Vivekananda (in his capacity as Executor of the Estate of Jayammal Vivekananda) v Insurance Australia Ltd t/as NRMA Insurance
[2014] FCAFC 116
•26 August 2014
FEDERAL COURT OF AUSTRALIA
Vivekananda (in his capacity as Executor of the Estate of Jayammal Vivekananda) v Insurance Australia Ltd t/as NRMA Insurance [2014]
FCAFC 116
Citation: Vivekananda (in his capacity as Executor of the Estate of Jayammal Vivekananda) v Insurance Australia Ltd t/as NRMA Insurance [2014] FCAFC 116 Appeal from: Vivekananda v Insurance Australia Ltd t/as NRMA Insurance [2014] FCA 161 Parties: RAVICHANDRA VIVEKANANDA (IN HIS CAPACITY AS EXECUTOR OF THE ESTATE OF JAYAMMAL VIVEKANANDA) v INSURANCE AUSTRALIA LTD T/AS NRMA INSURANCE (ACN 000 016 722) File number: ACD 17 of 2014 Judges: JACOBSON, GORDON AND BEACH JJ Date of judgment: 26 August 2014 Catchwords: INSURANCE — home building insurance policy — residential dwelling damaged by fire — ambit of cover — separate question to the determination of cover — whether the building works required constituted a “substantial alteration” — statutory interpretation — proper construction of s 29 of the Building Act 2004 (ACT) and s 23 of the Building (General) Regulation 2008 (ACT) Legislation: Building Act 2004 (ACT) ss 3, 6(1), 7(1), 8(1), 26(1), 28, 29, 136(2) and Dictionary
Legislation Act 2001 (ACT) ss 5, 6, 126(4), 132(1), 136, 138, 139(1), 141 and 142
Building (General) Regulation 2008 (ACT) s 23
Building Code of Australia cl A3.2Cases cited: Carr v Western Australia (2007) 232 CLR 138 Date of hearing: 26 August 2014 Date of publication of reasons:
5 September 2014 Place: Canberra Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 37 Counsel for the Appellant: Mr Williams SC Solicitors for the Appellant: Snedden Hall & Gallop Lawyers Counsel for the Respondent: Mr Donaldson SC with Mr Carolan Solicitors for the Respondent: William Roberts Lawyers
IN THE FEDERAL COURT OF AUSTRALIA
AUSTRALIAN CAPITAL TERRITORY DISTRICT REGISTRY
GENERAL DIVISION
ACD 17 of 2014
ON APPEAL FROM THE FEDERAL COURT OF AUSTRALIA
BETWEEN: RAVICHANDRA VIVEKANANDA (IN HIS CAPACITY AS EXECUTOR OF THE ESTATE OF JAYAMMAL VIVEKANANDA)
AppellantAND: INSURANCE AUSTRALIA LTD T/AS NRMA INSURANCE (ACN 000 016 722)
Respondent
JUDGES:
JACOBSON, GORDON AND BEACH JJ
DATE OF ORDER:
26 AUGUST 2014
WHERE MADE:
CANBERRA
THE COURT ORDERS THAT:
1.The Trial Judge’s answer to the first question be set aside.
2.The matter be referred to mediation before a Court appointed mediator, to take place on or by 2 September 2014, or such later date as may be convenient to the Court.
3.The Respondent is to pay the Appellant the costs of the appeal.
Note:Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
IN THE FEDERAL COURT OF AUSTRALIA
AUSTRALIAN CAPITAL TERRITORY DISTRICT REGISTRY
GENERAL DIVISION
ACD 17 of 2014
ON APPEAL FROM THE FEDERAL COURT OF AUSTRALIA
BETWEEN: RAVICHANDRA VIVEKANANDA (IN HIS CAPACITY AS EXECUTOR OF THE ESTATE OF JAYAMMAL VIVEKANANDA)
AppellantAND: INSURANCE AUSTRALIA LTD T/AS NRMA INSURANCE (ACN 000 016 722)
Respondent
JUDGES:
JACOBSON, GORDON AND BEACH JJ
DATE:
26 AUGUST 2014
PLACE:
CANBERRA
REASONS FOR JUDGMENT
THE COURT:
This is an appeal from a determination made by Foster J on 28 February 2014. His Honour answered two questions with respect to a policy of insurance provided by the respondent covering a house on premises known as 6 Macrobertson Street, Mawson ACT (the house). His Honour had previously ordered that these questions be tried separately and before all other questions arising in the proceeding.
The original applicant below, Jayammal Vivekananda (Mrs Vivekananda), previously resided at the house. The house comprised a single storey, five bedroom, brick residence which had been constructed in 1967 and then undergone significant extensions in 1986 and 2007. On 24 July 2011 the house was severely damaged by a fire. The house was insured with the respondent under a Home@50 Buildings Policy No HOM 217 404 740, which had been renewed on 19 December 2010 until 19 December 2011 (the policy). Under the policy, the applicant was insured against loss or damage caused to the house by one or more specified events occurring during the period in which the policy was in force. One specified event was fire. The sum insured was $956,776. As a result of the fire, Mrs Vivekananda made a claim under the policy in respect of the damage sustained to the house. An issue arose between Mrs Vivekananda and the respondent concerning the ambit of the cover provided by the policy.
On 11 November 2011, Mrs Vivekananda filed an originating application in this Court claiming indemnity under the policy in respect of the damage caused to the house by the fire. She also claimed damages against the respondent for breach of the terms of the contract of insurance embodied in the policy. Mrs Vivekananda died on 13 July 2012 and her cause of action against the respondent vested in her estate. The present appellant, being her son and the sole executor of her estate, was substituted as the applicant below.
One issue that arose in the proceeding concerned whether the respondent was obliged to indemnify the insured for such amount as would be required to demolish and rebuild the entire house, including its footings, so that the rebuilt house complied with the current requirements of the Building Code of Australia (Building Code), or whether upon the true construction of the policy the respondent’s obligation to indemnify only extended to the cost of reinstating the house to its configuration and condition immediately prior to the fire. That issue in part depended upon a consideration of the relevant provisions of the Building Act 2004 (ACT) (the Act) and the Building (General) Regulation 2008 (ACT) (the Regulation), in addition to also construing the terms of the policy.
It was common ground that as a result of the fire the entire roof of the house had to be demolished and replaced; other works were also required. If such works constituted a “substantial alteration” under s 29(1)(a) of the Act as illuminated by s 23 of the Regulation, then the entirety of the house as repaired and reinstated had to comply with the current Building Code. But because the original and later footings of the house were not so compliant, then to achieve compliance the house had to be demolished and rebuilt, including the undamaged portions. And if that was the case, the question arose as to whether the policy covered the entirety of such replacement, including the replacement of essentially undamaged sections.
Given the significance of these issues, his Honour on 19 December 2012 ordered that two separate questions be identified and answered before all other questions arising in the proceeding. His Honour ordered that:
…the following questions arising in the proceeding be heard separately from and before all other questions arising in the proceeding:
(a) Question 1 – The substantial alteration question
In circumstances where the residential premises more particularly described in paragraph 1 of Schedule 1 hereto (the insured building) were damaged by fire on 24 July 2011 necessitating, amongst other things, the demolition and replacement of the entire roof of the insured building and the other works specified in the respondent’s reinstatement “Scope of Works” document which is more particularly described in paragraph 3 of Schedule 1 hereto, does such building work amount to a substantial alteration as defined in and for the purposes of the Building Act 2004 (ACT) and the Building (General) Regulation 2008 (ACT), with the consequence that the insured building, including its concrete footings, must be entirely rebuilt so as to comply with the current requirements of the Building Code of Australia”?
(b) Question 2 – The indemnity question
If the answer to Question 1 is “Yes”, does the indemnity provided to the applicant under the policy of insurance described in Schedule 1 hereto extend to cover the cost of rebuilding so as to make the rebuilt building comply with the current requirements of the Building Code of Australia?
The trial of these separate questions was heard on 7 February 2013. On 28 February 2014 his Honour answered the first question “no” and the second question “this question need not be answered as it does not arise”.
On 26 March 2014, Nicholas J granted leave to appeal his Honour’s determination. By an amended notice of appeal filed on 9 April 2014, the appellant asserted 9 grounds of appeal in relation to his Honour’s determination. Ground 1 provided as follows:
“(1)His Honour erred in construing the Building Act 2004 and the Regulations under the Act so as to find that a substantial alteration referred to in Regulation 23(1) occurred only when there was an enlargement of the floor area of more than 50%”.
When the appeal came on for hearing, it became clear to us during the course of argument that the principal complaint was embodied in ground 1. The Court raised with the parties whether there would be utility in dealing with ground 1 only. The parties indicated that there would be utility in this course. Accordingly, argument on the appeal was confined to ground 1. The Court heard argument on that ground and then announced its decision, upholding the appeal and setting aside his Honour’s answer to question 1 with reasons to be published later. We now set out our reasons.
Relevant legislative provisions
Ground 1 of the notice of appeal raises a question as to the proper construction of the Act and the Regulation. It is convenient to set out the relevant provisions.
Division 3.3 of Pt 3 of the Act sets out detailed provisions dealing with the obtaining of building approvals for building work. Relevant to Pt 3 are various definitions. Under s 6(1), “building work” is defined:
6 Meaning of building work
(1) In this Act:
building work means—
(a)work in relation to the erection, alteration or demolition of a building, and includes disposal of waste materials generated—
(i)by the alteration of a building other than a building excluded under the regulations; or
(ii)by the demolition of a building (but not part of the building); or
(b) work in relation to repairs of a structural nature to a building.
…In s 7(1), “building” is defined:
7 Meaning of building
(1) In this Act:
building includes—
(a) a structure on or attached to land; and
(b) an addition to a building; and
(c) a structure attached to a building; and
(d) fixtures; and
(e) part of a building, whether the building is completed or not.
…Under s 8(1), “structure” is defined:
8 Meaning of structure
(1) In this Act:
structure includes—
(a)a fence, retaining wall, swimming pool, ornamental pond, mast, antenna, aerial, advertising device, notice or sign; and
(b) a thing prescribed under the regulations as a structure.
…Under s 26(1), an owner of land may apply to a certifier for a building approval for building work. Section 28 provides for the issuing of building approvals with the provision of a building approval certificate by the certifier.
Section 29 sets out various requirements in terms of approvals. It provides:
29 Approval requirements
(1) Each of the following is an approval requirement for plans:
(a)if the plans are for the substantial alteration of a building—the building as altered will comply with this Act and the building code;
Note 1 Substantial alteration—see s (2).
Note2 A reference to an Act includes a reference to the statutory
instruments made or in force under the Act, including regulations and the building code (see Legislation Act, s 104).
(b)if the plans are for the erection or alteration of a building—the building, if erected or altered in accordance with the plans, will comply with this Act;
(c)if the plans are for the demolition of a building—demolition in accordance with the plans will comply with this Act;
…
(2) A regulation may declare that—
(a) an alteration of a building is or is not a substantial alteration; or
(b)a part of a building (the unaltered part) that has not been altered need not comply with the building code despite subsection (1) (a).
(3) For subsection (1)—
(a)a building or a building as altered does not fail to comply with this Act only because the plans for the building or alteration contain something to which the building code does not apply; and
(b)a building product, construction method, design, component or system connected with a building is taken to comply with the building code if the product, method, design, component or system complies with a recognised standard.
…
Subsection(2) deals with the concept of “substantial alteration” by reference to what is declared in the Regulation. In the Dictionary to the Act, which forms part of the Act pursuant to s 3, there is a definition for “alteration” which provides:
alteration, of a building, includes—
(a) demolition of part of the building; and
(b) an addition to the building.There is no definition in the Act of “substantial alteration”.
Section 23 of the Regulation provides:
23 Substantial alteration—Act, s 29 (2) (a)
(1)An alteration of a building is a substantial alteration if, during the 3 years immediately before the day the application for building approval for the alteration is made—
(a)for a class 1 building—the total floor area of the proposed alteration, not including any internal alteration, is more than 50% of the floor area of the original building; and
(b)for a class 2, 3, 4, 5, 6, 7, 8 or 9 building—the total floor area of the proposed alteration, including any other alteration, is more than 50% of the floor area of the original building.
(2)However, neither refitting a building nor replacing the internal elements of the building is an alteration of the building unless the layout and function of the internal spaces of the building are changed.
(3) In this section:
floor area, of a building, means the area of floor measured from the outer walls of the building, and includes the area on each storey of the building if there is more than 1 storey.
Examples—effect of s 23
1The floor area of a house is extended by 51%. The whole house must comply with the Act and the building code, not just the extension (see s (1) (a)), other than the parts of the building code that do not apply to the unaltered part of the house because of s 24.
2A 40m2 sunroom is added to a building, adding only 10% floor area to the building. The sunroom must comply with the Act and the building code, but the rest of the building need not comply if no other floor area has been altered in the previous 3 years (see s (1) (a)).
3A variety store and retail book shop (a class 6 building) are separated by a common wall in a shopping mall. The wall is removed to create a single larger room.
If the room were to be used mainly for class 6 retailing, the only alteration is of an internal element, and the only alteration to the floor area is the addition of the floor area that was occupied by the wall.
However, the room is converted for use as a carwash (making the building a class 8 building). Because of the change in function, the total floor area of the 2 shops and the floor area that was occupied by the wall have been altered for this section. The altered floor area is the floor area of the carwash. In the previous 3 years, other floor area alterations have taken place in the mall. These add up to 49.5% of the mall’s total floor area on all levels. The floor area alteration to create the carwash area takes the total to 50.1%. The whole mall must comply with the Act and the building code, not just the carwash.4A warehouse has no internal walls. A wall is built to divide the warehouse into 2 spaces. This does not amount to a substantial alteration if both of the divided spaces continue to function as warehouse space.
However, if 1 of the divided spaces is to be used as a retail sales room, for this section the floor area of the space has been altered. If the floor area of the sales room and the area occupied by the wall is more than 50% of the total floor area of the warehouse, the change amounts to a substantial alteration and all of the warehouse must comply with the Act and building code.
5A building contains a nightclub where a fire sprinkler system was installed 1 year ago. Plans now propose to upgrade the airconditioning system and floor coverings throughout the building. As the work does not alter the floor area or function of the building it would not amount to a substantial alteration.
NoteAn example is part of the regulation, is not exhaustive and may extend, but does not limit, the meaning of the provision in which it appears (see Legislation Act, s 126 and s 132).
There is a Dictionary contained in the Regulation, but it contains nothing of significance to the present issues. There is a definition for “class” in the Act, which is defined to mean “the class of building under the Building Code”. That definition also applies to the Regulation.
Section 126(4) of the Legislation Act 2001 (ACT) (Legislation Act) provides that an example or diagram in an Act or statutory instrument is part of that Act or instrument. Therefore, the examples set out at the foot of s 23 form part of the Regulation. Section 132(1) of the Legislation Act provides that an example in an Act or statutory instrument is not to be taken to be exhaustive, and “may extend, but does not limit, the meaning of the Act or instrument, or the particular provision to which it relates”. One of the issues of construction that arises in relation to s 23 of the Regulation is informed by the text of the examples given to s 23 and what can be gleaned therefrom. For completeness, we note that both s 126 and 132 of the Legislation Act are “determinative provisions” (s 5(2)) and may only be displaced expressly or by a “manifest contrary intention” (s 6(2)) in the Regulation; the Regulation has not displaced them.
His Honour’s consideration of “substantial alteration”
The context of his Honour’s consideration of the Act and the Regulation, and our consideration, is the following. As a result of the fire, the entire roof of the house had to be demolished and replaced. The house also sustained other significant damage. Mr Dossetor, an engineer engaged by the respondent, gave a report about the fire damage to the house and the reinstatement works required. His Honour conveniently summarised Mr Dossetor’s opinion at [24]-[26] of his reasons, which we set out:
THE FIRE DAMAGE AND ITS IMPACT
24According to Mr Dossetor, the fire appears to have originated in or near the Dining Room in the house. He observed that:
(a)The roof of the house has been completely destroyed and must be completely rebuilt.
(b)Part of the roof being that part which is over the northern side of the house remains in place. That part of the roof is, to some extent, protecting the rooms beneath from further weather damage.
(c)Part of the roof has collapsed into the rooms at the front of the house – the Lounge Room, the Dining Room, the Entry Hall, the Kitchen and the Family Room. This has caused significant damage to those areas.
(d)The external walls of the house were not structurally damaged by the fire.
(e)The internal walls have been extensively damaged. This damage is not structural.
(f)The hardwood floor of the Dining Room is damaged and will have to be demolished and replaced. The concrete floors are undamaged. There is damage to the tiles in the tiled areas.
(g) Most of the fixtures and fittings in the house have been destroyed.
25 Mr Dossetor recommended the following reinstatement work:
▪Removal of fire debris and the demolition and reconstruction of the roof. This work requires the demolition of the whole of the roof including cladding, insulation, framing and trusses.
▪The reconstruction of the severely damaged front and southern wings of the house.
▪ The repair of the northern wing of the house.
▪The reinstatement of all wet areas, cladding, joinery, finishes, fittings and appliances.
26These works are more particularly described in the Scope of Works document. I shall refer to these works as the reinstatement works. They do not involve the demolition and rebuilding of the entire house. Mr Dossetor noted in his report that the reinstatement works would need to be approved by the ACT Government under the Act and under the regulation.
The appellant contended below that the fire damage and the minimum work required under Mr Dossetor’s Scope of Works was to more than 50% of the floor area of the house. Accordingly, it was submitted to his Honour that the reinstatement works constituted a “substantial alteration” within the meaning of s 29 of the Act such that the house as reinstated would have to comply in its entirety with the current provisions of the Building Code and the Act. Given that the footings of the house, particularly the original ones used in the 1960s (and also as used in the extensions in 1986), do not now comply with the current provisions of the Building Code, the appellant contended that in order to reinstate the house to now be compliant with the Building Code, the entire house would have to be demolished and replaced.
The key question is whether the works required constituted a “substantial alteration”. That issue depended upon the proper construction of s 29 of the Act and s 23 of the Regulation. His Honour at [74]‑[81] concluded that the reinstatement works relating to the roof and other alterations did not constitute a “substantial alteration”. His Honour also held that the reinstatement works other than the demolition and reconstruction of the roof did not constitute a “substantial alteration” (see [55], [56] and [81]).
His Honour’s principal reason as to why the relevant works did not involve a substantial alteration was based on the view he took concerning the proper construction of s 23 of the Regulation. At [74] his Honour observed:
74In my judgment, s 23(1) is directed to enlargements of the floor area of the building by the enlargement of the building envelope or by the addition of an extra storey. The subsection is not directed to the replacement of an existing roof structure across an existing building envelope.
In summary, his Honour concluded that s 23(1)(a) was directed to alterations that increased the floor area by enlarging the building envelope or adding an extra storey. His Honour concluded that if the alterations did not fit within that category then it could not be said that there was a substantial alteration under s 23(1)(a). On that basis, his Honour concluded that putting in a new roof that might have covered the entirety of the floor area of the building could not constitute a “substantial alteration” as it did not enlarge the floor area because it did not increase the building envelope or involve the addition of a new floor. Ground 1 of the appellant’s notice of appeal challenges his Honour’s construction of s 23(1)(a).
Before proceeding further, there is a preliminary matter that should be noted. In terms of determining what would constitute a “substantial alteration”, both the parties and his Honour principally confined their attention to s 23(1)(a). Now s 29(2)(a) of the Act stipulates that a regulation may declare what is or is not a “substantial alteration”. But it does not expressly say that if a regulation stipulates what is a substantial alteration that such a stipulation is exhaustive of the possibilities. Moreover, s 23(1) does not purport to be exhaustive. It states “(a)n alteration of a building is a substantial alteration if…”. It does not use the language “if and only if”. Theoretically then, it may be open to argue that s 23(1) is not exhaustive of the possibilities. But as the parties have confined their attention to the ambit of s 23(1), we are content to proceed on that basis.
The proper construction of s 23 of the Regulation
We considered, and the parties agreed, that there would be utility in dealing first with the proper construction of s 23(1)(a). In our opinion, and taking into account his Honour’s views, we have arrived at a different view to the learned trial judge in terms of the proper construction of that section. In our opinion, s 23(1)(a) does not necessarily require, for the relevant works to be a “substantial alteration”, that there be an increase to the building envelope or the addition of a new floor. Section 23(1)(a) is not confined to enlargements of floor area.
Before dealing with the specific reasons that support our construction, something should be said about the structure of s 23(1) of the Regulation. The section makes a distinction between a “class 1 building” (s 23(1)(a)) and a “class 2, 3, 4, 5, 6, 7, 8 or 9 building” (s 23(1)(b)). It is common ground that the house is a class 1 building — see cl A3.2 of the Building Code, which essentially embraces, inter alia, single dwelling detached houses; classes 2-9 embrace, inter alia, commercial, public, industrial and some residential buildings. Further, s 23(1) uses identical expressions for both limbs (a) and (b) in terms of “alteration” and “total floor area of the proposed alteration”. In terms of “working out the meaning” of s 23(1) (ss 136, 138, 139(1) and 140 of the Legislation Act), there is no reason not to give such expressions a similar meaning in the context of each limb given their consistent use. Turning then to our reasons as to why we have taken a different view to the learned trial judge, these can be stated shortly.
First, the words “total floor area of the proposed alteration” in s 23(1)(a) do not on their face require an increase in the total floor area as compared with the floor area of the original building. Rather, what is required is a comparison of the “total floor area of the proposed alteration” as compared with the “floor area of the original building”. No doubt a proposed alteration involving an extension or an additional floor would involve an increase in the total floor area as compared with the original building. But that is not what is necessarily required.
The “total floor area of the proposed alteration” could be entirely within the building envelope or floor area of the original building and still fall within the language and natural meaning of the words used. So, for example, if the floor area of the original building was 200m2, and 60% of that same 200m2 involved a proposed alteration, the literal wording “the total floor area of the proposed alteration … is more than 50% of the floor area of the original building” would be satisfied. In other words, no increase to the original floor area is required. We have put to one side, for the moment, the operation of the carve out “not including any internal alteration”.
Second, this view that no increase to the building area is required is confirmed by s 23(2). This subsection applies to both subparagraphs (a) and (b) of s 23(1). Section 23(2) applies to both “refitting” and “replacing the internal elements of the building”. If it simply applied to “internal elements” only, one might query its relevance to s 23(1)(a), which in any event already excludes internal alterations. But it also refers to refitting. Moreover, on its face s 23(2) is not expressed to apply to s 23(1)(b) only.
Given that s 23(2) applies to s 23(1)(a), it points against a construction of “the total floor area of the proposed alteration” that is limited to an increase to the floor area. Section 23(2) treats as an “alteration” for the purposes of s 23(1)(a) a “refitting” if the “layout and function of the internal spaces of the building are changed”. But such a refitting may not increase the floor area. Yet it is to be treated as an “alteration” in the phrase “total floor area of the proposed alteration”. Further, s 23(2) treats as an “alteration” for the purposes of s 23(1)(a) “replacing the internal elements” if the “layout and function of the internal spaces of the building are changed”. But such a replacement may not increase the floor area. Yet it is to be treated as an “alteration” in the phrase “total floor area of the proposed alteration”, albeit that the carve out “not including any internal alteration” may then operate. These possibilities demonstrate that a “proposed alteration” referred to in s 23(1)(a) is not limited to an alteration that increases the original floor area.
Third, in s 23(1)(b) the identical expression “the total floor area of the proposed alteration” is used. Moreover, both the terms of s 23(2) and examples 3 and 4 set out at the foot of that section indicate that a mere change in the function or use of the floor area of the original building can be embraced by the expression “the total floor area of the proposed alteration”, without any change in the building envelope or the addition of a new storey. In other words, the expression “the total floor area of the proposed alteration” in s 23(1)(b) does not require any addition to the floor area of the original building. But if that is the correct position for s 23(1)(b), then the same position applies to the identical expression in s 23(1)(a). As we have said earlier, there is no indication that any different meaning ought to apply to the identical phrase. The respondent suggested that there may be a difference given the different classes of residences dealt with by each subparagraph. Subparagraph (a) deals with class 1 buildings only; as stated, these are single dwellings and certain related types of buildings. Subparagraph (b) deals with classes 2-9 buildings which, as stated, embrace other types of buildings, including for commercial use. We agree that each subparagraph of s 23(1) deals with different classes, but given the identical language in each subparagraph “the total floor area of the proposed alteration” and given that s 23(2) applies to both subparagraphs, a consistent approach must be taken to the language used.
Fourth, the construction of s 23(1)(a) of the Regulation advanced by the appellant was said to be supported by a purposive approach to the construction of the provision (s 139(1) of the Legislation Act). It was said that the purpose of s 23(1)(a) and also s 29(1)(a) of the Act was to achieve a situation where in the long term older buildings were required to be upgraded to meet changes in the Building Code requirements (see for example the explanatory statement to the Building Bill 2003 (ACT) at p 80). So it was said that if the operation of s 23(1)(a) was limited in the manner so found by the learned trial judge, then alteration work to a building that did not increase the floor area of the building by more than 50% could be carried out without the existing building having to meet the current Building Code requirements, despite how extensive such work might be. For example, on the learned judge’s construction, it was said that if an earthquake destroyed the walls and roof of a building, but left undamaged the Code non-compliant concrete slab floor and foundations, the building could be rebuilt on the existing foundations and slab, despite the Code upgrading what is now acceptable in the industry as being structurally sufficient. It was said that such an interpretation defeated the purpose of s 29(1)(a) of the Act and s 23(1)(a) of the Regulation. There is some force in these submissions, but we are inclined to agree with the respondent that it is not a permissible approach to identify a very general purpose and then to prefer any construction that can be said to achieve such an amorphous purpose. The question in construing particular provisions in context and having regard to their subject matter is how far the legislature intended to go in achieving that purpose. Ultimately, “it is the text, construed according to such principles of interpretation as provide rational assistance in the circumstances of the particular case, that is controlling” (Carr v Western Australia (2007) 232 CLR 138 at [6] per Gleeson CJ).
Fifth, and relatedly, the respondent pointed to various extrinsic material which it contended supported the learned trial judge’s interpretation (ss 138, 139(1), 141 and 142 of the Legislation Act). Reference was made to the said explanatory statement for the Building Bill 2003 (ACT), the explanatory statement for the Regulation, the explanatory statement for the Building Legislation Amendment Regulation 2010 and the explanatory statement for the Building (ACT Appendix to the Building Code) Determination 2012 (ACT) (the Determination) (see s 136(2) of the Act). For example, the explanatory statement to the Determination provided that s 23 of the Regulations “prescribes for the Act’s s 29(2)(a), circumstances where pre-existing buildings must be brought into BCA compliance when the building is substantially altered (for example by a large extension to it)” (at p 4). We do not consider that such extrinsic material supports a limitation of s 23(1)(a) in the manner contended for by the respondent. To refer by way of example to an extension may refer to the paradigm case, but that does not support the limitation contended for. Moreover, it is to be doubted that extrinsic material that came into existence after the Regulation came into force can be referred to (see s 142(2), but cf s 142(3), of the Legislation Act).
Generally, in our view, a consideration of the extrinsic material and reference to amorphous general purposes adds little to the resolution of the present issues.
Sixth, the respondent pointed to the various examples at the foot of s 23 and suggested that examples 1 and 2 supported the learned trial judge’s construction. True it is that such examples refer to additions to floor area in the context of referring to s 23(1)(a). But as ss 126 and 132 of the Legislation Act make clear, the examples are not to be taken as being exhaustive of the scenarios covered by s 23(1)(a). They do not limit the possibilities. In our view, one cannot simply correlate examples 1 and 2 with s 23(1)(a) and examples 3 and 4 with s 23(1)(b) and conclude that only building classes 2-9 permit the scenario of no increase to the floor area in the phrase “total floor area of the proposed alteration” where used in s 23(1)(b) but not where used in s 23(1)(a). Comparing the language of s 23(1)(a) with s 23(1)(b), the only difference is that in the former the exclusion “not including any internal alteration” is used, whereas in the latter, the expression “including any other alteration” is used. But in our view that difference does not justify his Honour’s construction. The respondent contended that this exclusion in s 23(1)(a) suggests implicitly that only additions to the floor area are embraced within s 23(1)(a). In our opinion, that does not follow. One can have an external alteration that does not require any addition to the floor area.
Seventh, we note that the original form of the Regulation referred to a “substantial alteration” in terms of a volumetric measurement, viz “the aggregate volume of the proposed alteration” (s 16 of the Building Regulation 2004 (ACT) (now repealed)). We also note that analogous subordinate legislation in New South Wales (Environmental Planning and Assessment Regulation 2000 (NSW) reg 94(1)(a)) and in Victoria (Building Regulations 2006 (Vic) reg 608(3)) use a volumetric measure. That change or comparison has little relevance for present purposes. Whether the metric used was volume or floor area, the relevant phrase “proposed alteration” is not confined to increases or additions, whichever metric is used. That change or difference may or may not have significance when one later applies the composite phrase “total floor area of the proposed alteration” to the facts. But that matter is to be left to the trial judge to determine.
Finally, submissions were made by the parties concerning the meaning of “alteration” and as to whether this required or connoted some change as compared with replacing like with like. As we have said earlier, “alteration” is defined in the Dictionary to the Act to include “demolition” or an “addition”. The word is of broad ambit and is not limited by such instances. For our purposes, it is not necessary to construe “alteration” further, other than to say that it is not limited to building works which increase or add to floor area even though one example given of an “alteration” is an addition. But whether “alteration” embraces the replacement of a roof like with like or otherwise or embraces the non-roofing works are matters for the trial judge to determine.
Conclusion
In our opinion, his Honour at [74] of his reasons was in error and ground 1 of the notice of appeal has been established. It is for that reason that we ordered that his Honour’s answer to question 1 be set aside. But we were not in a position for ourselves to answer question 1. To consider whether the work envisaged by Mr Dossetor’s Scope of Works, if carried out, involves “the total floor area of the proposed alteration” being more than “50% of the floor area of the original building” requires a detailed forensic examination which considers both the proposed roofing and non-roofing works in combination, addresses which of the works are “alterations”, and in respect of such alterations then addresses how the proposed works are to be measured and treated in the context of the phrase “the total floor area of the proposed alteration”. That factual enquiry also requires consideration of whether any part of the works is excluded by the phrase “not including any internal alteration”.
Accordingly, we set aside his Honour’s answer to question 1 and remitted the matter to the trial judge for further disposition.
I certify that the preceding thirty-seven (37) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justices Jacobson, Gordon and Beach. Associate:
Dated: 5 September 2014
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