Arenco Pty Ltd v CSR Ltd & Anor

5 The plaintiff's grounds of appeal are that the Tribunal chairperson erred in holding that the CTTT did not have jurisdiction to hear the plaintiff's claim insofar as the second defendant erred in finding that the Home Building Act 1989 (NSW) (HBA) dictated that only involvement in physical work would confer jurisdiction upon the CTTT. 6 Section 65(3) of the Consumer, Trader and Tenancy Tribunal Act 2001 (NSW) (the Act) provides that relief can be granted by way of a judgment or order in the nature of prohibition, mandamus, certiorari, declaratory judgment or an injunction if in relation to the hearing or determination of the matter, a party had been denied procedural fairness or the Tribunal had no jurisdiction to make the order. 7 Section 67 of the Act allows for an appeal to be made to this court on a question of law. An appeal may only be made with leave of the court. Section 67(8) of the Act states that a reference to a matter of law includes a reference to a matter relating to the jurisdiction of the Tribunal. The onus lies on the plaintiff to demonstrate that there has been an error of law. Section 67(3) of the Act provides that after deciding the question of the subject of an appeal the court may, unless it affirms the decision of the Tribunal on the question that should have been made by the Tribunal, remit its decision on the question to the Tribunal and order a rehearing of the proceedings before the Tribunal. 8 The substantive issue in these proceedings is where CSR contracted to do (or otherwise did) the relevant "residential building work" and whether the Tribunal erred in finding that it did not.

The Tribunal Proceedings 9 On 28 January 2004, the Chairperson Kay Ransome, determined that the matter was not a building claim within the meaning of the HBA and that the Tribunal had no jurisdiction to deal with it under the Act. The matter was dismissed. 10 At the CTTT hearing, the plaintiff submitted that the first defendant provided goods and services in connection with the construction of the property and that the application came within the definition of "building claim" as set out in s48A of the HBA. It was the plaintiff's contention that the first defendant carried out work and/or was involved in the co-ordination and supervision of work, coming under the definition of "residential building work" contained in s3(1) of the HBA and provided building consultancy work in relation to design and installation falling within the definition of "building goods or services" in s48A of the HBA. Further and in the alternative the plaintiff submitted that the building claim is "a claim for the payment of a specified sum of money… that arises from a supply of building goods or services whether under a contract or not". 11 In response, the first defendant relied upon the definition of "building goods or services" in s48A of the HBA and the judgment of Constable v Anvic Holdings [2003] NSWSC 471. Maintaining that it did not contract to do, nor otherwise do, 'residential building work', 'specialist work', or 'building consultancy work' and that it was merely a supplier of material, the first defendant contended that the plaintiff's claim against it was not a building claim because the respondent did not supply "building goods and services" as defined in the HBA. While it was common ground that the first defendant was the manufacturer and supplier of the acoustic walls, the parties differed in their conception as to the precise role played by the first defendant in the building project. I will return to this later. 12 It was a decision made by the architects and the acoustic consultants in the design stage of the Lumina Apartments project that walls would be constructed using the CSR Hebel wall systems in order to meet acoustic requirements. The defendant was the manufacturer and supplier of the wall systems.

The Home Building Act 13 Section 48K of the HBA provides for the jurisdiction of the CTTT in respect of building claims which do not exceed $500,000.00. The plaintiff abandoned any claim in excess of $500,000.00. 14 The definitions for "building claim" and "building goods and services" are found in s48A of the HBA: " building claim means a claim for:

(c) relief from payment of a specified sum of money, or

(d) the delivery, return or replacement of specified goods or goods of a specified description, or

(e) a combination of two or more of the remedies referred to in paragraphs (a)-(d),

that arises from a supply of building goods or services whether under a contract or not, or that arises under a contract that is collateral to a contract for the supply of building goods or services, but does not include a claim that the regulations declare not to be a building claim." and: " building goods or services means goods or services supplied for or in connection with the carrying out of residential building work, specialist work or building consultancy work, being goods or services:

(a) supplied by the person who contracts to do, or otherwise does, that work, or

(b) supplied in any circumstances prescribed by the regulations to the person who contracts to do that work." 15 The definition of "residential building work" is found in s3(1) of the HBA as follows: " residential building work means any work involved in, or involved in co-ordinating or supervising any work involved in:

(b) the making of alterations or additions to a dwelling, or

(c) the repairing, renovation, decoration or protective treatment of a dwelling.

It includes work declared by the regulations to be roof plumbing work or specialist work done in connection with a dwelling and work concerned in installing a prescribed fixture or apparatus in a dwelling (or in adding to, altering or repairing any such installation).

It does not include work that is declared by the regulations to be excluded from this definition." 16 In Woolfe v Alexander Sussman t/as A Sussman Construction Consulting Services & Anor [2001] NSWSC 702 McClellan J, in finding that the then FTT did not have jurisdiction, determined that a feasibility study of a redevelopment of property did not fall within the definition of "residential building work". His Honour specifically considered the HBA's definition of the terms "residential work" and "building claim" and concluded [at 18] that: "In my opinion, residential building work is, as the definition makes plain, confined to building work in pursuance of the physical construction or alteration of a dwelling. It does not extend to goods or services provided in the course of considering the feasibility of the re-development of a property or the means by which utilising suitable valuations and cash flow projections the re-development of a property may be financed." 17 In Collings Homes Pty Ltd v Head [2002] NSWSC 1219, Malpass M, relying on McClellan J's decision in Woolfe v Alexander Sussman t/as A Sussman Construction Consulting Services & Anor added [at 28] that: "To satisfy the definition of 'residential building work', the work must be involved in or involved in co-ordinating or supervising any work involved in the construction of a dwelling." 18 While expanding the interpretation of "residential building work" to include involvement in co-ordinating or supervising work involved in the construction of a dwelling, Malpass M decided that services such as the design of the home and the provisions for costing building work did not fall within the definition of "residential building work". The plaintiff submitted that the work "involved" should be further expanded to be given the widest possible interpretation and the "work involved" would encompass people who work in an office and do not perform any physical work. 19 In Constable v Anvic Holdings, Malpass M, in determining the question of costs, reviewed the abandoned question of whether a claim in respect of the supply of tiles was a "building claim" under the HBA or a "consumer claim" under the Consumer Claims Act 1998 (NSW). At paragraph 10, the learned Master quoted the first order of the CTTT's decision: "The applicant says that 'work' is the carrying out of labour for reward, and that the relevant residential building work in this case was the work done in supplying the tiles to the building site. I do not accept this submission." 20 At paragraph 14 he concluded: "In my view, in making O1, the Tribunal reached the correct decision. I accept the stance taken by the first defendant. I regard the challenge that was brought to this decision as being manifestly hopeless. What was done by the first defendant cannot be described as 'building goods or services'. The tiles were not supplied by a person who had contracted to carry out 'residential building work'." 21 The Chairperson summarised the involvement of the respondent as follows: "…included the provision of advice as to the suitability of materials, the provision of results from independent laboratory tests and advice on alternative wall systems. The respondent also appears to have inspected work in progress, although there is little detail in the affidavit of Mr Ridings as to the nature of these inspections, their frequency and purpose. In my view the involvement of the respondent in the project is not sufficient to bring the matter within the definition of "building claim" in the Home Building act. There is an insufficient nexus between the activities of the respondent and the physical work of installation of the wall systems." 22 Hence the first defendant's involvement in this project was restricted to the manufacture and supply of the acoustic walls and the inspection of the installation by Yorkshire Masonry Pty Ltd and Renzo Tonin & Associates Pty Ltd but the details of the nature and frequency of the inspections were scant. 23 As Chairperson Ransome observed in her reasons for decision of 28 January 2004: A number of recent judgments in the Supreme Court have considered the meaning of 'building claim', 'building goods or services' and 'residential building work' (see Woolfe v Alexander Sussman t/as Sussman Construction Consulting Services [2001] NSWSC 702; Collings Homes v Head [2002] NSWSC 1219; Constable v Anvic Holdings [2003] NSWSC 471; Wolinski v HIA Insurance [2003] NSWSC 475).

It is clear from these judgments that in order for there to be a building claim under the Home Building Act there must be involvement by the supplier of building goods or services in the physical work of construction, alterations etc of a dwelling. The supplier must either carry out the actual physical work, or supervise or coordinate it." 24 On the evidence, the first defendant, though the manufacturer and supplier of the acoustic walls, did not carry out the actual physical work. Nor did the respondent supervise or co-ordinate the work. Thus the respondents activities do not fall into the HBA's definition of "residential building work" Yorkshire Masonry Pty Ltd and Renzo Tonin & Associates Pty Ltd performed these functions. There is another reason for affirming the Tribunal Member's decision, as stated earlier residential building work means any work involved in, or involved in co-ordinating or supervising any work involved in the constructions of a dwelling. It does not include work that is declared by the regulations to be excluded from this definition. 25 Regulation 8(f) excludes from the definition: "The supervision only of residential building work: … (iii) by any other person, if all the residential building work is being done or supervised by the holder of a licence authorising its holder to contract to do that work." 26 The building work was done or supervised by the holder of the licence namely the plaintiff. Thus the plaintiff's claim fails. The decision made by CTTT Chairperson Ransome on 28 January 2004 is affirmed. The appeal is dismissed. The plaintiff's summons filed 25 February 2004 is dismissed. 27 Costs are discretionary. Costs usually follow the event. The plaintiff is to pay the first defendant's costs as agreed or assessed. Orders 28 The court orders that:

(1) The decision made by CTTT Chairperson Ransome on 28 January 2004 is affirmed.

(3) The plaintiff's summons filed 25 February 2004 is dismissed.

(4) The plaintiff is to pay the first defendant's costs as agreed or assessed. **********

Last Modified: 06/28/2004 DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.