//
[2006] WASAT 367
General information, not legal advice.
State Administrative Tribunal (WA)
2006-12-15
Original judgment source is linked above.
ACT : BUILDERS' REGISTRATION ACT 1939 (WA)
CITATION : BGC CONSTRUCTION and VAGG & ANOR [2006] WASAT 367
Building disputes - Review of decision of Building Disputes Tribunal - Liquidated damages for non-completion within stipulated period - Meaning of "day" for purpose of liquidated damages clause - Whether calendar day or working day - Interest under s 32 and s 34 Supreme Court Act 1935 (WA) - Appropriate rate of interest - Whether those sections apply to Building Disputes Tribunal - Whether Building Disputes Tribunal a "court" for purposes of those sections
Builders Registration Amendment Act 1991 (WA), s 37(2)
Home Building Contracts Act 1991 (WA), s 9(1), s 11, s 17(4), s 22, s 23, s 28
State Administrative Tribunal Act 2004 (WA), Div 3, Pt III, s 87, s 87(2), s 105
Suitors Fund Act 1951 (NSW)
Supreme Court Act 1986 (Vic), s 33
Trade Practices Act 1974 (Cth)
Australian Postal Commission v Dao (No 2) (1986) 69 ALR 125
BGC Residential Pty Ltd and Parker [2006] WASAT 281
Brandy v Human Rights and Equal Opportunity Commission [1995] HCA 10; (1995) 183 CLR 245
Commonwealth of Australia v Wood [2006] FCA 60; (2006) 148 FCR 276
Commonwealth of Australia v Wood [2006] FCA 60 (9 February 2006)
Forge v Australian Securities and Investment Commission [2006] HCA 44
Global Network Services Pty Ltd v Legion Telecall Pty Ltd [2001] NSWCA 279
McLoughlin & Anor v Western Power Corporation 80 WAIG 3084
North Australian Aboriginal Legal Aid Service Inc v Bradley [2004] HCA 31; [2004] 206 ALR 315
Orellana-Fuentes v Standard Knitting Mills Pty Ltd [2003] NSWCA 146; [2003] 57 NSWLR 282
R v Trade Practices Tribunal; Ex parte Tasmanian Breweries Pty Ltd [1970] HCA 8; [1970] 123 CLR 361
Roads Corporation v Melbourne Estates Finance Co Pty Ltd (No 2) [1993] VicRp 94; [1993] 2 VR 620
Shell Company of Australia Limited v Federal Commission of Taxation [1930] 44 CLR 530
Smith & Anor v Fiebig as executrix of the estate of the late Jean Drysdale-Green [2003] WADC 184
Tangent Nominees Pty Ltd v Edwards & Anor [2006] WASC 45
Trust Company of Australia Limited (trading as Stockland Property Management) v Skiwing Pty Ltd [2006] NSWCA 185
Australian Liquor, Hospitality and Miscellaneous Workers' Union v HomeCare Transport Pty Ltd [2002] FCA 497
Brian Rochford Ltd (Administrator appointed) v Textile Clothing & Footwear Union of NSW (1998) 47 NSWLR 47
Van Blitterswyk v Sons of Gwalia and others (in administration) [2005] WAMW 06
1 The applicant built a house for the respondents under a building contract. The home was completed outside the contracted period, giving rise to a right of the respondents to liquidated damages. The Building Disputes Tribunal (Disputes Tribunal) adjudicated on that right. The applicant applies for leave to review that decision.
2 The application for leave and the review were heard together. The first issue raised was whether, under the contract, the calculation of liquidated damages should be by reference to calendar days or working days. The Tribunal analysed the competing arguments and found that the defined meaning of "days" applied so that working days was the correct reference.
3 The application raised the further issue regarding the Disputes Tribunal's decision to allow for interest prior to judgment on liquidated damages at 20% per annum. The Tribunal found that on any view the applicable rate was capped at 6%. It also considered whether the statutory basis for allowing interest applied to decisions of the Disputes Tribunal, which turned on the question of whether, for the purpose of s 32 and s 34 Supreme Court Act 1935 (WA) (SC Act), the Disputes Tribunal was to be regarded as a "court". In that regard, it referred to a number of cases and considered the function and characteristics of the Disputes Tribunal, and found the Disputes Tribunal to be a court for the relevant purpose.
4 The Tribunal set aside the Disputes Tribunal's decision and substituted an order for payment to the respondents of the correct amount of liquidated damages and interest at 6% per annum.
5 This is a combined application for leave under s 41 Builders' Registration Act 1939 (WA) (BR Act) and the review of a decision of the Disputes Tribunal reflected in an Order to Pay dated 18 May 2006 whereby the applicant was ordered to pay the applicants $7772.35 within 14 days.
6 BGC Construction Pty Ltd (builder) constructed a residential dwelling for Mr Vagg and Ms Roberts (owners) pursuant to a written contract dated 9 December 1999. The contract provided for completion of construction 145 days from the date the builder had commenced work. It is common ground that building work commenced on 9 February 2000 and it should therefore had been completed by 1 September 2000. The Disputes Tribunal has found that practical completion occurred on 29 March 2001 and this date is now also common ground.
7 The contract provided (cl 10(i)) for payment by the builder to the respondents of liquidated damages in the event that it did not complete the works within the specified time. The liquidated damages were prescribed "at the rate of THIRTY DOLLARS ($30.00) per day for each day beyond the due date for practical completion until practical completion is deemed to have taken place".
8 The Dispute Tribunal's order was based on its finding that the builder was liable for liquidated damages for 209 calendar days. Reliance was placed in par 14 of the decision to credit having been given by the builder for a delay of 96 "working days". However, at par 19, the Disputes Tribunal has erroneously provided the builder with a credit based on 82 days. It does not matter whether these days are calendar days or working days because the credit given was 96 days multiplied by the daily rate of liquidated damages of $30, that is, $2880. Based on the Dispute Tribunal's finding that there was an entitlement for liquidated damages for 209 calendar days, the liquidated damages computes to $6270, from which $2880 must be deducted, leaving a balance due to the owner of $3390. The Disputes Tribunal erred at par 19 in finding that the amount owing to the owners was $3810 and thereafter in calculating interest thereon. The Tribunal also exercised what it regarded as its discretion under s 32 and s 34 SC Act to allow interest to the owners at the rate of 20% per annum on the outstanding amount.
9 The issues for this Tribunal are twofold:
(a) Whether the Disputes Tribunal was correct in finding that the owners' entitlement to liquidated damages is to be calculated by reference to calendar days and not working days.
(b) Whether the Disputes Tribunal was correct in awarding interest as it did or at all.
What is the correct basis for calculation of liquidated damages?
10 The Disputes Tribunal upheld the owners' argument before it that their entitlement to liquidated damages is derived from the product of the number of calendar days elapsing between the contract completion date and actual practical completion date and the daily liquidated damages amount of $30. The contrary view, for which the builder contends, relies upon the following definition which appears in cl 23 of the contract:
" 'Days' means Monday to Friday but excluding any day that is a public holiday in the area of the Site or throughout the State of Western Australia."
11 The Disputes Tribunal adopted a purposive approach in holding that the owners should be compensated for each and every day after the contracted completion date that they were denied the house for which they had contracted, and refused to adopt the cl 23 definition. It drew a distinction between the plural, "days", which it observed was used in the clause dealing with commencement and completion of the contract, and the singular, "day", used in the liquidated damages clause. In doing so, in our view, it overlooked the further provision of cl 23 that "words importing the singular include the plural and vice versa".
12 The defined terms referred to in the interpretation clause each commence with a capital letter, eg "Proprietor", "Builder" and "Registrar". As can be seen from the definition of "days" reproduced above, the reference to "days" commences as a new sentence.
13 Throughout the contract, references are made to "the Proprietor", "the Builder" and to "the Registrar". By contrast, in the liquidated damages cl 10(i), reference is made to the application of liquidated damages at the rate of $30 per "day" for each day beyond the due date for practical completion. On this basis, the owners submit that the interpretation clause is not to be applied, and by implication that "days" means calendar days. They refer to the schedule to the contract by which item 6 prescribes the "days" from the latest date that all preconditions are satisfied and within which the works must be commenced and completed. Reference is also made to circumstances in which the contract makes reference to "the Works" which by cl 1 of the contract is a reference to all works described in item 2 of the schedule, the drawings, plans and specifications including further defined addenda and schedules, as opposed to a reference to "work" to be carried out by way of a variation under cl 5 of the contract.
14 We accept the owners' submission based on the common drafting technique that a defined meaning applies when reference is made to a term, which is defined, and which commences with a capital letter. The difficulty in applying that to the reference in the contract to "day", or "days", is that there is no single clause in the contract which uses either of those words commencing with a capital letter. The definition would therefore be denied of any operation. Further, there are other indications, within the contract, that the words have been referred to in accordance with the defined meaning.
15 Clause 11 of the contract provides for a defects liability period of 90 days, commencing from the date of practical completion. Section 11 of the Home Building Contracts Act 1991 (WA) (HBC Act) provides that "[i]t is a term of every contract that the builder is liable to make good at the cost of the builder defects in the home building work notified in writing to the builder within the period of four months commencing on the day of practical completion". If the reference to days was therefore a reference to calendar days in cl 11, the builder would be in breach of the HBC Act and by virtue of s 28 thereof, the clause would be void and the builder would be liable for a penalty of up to $10 000. Obviously an interpretation which upholds the validity of the clause is to be favoured: Global Network Services Pty Ltd v Legion Telecall Pty Ltd [2001] NSWCA 279 (28 August 2001). See also Lewison, The Interpretation of Contracts, Sweet & Maxwell, at par 7.10.
16 Clause 13 of the contract contains a condition that all approvals be obtained within 45 days of the date of the contract. If the interpretation clause is applied to read that as meaning 45 working days, that is entirely in accord with subsection 9(1) of the HBC Act which provides that every contract is conditional upon a building licence being issued and other approvals or consents being given within 45 working days from the date of the contract.
17 For the above reasons we do not accept that the definition of "day" or "days" as set out in cl 23 is not to apply by reason of the owner's above contentions.
18 We consider that the following excerpt from reasons for decision in BGC Residential Pty Ltd and Parker [2006] WASAT 281 is sufficient to dispose of this issue favourably to the builder. In the Parker matter, the building contract contained a similar liquidated damages clause to here, and the excerpt commences with reference to a definition clause relevantly identical to cl 23:
"That clause provides relevantly that words importing the singular shall include the plural and vice versa and in particular that 'days' means 'Monday to Friday but excluding any day that is a public holiday in the area of the site or throughout the state of Western Australia'.
The interpretation clause therefore conveys that the term 'day' is to have a corresponding meaning, being a day, namely Monday to Friday but excluding a day that is a public holiday in the area of the site or throughout the state of Western Australia. In Hudson's, 'Building and Engineering Contracts' Vol 2, 1995 edition, par 10.025, the learned authors discuss liquidated damages and say that 'day' in liquidated damages clauses includes holidays and Sundays unless, 'working days' are specifically referred to. Authority is given for that proposition being Brown v Johnson (1842) 10 MNW 331.
It is of course the case here that the contract does and expressly refers to working days. In the work, the 'Interpretation of Contracts' by Lewison, (London 2004) at par 5.10 the learned author discusses the effect of the use of definitions. Reference is made to the case Re Sassoon (1933) 1 Chancery 858 and a quotation is set out.
'Except in actions for rectification a court has no power whatsoever of adding to or subtracting from the words of a written instrument. A testator or settler may, however, in the instrument itself indicate sufficiently plainly that he is using certain words or phrases in other than their literal and ordinary meaning. In such cases he has said to have provided his own dictionary and the court will construe such words and phrases in the light of that dictionary.'
The author proceeds to then refer to a decision in Electric and Musical Industries Ltd v Lissen (1938) 4 All ER 221 where Lord Russell said:
'I would point out that there is no question here of words in the first claim bearing any special or unusual meaning by reason either of a dictionary found elsewhere in the specification or of technical knowledge possessed by persons skilled in the art. The prima facie meaning of words used in a claim may not be their true meaning when read in the light of such a dictionary or of such technical knowledge and in those circumstances a claim when so construed must bear a meaning different from that which it would have borne had no such assisting light been available.'
In applying those principles it is obvious therefore that the parties' own dictionary definition had to be applied to the calculation of liquidated damages.
19 Given our conclusion that the contractual definition for "days" applies we find, as asserted by the builder, that the number of days for which liquidated damages are payable reduces to 143. That calculation is based on the admitted facts that the contractual date for completion was 1 September 2000 and that practical completion was achieved on 29 March 2001. Liquidated damages payable for 143 days computes to $4290. After allowance is made for the credit provided by the builder of $2880, the amount outstanding, exclusive of any entitlement to interest, is $1410.
20 The Disputes Tribunal awarded interest at the rate of 20% per annum on the liquidated damages to which it concluded the owners were entitled. The Disputes Tribunal relied upon the general statutory provision for orders of interest in s 32(1) SC Act in the following terms:
"In any proceedings for the recovery of any money (including any debt or damages or the value of any goods), the Court may order that there shall be included, in the sum for which judgment is given, interest at such rate as it thinks fit on the whole or any part of the money for the whole or any part of the period between the date when the cause of action arose and the date when the judgment takes effect."
21 The Disputes Tribunal considered that s 34 of the SC Act permitted the extension of s 32 to monetary awards which it makes. Section 34 provides:
"The several rules of law enacted and declared by this Act shall be in force and take effect in all courts whatsoever in Western Australia so far as the matters to which such rules relate shall be respectively cognisable by such courts".
(a) Is the rate selected by the Disputes Tribunal as the applicable interest rate reviewable?
(b) Is the matter to which s 32 SC Act relates cognisable by the Disputes Tribunal?
(c) Is the Disputes Tribunal a "court" for the purposes of s 34 SC Act?
(a) Is the rate chosen by the Disputes Tribunal for interest reviewable?
23 The rate of 20% adopted by the Disputes Tribunal was the rate under the contract to which the builder would have been entitled had the owners been in default in payment of any contractual amount owing under the contract. It was not the subject of agreement between the parties, which explains the resort the Disputes Tribunal took to the statutory power to award interest. The statutory power is, however, limited as to the rate of interest in cases where the rate has not previously been agreed between the parties, to a maximum annual rate of 6%: s 31(2) SC Act. That being so, the Disputes Tribunal fell into error in allowing the rate it did. Subject to positive findings on the remaining two issues, we consider 6% to be an appropriate rate to apply to the liquidated damages to which we have found the owners are entitled.
(b) Is the matter to which the relevant rule relates cognisable by the Disputes Tribunal?
24 The builder submitted that the BR Act does not make provision for the awarding of interest on any sum found to be due and owing, and therefore the rule which is the subject of s 32(1) of the SC Act concerning interest is not cognisable by the Disputes Tribunal. It relied upon a decision of a Commissioner of the WA Industrial Relations Commission in McLoughlin & Anor v Western Power Corporation 80 WAIG 3084, which came to a similar conclusion with respect to the Commission.
25 In McLoughlin, the Learned Commissioner accepted a submission that as the Industrial Relations Act 1979 (WA) did not make any provision for the awarding of interest, such a claim is not cognisable by the Commission. Reliance was then placed on the provisions in Div 3 of Pt III of the SC Act, such as s 25(9) providing for the granting of mandamus or injunction as clearly being powers which were not conferred on the Commission.
26 With respect, we consider that the Learned Commissioner misconstrued the effect of s 32 and s 34 of the SC Act. If it was a requirement that a court, as referred to in s 34, must be empowered by its own enabling statute to award interest, or exercise any other powers the subject of the SC Act, there would be no need to rely on s 32 of the SC Act. The governing requirement of that section is that interest can be awarded in any proceedings for the recovery of any money (including any debt or damages or the value of any goods). Accordingly, if a court as referred to in s 34 has jurisdiction in respect of claims of that nature, s 34, read with s 32, permits the award of interest. As the recovery of money is a matter cognisable by the Disputes Tribunal, it has power to award interest provided it is a court within the meaning of that section.
(c) Is the Disputes Tribunal a "court" for the purposes of s 34 SC Act?
27 The Tribunal is not called a "court". But it is the function and purpose of the Tribunal and not its nomenclature which must determine whether it qualifies as a court for the purposes of s 34 of the SC Act: Australian Postal Commission v Dao (No 2) (1986) 69 ALR 125, Commonwealth of Australia v Wood [2006] FCA 60; (2006) 148 FCR 276.
28 The Australian Postal Commission decision, above, is an example of how the beneficial purpose of the Suitors Fund Act 1951 (NSW) contributed to a finding that the Equal Opportunity Tribunal was a court for the purposes of that legislation. Similarly, the former Commercial Tribunal in Western Australia was held to be a court for the purposes of the equivalent legislation, namely the Suitors Fund Act 1964 (WA): Smith & Anor v Fiebig as executrix of the estate of the late Jean Drysdale-Green [2003] WADC 184.
29 The purpose of s 34 is, in our view, obviously to vest "all courts whatsoever" in Western Australia with the power to act in accordance with the several rules of law enacted and declared by the SC Act, so far as the matters to which such rules relate are cognisable by "such courts". The legislature chose not to identify any specific courts to which the section applied, and the reference to "all courts whatsoever" reflects an intent to throw a net of coverage over all bodies which come within the meaning of "court".
30 It is necessary to distinguish between a body exercising judicial power subject to the constraints of Commonwealth constitutional law, and those bodies which do not have that character, but which may nevertheless constitute a court within the meaning of particular legislation: Australian Postal Commission v Dao (at [125 and 124]). As stated by McHugh JA, as he then was, in the Dao decision, the task of statutory interpretation is to give effect to the purpose of the Act, and that function cannot be performed by isolating the word "court" and asking whether the constitution and procedures of the Tribunal come within the supposed essence of that term. Legal usage gives the word several meanings. His Honour said (at [125]):
"Thus a 'court' may refer to a body exercising judicial power as in Ch III of the Commonwealth Constitution or to a body exercising non-judicial power such as the Coroners Court or to a Court of Petty Sessions hearing committal proceedings. It may even refer to a body exercising judicial and arbitral powers such as the former Commonwealth Court of Conciliation and Arbitration or the Queensland Industrial Court."
31 In these circumstances, we consider that there is no need to read s 34 of the SC Act restrictively as applying only to a court in the strict sense, bearing in mind that its application is in itself limited by the requirement that the subject matter of the rules created by the SC Act must be cognisable by the body concerned.
32 It is, at the very least, necessary that the body have sufficient of the attributes of a court, that it can be recognised as such and that it has within its powers the ability to determine matters which are the subject of the rules of the Supreme Court such that s 34 of the SC Act may operate. As the cases have recognised, there is no single test by which to determine whether or not a body is a court, and it becomes largely a matter of impression, having regard to all relevant indicators, as to whether or not the body constitutes a court in itself, or for the purposes of the particular legislation.
33 There have been two recent decisions, one of the Federal Court of Australia and the other of the NSW Court of Appeal, which provide some guidance. In Commonwealth of Australia v Wood [2006] FCA 60 (9 February 2006) Heerey J held that the Tasmanian Anti-Discrimination Tribunal was a court for the purposes of the Anti-Discrimination Act 1998 (Tas). In Trust Company of Australia Limited (trading as Stockland Property Management) v Skiwing Pty Ltd [2006] NSWCA 185 (13 July 2006) Spigelman CJ, Hodgson and Bryson JJA concluded that the Administrative Decisions Tribunal was not a court. In Skiwing the Court noted that for many statutory purposes the Tribunal would have sufficient of the characteristics of a court to answer a statutory provision relating to "courts" but that for the purposes of the use of powers under the Trade Practices Act 1974 (Cth) it was necessary to meet the requirements to constitute a "court of a State" within the meaning of s 77(iii) of the Australian Constitution (Cth). Those words were understood as a constitutional expression, so that any investiture of Federal jurisdiction in a State court, as part of an integrated system of justice, requires a high degree of similarity in the fundamental institutional characteristics of the component parts of that system (at [47]). Thus, in order for Federal jurisdiction to be permissibly conferred upon it, a "court of a State" must - exclusively, or at least predominantly - be constituted by judges (at [49]). Accordingly, in its analysis of the function of the Tribunal in Skiwing, the focus was on whether or not it met the requirements of a "court of a State" having regard to the constitutional overlay, but for which, it was recognised, the Tribunal would have sufficient of the characteristics of a court for many statutory purposes. By reason of these requirements, the court differed from the decision in Commonwealth v Wood, which was criticised for not considering the constitutional case law demonstrating the requirement for the court to be composed of judges.
34 The more recent decision of the High Court in Forge v Australian Securities and Investment Commission [2006] HCA 44, also bears on the question of what is a "court", especially for Ch III purposes. The Court by a majority found that the requirements of Ch III were not offended by the appointment of Acting Judges of the Supreme Court of New South Wales under New South Wales law. The majority emphasised that an important characteristic of a court is its capacity to be independent and impartial in its decision-making: see Gleeson CJ (at [43]) and Gummow, Hayne and Crennan JJ (at [65]).
35 This constitutional overlay is not relevant in this matter, which does not concern in any way the investiture of Commonwealth powers. Thus, although it may be argued that Wood was wrongly decided on this ground, the decision in that case nevertheless serves as a very useful analysis of the factors which may indicate that a body is a "court" as that word is used in particular statutes, and in the strict sense, without regard to the constitutional overlay to which we have referred. We shall revert to Heerey J's consideration of some of those factors after setting out the indicators for and against the Disputes Tribunal being a court. We shall also bear in mind the important characteristic of a court as an independent and impartial body.
Factors for the Disputes Tribunal being a court
1. The jurisdiction to be exercised by the Disputes Tribunal is that conferred on it by s 12A of the Builders' Registration Act 1939 (BR Act) and by the Home Building Contracts Act 1991 (WA) (HBC Act) (s 35 of the BR Act). Under either legislation proceedings could be commenced for the recovery of money (including any debt or damages or the value of any goods) within the meaning of s 32 of the SC Act. Thus the Disputes Tribunal is expressed to have a "jurisdiction".
2. The Disputes Tribunal comprises a chairperson or deputy chairperson, who shall hold office for such term not exceeding three years as is specified, and two members, one drawn from a panel of persons representative of the interests of consumers and the other from a panel of persons representative of the interests of builders.
3. At all sittings of the Disputes Tribunal the chairperson or a deputy chairperson shall preside and determine any question regarding admissibility of evidence and any other question of law or procedure: s 36(2) BR Act.
4. The Disputes Tribunal must afford parties a reasonable opportunity to call or give evidence, to examine and cross-examine witnesses and make submissions: s 37(2) BR Act.
5. The Disputes Tribunal may summons witnesses, take evidence on oath or affirmation and compel answers: s 38(1) BR Act.
6. The Disputes Tribunal may make costs orders: s 38(3) BR Act.
7. In relation to complaints brought under the BR Act, the Disputes Tribunal may order a builder to remedy an unsatisfactory building work or to pay compensation: s 12A BR Act.
8. In matters under the HBC Act, the Disputes Tribunal may restrain actions in breach of contract or require work to be done in performance of the contract, order payment of money and make declarations: s 17(4) HBC Act.
9. In exercising jurisdiction under the HBC Act, the Disputes Tribunal conducts a trial for actions for breach of contract which, like the punishment of criminal offences, has been described in the context of the exercise of Commonwealth judicial power as an inalienable exercise of judicial power: Brandy v Human Rights and Equal Opportunity Commission [1995] HCA 10; (1995) 183 CLR 245.
10. In the exercise of jurisdiction under the HBC Act, a claim based on breach of contract is not justiciable by a court, unless the matter was before that court at the time when application was made to the Disputes Tribunal or the application to the Disputes Tribunal is withdrawn or not pursued: s 22 HBC Act.
11. Where a matter that the Disputes Tribunal has jurisdiction to determine under the HBC Act is before a court, the court may order that the matter be transferred to and determined by the Disputes Tribunal and vice versa: s 23 HBC Act.
12. The Disputes Tribunal must keep a record of the proceedings before it: s 36 BR Act.
13. The Disputes Tribunal must give reasons when requested by a party: s 40 BR Act.
14. Orders for payment of money may be enforced in a court of competent jurisdiction: s 44(3) BR Act.
15. The Disputes Tribunal and its members have immunity against liability for any act or omission occurring in good faith and in the performance of its or their functions: s 45 BR Act.
16. The Disputes Tribunal's conclusions as to fact and law are binding and authoritative. Until the establishment of the State Administrative Tribunal (SAT) in 2004, leave to appeal on a question of fact or law to the District Court was required, and now the leave of SAT must be obtained, for a review by hearing de novo. There is a further right of appeal to the Supreme Court on a question of law, subject to leave: s 105 SAT Act.
Factors against the Disputes Tribunal being a Court
1. The members of the Disputes Tribunal are not required to be judges.
2. The chairperson is, or deputy chairpersons are, appointed by the Minister for a term not exceeding three years. The other members are drawn from a panel comprising such a number of persons appointed in writing by the Minister as the Minister from time to time thinks fit.
3. The chairperson, or deputy chairpersons, may be removed from office by that Minister on the grounds of mental or physical incapacity to carry out satisfactorily the duties of the person's office, neglect of duty or misconduct. There is no express provision for removal of a member, but that can be achieved by re-establishing the panel as the Minister from time to time thinks fit.
4. The members of the Disputes Tribunal, other than the chairperson, or deputy chairperson, are drawn from panels representing consumers and builders: s 28 BR Act.
5. The Disputes Tribunal is not bound by the rules of evidence and shall act according to equity, good conscience and the substantial merits of the case and without regard to technicalities and legal forms: s 36(1) BR Act.
6. The Disputes Tribunal has no power to deal with contempt and misbehaviour before it is the subject of criminal penalty: s 39 BR Act.
7. Where the parties agree, or the monetary value of the order sought exceeds $10 000, the parties are entitled to legal representation, but otherwise leave is required.
36 There is a number of conclusions stated in the Wood case based on considerations which have equal application to the Disputes Tribunal. We set those out below.
1. The Disputes Tribunal is incorporated into the judicial system of the State of Western Australia. While that was more clearly so when an appeal lay directly to the District Court, that is not substantially altered by the interposing of a review by SAT, because a further right of appeal, subject to leave, lies to the Supreme Court.
2. Subject to leave being granted by SAT, the review is on fact and law. This suggests that the body whose decisions are subject to such rights is a court because it is a part of a system which resolves, at trial and appellant level, legal and factual disputes between citizens and between State and citizens. It is to be noted that in considering leave, SAT applies the same tests as were applied by the District Court and is entitled to limit the grounds on which there might be a review: Tangent Nominees Pty Ltd v Edwards & Anor [2006] WASC 45.
3. Although the members of the Disputes Tribunal do not have security of tenure, there is nothing to suggest that reasonable and informed members of the public would not conclude that the Disputes Tribunal was free from the influence of the other branches of government in exercising its judicial function, for the same reasons as given in Wood and in North Australian Aboriginal Legal Aid Service Inc v Bradley [2004] HCA 31; [2004] 206 ALR 315. As emphasised in these decisions and in Forge above, the critical test is whether the Disputes Tribunal appears to be independent and impartial, which we consider informed members of the public would conclude it to be.
4. There are no significant administrative and non-judicial attributes, such as the performance of a conciliation function by the Disputes Tribunal, which was a factor in Orellana-Fuentes v Standard Knitting Mills Pty Ltd [2003] NSWCA 146; [2003] 57 NSWLR 282. Although the Disputes Tribunal may refer a matter to mediation it is not a function carried out by the Disputes Tribunal. The Disputes Tribunal performs no administrative functions.
5. To be not bound by the rules of evidence was regarded in Wood as to do no more than prescribe a law of evidence to be applied in a particular court, particularly due to the extent to which the common law of evidence has been modified by statute.
6. For the reasons given in Wood, the enforcement of orders without any need for intermediate permission or authorisation was regarded as confirmation of the position of the Tribunal as part of the judicial system.
37 In our view the Disputes Tribunal has many of the attributes of a court in the strict sense, but that is not necessarily sufficient to constitute it as a court in that sense. As was stated by Viscount Dunedin, delivering the advice of the Privy Council on appeal from the High Court in Shell Company of Australia Limited v Federal Commission of Taxation [1930] 44 CLR 530 (at [543-544]):
"The authorities are clear to show that there are tribunals with many of the trappings of a court which, nevertheless, are not courts in the strict sense of exercising judicial powers but in that connection it may be useful to enumerate some negative propositions on this subject:
(1) the Tribunal is not necessarily a court in the strict sense because it gives the final decision;
(3) nor because two or more contending parties appear before it between whom it has to decide;
(4) nor because it gives decisions which affect the rights of subjects;
(6) nor because it is a body to which a matter is referred by another party."
38 It is of course not necessary for us to determine whether the Disputes Tribunal is a court in the strict sense. The question is whether it is a court for the purposes of s 34 of the SC Act. The purpose of that legislation is to enable all courts whatsoever in the State of Western Australia, relevantly, when determining proceedings for the recovery of money (including any debt or damages or the value of any goods), to award prejudgment interest.
39 The Disputes Tribunal, originally called the Building Disputes Committee, was established by the Builders Registration Amendment Act 1991 (WA). Previously, the jurisdiction relating to unsatisfactory workmanship under s 12A of the BR Act was exercised by the Builders Registration Board. That function was transferred to the Disputes Tribunal. The amendments effected by the Builders Registration Amendment Act 1991 were passed in conjunction with the enactment of the HBC Act, which provided the option for contractual disputes previously dealt with in a court of competent jurisdiction, or if within its limits of jurisdiction, the Small Claims Tribunal, to be determined by the Disputes Tribunal. In the second reading speech of the Builders Registration Amendment Bill (Hansard, 28 March 1991 at 747) the Minister for Consumer Affairs stated as follows:
"This Bill deals with amendments to the Builders Registration Act 1939 which will establish the Building Disputes Tribunal. The Tribunal will form the disputes resolution procedure provided for in the Home Building Contracts Bill 1991 which provides protection for consumers who are building a new home or undertaking building work on an existing residence. It will also provide certainty for both the consumer and the builder entering into a contract.
The Building Disputes Tribunal will have the specialised function of dealing with home building disputes. The Tribunal provides, for the first time in this State, a single entity which can deal with all aspects of a home building dispute. In the past, consumers and builders were required to seek redress in different forums depending on the type of dispute. ...
Often a single dispute has both workmanship and contractual aspects, and consumers or builders are advised to pursue his or her grievance through separate forums involving additional expense. Often the issues are technical and difficult to separate. This leads to additional frustration for the persons involved.
The Building Disputes Tribunal will have the same powers as the Commercial Tribunal; that is, it will be able to issue summons for attendance and for the production of evidence before the Tribunal. It will be able to administer an oath or affirmation and require any person appearing before it to answer any relevant question. In certain circumstances, appeals against the Tribunal's decision are allowed to the District Court.
By establishing a single body to hear all home building disputes, the amendments represent a major improvement over the present system. They remove the frustrating and costly necessity for a consumer to pursue separate remedies for different aspects of a home building related grievance. ..."
40 Prior to the establishment of the Disputes Tribunal, contractual claims in respect of building disputes determined within the court system could include claims for interest by virtue of s 32 and s 34 of the SC Act. Under the HBC Act, proceedings can be transferred to and from the court system, depending upon the fortuitous event as to which proceedings were filed first in time. If, as we find, the purpose of the above provisions of the SC Act is to vest bodies fitting the description of a court with powers which apply to the matters to which the SC rules relate, why should that not include the Disputes Tribunal having regard to all relevant considerations?
41 As stated in the Skiwing decision above at par 17, it is well established on the authorities that the word "court" has a protean quality and takes its meaning from its context, and that various forms of quasi-judicial tribunals will fall within the concept of a "court" as that word is used in particular statutes. The controversy as to whether or not a tribunal is exercising judicial power and is to be regarded as a court is not new and pre-dates the enactment of the SC Act in 1935: see the various cases identified in R v Trade Practices Tribunal; Ex parte Tasmanian Breweries Pty Ltd [1970] HCA 8; [1970] 123 CLR 361 at 367. There is no apparent policy reason why the word "court" in the SC Act should be read restrictively as referring only to a court in the strict sense. To the contrary, there is no policy reason why a body charged with the exercise of a judicial power to determine contractual disputes, including claims within the type described in s 32 of the SC Act, between citizens, or citizens and the State, should not have a power to award interest, when interest could clearly be awarded if the same dispute was transferred to a court in the strict sense.
42 We note that this very issue was considered by Gobbo J in Roads Corporation v Melbourne Estates Finance Co Pty Ltd (No 2) [1993] VicRp 94; [1993] 2 VR 620 who held that the Land Valuation Board of Review could not be characterised as a court for the purposes of s 33 of the Supreme Court Act 1986 (Vic). While differently worded, that section is to much the same effect as s 34 of the SC Act here under consideration. It was held that the reference therein to "court" had to be given its ordinary meaning. Nevertheless the reasons for decision show that this conclusion did not prevent the court from considering whether the Board was a court in the general, as opposed to the strict, sense. Factors of significance in the decision were that 80% of the work of the Board was of an administrative nature, the chairman was not required to be a judge or a qualified legal practitioner, formal hearings were not held - meetings were conducted, and the responsible Minister was required to select a chairman and two members of a panel for each particular claim or appeal, having regard to the location of the land and the qualifications and experience of the members. The Disputes Tribunal operates very differently as canvassed above; apart from there being no judicial member, its chairpersons must be qualified lawyers, hearings are held, the right is preserved for evidence to be given on oath, for cross-examination of witnesses, to make submissions, and there is no executive say in the constitution of the Disputes Tribunal for particular hearings.
43 By contrast, the status of the Victorian Domestic Building Tribunal was considered in Volpe v Greenhill Homes Pty Ltd & Ors 12 VR 437, and the view expressed by Davey J was that the Tribunal was a court for the purposes of the Fair Trading Act 1995 (Vic). The function of the Tribunal as described in the decision is strikingly similar to the Disputes Tribunal; if objection is raised in proceedings commenced before the Supreme, County or Magistrates Courts the proceedings must be dismissed and can only be heard in the Tribunal, there is a right of appeal to the Court of Appeal on questions of law, the rules of evidence do not apply and there is a right to give evidence on oath and to cross-examine, and written reasons must be given if requested. While its Chairperson must be a County Court judge and all its members practising lawyers or magistrates, as reasoned in Wood and Bradley referred to above, that is not a necessary prerequisite if the body is free from influence from the other branches of government.
44 When regard is had to the propositions stated in the Shell case, all of which can be answered in the affirmative, and all of the above considerations are balanced, we conclude that the Disputes Tribunal is a court for the purposes of s 34 of the SC Act.
45 Standing in the shoes of the Disputes Tribunal, the interest to which we consider the owners are entitled is interest at 6% per annum on the liquidated damages of $1410 for the period from 20 March 2001 until today, a period of 5 years and 270 days. This computes to $485.58. The builder argued before us that as the owners had "sat on their hands" for some three years before lodging their complaint with the Disputes Tribunal, they should not have the benefit of an interest order, at least to the full extent, as a matter of the exercise of our discretion. We reject this argument on the basis that whatever the cause of the delay, the builder has had the benefit, and the owners have been deprived of the money which we have concluded is outstanding for the period to which we have referred.
46 The question of costs was not raised during argument but the builder has included in its amended application a proposed order that the owner pay the costs of the appeal.
47 The parties should be provided with an opportunity to apply for costs but we make the following observations. The starting point in this Tribunal is that each party bears its own costs. Although s 87(2) of the State Administrative Tribunal Act 2004 gives a wide discretion to award costs it will need to be demonstrated that there is good reason why each party should not bear their own costs. We note that neither party had legal representation before the Disputes Tribunal, that the monetary benefit achieved by the Builder as a result of the review is not significant, that the principles raised are of significance to the builder in the ongoing conduct of its operations, and even to the industry in which it operates, but are of relatively little importance to the owner except to justify the amount awarded to the owner by the Disputes Tribunal.
48 In these circumstances we will provide a limited time within which any application for costs may be made, failing which the proceedings will be regarded as finalised.
49 For the above reasons the owners are entitled to liquidated damages in the sum of $1410, plus interest thereon in the sum of $485.58. We also note that the Disputes Tribunal awarded the owners costs relating to the filing fee paid by them in the amount of $25 and as that award was not challenged it should be included in the amount which we find to be payable.
50 The Tribunal orders that:
1. The applicant is granted leave to review the decision of the Building Disputes Tribunal made on 18 May 2006 that the applicant pay the respondents the sum of $7,772.35 within 14 days.
2. The decision under review is set aside and the following order substituted:
That BGC Residential Pty Ltd pay to John Raymond Vagg and Linda Roberts :
(ii) interest thereon from 20 March 2001 to date, calculated at a rate of 6% per annum, in the sum of $485.58;
(b) costs, in respect of filing fees in the Building Disputes Tribunal in the sum of $25.
3. The parties have liberty to apply in respect of costs, subject to any partying wishing to so apply, filing and serving an affidavit detailing the costs incurred and the costs claimed, together with an outline of submissions within 14 days of this order.
4. In the event of any application for costs being made the other party shall, within 7 days of being served with the documents referred to in paragraph 4 of this order, file and serve any outline of submissions and affidavit in opposition.
5. Subject to further order, the Tribunal shall thereafter determine any application for costs made in accordance with paragraph 3 of this order on the documents.
I certify that this and the preceding [50] paragraphs comprise the reasons for decision of the State Administrative Tribunal.
___________________________________
MR C RAYMOND, SENIOR MEMBER
(1995) 183 CLR 245
(1986) 69 ALR 125
(2006) 148 FCR 276
(1998) 47 NSWLR 47