencement and completion of the investigation may well take longer than the warranty period.

94. The Owners Corporation’s December 2018 application was filed on 22 December 2018. The Owners Corporation alleges that 22 December 2018 was the last day before the expiry of a two-year period after the issue of the interim occupation certificate for the building on 23 December 2016. As earlier indicated the December 2018 application annexes a report of RHM Consultants Pty Limited, which is a detailed survey of a range of defects in the common property of the building including individual units. The RHM Consultants report shows on its face that very many of the defects identified, would not qualify as “major defects” as defined under HB Act s18E(1)(b) and (4), but would qualify as a defect “in any other case.

95. Therefore, the Owners Corporation alleges the “time for lodging a claim” in respect of those defects was due to expire on 22 December 2018, the day that the December 2018 application filed. The Owners Corporation further alleges that this imminent expiry of this lodgement period brings into play Directive 5, which allows the December 2018 to be accepted under HB Act s48J(b).

96. But before considering this argument it is first necessary to resolve the preliminary issue upon which it depends: namely, whether the lodgement period was indeed about to expire. This in turn depends upon the construction of the interim and final occupation certificates; the issue to which these reasons now turn.

89. The Occupation Certificates - Introduction. As earlier indicated, the Council issued the interim occupation certificate on 23 December 2016 and the final occupation certificate on 11 April 2017.

90. Proceedings for breach of warranty must be commenced within the “warranty period” for the breach: HB Act s 18E(1)(a). That period is “two years in any other case”, that is other than for a “major defect”: HB Act s 18E(1)(b). And the warranty period starts “on completion of the work to which it relates”: HB Act s 18E(1)(c).

91. The Owners Corporation is the registered proprietor of a “strata scheme” within the Strata Schemes Management Act 2015. HB Act s 3C governs when the warranty period starts for a strata scheme such as this building, which involves the construction of “a new building in a strata scheme” (emphasis added) and where “the issue of an occupation certificate is required to authorise commencement of the use or occupation of the building”: HB Act s 3C(1). That “an occupation certificate” (emphasis added) is required, indicates that more than one certificate may perhaps issue over time, although one of the occupation certificates may “authorise commencement of the use”. The “completion of residential building work” to which HB Act s 3C applies occurs (subject to some presently non-applicable exceptions) on the date of issue of “an occupation certificate that authorises the occupation and use of the whole of the building”: HB Act s 3C (2). So, the question presented here, and about which the parties are in contest, is whether the occupation certificate authorises the occupation and use of “the whole of the building [in a strata scheme]”. This requires closer analysis of the interim and final certificates and the known facts.

92. The Owners Corporation submits that it is the interim occupation certificate that authorises the occupation of “the whole of the building [in a strata scheme]” and that therefore the two-year warranty period in respect of non-major defects runs from the date of the interim occupation certificate 23 December 2016.

93. The Council submits in reply that the interim occupation does not authorise occupation of the whole of the building and that the two-year warranty period did not commence to run with the interim occupation certificate and therefore the owners corporation cannot take advantage of Directive 5 (4)(d) as the warranty period was not due to expire within three months. Rather the Council submits the warranty period did not expire until 11 April 2019, which is more than three months after the filing of the December 2018 application.

94. As has been indicated earlier, this residential development was somewhat unusual. The site was originally a car park owned by the Council. The development involved erection of a substantial residential building on top of the car park and the alteration of the car park area into retail and commercial space.

95. The Occupation Certificates – Analysis. The Owners Corporation’s argument is more persuasive on this issue and has informed the Court’s analysis below which refers to both the Owners Corporation’s and the Council’s submissions.

96. On 13 December 2016, WN Developments lodged an application for an occupation certificate for the building. Curiously the applicant was the builder, even though the Council’s application form said that the applicant “cannot be the builder unless the builder is the owner of the property”, which it was not – the property was owned by the Council. But the application resulted in an occupation certificate issued by Certified Building Specialists, the certifier under applicable legislation. The certifier’s application form posed two questions relevant to the present issue. First, the form asked about the “type of occupation certificate” that the applicant was seeking. Against the options “interim” and “final”, the Owners Corporation ticked a box to indicate that it was applying for a “final” occupation certificate. Secondly the form asked, “[i]s the [occupation certificate] for whole or part of the development”, the Owners Corporation responded, that it was for the “[w]hole” of the development.

97. On the second page of the application form the applicant was invited to tick the relevant class of Building Code of Australia (BCA) classification for the building for which the occupation certificate was sought. The Owners Corporation as applicant ticked as the relevant BCA classes as 2, 6 and 7a. These BCA classifications relate to apartments (class 2), shops and restaurants (class 6), and car parks (class 7a) respectively.

98. Although the applicant had applied for a final occupation certificate, the certifier issued only an interim certificate, which indicated a date of approval of 23 December 2016. Under a heading “description of development” the interim occupation certificate stated

“Demolition of existing structures and construction of a nine-story mixed use building comprising 50 units above basement car parking.”

107. The interim occupation certificate referred to the development application approvals and variations on 15 November 2012, 24 October 2014, 13 February 2015 and 26 November 2015. Under the heading "Description of Development" the interim occupation certificate said:

"Demolition of existing structures and construction of a 9-story mixed use building comprising 50 units above basement car parking."

108. Against the heading "Approval Extent" the certificate indicated "Part", which appears to imply that the certifier’s approval in the interim occupation certificate extended only to part of what was being described in the whole development. The certificate identified the cost of the works as $33,825,000.

109. Under the heading "NCC Building Classification", the interim occupation certificate did not describe the same range of classifications as had appeared in the application. The NCC (National Construction Code) classes that were ticked were only 2 and 7a. The BCA class 6 shops and restaurants were omitted. The NCC Building Classification classes 2 and 7a, refer to multi-residential buildings (class 2) and buildings attached to other buildings (class 7a). The NCC classes that were therefore approved under the interim occupation certificate appear to be wholly residential in nature.

110. Under the heading "Scope of Approval", the interim occupation certificate said:

"This Occupation Certificate relates to those works approved within the Development Consent and Construction Certificate documentation, excluding the fit out and use of any retail/commercial tenancies.

111. This Scope of Approval reinforces the exclusion of non-residential space from the approval conveyed by the interim occupation certificate. Finally, the certifier certified that the building was "suitable for occupation and use in accordance with its classification under the Building Code of Australia."

112. The 23 December 2017 final occupation certificate was different in several respects from the interim occupation certificate. Under the heading "Description of Development", it recorded the same descriptive words as the interim occupation certificate, but it increased the number of units referred to by eight. It read, “demolition of existing structures and construction of a 9-story mixed use building comprising 58 units above basement car parking".

113. Against the heading in the form “Approval Extent”, the declaration in the final occupation certificate was changed from “Part” to “Whole”. This appears to imply that the final certificate relates to the whole of what it describes. The "Scope of Approval" heading in the final certificate included similar language to the interim certificate and was to the following effect

“This Occupation Certificate relates to those works approved within the Development Consent and Construction Certificates for the construction of the overall development and excludes the fit out and use of any retail/commercial tenancies…"

114. Under the heading “Statement” the certifier stated in the final certificate “the building is suitable for occupation and use in accordance with its classification under the Building Code of Australia”.

115. What do these changes between the interim and final certificates mean? And what does the interim certificate stand for? The Council submits that the contrast between the interim occupation certificate and the final occupation certificate are clear: the “Approval Extent” of the interim certificate is for only “part” of the building and the “Approval Extent” for the final certificate is for the “whole” of the building. The Council submits that this appears clearly enough to follow from the change in wording after the heading “Approval Extent” from “Part” in the interim certificate to “Whole” in the final certificate. The increase in the units covered from 50 to 58 is consistent with this construction, in that whatever area (comprising eight units) was left out of the interim certificate has been aggregated with and included in the final certificate.

116. The Council points to the Council’s determination made on 11 January 2017 (“the January 2017 DA Modification”) of an application made by WN Developments under the Environmental Planning and Assessment Act 1979 s 96 to modify the original development consent (DA 90/12) including by changing the approval to 58 residential dwellings.

117. The Council says this is consistent with its contention that the interim certificate only covered part (that is 50) of the units in the new residential strata building (of 58 units).

118. In contrast the Owners Corporation submits that the interim occupation certificate was issued for the whole of the residential part of the building that comprised the strata scheme that was acquired by the Owners Corporation, even though this may have only been part of the building structure and that this is sufficient to indicate that the relevant “completion of residential building work” within HB Act s 3C(2) occurred when the interim occupation certificate was issued.

119. In the Court’s view (a) the Owners Corporation’s submission about the effect of the interim occupation certificate is reasonably arguable, and (b) that is all that the Owners Corporation is required to show to gain the prerogative relief it seeks.

120. The Owners Corporation submits that the interim occupation certificate qualifies as an “occupation certificate” authorising the occupation and use of “the whole of the building” within HB Act (3)(2)(a), because the “building” in the phrase “the whole of the building” in HB Act (3)(2)(a), means the “new building in a strata scheme” within HB Act (3)(1). And here the Owners Corporation submits that “new building” is the residential structure acquired by the Owners Corporation, which in December 2016 was 50 units.

121. This contention is supported by the approval in the interim occupation certificate of the NCC Building Classification, classes 2 and 7a that are multi-residential in nature for the space in question. This reinforces the idea that the interim occupation certificate issued only for the new residential space which is the strata scheme established under the Strata Schemes Management Act 2015 and the Strata Schemes Development Act 2015 and which is now owned and controlled by the Owners Corporation.

122. As to the Council’s argument based on the January 2017 DA Modification application, the Owners Corporation replies that whatever changes had occurred to the Strata Scheme configuration by the January 2017 DA Modification, it occurred simultaneously with the issue of the interim occupation certificate on 23 December 2016. The January 2017 DA Modification bears this out and suggests that there was a partition plan of part of the basement which redivides part of the basement associated with the residential dwellings. But this does not on its own indicate that only part of the building was available for occupation. It rather suggests that some redrawing and division of basement car parking spaces was in play, without affecting the whole envelope of space for which the interim occupation certificate had issued.

123. The Court indicated to the parties during submissions that the Court did not have the full factual materials available to it to decide on a final basis the question whether the interim certificate authorised occupation of the “whole of the building” within HB Act s 3C(2)(a). But that would require closer analysis of the building plans, the development application and a comparison of the terms of the interim occupation certificate with the final form of the strata plan. Neither side undertook that exercise in submissions. Nor in the Court’s view was that necessary because, as will be seen the Registrar did not give the Owners Corporation an opportunity to advance any such argument, when the additional documentation could have been provided.

124. The Registrar had, on 21 January 2019, the materials referred to here and could have acted upon it to decide if Direction (4)(d) should be applied here. But the course of correspondence allows the Court to infer that the Registrar did not embark upon that decision making process at all.

125. NCAT Deals with the Application. The NCAT Registrar’s letter of 24 December 2018 (albeit perhaps a standard form letter) misstates, by oversimplification, the statutory test for acceptance of the December 2018 application. The letter says that the Department must “have investigated any building dispute, otherwise the Registrar must not accept an application” (emphasis added). As a statement of the applicable law, the italicised words are not correct. A correct statement of the applicable law would be “must not accept an application, unless the president has directed acceptance of the application”. The statement in the 24 December 2018 letter does not allow for the alternative route to filing an application opened by HB Act s 48J(b), of a Presidential directive that “the building claim be accepted, without such an investigation having been made”. The Registrar’s letter of 24 December 2018 evidences the Registrar formulating a legal test for acceptance of the December 2018 application, which failed to identify, consider and apparently apply HB Act s 48J(b) and Directive 5.

126. The subsequent correspondence from the Registrar before the Registrar rejected the application on 21 January 2019 reaffirmed the narrow approach taken by the Registrar apparently ignoring HB Act s 48J(b). The Registrar’s letter to the owners corporation of 15 January 2019 repeats the erroneous statement of the applicable statutory command,

“Section 48J of the Home Building Act 1989 requires NSW Fair Trading to have investigated any building dispute otherwise the Registrar must not accept an application to the Tribunal for determination of a building claim.”

127. This statement was followed by a warning that if the relevant “documentary evidence” (of an investigation with the Department) was not provided, “the registrar must not accept your application, and your file will be closed”. No qualification reflecting the other avenue for acceptance of the application opened by HB Act s 48J(b) and Directive 5 is identified here.

128. Finally, the NCAT Registrar’s letter of rejection of the application on 21 January 2019, after noting the lack of any documentary evidence of an investigation and repeating the same narrow approach that ignores HB Act s 48J(b) and Directive 5, concludes.

“As the documentary evidence [of an investigation] has not been provided, your application cannot be accepted, and the file has now been closed.”

129. This email is evidence of the Registrar’s reasons for rejecting the December 2018 application. The Court should infer from this evidence that the Registrar’s lack of any reference to HB Act s 48J(b) and Directive 5 (4)(d), indicates that the Registrar’s decision failed to take those matters into account and applied a test that omitted them. In the Court’s view the Registrar failed to take into account those relevant considerations and erred in law in applying an incorrect test that omitted them. Moreover, the Registrar also denied the Owners Corporation procedural fairness in denying it an opportunity to advance an argument based on Directive 5(4)(d).

130. The NCAT Registrar’s letter of 24 December 2018 also says nothing about the “special needs” of the Owners Corporation that were notified to the Tribunal in the December 2018 application. NCAT’s standard form of application was structured to invite NCAT applicants to present to the Registry any considerations that may impair their capacity to communicate with the NCAT because of their “special needs”. By its application form NCAT represented to applicants that their “special needs” were considerations relevant to its decision to accept their application, or at least the manner and timing of acceptance of their application. The form at least implies that any disadvantages that the applicant faced would be considered in the manner and timing of a decision to accept or reject the application.

131. Nothing in HB Act s 48J D controls the manner in which, or the timing in which, the Registrar should reject an application to NCAT. That is left within the exercise of the Registrar’s statutory functions. As the Registrar had nominated special needs as a relevant consideration to the decision to accept the application (and that is all that its inclusion could have meant) and as the Owners Corporation had nominated special needs, it could be expected that the registrar would consider those nominated special needs.

132. Instead, without further enquiry the Registrar imposed a time limit which was inconsistent with the Owners Corporation’s nominated special needs. The Registrar’s letter on Monday, 24 December 2018 provided a deadline of 14 January 2019. The Registrar’s letter on Tuesday, 15 January 2019 provided a deadline of Friday 18 January 2019, three working days later for the provision of documentary evidence. No reply had been sent to either of these letters before the deadline expired, from which the decision-maker could probably infer that the declared special needs had affected the Owners Corporation, who did not have a chance to respond.

133. There is no evidence that the Registrar did anything to consider the Owners Corporation’s special needs, when several alternatives were readily available. The simplest of these was delaying the decision until hearing further from Bannermans. Had delay been offered the Owners Corporation would have had an opportunity to put the argument which was articulated in Bannerman’s letter of 22 January 2019 and advance documentary material in support. Not to offer that opportunity amounted to a denial of procedural fairness.

134. An Alternative Basis for Decision. The Court considers there may be another reason for reaching the same conclusion; one that was not elaborated by the parties. It has not been necessary for the Court to notify this alternative ground for decision to the parties for further submissions, because it is only an alternative way to reach the same conclusion.

135. The parties’ arguments assumed that the Owners Corporation needed to establish that it was the issue of the interim occupation certificate which triggered the “completion of residential building work” within HB Act 3C(2) and the running of the warranty period under HB Act s 18E (1)(b) and (c). Their contentions focused on the interim occupation certificate and put aside the final occupation certificate as relevant.

136. But that is arguably not correct. Although the date of filing of the December 2018 application was 22 December 2018, the correspondence clearly establishes that the date that the Registrar made the decision not to accept the application was 21 January 2019, after the extension was given to Friday, 18 January 2019. At the time the decision was made to reject the December 2018 application, the “time for lodging a claim [for non-major defects in this building was] due to expire within three months” within Direction 5. No serious argument was put disputing that the final certificate constituted the “completion of residential building work” and started the two-year warranty period. That period was due to expire within three months of 21 January 2019, namely on 11 April 2019. Direction 5 commands the Registrar to take into account various matters at the point of decision, not at the point of original application lodgement. The two events will often be at the same time. But in this case, when the Registrar finally considered rejection, the date was different from the date of lodgement. This brought the final occupation certificate in to play.

129. Another consequence of the Registrar’s failure to communicate with the Owners Corporation before deciding on 21 January 2019 is that the Owners Corporation had no opportunity to advance this persuasive alternative contention to accept the December 2018 application for filing. This and the facts that underlie it could have been examined by the Registrar or NCAT in determining whether it had jurisdiction to hear the December 2018 application: Dyldam Developments Pty Ltd v the Owners – Strata Plan 85305 [2020] NSWCA at [74] per White JA.

130. Equally the parties did not argue the question whether the Registrar was in error in not reversing the Registrar’s 21 January 2019 original decision in response to Bannerman’s letter of 22 January 2019. But had they done so, the operation of Directive 5 (4)(b) within three months of 11 April 2019 would also have been a potentially prominent issue.

Declining Relief on Discretionary Grounds?

139. The Council argues that relief should be refused on discretionary grounds because the Owners Corporation delayed some four years in commencing these proceedings.

140. Mandamus should be sought promptly and will not be granted if the plaintiff is guilty of unreasonable delay. The remedy has been denied to some plaintiffs who have delayed less than three months, such as in R v Australian Broadcasting Tribunal; ex parte Fowler (1980) 31 ALR 565 (“Fowler”). But in Fowler and similar cases where relief was denied, in the intervening period the decision-maker or public official had undertaken major action and expenditure on the strength of the validity of the decision under later challenge. In other cases delay of 15 months has been excused while settlement negotiations occurred: K & H Atkins Pty Ltd v Cunningham (1981) 2 NSWLR 288. Ultimately the reasonableness of the delay will vary among cases: R v Transport Regulation Board; ex parte Maine Carrying Co Pty Ltd [1940] VLR 19, at 34.

141. The Council’s contention that the Owners Corporation’s delay was unreasonable is not persuasive for several reasons.

142. First, the Owners Corporation will be greatly prejudiced if it cannot take the opportunity of advancing a claim for a substantial number of “other” defects which are said to require expenditure several million dollars on repairing the common property of a building with an overall construction cost of approximately $33 million and there is no insurance available to the owners corporation in respect of these defects under the statutory insurance scheme created by the HB Act, Part 6.

143. Secondly, the Council has not identified any prejudice that it will suffer from the Court granting relief. Nor is this a case where the Council can claim it will suffer from general prejudice because of the passage of time due to loss of memory and loss of records. During the period of alleged delay, the Council was actively engaged in the correspondence identified above concerning the alleged “other defects” at these premises. Moreover, the Council has been sued by the Owners Corporation in respect of these same “other defects” under the Design Practitioners Act in the November 2022 proceedings for which the Council has been required to prepare in any event. And the Council has cross-claimed in the November 2022 proceedings against other parties seeking recovery in respect of the same “other defects”.

144. The Council argues that it faces a different (and weaker) case for liability to the Owners Corporation under the Design Practitioners Act because to establish liability under the Design Practitioners Act it is necessary for the Owners Corporation to establish the Council had control of the site during the building works, whereas it is directly liable under the HB Act as a deemed developer.

145. But this argument somewhat misses the weighty consideration that the Council has had since receiving the December 2018 application with the RHM Report a detailed account of the non-major defects complained of, which it has had to prepare to deal with anyway (by taking steps to ensure the preservation of evidence), whatever the strengths or weaknesses of the Design Practitioners Act case against it.

146. Thirdly, during the almost four-year period from January 2019 to November 2020 the Owners Corporation was actively outlining its potential claim to the Council in correspondence and in negotiations, as Mr Blackwell’s affidavit filed for the Owners Corporation explains. The Council was actively denying liability in a manner which occasioned some of the delay by claiming that it was not the developer of the land on which the common property is constructed. The Court encourages parties to attempt to resolve their differences before resorting to using the Court’s resources in litigation and the Owners Corporation’s negotiations appear to have been conducted in good faith with a spirit of restraint before litigating.

147. Fourthly, the delay that has occurred is partly accounted for by the unexpected external administration of Trinity, the builder, which required adjustments by the Owners Corporation to the approach it was taking and to refocus its claims back on the Council and on other parties. The Court can also take judicial notice of the ever-present but now perhaps subliminal effect of the pandemic between 2020 and 2022 which affected every litigant before Courts and Tribunals in this State during that period.

148. Fifthly, if relief is granted the NCAT application can be transferred to this Court to be dealt with at the same time as the November 2022 proceedings which are still to be determined in the Technology and Construction List. There is no evidence that the decision-maker, the Registrar or NCAT has undertaken any significant course of action or expenditure based upon the validity of the decision. All that seem to have happened is that the file was closed.

149. Finally, WN Developments argues that there is a form of specific prejudice to the defendants from the delay that has occurred. It argues that NCAT has the power under HB Act s 48O to order that a party rectify defects and under HB Act s 48MA that is the preferred outcome that a Tribunal or Court should consider. WN Developments submits that the failure to seek judicial review and in a timely way has meant that this jurisdiction could not be exercised.

150. This argument is not persuasive. The alleged missed opportunity for the NCAT to make rectification orders is highly theoretical. Rather, a realistic assessment should be made. Through much of these years of lost opportunity, the Council was denying liability as a Developer under the HB Act and would be expected to have done so at NCAT had the December 2018 application been accepted which is likely to have impaired the making of s 48O orders. Moreover, although the Builder, Trinity, went into external administration on 1 September 2021, it can be expected that its capacity to carry out effective rectification work would have been in decline long before that.

Leave to Commence Proceedings Out of Time

151. Finally, now that the Court is prepared to grant relief, it is necessary to consider the effect of the late filing of the summons outside the three-month period provided under Uniform Civil Procedure Rules (UCPR) r 59.10(1) for judicial review proceedings. The Council submits that this short period indicates how promptly the law expects judicial review proceedings to be commenced.

152. The Court can extend the time for commencing proceedings fixed by UCPR r 59.10(1) under UCPR r 59.10(2) and can do so during the hearing after the event: El-Hanania v Vella [2019] NSWCA 167.

153. It is appropriate to extend time given that the Council’s argument that the relief should not be granted on the grounds of delay has failed. The considerations for extending time under UCPR r 59.10(2) are much the same as those that allow the Court to grant relief in the face of the delay on the part of the Owners Corporation that has occurred. This is not a case where any significant burden is going to be placed upon the Registrar who is the object of the judicial review and who has filed a submitting appearance.

Conclusions and orders

154. The Owners Corporation has been successful in the proceedings. Costs should ordinarily follow the event. The Court will make a costs order against the Council, which will be operative only after 21 days. If either party wish to seek a special costs order it may do so within that period.

155. The Owners Corporation indicated that in the event it was successful, once the December 2018 application was accepted by NCAT the owners corporation would apply for it to be removed into this court for determination with the November 2022 proceedings. The Owners Corporation is invited to consult with the Council and NCAT and will be given leave to send short minutes of order to chambers for the Court to give effect to that intent.

156. For these reasons Court makes the following declarations, orders and notations:

1. ORDER pursuant to Supreme Court Act 1970, section 69 that subject to the second defendant’s applicable procedural requirements the second defendant shall accept for filing and for determination (or for transfer to this Court) the application which the plaintiff filed online with the second defendant on 22 December 2018, and to which the second defendant allocated file number RC 18/54380 but rejected on 21 January 2019;

2. GRANT leave to the parties to provide further consent orders to chambers to enable the transfer of the second defendant’s proceedings in file number RC 18/54380 to this Court;

3. ORDER that subject to DIRECTION (4), the first defendant shall pay the plaintiff’s costs of these proceedings; and

4. DIRECT that if either party seeks a special costs order by motion within 21 days ORDER (3) will be stayed until determination of the motion.

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Amendments

14 April 2025 -

[17(6)], [24], [146] - amended punctuation

[92] - second sentence deleted "instruction to" inserted "addresses"

[115] - second sentence insert ":"

[124] - first sentence - deleted "have" and inserted "here"

[122], [123], [129] [132] - typographical amendments

Decision last updated: 14 April 2025