Arora v Hilder and Jambell Building Pty Ltd (t/as Serenity Landscapes and Property Maintenance)

1. The Appellant lodged a Notice of Appeal on 26 May 2025. As stated, the appeal is limited to the order refusing the Appellant's application to join Ms Hilder as a party to the proceedings. The grounds of appeal may be summarised as follows:

(1) Directorial responsibility: Ms Hilder is listed as the director of Jambell.

(2) Negligent oversight: under her directorship, the company hired/sent Mr Wczesniak (Ms Hilder's husband) and another unlicensed individual to carry out significant landscaping work.

(3) Duty of care and accountability: as a company director, Ms Hilder had a legal duty to ensure her business complied with licensing and employment regulations. Allowing an unlicensed and bankrupt person to represent the company and carry out the work constitutes a breach of that duty.

(4) Vicarious liability: the conduct and unqualified actions of Mr Wczesniak directly contributed to the damages suffered.

1. The Notice of Appeal also stated that the Tribunal refused to join Ms Hilder "despite clear evidence that she is the director of the company that hired an unlicensed and bankrupt individual to conduct work on our property".
2. Attached to the Notice of Appeal was a quotation dated 16 January 2025 issued by Serenity Landscapes and Property Maintenance. The Appellant alleges that that that quotation forms the basis of the agreement for the undertaking of landscape gardening works.
3. Also annexed to the Notice of Appeal is a letter dated 20 February 2025 from the Building Commission New South Wales. That letter states that Serenity Landscapes and Property Maintenance is unlicensed.

1. On 10 June 2023 a Reply to Appeal was lodged by a solicitor, Mark An. Mr An did not appear at the hearing of the appeal having withdrawn by email to the Tribunal several days before the appeal was heard. There was no appearance for any of the Respondents.
2. The Reply to Appeal may be summarised as follows:

(1) Although Ms Hilder is a director of Jambell, at no time did she enter into any contract or interact with the Appellant in her personal capacity. Dealings with the Appellant and Jambell were conducted by Mr Wczesniak.

(2) There is nothing under the common law or in the Home Building Act 1989 (NSW) causing Ms Hilder to have personal liability.

(3) Ms Hilder has no duty of care owing to the Appellant.

1. The Appellant has lodged written submissions the effect of which are summarised below:

(1) The Tribunal erred in failing to properly consider the liability of Ms Hilder. Since 12 December 2024 she has been the sole director of Jambell.

(2) The Appellant relies upon the provisions of s 137 of the Home Building Act. That section provides:

137 Offence by body corporate--general liability of directors etc

(1) If a body corporate contravenes any provision of this Act or the regulations, each person who is a director of the body corporate or who is concerned in its management is to be taken to have contravened the same provision if the person knowingly authorised or permitted the contravention.

(1A) Subsection (1) does not apply in respect of a contravention of a provision of Division 4 of Part 6A or a contravention that constitutes an executive liability offence for the purposes of section 137A.

(2) A person may be proceeded against and convicted under a provision pursuant to subsection (1) whether or not the body corporate has been proceeded against or convicted under that provision.

(3) A director cannot evade liability for corporate wrongdoing simply by relying on the corporate veil, particularly where they exercise control or allow known unlicensed activity to proceed.

1. The Appellant seeks orders from the Appeal Panel to the effect that the decision to refuse to join Ms Hilder as a Respondent be set aside, that she be joined as a party, and that the proceedings be remitted to the Consumer and Commercial Division for hearing.
2. It is necessary to add that the Appellant advised us during the hearing of the appeal that he no longer wished to proceed against Mr Wczesniak and that therefore he should be removed as a party. He took this step because he did not want to incur the expense of obtaining court approval to proceed against Mr Wczesniak as an undischarged bankrupt. We note that s 58(3) of the Bankruptcy Act 1966 (Cth) precludes steps being taken in proceedings involving an undischarged bankrupt without prior court approval.

1. The issue for consideration in this appeal is whether there may be a cause of action available to the Appellant against Ms Hilder, by reason of her position as the sole director of Jambell at the time the contract between the Appellant and Jambell was entered into and the subsequent period when the work was undertaken.
2. We are of the view that, in the circumstances of this case, there is no general law principle or a principle derived from the Corporations Act 2001 (Cth) which could potentially impose liability upon Ms Hilder and that therefore, having regard to the general law and the Corporations Act, it is not apparent that the decision to refuse to join Ms Hilder involved error.
3. However, the question arises in the circumstances of this case whether s 137 of the Home Building Act has the effect of giving rise to a cause of action against Ms Hilder available to the Appellant.
4. We assume that one of the breaches that the Appellant will allege against Jambell is a breach of s 18B(1)(c) of the Home Building Act. That section provides:

18B Warranties as to residential building work

(1) The following warranties by the holder of a contractor licence, or a person required to hold a contractor licence before entering into a contract, are implied in every contract to do residential building work--

(a) ...

(b) ...

(c) a warranty that the work will be done in accordance with, and will comply with, this or any other law,

1. The elements of s 137(1) are as follows:

(1) A contravention of the Home Building Act or Regulations by a body corporate.

(2) The presence of a director of the body corporate or a person who is concerned with its management.

(3) If elements (1) and (2) can be established, then a person who is a director "is to be taken to have contravened the same provision" if the person "knowingly authorised or permitted the contravention." The above provision would impose liability upon Ms Hilder as a director of Jambell if it can be established that she knowingly authorised or permitted the contravention by Jambell. It is of course necessary to establish by evidence that there was a contravention by Jambell.

1. The parties did not provide us with any submissions concerning the scope and meaning of s 137 and accordingly we have been left with the task of establishing whether there are relevant decisions of the Tribunal or a court helpful in resolving the issue before us.
2. There is, in our view, a distinction between a contravention by a person or other legal entity of a provision of the Home Building Act on the one hand and the breach of a warranty imposed by the same Act.
3. The Appellant's case against Jambell will presumably involve alleging that Jambell breached the warranty described above or other warranties imposed by s 18B of the Home Building Act. That section provides for warranties to be "implied in every contract to do residential building work". The Appellant's case against Ms Hilder would therefore involve an allegation that, by reasons of s 137, she gives the same warranty as Jambell has been required to give. Such an assertion involves the contention that Ms Hilder breached an implied term of the contract as opposed to breaching a provision of the Home Building Act .
4. Section 137 is, in our opinion, restricted to imposing liability on directors where a company contravenes a provision of the Home Building Act (as opposed to breaching an implied warranty of the contract). It is clear from s 137(2) that the subject of s 137 is restricted to contraventions by which a person may be convicted. In our view, s 137 is concerned only with enabling a director to be convicted by reason of the breach of a provision by a company and does not impose upon a director personal liability for breach of a contractual provision imposed upon the company, including one or more of the contractual warranties implied into the contract by reason of s 18B.
5. We have not been able to locate any Tribunal decision or Court judgment concerning s 137.
6. Having regard to the conclusions described above, the appeal must be dismissed.
7. We make the following orders:

(1) Appeal dismissed.

(2) The proceedings at first instance are remitted to the Consumer and Commercial Division of the Tribunal for further directions.

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.