Turnstone Nominees Pty Ltd v Babcock & Brown Real Estate Finance Ltd - [2008] WASC 80

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION: TURNSTONE NOMINEES PTY LTD -v- BABCOCK & BROWN REAL ESTATE FINANCE LTD [2008] WASC 80

CORAM: BEECH J

HEARD: 30 APRIL 2008

DELIVERED : 12 MAY 2008

FILE NO/S: CIV 1390 of 2008

BETWEEN: TURNSTONE NOMINEES PTY LTD
Plaintiff
AND
BABCOCK & BROWN REAL ESTATE FINANCE LTD
Defendant

Catchwords:

Building and construction - Indemnity insurance - Exemption - Construction of regulations - Turns on own facts

Legislation:

Home Building Contracts (Home Indemnity Insurance Exemptions) Regulations 2002 (WA)

Result:

Declarations made

Category: B

Representation:

Counsel:

Plaintiff: Mr D K Barker
Defendant: Mr A J McLean

Solicitors:

Plaintiff: Chalmers Legal Studio
Defendant: Minter Ellison

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

Ainsworth v Criminal Justice Commission (1992) 175 CLR 564
CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384
Cooper Brookes (Wollongong) Pty Ltd v Federal Commissioner of Taxation (1981) 147 CLR 297
Morrell v Mercantile Mutual Insurance (Australia) Ltd [1999] WASCA 250; (1999) 21 WAR 451
Network Ten Pty Ltd v TCN Channel Nine Pty Ltd [2004] HCA 14; (2004) 218 CLR 273
News Ltd v Australian Rugby Football League (1996) 64 FCR 410
Rugs‑A‑Million (WA) Pty Ltd v Walker [2007] WASCA 23

BEECH J: The plaintiff is the developer of a high rise residential building that is yet to be constructed. It seeks declaratory orders in respect of the construction and operation of the Home Building Contracts (Home Indemnity Insurance Exemptions) Regulations 2002 (WA) (the Regulations). It is convenient to begin by setting out the relevant provisions of the Regulations.

The Regulations

Part 3A of the Home Building Contracts Act 1991 (WA) creates requirements for home indemnity insurance in respect of residential building work.
The Regulations create exemptions from those requirements. Relevantly, reg 4 to reg 8 are in the following terms:
4.Exemption from Part 3A of the Act - contracts entered into before building licence issued
(1)Residential building work for or in respect of a multi‑storey multi‑unit development for which a building licence is to be issued after these regulations commence is exempt from the requirements of Part 3A of the Act if, for each building contract or sale contract in respect of the building work that -
(a)the builder has entered into before the building licence is to be issued; and
(b)is in force at that time,
the builder has given a notice in the form set out in Schedule 1 Form 1 to the other party to the contract.
(2)If the builder does not give the notice to the other party to the contract before the contract is entered into and the other party is not a developer of the development, the other party (the 'purchaser') may rescind the contract.
(3)To rescind the contract, the purchaser must give notice of the exercise of the right to rescind to the builder, before the earlier of -
(a)the expiration of one month after the day on which the notice referred to in subregulation (1) is received by the purchaser; or
(b)settlement.
5.Exemption from Part 3A of the Act - no contracts entered into at the time building licence issued
Residential building work for or in respect of a multi‑storey multi‑unit development for which a building licence is to be issued after these regulations commence and for which there is no building contract or sale contract in respect of the building work that -
(a)the builder has entered into; and
(b)is in force at the time the building licence is to be issued,
is exempt from the requirements of Part 3A of the Act.
6.Exemption from Part 3A of the Act - contracts entered into after building licence issued
(1)The exemption under regulation 4 or 5 of particular residential building work ceases if, before entering into a building contract or sale contract in respect of the building work after the building licence for the building work is issued, the builder does not give a notice in the form set out in Schedule 1 Form 1 to the other party to the contract.
(2)Residential building work that is not exempt from Part 3A of the Act because of subregulation (1) becomes exempt again when the builder has given a notice in the form set out in Schedule 1 Form 1 to the other party to each contract referred to in subregulation (1) for which the builder did not give such a notice before entering into the contract.
(3)If the party to a contract referred to in subregulation (2) is not a developer of the development, the party (the 'purchaser') may rescind the contract.
(4)To rescind the contract, the purchaser must give notice of the exercise of the right to rescind to the builder, before the earlier of -
(a)the expiration of one month after the day on which the notice referred to in subregulation (1) is received by the purchaser; or
(b)settlement.
7.Giving a copy of the builder's notice to a purchaser ‑ developers
(1)This regulation applies to a developer of a multi‑storey multi‑unit development who is given a notice under regulation 4(1), or 6(1) or (2) (the 'builder's notice').
(2)After receiving the builder's notice, the developer must -
(a)before entering into a sale contract in respect of the development, give a copy of the builder's notice to the other party to the sale contract (the 'purchaser') if settlement is to occur within 6 years of practical completion of the building work in respect of which the builder's notice was given; and
(b)give a copy of the builder's notice to each person (each 'purchaser') with whom the developer has already entered into a sale contract in respect of the development, within 10 days after the day on which the developer received the builder's notice.
Penalty: $5 000.
(3)If the developer fails to comply with subregulation (2)(a) the purchaser may rescind the sale contract.
(4)A purchaser referred to in subregulation (2)(b) may rescind the sale contract unless the developer gave the purchaser a notice in the form set out in Schedule 1 Form 2 before the purchaser and the developer entered into the sale contract.
(5)A purchaser who may rescind a sale contract under subregulation (4) may not do so until the purchaser has received the copy of the builder's notice referred to in subregulation (2)(b) or the 10 days referred to in subregulation (2)(b) have elapsed.
(6)To rescind a sale contract, a purchaser must give notice of the exercise of the right to rescind to the developer, before the earlier of -
(a)the expiration of one month after the day upon which the purchaser received the copy of the builder's notice; or
(b)settlement.
7A. Giving a copy of the builder's notice to a purchaser - persons other than developers
(1)This regulation applies to a person, other than a developer, who is given a notice under regulation 4(1), or 6(1) or (2) (the 'builder's notice').
(2)After receiving the builder's notice, the person must, before entering into a sale contract in respect of the building work, give a copy of the builder's notice to the party to the sale contract if settlement is to occur within 6 years of practical completion of the building work in respect of which the builder's notice was given.
8.Form of notice of exercise of right to rescind
A purchaser may give notice of the exercise of the right to rescind to the builder or developer in the form set out at the end of Schedule 1 Form 1.
Forms 1 and 2 are in sch 1 of the Regulations. Although they are lengthy, it is convenient to set them out in full. That is because their contents are relevant to the proper construction of the regulations in issue in these proceedings. Forms 1 and 2 are in the following terms:
Form 1
[r. 4(1), 6(1) and (2)]
Home Building Contracts Act 1991
Home Building Contracts (Home Indemnity Insurance Exemptions) Regulations 2002
Builder's notice
Important notice about home indemnity insurance for multi storey multi unit developments
The development or dwelling unit concerned
1.This notice is about ..........................................................................
..........................................................................................................
[insert details of the development/dwelling unit]
Background to home indemnity insurance
2.The Home Building Contracts Act 1991 requires that the builder take out home indemnity insurance for residential building work costing over $20 000, unless there is an exemption.
3.Generally, home indemnity insurance covers the person for whom the builder is doing the work against financial loss if the builder is unable to complete the work or meet a valid claim for faulty workmanship because the builder has died, disappeared or become insolvent. The insurance also covers any other person obtaining the property from that person. In most cases the insurance policy must cover the construction period and the 6 years after practical completion of the building work.
4.Residential building work done under a cost plus contract is usually only insured for faulty workmanship.
Exemptions from the requirement to have insurance
5.Building work on multi‑storey multi‑unit developments is exempt from the requirement for the builder to take out home indemnity insurance, provided that the builder gives this notice in accordance with the Home Building Contracts (Home Indemnity Insurance Exemptions) Regulations 2002.
6.A person who receives this notice from the builder is required by the regulations to give a copy of it to any person who intends to purchase a unit in the development from that person, before they enter into a contract for the sale of the unit.
Why did you get this notice?
7.You have been given this notice, or a copy of it, because you may enter into a contract, or have a contract, with the person who gave you the notice. It is to notify you that the builder who is doing, or has done, the building work has not taken out home indemnity insurance for the building work.
8.That means that the person for whom the builder is doing, or has done, the building work (and any person obtaining the property from that person) is not insured against financial loss if the builder is unable to complete the work or meet a valid claim for faulty workmanship because the builder has died, disappeared or become insolvent.
You may have the right to rescind your contract to purchase a unit in the development
9.If you received this notice, or a copy of it, after you entered into the contract and you are not a developer of the development, you have a right to rescind the contract (in accordance with the regulations) unless you were given a developer's notice before you entered into the contract.
10.If you have a right to rescind the contract -
(a)you may end the contract;
(b)you have a right to get your deposit and any other payments made to the builder or developer with whom you have the contract towards the construction, alteration or purchase of the dwelling unit back from the builder or developer; and
(c)the builder or developer cannot recover from you any expenses incurred by them.
If you want to rescind the contract
11.If you want to rescind the contract you must give the builder or developer with whom you have the contract a 'Notice of exercise of right to rescind' before -
(a)the end of one month after the day on which you received this notice; or
(b)settlement,
which ever is the earlier.
The 'Notice of exercise of right to rescind' is set out below.
For example: you receive a copy of this notice on 21 June, the one month starts on 22 June and ends on 21 July. To exercise your right to rescind, the builder or developer must receive your Notice of exercise of right to rescind on or before 21 July, or before settlement if settlement is going to take place before the end of 21 July.
Other matters
12.Just because you have been given this notice, or a copy of it, does not necessarily mean that the person who gave it to you is at fault.
13.If you are in doubt about your rights, or you don't understand this notice, you should seek legal advice.
........................................................................................................................
Builder
Date ..........................................
I acknowledge that I have read this notice:
................................................................................................................
Person to whom the builder has given this notice
Date ..........................................
*I acknowledge that I have read this notice:
................................................................................................................
Person receiving this copy of the notice
Date ..........................................
*Complete or delete as necessary.
Notice of exercise of right to rescind
To ................................................................................................................
[name of builder or developer]
*I/We .................................................................................................[insert
name(s)] rescind the contract dated ............................ [insert date] for the
*construction/purchase of the ......................................................................
......................................................................................................................
[insert details of the development / unit(s)]
.................................................................................................................
Person rescinding the contract
Date ..................................
NB: You should make sure that you have some evidence of the time and date on which you sent or gave this notice.
*Complete or delete as necessary.
Form 2
[r. 7(4)]
Home Building Contracts Act 1991
Home Building Contracts (Home Indemnity Insurance Exemptions) Regulations 2002
Developer's notice
Important notice about home indemnity insurance for multi storey multi unit developments where a developer sells off the plan to a purchaser before engaging a builder
The development or dwelling unit concerned
1.This notice is about ..........................................................................
............................................................................................................
[insert details of the development/dwelling unit]
Background to home indemnity insurance
2.The Home Building Contracts Act 1991 requires that the builder take out home indemnity insurance for residential building work costing over $20 000, unless there is an exemption.
3.Generally, home indemnity insurance covers the person for whom the builder is doing the work against financial loss if the builder is unable to complete the work or meet a valid claim for faulty workmanship because the builder has died, disappeared or become insolvent. The insurance also covers any other person (in this case, you) obtaining the property from that person. In most cases the insurance policy must cover the construction period and the 6 years after practical completion of the building work.
Exemption from the requirement to have insurance
4.Building work on multi storey multi unit developments is exempt from the requirement for the builder to take out home indemnity insurance, provided that the builder of the development gives a notice (known as a builder's notice) to the person for whom the builder is doing the work. See the Home Building Contracts (Home Indemnity Insurance Exemptions) Regulations 2002.
5.Once the developer engages a builder and the builder has given the developer the builder's notice, the developer must give you a copy of the builder's notice within 10 days after receiving the notice.
Why did you get this notice?
6.This notice is to warn you that -
(a)the developer has not yet engaged a builder to carry out the building work for the development;
(b)it is likely that the builder will not take out home indemnity insurance for the building work; and
(c)you may not be in a position to assess the risk resulting from the builder not having home indemnity insurance for the building work (should that be the case).
7.If the builder does not have home indemnity insurance for the building work it means that -
(a)the developer; and
(b)you, as a person purchasing the property from the developer,
are not insured against financial loss if the builder is unable to meet a valid claim for faulty workmanship because the builder has died, disappeared or become insolvent.
8.If you are in doubt about your rights, or you don't understand this notice, you should seek legal advice or contact the Department of Consumer and Employment Protection Call Centre on 1300 30 40 54 (local call).
............................................................................................................
Developer
Date ..........................................
I acknowledge that I have read this notice:
...........................................................................................................
Person to whom the developer has given this notice
Date ..........................................

The facts

The plaintiff is the registered proprietor of land now contained in Certificate of Title vol 2230 folio 527, previously the whole of the land contained in Certificate of Title vol 2127 folio 75 (the Land).
The plaintiff is the nominee under a joint venture agreement made 27 July 2006. As nominee, the plaintiff is causing to be constructed on part of the Land, and pre‑sold, a residential multi‑storey multi‑unit strata lot development (the Development).
On 22 January 2008 a builder, John Holland Pty Ltd (the Builder), delivered to the plaintiff a notice of that date (the Builder's Notice), in the form set out in Sch 1 Form 1 of the Regulations. The words 'Lot 200 Mounts Bay Road, Capital Square Forward Works' were written in par 1 of the Builder's Notice in the place where Form 1 instructs the writer to 'insert details of the development/dwelling‑unit'.
On 8 February 2008, the City of Perth issued to the Builder a building licence in respect of the Forward Works for the Development. In substance, the Forward Works are in the nature of preliminary and preparatory works such as site retention, and do not include the construction of the building the subject of the Development.
On 14 March 2008 the Builder entered into a contract (the Building Contract) with the plaintiff for the Builder to perform the Forward Works as part of the Development.
Subsequent to receipt of the Builder's Notice, the plaintiff entered into contracts for the sale by the plaintiff of proposed strata lots in the development (the Sale Contracts). The plaintiff provided a copy of the Builder's Notice to each purchaser under the Sale Contracts. Each Sale Contract included a copy of the Builder's Notice.
The plaintiff has not given a Form 2 notice (under reg 7) in respect of the Sale Contracts the subject of these proceedings.

Application of the regulations to the events that have happened

Regulation 4 creates an exemption in respect of work for which a building licence is to be issued if, for each building contract or sale contract that the builder has entered into before the building licence is to be issued (and that is in force at the time), the builder has given a Form 1 notice. That regulation is not engaged in this case because the Builder had not entered into a building contract prior to the issue of the building licence. Further, the Builder had not entered into any sale contracts. (Sale contracts were and are, in this case, entered into by the developer, not by the Builder.)

Regulation 5 applies in this case. There was no building contract or sale contract that the Builder had entered into at the time of the issue of the licence. Accordingly, reg 5 is engaged and operates to create an exemption from the requirements of pt 3A in respect of the building work to be done for or in respect of the Development.
The effect of reg 6(1) is that the exemption under reg 5 ceases if, before entering into a building contract in respect of the building work after the building licence is issued, the builder did not give a notice in Form 1. In this case, the Builder gave the Builder's Notice on 22 January 2008. The building licence was issued on 8 February 2008. The notice was, therefore, given before the building licence was issued.
Accordingly, the exemption under reg 5 has not ceased by virtue of reg 6.
The giving of the notice under reg 6(1) by the Builder engaged reg 7: see reg 7(1). By reg 7(2)(a) the plaintiff, as the developer, was obliged to give a copy of the notice to any other party to a sales contract before entering into such agreement. The evidence before the court establishes that the plaintiff satisfied that requirement.
The matters set out under this heading of these reasons are not, as I understand it, in dispute. The controversy between the parties relates to the application of the Regulations in the future. I turn to identifying the issues between the parties.

The issues

The Building Contract relates, as I have said, to the Forward Works for the Development. Accordingly, one or more further building contracts will be necessary for the construction of the building the subject of the Development. Similarly, the building licence that has been issued relates to the Forward Works. One or more further building licences will be required in respect of future construction works for the Development.
It is those facts which give rise to the primary issue between the parties. The question is whether any further builder's notice in Form 1 will be required to be given by the builder in order to avoid the cessation under reg 6(1) of the exemption from the requirements for indemnity insurance.
That issue has arisen in the following way.
The defendant is, in effect, a financier of the Development. The defendant's solicitors have reviewed the status of the Sale Contracts, including whether any purchaser may have a right to rescind those contracts. In that context, the defendant contends that the position is as follows:
1.When a further building licence is obtained, reg 6(1) will operate to mean that the exemption of the Development from indemnity insurance will cease unless a new Form 1 notice is given by the builder prior to entering into a further building contract in respect of work the subject of the further building licence that is to be issued;
2.When a new Form 1 notice is given by the builder to the plaintiff, the plaintiff will be obliged by reg 7(2)(b) to give a copy of that notice to each of the purchasers under the Sale Contracts, in that those purchasers will be persons with whom the plaintiff has already entered into a Sale Contract in respect of the Development;
3.The purchasers under the Sale Contracts will, in those circumstances, be within the class of 'a purchaser referred to in subregulation 7(2)(b)';
4.Accordingly, upon the giving of a further Form 1 notice by the plaintiff to a purchaser under the Sale Contract, reg 7(4) will operate to give such purchasers a right to rescind the Sale Contract (given that purchasers under the Sale Contracts were not given notice in Sch 1 Form 2 in this case).
The plaintiff disagrees with all of those propositions. However, the subject matter of the declarations sought by the plaintiff is limited to the first of those propositions. No declarations are sought in relation to the operation or effect of reg 7. The plaintiff recognises that were such declarations to be sought, issues would arise as to whether the purchasers under the Sale Contracts were necessary parties (as to which see News Ltd v Australian Rugby Football League (1996) 64 FCR 410, 525; Morrell v Mercantile Mutual Insurance (Australia) Ltd [1999] WASCA 250; (1999) 21 WAR 451 [14] ‑ [16]).
The primary dispute is, as I have said, whether, upon the issue of a further building licence for the Development, a further Form 1 notice must be given by the builder to avoid cessation of the indemnity insurance exemption under reg 6 of the Regulations. I begin with an outline of principles relevant to statutory construction.

Statutory construction - general principles

In Rugs‑A‑Million (WA) Pty Ltd v Walker [2007] WASCA 23 [34], the Court of Appeal summarised the general principles of statutory construction in the following way:
The proper principles of construction are not in dispute. The court must begin by looking at the language of the statute rather than secondary sources or materials: Weiss v The Queen (2005) 80 ALJR 444 [31]. The primary object of all statutory construction is to construe the relevant provision so that it is consistent with the language and purpose of all the provisions of the statute. The duty of the court is to give the words of a statute the meaning that the legislature is taken to have intended them to have. The grammatical meaning of a statute may on occasions be ambiguous, but ordinarily the legal meaning will correspond with the grammatical meaning of the provision. In determining the grammatical meaning, due consideration must be given to the context, the general purpose and the policy of the provision: Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 [69] and [78]; Commissioners for Railways (NSW) v Agalianos (1955) 92 CLR 390 at 397, cited in Blue Sky at [69].
In Network Ten Pty Ltd v TCN Channel Nine Pty Ltd [2004] HCA 14; (2004) 218 CLR 273 [11] McHugh ACJ, Gummow and Hayne JJ restated the following principles of statutory interpretation, by reference to earlier authorities:
In Newcastle City Council v GIO General Ltd (1997) 191 CLR 85, 112, McHugh J observed:
'[A] court is permitted to have regard to the words used by the legislature in their legal and historical context and, in appropriate cases, to give them a meaning that will give effect to any purpose of the legislation that can be deduced from that context.'
His Honour went on to refer to what had been said in the joint judgment in CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384. There, Brennan CJ, Dawson, Toohey and Gummow JJ said (408):
'It is well settled that at common law, apart from any reliance upon s 15AB of the Acts Interpretation Act 1901 (Cth), the court may have regard to reports of law reform bodies to ascertain the mischief which a statute is intended to cure. Moreover, the modern approach to statutory interpretation (a) insists that the context be considered in the first instance, not merely at some later stage when ambiguity might be thought to arise, and (b) uses "context" in its widest sense to include such things as the existing state of the law and the mischief which, by legitimate means such as those just mentioned, one may discern the statute was intended to remedy. Instances of general words in a statute being so constrained by their context are numerous. In particular, as McHugh JA pointed out in Isherwood v Butler Pollnow Pty Ltd [1986] 6 NSWLR 363, 388, if the apparently plain words of a provision are read in the light of the mischief which the statute was designed to overcome and of the objects of the legislation, they may wear a very different appearance. Further, inconvenience or improbability of result may assist the court in preferring to the literal meaning an alternative construction which, by the steps identified above, is reasonably open and more closely conforms to the legislative intent.' (footnotes omitted)
In the passage from CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384, 408, set out above, Brennan CJ, Dawson, Toohey and Gummow JJ cited with approval the reasons of Mason and Wilson JJ in Cooper Brookes (Wollongong) Pty Ltd v Federal Commissioner of Taxation (1981) 147 CLR 297, 320 ‑ 321, where their Honours said:
If the judge applies the literal rule it is because it gives emphasis to the factor which in the particular case he thinks is decisive. When he considers that the statute admits of no reasonable alternative construction it is because (a) the language is intractable or (b) although the language is not intractable, the operation of the statute, read literally, is not such as to indicate that it could not have been intended by the legislature.
[T]he propriety of departing from the literal interpretation is not confined to situations described by these labels [namely absurd, extraordinary, capricious, irrational or obscure]. It extends to any situation in which for good reason the operation of the statute on a literal reading does not conform to the legislative intent as ascertained from the provisions of the statute, including the policy which may be discerned from those provisions.
Thus while the language of the statute is the starting point, in construing a statute consideration is also to be given to context, object, and inconvenience or improbability of result.

The proper construction of reg 6

The question of construction of reg 6(1) arises when (as has occurred in the present case):
(a)a building licence covers only part of the work the subject of a development;
(b)the builder gives a Form 1 notice (as required by reg 6(1)) to the developer and then enters into a building contract with the developer;
(c)the developer enters into sale contracts after receiving the Form 1 notice from the builder; and
(d)subsequently:
(i)the builder obtains a second or subsequent builder's licence so as to complete the work the subject of the development; and
(ii)the builder enters into a second (or subsequent) building contract in respect of the further work to complete the development.
The question of construction of reg 6 is whether, in those circumstances, the builder is required to give a second Form 1 notice in order to avoid cessation, by operation of reg 6, of the insurance exemption.
The language of reg 6 is capable of being read in the way contended for by the defendant. In particular, the phrase 'a building contract' in reg 6(1) might be read as meaning, in effect, 'any building contract'. On that reading, every time that the builder enters into a building contract after the building licence for building work is issued, the exemption is in jeopardy of cessation unless the builder gives a notice in Form 1.
However, for reasons to be developed, when reg 6(1) is read in the context of the whole of the Regulations, including Form 1 and Form 2, and when considerations of context, purpose and inconvenience or improbability of result are taken into account, reg 6 should not be construed in the way contended by the defendant. Rather, in my opinion, on a proper construction, reg 6(1) does not apply in the circumstances postulated in [28] to second and subsequent building licences in respect of a development. The reasons for that opinion are as follows.
I begin with textual considerations.
As I have said, reg 5 applies in this case and operates to create an exemption from the requirements of pt 3 of the Home Building Contracts Act in respect of the building work to be done for or in respect of the Development. It is to be noticed that the exemption created by reg 5 is not limited to the building work the subject of the building licence. Rather, the scope of the exemption is for building work 'for or in respect of' the Development. Thus, in effect, reg 5 operates to create an exemption for the whole of the work the subject of the Development.
Regulation 6(1), when it applies, places an existing exemption (under reg 4 or reg 5) in jeopardy unless the builder gives a notice in the form of Form 1. It is instructive to consider the contents of Form 1 set out in sch 1 to the Regulations.
In par 1 of Form 1, the writer is invited to 'insert details of the development/dwelling unit'. As the plaintiff points out, the form does not contemplate the insertion of details about the aspect of the construction work the subject of the development. Rather, details are to be inserted so as to identify the development and nothing more.
The contents of par 5 of Form 1 must be viewed in that light. Paragraph 5 states that 'building work on multi‑storey multi‑unit developments is exempt from the requirement for the builder to take out home indemnity insurance, provided that the builder gives this notice …' (my emphasis). Thus the substance of what is communicated by par 5 of Form 1 is that upon the giving of the notice, the builder is exempt from home indemnity insurance requirements. The terms of the notice are, therefore, not consistent with a construction of reg 6(1) as requiring the giving of further notices (in the form of Form 1) to avoid the cessation of the exemption.
Paragraph 7 of Form 1 states that the notice is 'to notify you that the builder who is doing or has done the building work has not taken out home indemnity insurance for the building work'. I will return to the significance of that paragraph of Form 1 shortly.
The consequences of the defendant's construction of reg 6 can be tested by reference to the position of any developer wishing to enter into sale contracts in circumstances where the initial building licence extends to only part of the work necessary to complete the development. As I will explain, the defendant's construction would mean that a developer in such circumstances must give a prospective purchaser notice in accordance with Form 1, and also notice in accordance with Form 2, in order to avoid any sale contract being susceptible of rescission by the purchaser under reg 7. The need for the developer to give notice in Form 1 arises by operation of reg 7(2)(a), as I have already explained. The need for the developer to give notice in accordance with Form 2 arises by operation of reg 7(2)(b) in the following way.
In the postulated circumstances, it is (assuming the development proceeds to completion) inevitable that a second building licence will be obtained by the builder. When that occurs, the builder would (on the defendant's construction) give notice in Form 1 to the developer before entering into the building contract relating to the work the subject of the second building licence. When the developer receives the second Form 1 from the builder, the developer would then be obliged by reg 7(2)(b) to give a copy of the builder's notice to the purchasers under sale contracts which had been entered into earlier. That in turn would mean that those purchasers were purchasers 'referred to in' reg 7(2)(b), and so were entitled by reg 7(4) to rescind the sale contracts unless they had been given a Form 2 notice prior to entering into the sale contract. Thus, a developer would, in the postulated circumstances, need to give a prospective purchaser a Form 2 notice before entering into a sale contract in order to avoid the purchaser having the right to rescind when, as is inevitable, the second building licence is issued.
A construction of the regulations that requires a developer to give a prospective purchaser both a Form 1 and a Form 2 would be absurd. The language of Form 2 makes clear that it is apposite to the situation where the developer has not engaged the builder. Indeed, that is expressly stated in par 6 of Form 2. As I have said, par 7 of Form 1 refers to the builder 'who is doing or has done' the work. A prospective purchaser who received both a Form 1 and a Form 2 from a developer would be in a state of confusion.
Finally, a construction of reg 6(1) as requiring, in effect, a further Form 1 for second and subsequent building licences in respect of a given development would not advance the evident purpose of reg 6 and pt 2 of the Regulations. In the course of the second reading speech, the responsible Minister the Hon Mr J Kobelke identified the reason for the need for an exemption in respect of multi‑unit high rise developments from the home indemnity insurance scheme. Because insurers had indicated that they were leaving the market it was said to be untenable to require an insurance policy that was not available in the market. The Minister stated that an exemption applies provided that the builder gives the purchaser a disclosure notice that clearly informs them of the absence of home indemnity insurance cover. The purpose of the provision is, in my opinion, achieved by the giving of one notice. The giving of a second or further notice would not better inform the purchaser.
The defendant pointed out that there is no guarantee that the same builder would be engaged to perform the construction works the subject of the development. That meant, the defendant submitted, that a purchaser might be misled by the identification, in the Builder's Notice given in this case, of John Holland Pty Ltd as the builder. In my opinion, there is no substance in that submission. As the plaintiff submitted, Form 2 does not identify the builder.
For these reasons, in my opinion, reg 6(1) does not, in the circumstances postulated in [28], require a builder to give multiple Form 1 notices in respect of a particular development.

Declarations sought by the plaintiff

The plaintiff sought declarations in the following terms:
1.Upon the plaintiff receiving on 22 January 2008 the Form 1 notice under the Home Building Contracts (Home Indemnity Insurance Exemptions) Regulations 2002 (WA) from John Holland Pty Ltd, the building work required for the construction of a multi‑storey multi‑unit development on the land contained in Certificate of Title vol 2230 folio 527 was and remains exempt from the requirements of pt 3A of the Home Building Contracts Act 1991(WA).
2.No further Form 1 notice in respect of the Development is required to be given by the builder in order to preserve the exemption referred to in par 1.
Declaratory orders in those terms reflect the conclusions I have reached on the proper construction of reg 6(1). That construction was in controversy between the plaintiff and defendant and its resolution has foreseeable consequences for both of the parties. That being so, it seems to me to be appropriate to make the declarations sought (see Ainsworth v Criminal Justice Commission (1992) 175 CLR 564).

Conclusion

For the reasons I have given, I would grant the declaratory orders sought by the plaintiff.