Building Insurers' Guarantee Corporation v The Owners - Strata Plan 60848 - [2012] NSWCA 375 - NSWCA 2012 case summary

Court of Appeal (NSW)|2012-09-05|Before: Macfarlan JA, Bergin CJ, MacFarlan JA

Judgment 1MACFARLAN JA: I agree with both Bergin CJ in Eq and Sackville AJA. 2BERGIN CJ in Eq: The applicant, Building Insurers' Guarantee Corporation (BIGC), seeks orders in the nature of certiorari quashing orders made by the District Court of New South Wales (McLoughlin DCJ) on 3 February 2011 (Owners Corporation of SP 60848 v Building Insurers Guarantee Corporation (Unreported, District Court of New South Wales, McLoughlin DCJ, 3 February 2012)) (the Judgment). The primary judge allowed an appeal brought by the respondent, Owners Corporation Strata Plan 60848 (Owners), pursuant to s 67(1) of the Consumer Trader and Tenancy Tribunal Act 2001 (NSW) (the CTTT Act) from a decision of the Consumer Trader and Tenancy Tribunal (the Tribunal): Owners Corporation of SP 60848 v Building Insurers Guarantee Corporation [2011] NSWCTTT 346. Background 3In about 1998/1999 Dorigad Two Pty Ltd (the developer) and Veraxo Pty Ltd (the builder) converted an existing office building in Stanley Street, East Sydney into residential apartments and commercial suites (the Building). These two companies had worked together over a lengthy period and there was no written contract in respect of the conversion of the Building. 4On around 15 June 1998 FAI Insurance Limited (FAI) issued a home warranty insurance certificate pursuant to Part 6 of the Home Building Act 1989 (NSW) (the HB Act). 5In August 1999 Owners was constituted and became the registered proprietor of the Building. As a result of the subsequent liquidation of FAI, BIGC indemnified the respondent pursuant to s 103I of the HB Act to the extent that Owners would have been entitled to recover under the insurance contract issued by FAI. 6In July 2005 Owners lodged a claim with BIGC under Part 6A of the HB Act including relevantly a claim in respect of a lack of waterproofing of the façade of the Building that was causing the ingress of water through the walls and windows of the Building. On 11 January 2007 BIGC denied indemnity on the basis that the builder "was not contracted to waterproof the external façade" of the Building and there was "no breach of statutory warranty." The Tribunal Proceedings 7On 30 May 2007, Owners filed an application in the Tribunal, by way of an appeal from BIGC's denial of indemnity (ss 103J and 103ZA of the HB Act). Owners claimed that the builder had breached the warranties in s 18B of the HB Act and that BIGC was not entitled to deny indemnity in respect of the consequential damage from the failure to waterproof the external façade of the Building. 8The Tribunal proceedings were heard on 27, 28 & 29 October 2010. 9There was an issue before the Tribunal as to whether a conversation between the principal of the builder, Mr Wray (referred to by the primary judge as Mr Rae - nomenclature which I will adopt for convenience), and the principal of the developer, Mr Onisforou, had occurred in the terms alleged by the builder (in paragraph 27 of Mr Rae's statement). Mr Rae alleged that the conversation was in the following terms: Rae: The existing windows are leaking and so are the stairwells. There is no cavity in the external walls, it's only a 200mm wall. What do you want me to do? Onisforou: Don't worry about it. Just keep on building. 10Mr Onisforou denied that the conversation occurred. The Tribunal preferred the evidence of the builder to that of the developer and found that the conversation occurred ([21] AB 199-200). 11The Tribunal dismissed Owners' application on 2 August 2011. The Tribunal's Reasons included findings that: the contract between the builder and the developer was wholly oral ([18] AB 199); it was a "do and charge" contract ([15] AB 198); the builder's instructions were that the whole Building was to be stripped out and all external walls were to be retained (the builder was not asked to build any external walls and did not do so) ([15] AB 198); this was not a contract where the builder was required to carry out works to the exterior of the Building ([23] AB 200); "apart from such matters as windows" the builder's contract required work that was limited to the interior of the building ([23] AB 200); the builder did not apply a waterproofing membrane ([16] AB 199); there was no contractual obligation on the builder to carry out any work to apply a waterproofing membrane ([20] AB 199; [23] AB 200); the lack of such a membrane was not a breach of contract by the builder ([20] AB 199); for the builder "to take such steps" (that is waterproofing the Building to make it fit for occupation) was beyond the contract and the warranty in s 18B(e) of the Act did not come into play ([25] AB 200). District Court Proceedings 12On 31 August 2011, Owners commenced proceedings in the District Court pursuant to s 67(1) of the CTTT Act by way of an appeal against the Tribunal's decision with respect to a matter of law. The grounds of appeal as claimed in the Summons (AB 81-82) were (with some repetition) that the Tribunal erred in:

This Court's Jurisdiction 55The respondent ("Owners") submitted that this Court's jurisdiction to grant relief in the nature of certiorari is limited by s 65(1) of the Consumer, Trader and Tenancy Tribunal Act 2001 ("CTTT Act"). Mr Svehla, who appeared for Owners, accepted that in consequence of Kirk v Industrial Relations Commission (NSW) [2010] HCA 1; 239 CLR 531, this Court cannot be deprived of its jurisdiction to quash the District Court's decision, provided that decision was affected by jurisdictional error. However, he contended that s 65(1) of the CTTT Act, when read with s 69(5) of the Supreme Court Act, removes the jurisdiction of this Court to grant relief in respect of non-jurisdictional error by the District Court when making orders on an appeal from a decision of the Consumer, Trader and Tenancy Tribunal ("Tribunal"). Since, so he argued, any error by the District Court in the present case was only non-jurisdictional, BIGC's application had to fail.

Legislation 56To assess this submission, it is necessary to set out the terms of ss 65 and 67 of the CTTT Act and s 69 of the Supreme Court Act. They are as follows: CTTT Act "65 Review by prerogative writ etc generally excluded (1) Except as provided by this section, a court has no jurisdiction to grant relief or a remedy by way of: (a) a judgment or order in the nature of prohibition, mandamus, certiorari or other relief, or (b) a declaratory judgment or order, or (c) an injunction, in respect of any matter that has been heard and determined (or is to be heard or determined) by the Tribunal in accordance with this Act or in respect of any ruling, order or other proceeding relating to such a matter. (2) A court is not prevented from granting relief or a remedy of a kind referred to in subsection (1) in relation to a matter in respect of which the jurisdiction of the Tribunal to determine the matter was disputed if the ground on which the relief or remedy is sought is that: (a) the Tribunal gave an erroneous ruling as to its jurisdiction, or (b) the Tribunal erred in refusing or failing to give a ruling as to its jurisdiction when its jurisdiction was disputed. (3) A court is not prevented from granting relief or a remedy of a kind referred to in subsection (1) in relation to a matter in respect of which the Tribunal has made an order if the ground on which the relief or remedy is sought is that: (a) the Tribunal had no jurisdiction to make the order, or (b) in relation to the hearing or determination of the matter, a party had been denied procedural fairness. ... 67 Appeal against decision of Tribunal with respect to matter of law (1) If, in respect of any proceedings, the Tribunal decides a question with respect to a matter of law, a party in the proceedings who is dissatisfied with the decision may, subject to this section, appeal to the District Court against the decision. ... (3) After deciding the question the subject of such an appeal, the District Court may, unless it affirms the decision of the Tribunal on the question: (a) make such order in relation to the proceedings in which the question arose as, in its opinion, should have been made by the Tribunal, or (b) remit its decision on the question to the Tribunal and order a rehearing of the proceedings by the Tribunal." Supreme Court Act "69 ... (3) It is declared that the jurisdiction of the Court to grant any relief or remedy in the nature of a writ of certiorari includes jurisdiction to quash the ultimate determination of a court or tribunal in any proceedings if that determination has been made on the basis of an error of law that appears on the face of the record of the proceedings. (4) For the purposes of subsection (3), the face of the record includes the reasons expressed by the court or tribunal for its ultimate determination. (5) Subsections (3) and (4) do not affect the operation of any legislative provision to the extent to which the provision is, according to common law principles and disregarding those subsections, effective to prevent the Court from exercising its powers to quash or otherwise review a decision." Submissions 57Mr Svehla's submissions rest on the contention that BIGC's application to this Court is for relief "in respect of any ruling, order or other proceeding relating to ... a matter" that has been heard and determined by the Tribunal within the meaning of s 65(1) of the CTTT Act. He says that the District Court's orders relate to the matter heard and determined by the Tribunal because the District Court's orders set aside the Tribunal's determination. It follows, so Mr Svehla argues, that the terms of s 65(1) of the CTTT Act are satisfied. 58The next step in Owner's argument is that s 69(5) of the Supreme Court Act preserves the operation of s 65(1) of the CTTT Act against what otherwise would be the broader conferral of jurisdiction on this Court by s 69(3) and (4) of the Supreme Court Act. Accordingly, BIGC cannot claim relief in the nature of certiorari unless it establishes that the decision of the District Court was affected by jurisdictional error. 59BIGC submitted that s 65(1) of the CTTT Act does not apply to an application for relief in relation to a decision of the District Court on an appeal from a Tribunal decision. Mr Lynch contended that the District Court appeal is not, for the purposes of s 65(1) of the CTTT Act, a "proceeding relating to ... a matter" determined by the Tribunal. Thus, so he argued, it is open to BIGC to seek orders quashing the decision of the District Court on the basis of an error of law that appears on the face of the record (Supreme Court Act, s 69(3)), whether or not the error also constitutes a jurisdictional error. 60Mr Lynch contended that s 65(1) of the CTTT Act is intended to preclude both direct and collateral attacks on orders made by the Tribunal and on orders made in proceedings founded upon the correctness of a Tribunal determination. He gave a number of illustrations of proceedings founded on the correctness of a Tribunal determination. The illustrations included an application to the Registrar of the Tribunal for a certificate which, if filed in a court, operates as a judgment of that court (CTTT Act, s 51); a proceeding to enforce a judgment obtained by filing a certificate; a prosecution against a person for wilfully contravening an order of the Tribunal (CTTT Act, s 52); and a disciplinary complaint against a holder of a contractor licence for failure to comply with a rectification order made by the Tribunal (Home Buildings Act 1989 ("HB Act"), s 51(1)(b)).

Reasoning 61The CTTT Act does not define the word "proceeding" used in s 65(1). The only other provision in the CTTT Act which uses that word is s 54(3) which is in Div 1 of Part 5 dealing with conciliation. Section 54(1) in Div 1 states that it is the Tribunal's duty, before determining any matter that is the subject of proceedings, to use its best endeavours to bring the parties in the proceedings to an acceptable settlement. Section 54(3) provides that any statement made: "before the Tribunal or any person at a meeting or other proceeding held for the purpose of [s 54(1)] is not admissible at a hearing of the matter concerned or in any other legal proceedings". Clearly a proceeding under s 54(3), conducted for the purposes of promoting settlement, would fall within s 65(1) since it would be a proceeding relating to a matter to be determined by the Tribunal. 62Section 4(1) of the CTTT Act defines "proceedings" to mean: "proceedings in or before the Tribunal, and includes any alternative dispute resolution procedures under Part 5". While s 65(1) uses only the singular form of the word "proceeding", the definition of "proceedings" plainly does not include an appeal to the District Court from a decision of the Tribunal. 63The CTTT Act distinguishes between a "matter" and the proceedings in which the matter is to be determined. This appears from s 54(1) and other provisions in the CTTT Act: see, for example, ss 59(1), 64(b). Section 65(1) makes a similar distinction between a matter that has been or is to be determined and a proceeding (or ruling or order) relating to such a matter. 64The structure of s 65(1) is that a court is deprived of jurisdiction to grant the specified relief:

in respect of any matter that has been heard and determined by the Tribunal; and
in respect of any matter that is yet to be heard or determined by the Tribunal.

The reference in s 65(1) to "any ruling, order or other proceeding relating to such a matter" is apt to describe interlocutory rulings, orders or proceedings in a matter that is yet to be heard or determined by the Tribunal. 65The most natural reading of s 65(1) is that it is intended to protect from challenge, otherwise than as provided in Part 6, a final decision by the Tribunal that resolves a matter and also any ruling, order or other proceeding made or undertaken by the Tribunal in the course of dealing with the matter before it. The reference to "proceeding" in s 65(1) is explained by the need to protect the Tribunal from an injunction restraining the Tribunal from undertaking a proceeding (such as a hearing) for the purposes of resolving the matter. 66Section 65(1) of the CTTT Act therefore protects a final decision of the Tribunal disposing of a matter, an interlocutory decision made in the course of dealing with the matter and any proceeding undertaken by the Tribunal for the purposes of hearing and deciding the matter. It is unnecessary for the purposes of this case to decide whether s 65(1) precludes collateral attacks on the orders of the Tribunal in proceedings founded on the correctness of the Tribunal's orders. 67The language and context of s 65(1) do not suggest that it was intended to protect from judicial review not only the Tribunal's rulings, orders and proceedings, but also orders made by the District Court on an appeal against a decision of the Tribunal with respect to a matter of law. Section 65(1) makes no express reference to decisions or orders of the District Court notwithstanding that s 67(1), which creates the right of appeal to the District Court, is also in Part 6 of the CTTT Act. If s 65(1) was intended to have the operation attributed to it by Owners, it might have been expected to say so expressly. 68Section 65(1) must also be read in context. Section 65(2) and (3) appear to be drafted on the assumption that s 65(1) protects only rulings or orders made by the Tribunal itself. These provisions preserve the jurisdiction of a court to grant relief in defined circumstances where the Tribunal itself has made a ruling or order. They do not appear to contemplate that s 65(1) might (on Owners' argument) extend to orders made by the District Court on appeal from the Tribunal. 69It is also necessary to bear in mind that s 65(1) of the CTTT Act is to be interpreted having regard to the "basic rule" that privative clauses are construed: "by reference to a presumption that the legislature does not intend to deprive the citizen of access to the courts, other than to the extent expressly stated or necessarily to be implied." Plaintiff S157/2002 v Commonwealth [2003] HCA 2; 211 CLR 476, at [32], per Gleeson CJ; at [72], per Gaudron, McHugh, Gummow, Kirby and Hayne JJ (citing Public Service Association (SA) v Federated Clerks' Union [1991] HCA 33; 173 CLR 132, at 160, per Dawson and Gaudron JJ). 70It is true that by reason of the decision in Kirk v IRC, Owners' argument, if accepted, would not deprive a person wishing to challenge a decision of the District Court on appeal from the Tribunal of access to this Court for the purpose. But if s 65(1) were given the meaning attributed to it by Owners, it would substantially curtail the scope of judicial review conferred by s 69(3) and (4) of the Supreme Court Act. In reconciling these provisions, the "basic rule" counts against giving s 65(1) of the CTTT Act a wider operation than the statutory language requires. 71For these reasons, s 65(1) of the CTTT Act does not restrict the scope of this Court's jurisdiction under s 69 of the Supreme Court Act.

Error of Law 72I agree with Bergin CJ in Eq that the primary Judge erred in law in holding that s 18B(e) of the HB Act applied to the building contract so as to make the builder liable for failing to render the building waterproof. In view of the Tribunal's finding of fact that the building contract did not extend to waterproofing work, s 18B(e) could not operate to impose an implied term requiring the builder to carry out waterproofing work so as to render the premises fit for occupation as a dwelling. It follows that the primary Judge also erred in law in holding that the absence of any requirement in the building contract to perform waterproofing work attracted the operation of s 18G of the HB Act. 73As I have explained, it is not necessary for BIGC to demonstrate that the District Court's errors of law constituted jurisdictional errors. That question was not addressed in depth in the argument and I express no opinion on it. 74I agree with the orders proposed by Bergin CJ in Eq.

Amendments 20 November 2012 - changed plaintiff's to defendant's name Amended paragraphs: 42 and 58 21 November 2012 - BIGC's changed to Owner'sOwner changed to BIGC Amended paragraphs: 58 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. Decision last updated: 21 November 2012

Consumer Trader and Tenancy Tribunal Act 2001(NSW)

Building Insurers' Guarantee Corporation v The Owners - Strata Plan 60848

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