The Owners - Strata Plan No 78103 v Charlie Habkouk
[2014] NSWCATCD 46
•10 April 2014
NSW Civil and Administrative Tribunal
New South Wales
Medium Neutral Citation: The Owners - Strata Plan No 78103 v Charlie Habkouk [2014] NSWCATCD 46 Decision date: 10 April 2014 Before: D Goldstein, Senior Member Decision: Application dismissed
Catchwords: Limitation period Legislation Cited: Home Building Act 1989,
Consumer, Trader and Tenancy Act 2001, Home Building Amendment Act 2011Cases Cited: Jones v Dunkel (1959) 101 CLR 298,
Payne v Parker [1976] 1 NSWLR 191, Commercial Union Assurance Company of Australia Ltd v Ferrcom Pty Ltd (1991) 22 NSWLR 389,
Manly Council v Byrne and Anor [2004] NSWCA 123,
John W Wade Limited v The Proprietors of Strata Plan 56752 & Ors [2004] NSWSC 312,
Bailey v Owners Corporation of Strata Plan 62666 [2011] NSWCA 293,
Griffith v Gates [2013] NSWCTTT 302 , Sayegh v Vojvodic ] NSWCTTT 436 The Owners Corp SP 74568 v Dyldham Developments [2012] NSWCTTT 361Category: Principal judgment Parties: The Owners - Strata Plan No 78103 (applicant)
Charlie Habkouk (respondent)Representation: Mr Barham for the applicant,
Mr Adams, solicitor, for the respondent
Teys Lawyers for the applicant,
Adams Partners for the respondent
File Number(s): HB 12/42999 Publication restriction: Unrestricted
REASONS FOR DECISION
APPLICATION
1. In this application the applicant seeks work orders and damages alleged to arise out of the respondent's alleged breach of statutory warranties implied pursuant to section 18B of the Home Building Act 1989 (the 'Act') and in negligence.
2. These proceedings concern building defects in strata premises situate at [XXX] Telopea (the 'property').
3. The applicant is the successor in title to the developer who entered into a building contract with the respondent.
4. Under section 18D of the Act, the applicant has the benefit of the statutory warranties given by the respondent to the developer under section 18B of the Act. There is nothing controversial between the parties in connection with these issues.
5. While the application was commenced in the Tribunal on 15 August 2012, on 8 February 2013 the builder was joined as a party to the application.
6. On 25 March 2013 the builder wrote to the Tribunal stating, among other things, 'I believe that the proceedings against me should be dismissed as the project was handed over to the developer on the 24th June 2005' and 'The substance of my request is that the statutory warranty period has far expired'.
7. On 7 May 2013 the Tribunal made orders requiring the parties to file and serve written submissions 'as to the jurisdiction of the Tribunal to determine this matter'.
8. As described above the respondent has taken the point that this application has not been brought within the time required by section 18E of the Act with the result that the applicant is unable to pursue its claim against the respondent in the tribunal. The respondent has applied for orders to strike out these proceedings on the basis that they have not been brought within the time permitted under section 18E of the Act.
9. The respondent states in submissions dated 13 November 2013 that the time to file the applicant's claim expired on 23 June 2012 well before the applicant filed this application in the Tribunal on 15 August 2012.
10. It is necessary for the purposes of this application to recite some of the facts relating to this application. The facts themselves are not controversial. However, what turns on some of the facts is of consequence to the parties' positions.
11. In these reasons I will refer to the applicant as the owner and to the respondent as the builder. I will refer to the original owner as the developer. I will record at this point that the developer is in liquidation.
APPLICANT'S EVIDENCE
12. The evidence that the builder brought in support of his application was limited to documents attached to its various submissions. In addition the builder relied upon documents that were attached to the owner's written submissions.
13. The builder provided written submissions dated 14 March 2014, received in the Tribunal on 17 March 2014, 13 November 2013 and 31 May 2013.
RESPONDENT'S EVIDENCE
14. The evidence that the owner brought in response to the application to dismiss was in the form of a number of documents attached to its written submissions lodged in the Tribunal on 5 September 20
FACTS
15. The facts which are relevant to this application are set out below. If there is any disagreement as to a factual issue or the consequences which are alleged to arise from a fact, I will indicate that.
16. The developer, Crowne Equity Developments Pty Ltd, entered into a building contract with the builder on 25 February 2005.
17. The builder relies upon a letter dated 24 June 2005 to sustain an allegation that he 'handed the site over to the Developer as his contract obligations had been fulfilled' on that date. Paragraph 12 of the builder's submissions 13 November 2013. There is a disagreement between the parties about whether the matters referred to by the builder in his letter are factually correct.
18. An interim occupation certificate was issued to the developer on 24 December 2005.
19. A final occupation certificate was issued to the developer on 23 May 2006.
20. On 12 January 2012 the owner's lawyers sent a letter of demand to the builder.
21. Between April and July 2012 there was correspondence and meetings between the parties regarding the property and the owner's claims as regards defective work.
22. On 15 August 2012 the owner instituted these proceedings in the Tribunal. The respondent was named as FMH Projects Pty Ltd
23. On 8 February 2013 the builder was joined as a party to this application.
24. The builder concedes in its written submissions dated 13 November 2013 that section 32 of the Consumer, Trader and Tenancy Tribunal Act 2001 permits the Tribunal to amend the application including the inclusion of a party in circumstances where the limitation period may have expired.
25. He also accepted in his written submissions that the amendment takes place effective the date of the original application.
BUILDING CONTRACT
26. The developer and the builder entered into a written building contract HIA CPC February 2004 edition (the 'contract') dated 23 February 2005.
27. The contract was a cost plus contract. The estimated cost of the building works was $297,000 inclusive of GST.
28. The building works as defined in the contract were not ascertainable by reference to plans, drawings or a specification. The best description of the work to be carried out by the builder was to be found in the description of the work that the builder was to carry out and complete in order to be paid the amount stated for the stages of work referred to in the Schedule of Payments.
29. I have had regard to the Schedule of Payments set out in the contract in order to ascertain as best as one can, the work the builder was required to undertake. After completing slabs, walls and the roof the builder was obliged to carry out internal roughins, gyprock, tiling, internal carpentry, internal fitout, render, painting and lock up.
30. The contract provided at clause 11 of Schedule 1 that there was a contractual period of 32 weeks for the building works to reach practical completion.
31. The 32 week period commenced as from the commencement date which is dealt with in clause 8. There is no evidence from the builder before the Tribunal about when work commenced. The owner has produced documentary evidence to show when work was permitted to commence by relevant authorities.
32. Practical completion was defined as meaning 'when the building works are complete except for minor omissions and defects that do not prevent the building works from being reasonably capable of being used for their purpose'.
33. The 'date of practical completion' was defined to mean the 'date of practical completion under Clause 22 except where the date is determined by dispute resolution...'.
34. Clause 22 of the contract dealt with practical completion. The clause set out a series of actions that were to commence with the builder giving a written notice of practical completion to the developer. The notice of practical completion was to contain the information set out in clause 22.2, including, of significance, the builder's 'assessment of the date of practical completion'. Thereafter the owner and developer were to meet on site to inspect the building works. At the meeting the developer was either to pay the final progress claim or if it did not believe that the building works had reached practical completion, it was to give the builder a written notice detailing what was to be done to reach practical completion.
35. Importantly, if the developer paid the final progress claim, the date of practical completion stated in the builder's written notice of practical completion was deemed to be the date of practical completion.
36. In the event the developer did not believe that the building works had reached practical completion and gave the builder a written notice detailing what was to be done to reach practical completion, there was a separate set of contractual procedures to be undertaken to achieve practical completion.
37. In the event that the developer did not respond to the builder's written notice of practical completion and did not pay the final progress claim, clause 22.6 of the contract provides, among other things, that the date of practical completion stated in the builder's notice of practical completion is deemed by the contract to be the date of practical completion.
38. Clause 23 of the contract stated that the builder was not required to obtain any certificate of occupancy or final inspection certificate relating to the building works.
APPLICATION OF RELEVANT LAW
Section 18E of the Act
39. This provision is of importance to the builder's application. The first question to be decided is which version of section 18E of the Act is applicable to these proceedings.
40. Section 13 of the Home Building Amendment Act 2011 (the 'Amending Act') amended section 18E of the Act by, among other things, amending the warranty period to be 6 years for a breach of an implied warranty resulting in a structural defect and 2 years in any other case.
41. Before the Amending Act took effect, the position was that there was a warranty period of 7 years commencing from the completion of the relevant work.
42. I understand the position of the parties in connection with this application to be that there is a warranty period of 7 years commencing from the completion of the relevant work.
43. Section 18E of the Act states:
1) Proceedings for a breach of a statutory warranty must be commenced within 7 years after:
(a) the completion of the work to which it relates, or
(b) if the work is not completed:
(i) the date for completion of the work specified or determined in accordance with the contract, or
(ii) if there is no such date, the date of the contract.
Does the Tribunal have jurisdiction in respect of the owner's claim?
44. Section 48K (7) of the Act provides:
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).
45. In my view to succeed in its application the builder is obliged to establish on the balance of probabilities that the application was lodged seven years after completion of the work the subject of the contract between the parties. The application was lodged in the Tribunal on 15 August 2012. To put it another way, as expressed in Bailey v Owners Corporation ofStrata Plan 62666 [2011] NSWCA 293, to be successful the builder 'needed to establish that the work was completed more than seven years before the date of the lodgement of the claim'.
46. The builder contends that the building work was complete on 25 June 2005 and as a result these proceedings have been commenced out if time as seven years after 25 June 2005 expires on 24 June 2012 well before the date upon which this application was lodged, 15 August 2012.
47. In my view the builder is in the same position as the builder/developer in Bailey v Owners Corporation of Strata Plan 62666 where Basten JA at paragraph 5, stated, the applicants on the jurisdictional application (who were the respondents to the claims for defective work) as their counsel accepted, 'bore the onus of proof in relation to the facts required to establish a lack of jurisdiction'.
48. In Briginshaw v Briginshaw (1938) 60 CLR 336 Dixon J stated as follows in connection with the civil standard of proof, such observations being relevant to deciding whether a matter is proved on the balance of probabilities:
"Except upon criminal issues to be proved by the prosecution, it is enough that the affirmative of an allegation is made out to the reasonable satisfaction of the tribunal. But reasonable satisfaction is not a state of mind that is attained or established independently of the nature and consequence of the fact or facts to be proved. The seriousness of an allegation made, the inherent unlikelihood of an occurrence of a given description, or the gravity of the consequences flowing from a particular finding are considerations which must affect the answer to the question whether the issue has been proved to the reasonable satisfaction of the tribunal. In such matters "reasonable satisfaction" should not be produced by inexact proofs, indefinite testimony, or indirect inferences"
Date of completion of the work
49. Section 3B of the Act is applicable to the question of the date of completion of the work to which the warranty period relates.
50. Section 3(B) of the Act provides:
(1) The completion of residential building work occurs on the date that the work is complete within the meaning of the contract under which the work was done.
(2) If the contract does not provide for when work is complete (or there is no contract), the completion of residential building work occurs on practical completion of the work, which is when the work is completed except for any omissions or defects that do not prevent the work from being reasonably capable of being used for its intended purpose.
(3) It is to be presumed (unless an earlier date for practical completion can be established) that practical completion of residential building work occurred on the earliest of whichever of the following dates can be established for the work:
(a) the date on which the contractor handed over possession of the work to the owner,
(b) the date on which the contractor last attended the site to carry out work (other than work to remedy any defect that does not affect practical completion),
(c) the date of issue of an occupation certificate under the Environmental Planning and Assessment Act 1979 that authorises commencement of the use or occupation of the work,
(d) (in the case of owner-builder work) the date that is 18 months after the issue of the owner-builder permit for the work.
(4) If residential building work comprises the construction of 2 or more buildings each of which is reasonably capable of being used and occupied separately, practical completion of the individual buildings can occur at different times (so that practical completion of any one building does not require practical completion of all the buildings).
(5) This section applies for the purposes of determining when completion of residential building work occurs for the purposes of any provision of this Act, the regulations or a contract of home warranty insurance.
51. At the hearing of this application I referred the parties to a recent Tribunal decision of Senior Member J Smith in Griffith v Gates (Home Building) [2013] NSWCTTT 302 (26 June 2013) and to my decision in Sayegh vVojvodic[2013] NSWCTTT 436 (29 August 2013).
52. In Griffith v Gates Senior Member Smith stated that section 106 of the Amending Act made it clear that section 3B of the Act which came into effect on 25 October 2011 applied to residential building work commenced or completed before the commencement of that section on 25 October 2011.
53. Senior Member Smith stated that in the application before him, it was clear that section 3B of the Act was the applicable provision for determining the date of completion of the relevant works.
54. With respect I agree with that reasoning and find that section 3B of the Act is the applicable provision in the Act for determining the date of completion of residential building work in this application for the purpose of sections 18E and 48K(7) of the Act.
55. In considering section 3B of the Act it is important to consider precisely how sub-section (3) operates. Do the presumptions in sub-section 3B(3) apply in priority to sub-sections 3B(1) and (2)?
56. In the case of Sayegh v Vojvodic I stated that I agreed with the reasoning of Senior Member Smith in Griffith v Gates at paragraphs 45-63 of his reasons for decision in connection with the proper construction of section 3B of the Act, especially his comments at paragraph 59 of his reasons.
57. I stated that in my view sections 3B(2) and 3B(3) are to be read together since both provisions refer to the term 'practical completion'. I also stated that 'in my view the presumptions in section 3B(3) operate to ascertain when practical completion of residential work occurs. These presumptions are as stated by Senior Member Smith irrebuttable, except when an earlier date can be established (as specifically provided in section 3B(3) itself). In circumstances where the matters referred to in section 3B(3) (a) - (d) cannot be established, then practical completion is to be determined in accordance with section 3B(2).'
58. In the cases referred to above the factual situations were different to the present facts in that the parties had not entered into a single building contract. The cases concerned owner builders where a number of contracts were entered into. In particular, neither Senior Member Smith nor I considered the relationship between sections 3B(1) and 3B(3) of the Act.
59. In my view section 3B(1) of the Act applies to the facts of these proceedings as the contract under which the work in issue was carried out provides a meaning of when the residential building work is complete. Such a meaning is obtained via the definition of practical completion in the contract. It is not necessary in my view that the contract in question must contain a reference to 'completion' of building work. So long as the contract provides for when building work is complete, section 3B(1) of the Act will apply even if the contract contains terms such as 'practical' or 'substantial' completion, or if the contract deals with the completion of building work in some other way.
60. Sections 3(B) (2) and (3) of the Act apply when the contract in issue does not provide for when the work is complete and so are not applicable on the facts in issue in these proceedings.
61. I will commence by considering the builder's position under section 3B(1) of the Act which as set out above, states;
The completion of residential building work occurs on the date that the work is complete within the meaning of the contract under which the work was done.
62. The respondent has referred me to the decision of Senior Member Buckley in The Owners Corp SP 74568 v Dyldham Developments [2012] NSWCTTT 361. Senior Member Buckley stated at paragraphs 17, 18 and 19 of his Reasons for Decision:
"17.By reason of the operation of subsection 1, the date of completion must, in my view, be determined in accordance with the terms of the contract by reference to the contractual definition of practical completion contained in clause 22(a). This determination is not to be misconstrued with either, the concept of the builder's opinion of practical completion contained within clause 22(b) of the contract, or the owner's deemed acceptance of that date as provided for in clause 22(d), except where relevant for issues of estoppel or admission between contesting parties.
18 In my view, s 3B(1) imports a definitional criterion, and not the contractual obligations, contained within clause 22 of the contract into a wider legislative use.
19 Therefore the issue to be decided between the parties is whether as at the 25 November 2004 were the various strata lots and common property on the entire strata scheme, reasonably fit for occupation as a dwelling."
63. Senior Member Buckley takes the view that in ascertaining when the completion of residential work occurs for the purposes of section 3B(1), one only has reference to the contractual definition of completion or whatever term is used, or the contractual provisions stating what has to be done in order for completion to occur.
64. I understand his views set out above to be that one does not have regard to, for example, the provisions of a clause such as clause 22 which sets out a contractual mechanism whereby a number of events occur which lead to a deemed date of practical completion, unless there is a dispute about the date of practical completion in which case the dispute resolution provisions of the contract apply to determine that date. He also states that one should not misconstrue the contractual meaning of completion with the builder's view of the date upon which practical completion has been achieved or any deemed acceptance of that date by reason of the operation of clauses such as clause 22 of the contract.
65. In essence Senior Member Buckley interpreted section 3B(1) of the Act to require the Tribunal to embark upon an enquiry of when the contractually defined state of completion of residential building work has occurred and in doing so to ignore when a contractual 'date of contractual completion' may have been achieved. This approach will lead the Tribunal to reach a conclusion that will be unaffected by a parties position of when completion occurred which may be self -serving, or a contractually deemed date of completion which may be unfair and factually incorrect. The Tribunal's finding of the date when completion occurred will, on this interpretation, be reached by an independent fact finding exercise carried out by the Tribunal on the evidence available.
66. I would qualify the statement in the preceding paragraph to the extent that as recognised by Senior Member Buckley in paragraph 19 above, the enquiry is to be framed by reference to the date of completion asserted by the builder as the date of completion, namely 25 June 2005.
67. The question to be decided in this application is, therefore, whether as at 25 June 2005 the building works were complete except for minor omissions and defects that did not prevent them from being reasonably capable of being used for their purpose.
68. This application poses difficulties to the Tribunal in embarking upon the exercise referred to above by reason of the paucity of the evidence adduced by the builder on this application. The owner as successor in title to the developer does not have access to any of the documents which may be relevant to the question of when the residential building work was complete. It did however issue summonses to produce documents in order to collect the relevant documents.
69. Senior Member Buckley's comments that the determination of the 'contractual definition of practical completion.... is not to be misconstrued with ... the concept of the builder's opinion of practical completion' does not in my view mean that I should have no regard to the evidentiary weight of the builder's opinion of practical completion. His comments, in my view, mean that I should not accept the builder's opinion of practical completion without an analytical review of the issue.
70. I should state in response to the owner's submissions that in considering when the work was complete within the meaning of the contract, I will not take into account the contractual mechanism, in this case clause 22 of the contract, for determining when practical completion took place. In this regard I repeat Senior Member Buckley in The Owners Corp SP 74568 v Dyldham Developments where he stated:
"18 In my view, s 3B(1) imports a definitional criterion, and not the contractual obligations, contained within clause 22 of the contract into a wider legislative use."
71. This means that I will not base my decision on whether or not the builder's letter of 24 June 2005 complied with the provisions of clause 22 of the contract, or whether the contractual procedures in clause 22 were carried out as contemplated in that clause..
72. The builder did not provide a witness statement, but relied upon essentially three documents, his quotation, a copy of the contract and his letter dated 24 June 2005.
73. The owner being the successor in title to the developer had no documents going to the issue and as stated above, served summonses to produce documents to the builder and other parties. The builder only produced the three documents referred to above.
74. The owner relies upon a range of other documents which are referred to in its written submissions and attached thereto.
75. The critical issue for me to decide is whether the builder has produced sufficient evidence to satisfy me that the building work the subject of this application was completed more than seven years before these proceedings were commenced in the Tribunal. That date as referred to, is 24 June 2005.
INFERENCES
76. The owner's counsel has referred me to the decision of Commercial Union Assurance Company of Australia Ltd v Ferrcom Pty Ltd (1991) 22 NSWLR 389 insofar as the case deals with the drawing of inferences. The trial judge was found to have erroneously drawn an inference that an endorsement on an insurance policy that denied liability in specified circumstances 'would not have been acceptable to the insured'. At the trial counsel for the insured did not ask his witnesses about the subject matter, nor did he cross examine on the point. Handley JA at p. 419 stated 'I do not consider that inferences should be drawn favourable to a party whose counsel refrained any question on this topic.'
77. His honour had earlier at p. 418 discussed the extension of the principles in Jones v Dunkel (1959) 101 CLR 298 to a 'case where a party fails to ask questions of a witness in chief.'
78. I do not find the owner's references to Commercial Union AssuranceCompany of Australia Ltd v Ferrcom Pty Ltd to be of assistance since in this application there have been no witnesses, let alone a failure by a party to ask its witness relevant questions as was the issue in the case cited.
79. However in considering the issue of whether inferences are to be drawn, in considering the builder's application I have had regard to the judgement of Campbell J in Manly Council v Byrne and Anor [2004] NSWCA 123. Campbell J states at paragraph 54 of his judgement:
"The inferences licensed by Jones v Dunkel are ones which are drawn, if at all, once all the evidence in the case is in. This has significance in two ways. The first is that, though Jones v Dunkel licenses drawing more confidently, an inference available against the party who has failed to call the evidence, before that can happen there must first be available to be drawn, on the evidence which has been admitted, an inference against that party."
80. Campbell J. also referred to the decision of Glass JA in Payne v Parker [1976] 1 NSWLR 191 where his honour states in connection with the drawing of inferences:
"(6) Whether the principle can or should be applied depends upon whether the conditions for its operation exist. These conditions are three in number: (a) the missing witness would be expected to be called by one party rather than the other, (b) his evidence would elucidate a particular matter, (c) his absence is unexplained."
81. Before I consider whether any inferences ought to be drawn on this application, I will consider the evidence there is on the application about when the work was complete within the meaning of the contract.
82. The builder's submissions of 31 May 2013 refers to his letter of 24 June 2005. He also states by way of submission that he last attended site to carry out work on 24 June 2005.
83. The builder's submissions dated 13 November 2013 rely upon, among other things and in my view the most relevant, the builder's quote dated 16 February 2005 and his letter dated 24 June 2005. The builder relies upon his letter dated 24 June 2005 to establish completion. As mentioned earlier, there is a dispute between the parties as to the evidentiary value of this letter. The letter is addressed to the developer. It does not spell the developer's name correctly, a point taken by the owner. However, I do not think that can be a valid basis for ignoring it or its content. The owner also states that the letter is addressed to the developer at the project location, the property, rather than at its registered office. I also think that this cannot be a valid basis for ignoring it or its content.
84. The letter states that the contract has been completed 'as per the date of this letter'. It goes on to state that 'all aspects of the quotation have been completed and all relevant certificates have been handed over'. It then goes on to state that the builder will hand over the keys to the site upon final payment.
85. The builder also produced further submissions and a chronology on the morning of the hearing. However no further evidence was produced regarding the question of when the work was complete within the meaning of the contract.
86. The builder's solicitor, in response to the owner's counsel's submissions, stated that even if the 24 June 2005 letter did not comply with clause 22 of the contract, it was nonetheless an expression by the builder of the fact that the building work under the contract had been completed. The letter does not in terms state that. However, it may in the broadest sense be understood to be stating that was the builder's position by reason of the statement that the builder had completed its obligations under the contract and was in a position to hand over the keys to the site upon payment of its final invoice. However, the 24 June 2005 letter is not in my view, conclusive. The developer may have had a different position about whether the building work under the contract had been completed. I am not prepared to draw an inference in the builder's favour that the builder's 24 June 2005 letter was a correct and undisputed statement of the position.
87. The respondent's evidence took the form of what I will describe as regulatory documents, including copies of the Development Consent dated 9 August 2004, the Construction Certificate obtained on behalf of the developer, a Construction Management Program , interim and final occupation certificates and correspondence between the parties regarding the owner's claims on the builder.
88. At paragraph 68 of its submissions the owner submits that the date of completion of 24 June 2005 is inconsistent with other contemporaneous documents and 'should be considered with caution'.
89. The contemporaneous documents that the owner refers to in its submissions are the Conditions of Development Consent, the Principal Certifying Authority's Notice of Commencement of Building Work, the Principal Certifying Authority's first inspection date and the Contract Management Program.
90. The owner's former solicitors have referred to the relevant documents and made careful and closely reasoned submissions at paragraphs 81 to 88 of the Owners submissions on the Preliminary Issue regarding Jurisdiction. The owner submits that as a result of the contemporaneous documents, 'a negative inference should be drawn in respect of the reliability of the 24 June letter and the alleged completion date of the building work' to be taken from that letter. By a negative inference I assume that the owner submits that I should not accept the builder's assertions as set out in that letter.
91. The Contract Management Program was prepared for the developer. It does not refer to the contract. It sets out a number of construction activities which do not correspond in identical terms to the stages of work referred to in the contractual Schedule of Payments. However, the Contract Management Program aligns with the contractual Schedule of Payments up to fit out which it provides is to be completed by 6 August 2005. It then allows for landscaping, which is not included in the contract, to commence on 6 August 2005 and to be completed by 20 August 2005. Practical completion with handover is then scheduled for 31 August 2005. The entire construction sequence in the Contract Management Program is between 19 and 20 weeks.
92. As mentioned, the contract provided at clause 11 of Schedule 1 that there was a contractual period of 32 weeks for the building works to reach practical completion. Therefore the contractual period for completion easily accommodated the construction sequence in the Contract Management Program, even allowing for the fact that the contract did not require the builder to carry out landscaping.
93. The owner in its submissions points out that in accordance with the Conditions of Development Consent, commencement of the works could not commence until the construction certificate was issued which took place on 7 April 2005, as evidenced by the copy of the construction certificate attached to the owner's submissions. This date is confirmed by the Principal Certifying Authority's inspection record which shows the commencement of building work as 5 April 2005.
94. The owner further points out that a commencement date of 7 April 2005 would have affected the excavation phase of the Contract Management Program, and would have delayed the commencement date for that work from 20 March 2005 to 7 April 2005 and the completion date for that work of 2 April 2005, to 16 April 2005. Absent any evidence to the contrary, the commencement and completion date of each other phase of the works in the Contract Management Program would have been similarly affected and, as the owner submits, practical completion and handover would have been delayed until 10 September 2005.
95. The following inferences are available from the documents tendered by the owner. First, the excavation works under the contract, planned to commence on 20 March 2005 could not commence until 7 April 2005. Secondly, this late commencement date would delay the commencement and completion of each other phase of the works set out in the Contract Management Program. Thirdly, the effect of the delay referred to would result in the planned completion of the works being pushed out to 10 September 2005. Fourthly, that completion of the building work was likely to take place on or about 10 September 2005.
96. To accept the assertions in the builder's letter of 24 June 2005 as evidence of completion of the building work under the contract would mean that the builder had completed the work under the contract in the period between 7 April 2005 and 24 June 2005, that is in 11 weeks, when the contract duration was 32 weeks and the Contract Management Program was between 19 and 20 weeks.
97. The three conditions referred to by Glass JA in the passage set out above are, I find, satisfied in this application. The builder himself is the missing witness. His evidence could certainly be expected to elucidate the facts and circumstances surrounding the completion of the work. The builder was in the Tribunal on the day of the hearing. There was no explanation offered about why he did not serve a witness statement going to the relevant facts and circumstances concerning practical completion or the matters referred to in section 3B(1) of the Act.
98. Given the satisfaction of the conditions referred to by Glass JA, and the fact that as stated by Campbell J, there must first be available to be drawn, on the evidence which has been admitted, an inference against the party who has failed to call a relevant witness, I am of the view that I am in a position to draw an inference in connection with the builder's failure to give evidence.
99. At paragraph 51 of his judgement Campbell J. describes the nature of the inferences that may be drawn:
"Thus, if a witness is not called two different types of result might follow. The first is that the tribunal of fact might infer that the evidence of the absent witness, if called, would not have assisted the party who failed to call that witness. The second is that the tribunal of fact might draw with greater confidence any inference unfavourable to the party who failed to call the witness, if that witness seems to be in a position to cast light on whether that inference should properly be drawn."
100. In the circumstances of this application I am minded to draw the second result referred to above, namely that I am able to draw with greater confidence the inferences referred to above, namely that first, the excavation works under the contract, planned to commence on 20 March 2005 could not commence until 7 April 2005. Secondly, this late commencement date would delay the commencement and completion of each other phase of the works set out in the Contract Management Program. Thirdly, the effect of the delay referred to would result in the planned completion of the works being pushed out to 10 September 2005. Fourthly, that completion of the building work was likely to take place on or about 10 September 2005.
101. The builder's evidence which is contrary to the inferences referred to, is that the works achieved practical completion on 24 June 2005 as asserted by the builder in its letter of that date. This, as pointed out above, would mean that the builder had completed the work under the contract in the period between 7 April 2005 and 24 June 2005, in 11 weeks, when the contract duration was 32 weeks and the Contract Management Program was between 19 and 20 weeks. I do not accept this evidence.
102. Having regard to all of the evidence that I have referred to, and having drawn the inferences referred to, I am not satisfied that the residential building work carried out by the builder was completed on 24 June 2005 as alleged by him. I am also not satisfied that the 24 June 2005 letter is evidence that the building works were complete except for minor omissions and defects that did not prevent them from being reasonably capable of being used for their purpose.
103. There is a second line of argument from the builder which his solicitor developed in oral argument before the Tribunal which was that his joinder to these proceedings was defective.
104. This was contained in the written submission dated 14 March 2014, but not seen by the owner until the morning of the hearing. The submission, so far as it was relied upon, altered the builder's concessions in his 13 November 2014 submissions as referred to in paragraphs 24 and 25 above. His altered position is that his joinder is defective because there was no confusion about the identity of the builder and further because he was not present in the Tribunal when the order joining him was made.
105. The builder states that his joinder was made pursuant to section 32 of the Consumer, Trader and Tenancy Tribunal Act 2001.
106. In considering this submission I will start with the point that there are two possible sources of power for the Tribunal to join a party. The first is section 26(4) of the Consumer, Trader and Tenancy Tribunal Act 2001. The second is section 32 of the Consumer, Trader and Tenancy Tribunal Act 2001 The builder's solicitor referred me to regulation 26 of the Consumer, Trader and Tenancy Tribunal Regulation 2009 which states that:
"For the purposes of section 26 (1) of the Act, the classes of proceedings that are prescribed are those in the Residential Parks Division, Retirement Villages Division, Strata and Community Schemes Division, Tenancy Division and Social Housing Division in respect of which 2 or more persons have joint liability."
107. Given that these proceedings were commenced in the Home Building Division of the Tribunal it is clear that the Tribunal had no power to order a joinder of the builder under section 26(4) of the Consumer, Trader andTenancy Tribunal Act 2001 which sub-section provides the Tribunal power to join parties 'in proceedings to which this section applies'.
108. I am of the view that the Tribunal's letter to the builder on 7 March 2013 informing him that the joinder had been made "pursuant to section 26(4) of the Consumer, Trader and Tenancy Tribunal Act 2001 was in error.
109. If the builder had any issue about the power of the Tribunal to join him as a party to these proceedings under section 32 of the Consumer, Traderand Tenancy Tribunal Act 2001 in my view he should have made an appropriate application soon after he was notified of the joinder on 7 March 2013. I note that the builder has not and does not seek an order to be removed from the proceedings by reason of some alleged irregularity in the way he was joined. He has participated in these proceedings since that time of his joinder.
110. As stated above, immediately after he was joined, he made it clear that he was of the view that the Tribunal did not have jurisdiction because of the expiration of the statutory warranty period.
111. Indeed as at 13 November 2013, the builder conceded that section 32 of the Consumer, Trader and Tenancy Tribunal Act 2001 permitted the Tribunal to amend the application for the inclusion of a party in circumstances where the limitation period may have expired. He also accepted that the amendment takes place effective the date of the original application. His position in relation to these matters changed on the morning of the hearing.
112. The builder has referred to the case of John W Wade Limited v TheProprietors of Strata Plan 56752 & Ors [2004] NSWSC 312 in connection with the issue of amending an application under section 32(2) of the Consumer, Trader and Tenancy Tribunal Act 2001. In that case Master Malpass, as he was then, stated :
"17 The powers of amendment are expressed in the widest terms. It is well established that the width of such a power enables an amendment to be made inter alia even though a relevant limitation period has expired (see McGee). Further, it is well established that any amendment made under such a provision takes effect from the time when the application was filed. Further, it is well established that such a provision enables an amendment to correct any genuine mistake as to the identity of the person being sued provided that the party seeking to amend showed that the mistake was neither misleading nor such as to cause reasonable doubt as to the identity of that person (see inter alia Bridge Shipping Pty Ltd v Grand Shipping SA (1991) 173 CLR 231)."
113. In dealing with the builder's application that the Tribunal does not have jurisdiction to hear the applicant's claim, the question of the joinder of the builder does not arise. However, since the parties have made submissions on the point I will deal with what I consider to be the two relevant points.
114. The first point raised by the builder is that section 32 of the Consumer,Trader and Tenancy Tribunal Act 2001 only applies to genuine mistakes as to identity. The builder states that there can be no genuine mistake as to identity.
115. I have had regard to all of the evidence which is contained in correspondence between the parties on this issue and also to their solicitors' submissions. I have also had regard to the lateness of the builder's change of position which deprived the owner of the opportunity to file and serve further evidence going to the issue. In my view and I so find there was obviously a genuine mistake by Mr Cosier on behalf of the owner regarding the identity of the builder.
116. The builder bases his submission that there was no genuine mistake as to identity on the letter from the owner's former solicitors, Grace Lawyers to the builder on 12 January 2012. The builder states that the owner was not mistaken about the identity of the builder at that time.
117. I note the owner's submissions at paragraph 38 regarding the relationship between FMH Projects Pty Ltd and the builder. The matters referred to in paragraph 38 in my view are capable of creating genuine confusion and mistake about who was the builder. The same observation may be made about the matters referred to in paragraphs 39 - 46 of the owner's submissions. I also accept that the email dated 24 May 2012 from FMH Projects Pty Ltd gave the strong impression that it was the builder, as it was conducting itself as a builder would do.
118. By reason of the matters referred to in the preceding paragraph and in the submissions that I have referred to, I accept the owner's submission that in the circumstances it was reasonable for the owner through Mr Cosier to form the genuine belief that FMH Projects Pty Ltd was the builder. In particular there was a deal of contact between Mr Cosier and Mr Pierre Habkouk of FMH Projects Pty Ltd that took place after the Grace Lawyers letter to the builder on 12 January 2012. Of significance, the 24 May 2012 email from FMH Projects Pty Ltd was capable of giving the strong impression that it was the builder, thereby giving rise to a genuine mistake on the part of the owner about the identity of the builder.
119. The second point is that the builder did not receive proper notice of the joinder. This was an issue raised in John W Wade Limited v The Proprietors of Strata Plan 56752 & Ors, where Master Malpass stated:
"In my view, subs (2) of s 32 does no more than impose a requirement that the party to whom the amendment relates be notified. I consider that it was not intended to take away the power provided by a general amendment provision to correct genuine mistakes as to identity (whether or not a substitution is involved). Amendments may be made without notification to a non-party sought to be affected by the amendment and this is often done."
120. That statement applies here and is a complete answer to the builder's complaint that he was not present when the order joining him was made thus invalidating his joinder.
CONCLUSIONS
121. The builder bears the onus of proving the date that the building work was completed within the meaning of the contract in order to succeed in obtaining an order under section 48K(7) of the Act that the Tribunal does not have jurisdiction in respect of the building claim the subject of these proceedings. For the reasons set out above the builder has failed in his case that the building work was completed on 24 June 2014. He has not alleged any other completion date.
122. By failing to prove when the building work was completed, the builder has failed to establish a date for commencing the calculation of the 7 year period referred to in that section 18E (1)(a) of the Act . It follows that as a consequence, the expiration of the 7 year period cannot be ascertained on the evidence available.
123. As a result of the finding in the preceding paragraphs and for the reasons set out above, the builder's application is dismissed.
COSTS
124. If any party wishes to make a costs application pursuant to section 53 of the Consumer, Trader and Tenancy Tribunal Act 2001 as a result of the order disposing of the builder's application to dismiss these proceedings on the basis that the Tribunal has no jurisdiction under section 48(K)(7) of the Act, that party, the costs applicant, must lodge a costs application in the Tribunal and serve the same on the costs respondent within 21 days of the date of this order, either attaching or referring to the documents relied upon in support of the application.
125. The costs respondent will have 21 days after the date it receives the application referred to above to lodge in the Tribunal and serve on the costs applicant its submissions, if any, in response to the cost applicant's costs application, such submissions either attaching or referring to the documents relied upon.
126. The cost applicant will have 14 days after the date it receives the cost respondent's submissions to lodge in the Tribunal and serve on the costs respondent its submissions, if any, in reply, such submissions either attaching or referring to the documents relied upon.
127. The Tribunal will determine any costs application on the basis of the papers lodged in the Tribunal.
D Goldstein
Senior Member
Civil and Administrative Tribunal of New South Wales
10 April 2014
I hereby certify that this is a true and accurate record of the reasons for decision of the New South Wales Civil and Administrative Tribunal.
Registrar
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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: 24 July 2014
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