Solicitors:
Appellant - Fair Trading Legal Services
Respondent - Sachs Gerace Broome
File Number(s): AP 16/09215, AP 16/25075
Decision under appeal Court or tribunal: Civil and Administrative Tribunal
Jurisdiction: Occupational Division
Citation: [2016] NSWCATOD 12, [2016] NSWCATOD 60
Date of Decision: 27 January 2016
Before: J Lucy, Senior Member
File Number(s): 1520194
[2]
Background
1 This decision deals with appeals which were heard together, from two decisions in the Occupational Division ("OD") of this Tribunal.
The first decision under appeal (Younan v Commissioner for Fair Trading [2016] NSWCATOD 12) in an administrative review, set aside a decision ("the Commissioner's decision") which had been made on 2 September 2015 by the Commissioner for Fair Trading (the appellant in this appeal and hereinafter referred to as "the appellant" or "the Commissioner") and which in an internal review, agreed with and affirmed a decision of a Delegate of the Commissioner pursuant to s62(c) of the Home Building Act 1989 ("the HBA"). The Delegate had determined that Mr Wardy Younan (the respondent in these proceedings and hereinafter referred to as "the respondent" or "Mr Younan") had conducted himself, as a director of Nazero Pty Ltd, in a manner that would warrant the taking of disciplinary action against him and that he be required to pay to the Commissioner, as a penalty, $3,000.00. We understand that the $3,000.00 has been paid to the Comissioner.
In the second decision under appeal (Younan v Commissioner for Fair Trading (No.2) [2016] NSWCATOD 60) the Commissioner was ordered to pay Mr Younan's costs of those proceedings.
The material facts involved in the allegations against Mr Younan, shortly stated, were:
1. At all relevant times Mr Younan was a director of Nazero Construction Pty Ltd (later known as Zeecat Constructions Pty Ltd) which was a licensed contractor under the HBA ("the contractor").
2. The contractor failed without reasonable cause to comply with the requirements of rectification orders issued to it, requiring it to rectify defective work in relation to residential building work it had done on two properties, one at Manly and one at Gosford.
3. The contractor was therefore guilty of improper conduct under s51(2)(b) of the HBA and Mr Younan, as a director of the contractor, was guilty of improper conduct under s54(1) of the HBA.
Additional matters concerning the Manly work included:
1. On 17 April 2013 an inspector of NSW Fair Trading issued to the contractor a rectification order ("the Manly rectification order") requiring the contractor, by 18 May 2013, to attend to defective work, evidently involving a bathroom leak in a home unit.
2. On 19 March 2014, the owner of the property instituted a building claim against Nazero in the Consumer and Commercial Division of this Tribunal, which included the defective work referred to in the Manly rectification order.
Matters of fact had been raised by Mr Younan in respect of the Manly work, but given the outcome, as we will explain later in this decision, which the Commissioner has in this appeal conceded for this aspect of the proceedings, these matters need not be detailed.
Additional alleged matters concerning the Gosford work included:
1. On 2 July 2014, at a site meeting involving the owners of a home unit in the property, Mr Younan and an inspector of NSW Fair Trading, the inspector issued to the contractor a Complaint Inspection Advice under s48D of the HBA requiring the contractor to rectify by 23 July 2014 an issue described in the notice thus, "Water ingress from shower area of main bathroom into hallway area. A flood test revealed water coming from the recess".
2. On 18 August 2014 an inspector of NSW Fair Trading issued to the contractor a rectification order under s48E of the HBA requiring the contractor, by 1 September 2014, to attend to an item of defective work in the subject unit described in the Order thus, "Rectify water ingress coming from shower recess in main bathroom" ("the Gosford rectification order").
Matters of fact had been raised by Mr Younan with NSW Fair Trading in respect of the Gosford work, including, apparently, the following allegations:
1. Prior to the rectification order a plumber had inspected the pipes and indicated that they were not the cause of the leak;
2. Also prior to the rectification order the contractor had flood tested the shower recess on two separate occasions: the first test, when water was filled to the height of the shower door frame, did not show a leak; and the second test, when water was filled above the height of the shower door frame, did show a leak; and
3. The contractor was not permitted adequate access to the subject unit after the rectification order.
[3]
First decision under appeal
Mr Younan's solicitors on his behalf applied under the Administrative Decisions Review Act 1997 for an administrative review of the Commissioner's decision. That application was heard, and the first decision under appeal was delivered, on 27 January 2016. The Tribunal made the following orders:
1. The Commissioner's decision is set aside and, in substitution for that decision, the Tribunal decides that there are no identified grounds for taking disciplinary action against the applicant under s 62 of the Home Building Act 1989.
2. Applicant's application for costs is to be determined on the papers.
In relation to the Manly property, the decision dealt with what was referred to as a threshold issue. That issue had been specified prior to the hearing and was, essentially, whether by reason of the institution on 19 March 2014 of the building claim which included the defective work referred to in the Manly rectification order, and of the operation of s 48F of the HBA as amended by the Home Building Amendment Act 2014 (which came into operation on 15 January 2015 - "the 2014 Amendment Act"), the rectification order ceased to have effect. No building claim had been instituted in respect of the Gosford property so the threshold issue did not apply to the Gosford property.
At the time of the rectification orders, s48E and s48F of the HBA relevantly provided:
48E (1) If, after completing an investigation under section 48D, an inspector is satisfied ..
(b) that any residential building work … done by the contractor is defective
…
the inspector may serve a written order on the contract requiring the contractor to take such steps in the order to ensure that the … defect (is) rectified.
(3) A rectification order:
…
(b) must specify a date by which the requirements of the order must be complied with…, and
(c) must indicate that the order will cease to have effect if matter giving rise to the order becomes the subject of a building claim before the date specified in accordance with paragraph (b).
48F (1) Except as provided by section 51, a rectification order does not give rise to any rights or obligations.
(2) …a rectification order ceases to have effect for the purposes of section 51 if the matter giving rise to the order becomes the subject of a building claim before the date specified in accordance with section 48E(3)(b).
Section 51 deals with improper conduct by a holder of a contractor licence and it and s 54, dealing with the position of an officer of a corporation, were invoked by the Commissioner in imposing the penalty.
As a result of the 2014 Amendment Act, there were omitted the words "…before the date specified in accordance with paragraph (b)" from the end of s43E(3)(c) and the words "…before the date specified in accordance with section 48E(3)(b)" from the end of s48F(2).
The transitional situation following the 2014 Amendment Act was relevantly provided for in these clause in Schedule 4 of the HBA (as thereby amended):
121 General operation of amendments
(1) Except as otherwise provided by this Part or the regulations, an amendment made by the Amending Act extends to
…
(d) a loss, liability, claim or dispute that arose before the commencement of the amendment.
…
129 Rectification orders
An amendment of section 48E by the Amending Act does not apply to an order under that section made before the commencement of the amendment.
In the OD hearing it was common ground that there was no other provision in the HBA, the 2014 Amending Act or the regulations under the HBA dealing with the transitional situation involved in the threshold issue. A principal submission made on behalf of the Commissioner was described in the decision thus:
22. Ms Robosa submits that the express reference to s 48E in the savings provision in cl 129 does not exclude s 48F as these two provisions relate to the same scheme of resolving building disputes - that is, they both relate to the issue of rectification orders. In her submission, it is unnecessary for s 48F to be expressly referred to in cl 129 because it is related to and consistent with the requirement to indicate the effect of a building claim lodged before the date specified for the order to be complied with under s 48E(3)(b).
It was also submitted on behalf of the Commissioner that to construe cl 129 as not applying to s48F would lead to an absurdity. The decision described the submissions made on behalf of Mr Younan thus:
27 Mr Johnson, for the applicant, submitted that cl 129 of Sch 4 to the Act should be given effect according to its terms. That is, it applies on its face to s 48E and there is no basis for extending its application to s 48F.
28 He said that the basis for the amendment of s 48F(2), omitting the words "before the date specified in accordance with section 48E(3)(b)," was to avoid subjecting the builder to double jeopardy. That is, it would be unjust to penalise the builder twice: once by an order made against him in the proceedings brought by the home owner, and again in a penalty imposed by the Commissioner. In response to a question from the Tribunal about the purpose of the imposition of a penalty being protective of the public not punitive, Mr Johnson submitted that there was always an element of punishment in the imposition of a penalty.
29 Mr Johnson submitted that the amendment demonstrated that the legislature had decided for the new provision (that is, s 48F) to come into effect immediately.
In ruling against the Commissioner on the threshold issue, the Tribunal said in particular:
33 I do not accept Mr Robosa's submission that cl 129 can be read so as to apply to s 48F. It clearly does not do so on its terms. This appears to be an expression of a legislative change of policy, which is reflected in the terms of s48F itself. The new policy is that a rectification order ceases to have effect upon the making of a building claim, irrespective of when that building claim is commenced.
34 I do not accept Ms Robosa's submission that the plain words of clause 129 give rise to absurdity.
In relation to the Manly property the Tribunal raised at the hearing, and there was then argued and decided, another separate issue which the Member described in the Decision at [44]:
…a rectification order, as defined in s 48B was, relevantly, an order under s 48E(1). Section 48E(1) refers to an order "requiring the contractor to take such steps as are specified in the order to ensure that the work is completed or the defect or damage rectified, as the case requires"… the Gosford rectification does not appear to specify any steps which had to be taken to ensure that the defects were rectified.
The Tribunal decided that issue in favour of the appellant, reasoning predominantly as follows:
58 In my view, there is no scope to interpret these words in s 48E(1) as giving an inspector a discretionary power to specify the steps a contractor must take in an order made under that provision. Rather, a rectification order is an order "requiring the contractor to take such steps as are specified in the order to ensure that the work is completed or the defect or damage rectified, as the case requires". An order which does not require the contractor to take steps to complete work, or rectify a defect or damage, is not an order under s 48E(1) and so is not a "rectification order".
59 The difficulties an inspector may face in identifying a defect and the steps required to fix it, and the consequent expense to the Department, are not reasons to interpret s 48E(1) differently. The legislative purpose, which is apparent from that provision, is that the inspector is to identify clearly what the contractor has to do to comply with the order by specifying "steps". Disciplinary action may then be taken if the contractor has not undertaken the steps specified in the order. This greatly reduces the prospect of any dispute as to whether the contractor has complied with the order or not and provides a clearer basis for taking disciplinary action if the contractor does not comply.
60 I agree with Mr Johnson's submissions that the emails and documents sent to the applicant and the applicant's presence at an inspection of the property are not relevant to the question of whether the order purportedly made under s 48E(1) in relation to the Gosford property is a "rectification order."
61 I do not consider that the statutory warranty in s 18B(1)(a) is relevant to the construction of s 48E(1) in circumstances where the latter provision is unambiguous.
62 I find that the order served upon the applicant's company, Nazero, purportedly pursuant to s 48E(1) in respect of the Gosford property was not a "rectification order" because it did not specify the steps Nazero was required to take to ensure that the aspect was remedied.
The reasons concluded:
64 I am not satisfied that "that any ground on which disciplinary action may be taken against the [applicant] has been established in relation to the [applicant]" (Act, s 62). The ground relied upon in s 51(2)(b) to establish improper conduct, that "without reasonable cause" Nazero has not complied "with the requirements of a rectification order under Division 2 of Part 3A" has not been established. The Commissioner is not entitled to have regard to any non-compliance with the Manly rectification order for reasons given earlier. In the base of the Gosford rectification order, it is not "a rectification order under Division 2 of Part 3A" of the Act, for reasons given above.
65 Accordingly, the correct and preferable decision is to set aside the decision of the Commissioner to require the applicant to pay a penalty of $3,000 and to decide, in substitution for that decision, that there are no identified grounds for taking disciplinary action against the applicant under s 62 of the Home Building Act 1989.
[4]
Second decision under appeal
In the second decision under appeal the Tribunal made the following order;
The respondent is to pay the applicant's costs of these proceedings as agreed or, failing such agreement, as assessed on the basis set out in the legal costs legislation (as defined in s 3A of the Legal Profession Uniform Law Application Act 2014 (NSW).
As to costs, s 60 of the Civil and Administrative Tribunal Act 2013 ("the NCAT Act") relevantly provides:
1. Each party to proceedings in the Tribunal is to pay the party's own costs.
2. The Tribunal may award costs in relation to proceedings before it only if it is satisfied that there are special circumstances warranting an award of costs.
3. In determining whether there are special circumstances warranting an award of costs, the Tribunal may have regard to the following:
1. whether a party has conducted the proceedings in a way that unnecessarily disadvantaged another party to the proceedings,
2. whether a party has been responsible for prolonging unreasonably the time taken to complete the proceedings,
3. the relative strengths of the claims made by each of the parties, including whether a party has made a claim that has no tenable basis in fact or law,
4. the nature and complexity of the proceedings,
5. whether the proceedings were frivolous or vexatious or otherwise misconceived or lacking in substance,
6. whether a party has refused or failed to comply with the duty imposed by section 36(3),
7. any other matter that the Tribunal considers relevant.
The Tribunal's reasons for the costs order were encapsulated thus in the concluding section of the decision:
34 I have found that the Commissioner's claims in these proceedings had no tenable basis in law and on this basis, and on the basis of what follows, I am satisfied that there are special circumstances warranting an award of costs. In finding that special circumstances exist, I take into account that the Commissioner is responsible for administering the Act and it is of concern that the Commissioner's decision to impose a penalty was made without power. This particularly so where the error concerning the Commissioner's reliance on the Manly rectification order as a basis for the imposition of a penalty was pointed out in the applicant's application to the Tribunal of 1 October 2015, yet the Commissioner persisted in his position. Similarly, it is concern that, where the Commissioner should have been put on notice that the Gosford rectification order was not a "rectification order" by the applicant's submissions of 8 December 2015, he maintained the view at the hearing that it was such an order.
The decision had earlier at [15] and [22] spoken of the Commissioner's positions on each of the issues as having been "untenable".
[5]
Appeals
The first appeal (AP 16/09215) is in respect of the first decision under appeal and the second appeal (AP 16/25075) is in respect of the second decision under appeal. Section 80(2) of the NCAT Act specifies the circumstances in which internal appeals such as these may be made:
Any internal appeal may be made:
(a) in the case of an interlocutory decision of the Tribunal at first instance - with the leave of the appeal panel, and
(b) in the case of any other kind of decision (including an ancillary decision) of the Tribunal at first instance - as of right on any question of law, or with the leave of the Appeal Panel on any other grounds.
The Notice of Appeal in the first appeal specified the following grounds of appeal:
The Tribunal erred in its determination of the meaning of the word "steps" in s 48E(1) of the Act (Decision [58], [62]).
The Tribunal erred in finding that the Gosford rectification order did not set out the "steps" required for compliance with that order (Decision [44], [62]).
The Tribunal erred in finding that s 48D of the Act was not relevant to the construction of s 48E and that the written report produced pursuant to s 48D was not relevant to the construction or validity of the Gosford order (Decision [60]).
As a consequence of ground 3, the Tribunal did not have jurisdiction to find that s 48E(1) of the Act in force immediately prior to 15 January 2015 and s 48F of the Act in force following 15 January 2015 applied to the rectification order made under s 48E(1) before 15 January 2015 (Decision [30]-[37]) because the order under consideration was invalid for failure to comply with s 48D of the Act.
By amendment an additional ground was added:
The Tribunal erred in finding that the pre-amendment s 48E(1) and amended s 48F apply in respect of rectification orders made prior to 15 January 2015.
It is convenient to note as preliminary considerations two aspects of the appeal. First, in a Reply to Appeal there are included in the matters raised by way of opposition to the appeal, contentions that ground 2 (relating to the Gosford work) involves an alleged error of fact and not a question of law and that the appellant has not sought leave to appeal on a question other than a question of law and has not provided any reasons for such leave to be granted. Secondly, included the Commissioner's submissions are concessions in respect of the Manly work that:
1. There had not been compliance with the requirements of s48D(2) of the HBA that following an investigation by a member of staff of the Department of Fair Trading of the matter that had given rise to the building dispute, there be given to the parties a written report on the results of that investigation;
2. S48D(2) is a mandatory provision compliance with which is a condition precedent to the valid issue of a rectification order under s48E and any related exercise of the Commissioner's (and any subsequent decision-maker's) disciplinary jurisdiction under Part 4 Disciplinary proceedings of the Act; and
3. In these circumstances, the Commissioner's finding cannot stand insofar as it related to the Manly work.
We will deal with the first aspect in the next section of this decision. The second aspect will require, regardless of other submissions from the appellant in respect of the Manly work, that the Commissioner's decision insofar as it related to the Manly work, cannot stand.
[6]
Issues and Consideration
We will deal with the situation of the Gosford work first. This turns on the sufficiency of the document relied on to constitute a rectification order under s 48E.
[7]
Question of Law
The initial matter to consider, consistently with the first preliminary aspect of the appeal we have noted above at [25], is whether there is involved in ground of appeal 2 a question of law. The grounds are set out at [24] above in this decision. Ground 1 involves the construction of s 48E(1) basically in respect of a written order which required "the contractor to take such steps as are specified in order to ensure that … the defect (is) rectified". Statutory construction, clearly enough, generally involves a question of law (see e.g. the discussion in Lombard Farms Pty Ltd v Chief Commissioner of State Revenue [2013] NSWADTAP 42 at [5] to [36]). What is also involved in ground 2, however, is whether the rectification order relied on by the appellant specified "steps" and thereby satisfied the requirements of s 48E(1) of the HBA. In our opinion, such an issue does not involve a question of fact but as much as the issue of statutory construction does, it involves a question of law. We see that opinion as being substantiated by authority in Collector of Customs v Agfa-Gevaert Ltd (1996) 186 CLR 391. There was involved in that case an issue which has some similarity to the one in this appeal and which was whether a particular type of photographic paper came within the language of a Customs Tariff Concession Order made under the Customs Act 1901 (Cth). The High Court held that such a question was one of law and in particular the judgment of the Court said at 394-395:
The distinction between questions of fact and questions of law is a vital distinction in many fields of law. Notwithstanding attempts by many distinguished judges and jurists to formulate tests for finding the line between the two questions, no satisfactory test of universal application has yet been formulated. In Hayes v Federal Commissioner of Taxation (1956) 96 CLR 47, Fullagar J emphasised the distinction between the factum probandum (the ultimate fact in issue) and the facta probantia (the facts adduced to prove or disprove that ultimate fact). His Honour said (at 51);
"Where the factum probandum involves a term used in a statute, the question whether the accepted facta probantia establish that factum probandum will generally - so far as I can see, always - be a question of law."
In Collector of Customs v Pozzolanic Enterprises Pty Ltd (1993) 43 FCR 280, the Full Federal Court spoke of the distinction between law and fact in a statutory context as resting upon "value judgment[s] about the range of [an] Act" which, the Court said, necessarily raised questions of law (at 289).
Thus, in our opinion, leave to appeal is not necessary and we may deal with the grounds of appeal as involving questions of law.
[8]
Gosford Rectification Order
Central to the first two grounds of appeal is the way the first decision dealt with the concept of "steps" in s48E, particularly at [44], [58] and [62]. Effectively the decision suggested that the rectification order should elaborate steps which the contractor was to follow to achieve rectification of the defective work. Such a suggestion would seem to point to a need for a degree of particularisation first, for the order separately and expressly to specify on the one hand the defective work and on the other hand, the steps to be taken to ensure that the defect is rectified; and secondly, for the steps to detail the individual items of work constituting the steps. For example, in the appellant's submissions attached to the Reply to Appeal included in support of the decision:
43 The Gosford Rectification Order was made on 18 August 2014 and was ordered to be complied with by 1 September 2014. This gave Nazero two weeks to comply. The Order was that Nazero: "Rectify water ingress coming from shower recess area in main bathroom." This order:
(a) Did not specify what works were required to rectify the water ingress.
(b) Did not identify the cause of the water ingress.
(c) Did not identify a particular defect or breach of the Statutory Warranties.
(d) Simply required that a result be achieved.
44 Water ingress is a notoriously difficult issue to remedy. It is difficult to identify the cause of water egress from a shower area as there are many possible causes, these include:
(a) leaking pipes;
(b) damaged fixtures;
(c) holes in a waterproofing membrane;
(d) damage to shower door frame;
(e) cracks in tiling;
(f) misuse;
(g) improperly laid membrane; and
(h) lack of appropriate fall in tiling.
The actual terms of s 48E(1) of the HBA do not call for such detail to be set out in a rectification order. Those terms require there to be identified only the defect (constituting defective work), and the steps to ensure that the defect is rectified.
Also, it is to be borne in mind that a statutory provision has to be construed with reference to the content and purpose of the whole Act. The following paragraphs from the plurality judgement in Project Blue Sky Inc. v Australian Broadcasting Authority (1968) 194 CLR 355 are in point (references have been omitted):
[69] The primary object of statutory construction is to construe the relevant provision so that it is consistent with the language and purpose of all the provisions of the statute. The meaning of the provision must be determined "by reference to the language of the instrument viewed as a whole". In Commissioner for Railways (NSW) v Agalianos, Dixon CJ pointed out that "the context, the general purpose and policy of a provision and its consistency and fairness are surer guides to its meaning than the logic with which it is constructed." Thus, the process of construction must always begin by examining the context of the provision that is being construed.
[70] A legislative instrument must be construed on the prima facie basis that its provisions are intended to give effect to harmonious goals. Where conflict appears to arise from the language of particular provisions, the conflict must be alleviated, so far as possible, by adjusting the meaning of the competing provisions to achieve that result which will best give effect to the purpose and language of those provisions while maintaining the unity of all the statutory provisions. Reconciling conflicting provisions will often require the court "to determine which is the leading provision and which is the subordinate provision, and which must give way to the other". Only by determining the hierarchy of the provisions will it be possible in many cases to give each provision the meaning which best gives effect to its purpose and language while maintaining the unity of the statutory scheme.
The HBA regulates residential building work and it includes provisions for the licensing of contractors, for the resolution of building disputes and building claims and for disciplinary action against licence holders. Among its sections is s 18B which imposes warranties by, in particular, the holder of a contractor licence, in every contract to do residential building work that, among other things, "the work will be performed in a proper and workmanlike manner". The legislation is clearly directed to the purpose of consumer protection. When consideration is given to the content and purpose of the legislation, the literal meaning of s 48E(1), which in its terms does not require detail to the extent suggested in this decision under appeal to be set forth in a rectification order, is reinforced.
The rectification order itself then has to be construed in the context of s 48E(1). What is involved is the question whether there was in the order any, of any sufficient, specification of the steps required to be taken by the builder. There is guidance as to the degree of specification called for in the order, in a discussion concerning specificity required in notices under construction contracts in FPM Constructions v Council of the City of Blue Mountains [2005] NSWCA 340 at [145] to [151] by Basten JA. Such contractual notices have some similarity to the rectification order here. At [151] Basten JA after considering relevant authorities concluded:
"It follows that a contractual notice should be read with the understanding which will be brought to the exercise by the recipient, including his or her knowledge of the circumstances in which it is given. If the recipient is a builder, it should not be assumed that the reader will understand technical legal terms, but it may be assumed that expressions commonly adopted in that industry will be understood. …"
The rectification order's language, "rectify water ingress coming from shower recess in main bathroom", in our opinion, may be naturally and sensibly read, perhaps more so by the builder who had done the subject work, as requiring that there be taken the step of rectifying the ingression of water from the shower recess into another part of the house. It expressly identified that as the step to be taken, and it also, whether impliedly or on the proper construction of the words used, identified the defect as a leaking shower recess. We see it thus sufficiently complying with the terms of s 48E(1) and, contrary to the finding in the first decision under appeal, to constitute an effective rectification order.
We add that in the OD proceedings, the Commissioner had submitted to the effect that communications from Fair Trading to the contractor prior to the rectification order, particularly the s 48D report detailed in this decision above at [7], should be read in conjunction with the rectification order and that they supported the construction of the rectification order for which the Commissioner contended. The Commissioner submits that the rejection of this submission at [60] in the OD decision was not appropriate. While those communications may be part of the context within which the rectification order was issued, we have not seen it necessary to rely on them in construing the rectification order as we have. Without expressing a concluded view on this point, we think that as the rectification order was a document, non-compliance with which might lead to disciplinary measures, it would be better to construe it alone, according to its own terms, and without reference to extraneous material, as we have done.
For these reasons, we are of the opinion that the finding in the first decision under appeal that there was not a rectification order under s 48E(1) in relation to the Gosford property was incorrect and that the appeal succeeds in that respect. The matter will have to be remitted to OD for the administrative review of the Commissioner's decision to the extent that it related to the Gosford property.
[9]
Threshold Issue
Given the concession that the Commissioner has made in the first appeal, that the Manly rectification order was defective in any event by reason of non-compliance beforehand with s48D of the HBA, the threshold point is no longer an issue here. It is not an issue in respect of the Gosford rectification order either, because there was no relevant building claim there. In these circumstances, we are not required to decide the question raised by the threshold point, which we have described above at [10] as essentially whether by reason of the institution on 19 March 2014 of a building claim which included the defective work referred to in the rectification order of 17 April 2013, and of the operation of s 48F of the HBA as amended by the 2014 Amendment Act, the rectification order ceased to have effect. Nevertheless, submissions were made to us on this issue and in the second decision under appeal, the Commissioner's contended construction of the savings and transitional provisions concerning the 2014 Amendment Act was said at [15] and [34] to be "untenable" and to constitute special circumstances warranting an award of costs in favour of Mr Younan.
The contentions of the Commissioner, which were repeated in submissions made in this appeal, included particularly one that notwithstanding that cl 129 of Schedule 4 refers only to s 48E, its application should be extended to s 48F. The thrust of the submissions is presented in the following paragraphs in the Submissions in Reply:
8. Sections 48E and 48F of the Act are related and must be read together. Section 48E sets out the requirements for a valid rectification order; s 48F sets out the effect of a validly issued order. It is not necessary to consider the effect of s 48F unless an order has been made under s 48E. Such an order forms the subject-matter of s 48F.
…
10. However, retrospective amendments require the express intention of Parliament and in the absence of such an intention, it is presumed that amendments do not operate retrospectively: Maxwell v Murphy (1957) 96 CLR 261 at 267 per Dixon CJ. No express intention can be discerned in the Act, the Amendment Act or in any extrinsic materials. Nor can any clear intention be implied from those sources.
…
12. All of the rectification orders issued by the Commissioner prior to 15 January 2015 are, nevertheless, affected by the inconsistency. The effectiveness of those orders, and of disciplinary proceedings commenced but not completed by that date, is uncertain if the Tribunal's construction of the transitional provisions is allowed to stand. …
13. In the face of inconsistency, the first step is to consider whether a construction that:
a. avoids a finding of conflict between provisions, and
b. achieves the purpose of the legislation
is available, without doing too much violence to the language of the statute: Project Blue Sky v Australian Broadcasting Authority (1998) 194 CLR 355 at 381-382 ("Project Blue Sky").
14. In Project Blue Sky, the High Court observed that the literal meaning of statutory language used should always give way to the context, consequence and purpose of the statute (at 384).
15. In the absence of a clear parliamentary intention as to retrospectivity and in the light of the general purpose of transitional provisions to avoid inconsistency, cl.129 of Schedule 4 of the Act should therefore be read as follows:
"An amendment of sections 48E and 48F by the Amending Act does not apply to orders under s 48E made prior to the commencement of the amendment."
16. This reading is available to the Tribunal on the same basis as that adopted in Commissioner of Fair Trading v Kassem [2015] NSWCATAP 173 at [38], a decision that also deals with the transitional provisions of the Amendment Act.
The Commissioner for Fair Trading v Kassem decision was published on 18 August 2015 and while it preceded the OD hearing in the first matter now before us, apparently it was not referred to there. It dealt with a perceived problem arising from the 2014 Amendment Act concerning the relationship between cl 121 in Schedule 4 of the HBA and cl 143 in that Schedule and in the course of its decision the Appeal Panel there propounded a construction of cl 143 which involved some rewriting of the clause. In that respect there was some similarity to the construction advanced by the appellant in this appeal in respect of cl 129. In summary, the 2014 Amendment Act sought to transfer qualifications or requirements necessary for holding a licence or certificate under the HBA from the regulations made under the HBA to the HBA itself. Clause 143 of Schedule 4 provided:
An amendment made by this amending Act that imposes a requirement that was a requirement of the regulation before the amendment commenced extends to any contract or other matter the requirement was subject to under the regulation immediately before the commencement of the amendment.
Clause 121 is set out in this decision at [14] above. In the OD decision then under appeal it was held that clause 121 was "a more specific provision" and prevailed over clause 143 with a result that no qualification provisions would apply to pre-amendment applications. The Appeal Panel reversed that decision, holding that the more specific provision was cl 143, and went on to point to what it assessed to be "a grammatical error" at [38] or "a drafting mistake" at [39], in cl 143. They had regard at [39] to what was said by Lord Nicholls of Birkenhead in Inco Europe Ltd v First Choice Distribution [2000] 1 WLR 586 at 592 (cited with approval in Minister for Immigration and Citizenship v SZJGV (2009) 238 CLR 642 at [9] and in Taylor v Owners-Strata Plan 11564 (2014) 253 CLR 531 at [39]):
…So the courts exercise considerable caution before adding or omitting or substituting words. Before interpreting a statute in this way the court must be abundantly sure of these matters:
The intended purpose in the provision in question;
That by inadvertence the draftsman and Parliament failed to give effect to that purpose in the provision in question; and
The substance of the provision Parliament would have made, although not necessarily the precise words Parliament would have used, had the error in the Bill been noticed.
The construction of cl 129 suggested in the first appeal before us involves a re-writing of the clause by the insertion of reference to s 48F and not only the correction of a "grammatical error" as in Kassem. Nevertheless, consideration of Project Blue Sky and Kassem and the authorities referred to in them suggest that there is some room for argument in favour of the Commissioner's submissions. The argument may be difficult to sustain but we do not agree that it would be impossible to sustain, as the epithet "untenable" as used in the second decision under appeal would suggest. Whether that argument should succeed is not now for us to decide.
[10]
Costs
The second decision under appeal, in our opinion, cannot stand given that the first appeal succeeds in respect of the Gosford rectification order. We appreciate that the Commissioner has conceded, for a reason not canvassed in the OD proceedings, that, in effect, the first appeal must fail in respect of the Manly rectification order. We have contemplated whether it would be appropriate for the costs order, the subject of the second appeal, should be permitted to stand to the extent that it relates to the Manly rectification order. Nevertheless, a premise of the costs order was the view expressed particularly at [15] and [34] of the second decision under appeal that the Commissioner's position in respect of the Manly rectification order, and the Commissioner's persistence with it, were "untenable". As we have discussed above at [38] to [41] we do not agree with that view. In supplementary written submissions the respondent has also contended that it has not been demonstrated "that the Senior Member has made an error in exercising her discretion sufficient to satisfy the test in House v R (1936) 55 CLR 499". At pp 504-5 in that case the plurality judgment said:
It is not enough that the judges comprising the appellate court consider that, if they had been in the position of the primary judge, they would have taken a different course. It must appear that some error has been made in exercising the discretion. If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellant court may exercise its own discretion in substitution for his if it has the materials for doing so. It may not appear how the primary judge has reached the result embodied in his order, but if upon the facts it is unreasonable or plainly unjust, the appellate court may infer that in some way there has been a failure properly to exercise the discretion which the law reposes in the court of first instance.
Here, the second decision under appeal in relation to the Manly rectification order, as we have explained, was based on an inappropriate premise and thus it failed the test in House v R.
The Commissioner has indicated, we understand, that he would not seek costs if the appeal were successful. The first appeal has been successful only in relation to the Gosford rectification order. The respondent should be given the opportunity to be heard in relation to the costs of the first appeal to the extent that they relate to the Manly rectification order.
[11]
Orders
In respect of the appeal AP 16/09215 the Appeal Panel orders:
1. The appeal is upheld in respect of the Gosford rectification order and is dismissed in respect of the Manly rectification order.
2. The orders made in the decision under appeal are set aside.
3. The proceedings are remitted to the Occupational Division of this Tribunal for a further review of the Commissioner's decision.
4. That review is to be made on the basis that the Gosford rectification order was valid and effective and that the Manly rectification order was invalid and ineffective, and otherwise in accordance with this decision.
5. Any application by the respondent for costs of this appeal to the extent they relate to the Manly rectification order is to be made by written submissions filed and served within 21 days after publication of this decision. The appellant may reply to any such application by written submissions filed and served within 21 days after service on the respondent of any such application. The application will then be decided by the Appeal Panel on the papers.
In respect of appeal AP 16/25075 the Appeal Panel orders:
1. The appeal is upheld.
2. The order made in the decision under appeal is set aside.
3. The issue of costs in the Occupational Division proceedings, including those in proceedings OD 1520194, is remitted to the Occupational Division.
4. Each party is to pay their own costs of the appeal.
[12]
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.
Registrar
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Decision last updated: 21 December 2016