Collings Homes v Head & Ors [2002] NSWSC 1219 | Case summary

REASONS FOR DECISION 1 MASTER: The plaintiff carries on business as a designer of homes and provides other services. The first and second defendants (the defendants) wanted to build a new home on land owned by them at Macquarie Links. They responded to an advertisement published by the plaintiff. Following discussion had between the parties, certain documentation came into being. The plaintiff regarded this as a contract to provide certain services for a fixed sum of $38,500. 2 I shall mention certain of the services provided by the plaintiff. The plaintiff designs project homes which can be modified to meet individual requirements. It provides costings for building work. It obtains development approval. It introduces a licensed builder who is prepared to enter into a building contract for a fixed price and procures execution of such building contract. 3 In the present case, the services to be provided by the plaintiff were of a like nature. The building contract was to be in the sum of $316,000. The price to be paid to the plaintiff for the services was $38,500. 4 Certain of the services were provided. The stage had been reached where application had been made to council and approval may have been forthcoming. A licensed builder had been procured and he had signed the building contract. 5 The defendants had paid a sum of $20,000 to the plaintiff. The plaintiff had expended certain moneys (including council fees). The defendants decided not to proceed. They demanded a refund of the moneys that had been paid. Council was asked not to proceed with the development application. 6 The defendants sought legal advice. A demand was made for the refund of the moneys paid to the plaintiff. This appears to have been done at least in part on the basis of there having been a total failure of consideration. The plaintiff refused to refund the moneys. 7 On 18 December 2001, the defendants made application to the third defendant (the Tribunal). The claim was heard on 24 May 2002. Reasons for decision have been provided by the Tribunal. These are dated 22 July 2002. 8 The application sought the refund of the $20,000. The basis upon which the relief was sought was far from clear. One matter raised in the application is an assertion that the defendants were misled into believing that the plaintiff would be both designing and building the house. 9 For completeness, I should observe that the Tribunal did not accept that the defendants had been so misled by the plaintiff. 10 The Tribunal had before it both a tender of documentation (including the contract documents Exhibit 2) and oral evidence from the defendants and Mr Collings. A finding favourable to Mr Collings was made in respect to credibility. 11 It appears that the proceedings were not recorded. Accordingly, there is no transcript. As can be expected, this is a recipe for subsequent dispute. Like as has happened in many other such cases, there is dispute as to what took place during the hearing. 12 The parties were not represented. There is evidence that a solicitor (Mr Bradbury) who remains the solicitor for the plaintiff, sat at the back of the court during the hearing. 13 Somehow the application came to be propounded in the Tribunal as a building claim under the Home Building Act 1989 (the Act). The plaintiff made an objection to jurisdiction. It was contended that the defendants' claim was not a "building claim" within the meaning of s 84 of the Act. In support of that contention, the Tribunal was given a copy of advice from Mr Glissan of counsel to which was annexed the judgment of McClellan J in Woolfe v Alexander Sussman t/as A Sussman Construction Consulting Services & Anor [2001] NSWSC 702. 14 The Tribunal first determined the jurisdictional issue in favour of the defendants. It then proceeded to determine the application. 15 The reasons for decision inter alia record that notice was given to the parties of the issues or consequences that followed the finding that the claim was one to which the Act applied and that an opportunity to take an adjournment was given to the parties. 16 The plaintiff disputes aspects of this material. There is conflicting evidence from the parties as to it. Only one of the deponents was the subject of any cross-examination and it was of a very limited nature. The court was not in a position to resolve that issue and fortunately was not asked to do so. 17 The decision of the Tribunal saw the making of a number of orders (including an order in favour of the defendants for the payment of the sum of $20,000 and an order that the plaintiff recover the sum of $2,000 on its Cross-Claim). 18 The reasons for the decision are lengthy and include many references to decided cases. The reasoning involved a consideration of many matters, very little of which could have been expected to have arisen from such submissions as were made by the parties. Indeed, it could be thought that they would not have had any of them in contemplation. 19 The case for the plaintiff is presently propounded in a document entitled Supplementary Notice of Summons. The court has been told that this title was insisted upon by the Registry. It contains a statement of grounds. The grounds raise a matter of denial of procedural fairness. This aspect of the matter concerned inter alia what has been earlier mentioned in paragraphs 15 and 16 hereof, findings subsequently made as to the plaintiff being required to hold a licence under the Act and to have homeowner's warranty insurance and findings of illegality as to both contract and performance. 20 Ultimately, the court was not asked to determine these matters and they were therefore not the subject of argument. 21 It was common ground that the jurisdictional issue was a threshold question which would be determinative of the appeal. 22 At the conclusion of argument on the question, I informed the parties that I had reached a view on it. I had reached the view that the Tribunal had erred in determining that the plaintiff's application was a "building claim" under the Act. I then made orders (including orders setting aside the decisions and orders of the Tribunal made on 22 July 2002). I was asked to deliver short reasons in due course. I shall now proceed with the performance of that exercise. 23 The jurisdiction of the Tribunal to entertain a building claim is conferred by s 89B of the Act. The definition of a building claim is to be found in s 84. The terms of the definition require recourse to s 3. 24 For present purposes, it suffices to merely refer to those provisions contained in the definitions which are relevant to this matter. A "building claim" is any one of the remedies specified in (a) to (e) of subsection (1) of s 84 that arises from a supply of building goods or services whether under a contract or not. The section defines "building goods or services" as goods or services supplied for or in connection with the carrying out of residential building work supplied by the person who contracts to do that work. Section 3 defines "residential building work" as any work involved in or involved in co-ordinating or supervising any work involved in the construction of a dwelling. 25 In Woolfe, at paragraph 18, McClellan J observed as follows:- "18 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." 26 It appears that the Tribunal in reaching its decision on the jurisdictional issue distinguished the facts in the present case from those before the court in Woolfe (see paragraphs 27 and 28). It was found that the services were not provided in the course of considering the feasibility of the re-development of the defendants' property. To the extent that regard was had to the matter of the proper construction of the statutory provisions there seems to have been misconception and misdirection. 27 There are inter alia two reasons why the application is not a "building claim". Firstly, the services to be provided by the plaintiff did not fall within the definition of "residential building work". Secondly, there was then no "residential building work" supplied by the person who had contracted to do that work. 28 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. 29 In this case, the building of the dwelling was to be done by a licensed builder and it was to be done pursuant to a home building contract that had been executed by him. As a consequence of the conduct of the defendants, no building contract came into being and no building of a dwelling took place involving only work done by the plaintiff or that builder. 30 The relevant statutory provisions need to be construed having regard to their context, with regard also being had to the purpose of the legislation. 31 The Act is expressed to be a statute inter alia "to make provision concerning the residential building industry". The provisions appear in Part 5 (which deals with appeals and applications to the Tribunal). 32 The dictionary meaning attributed to "construction" connotes inter alia building and the way in which something is put together. 33 When regard is had to the literal meaning and matters of context and purpose I consider that it was intended that "construction" be seen as the building process itself. 34 Accordingly, I reached the view, that the services which were to be provided by the plaintiff did not fall within the definition of "residential building work". They are not work involved in the construction of a dwelling. They are not work involved in co-ordinating or supervising any work involved in the construction of a dwelling. 35 The services may be seen as work that preceded or was preliminary to work involved in the construction of a dwelling. There was no co-ordination or supervision of any such latter work required from the plaintiff. 36 In the circumstances, it was my view, that the plaintiff was entitled to have the determination as to jurisdiction disturbed and the decisions and orders of the Tribunal set aside. Accordingly, I have so ordered.

Collings Homes v Head & Ors

At a glance

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Judgment (8 paragraphs)

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Cited By (15)