Cyril Smith & Associates Pty Ltd v Owners-Strata Plan No. 64970

EX TEMPORE Judgment 1HIS HONOUR: The plaintiff is the Owners Corporation of a strata plan comprising a residential strata development at Hornsby, New South Wales ("the building"). The defendant is the builder which constructed the building. 2The building was constructed between March 2001 and the end of December 2001. 3Section 18B of the Home Building Act 1989 (NSW) ("the Act") implies warranties, as to the quality of the work, in favour of the plaintiff into the contract under which the defendant constructed the building. 4Section 18E(1) of the Act provides, relevantly, that proceedings for breach of a statutory warranty must be commenced within seven years after completion of the work to which it relates. 5Part 3A of the Act confers upon the Consumer, Trader and Tenancy Tribunal ("the Tribunal") jurisdiction to deal with claims for breach of statutory warranty up to $500,000. 6Section 23(1) of Consumer, Trader and Tenancy Tribunal Act 2001 (NSW) ("the CTTT Act") provides as follows: (1) If the parties in any Tribunal proceedings so agree, or if the Tribunal of its own motion or on the application of a party so directs, the proceedings are: (a) to be transferred to a court (in accordance with the rules of that court) that has jurisdiction in the matter, and (b) to continue before that court as if they had been instituted there. 7Section 24(1) of the CTTT Act provides that a person may, in accordance with the Act under which the application is made, apply to the Tribunal to have a matter dealt with by the Tribunal. 8Section 24(2) of the CTTT Act provides that Despite the provisions of any other Act, an application to have a matter dealt with by the Tribunal must be made: (a) in writing (or in such other form as may be prescribed by the regulations), and (b) in accordance with the regulations. 9Section 32 of the CTTT Act provides that: (1) The Tribunal may, in any proceedings, make any amendments to any document (for example, an application) filed in connection with the proceedings that the Tribunal considers to be necessary in the interests of justice. (2) Any such amendment may be made: (a) at any stage of the proceedings, and (b) on such terms as the Tribunal thinks fit, but may only be made after notifying the party to whom the amendment relates. (3) If a provision of this Act or the regulations is not complied with in relation to the commencement or conduct of proceedings, the failure to comply is to be treated as an irregularity and does not nullify the proceedings or any decision in the proceedings unless the Tribunal otherwise determines. (4) The Tribunal may, however, in dealing with any such irregularity, wholly or partly set aside the proceedings or a decision in the proceedings. 10Regulation 11(1) of the Consumer, Trader and Tenancy Tribunal Regulation 2009 (NSW) ("the Regulations") provides as follows: (1) For the purposes of section 24 (2) of the Act, an application made to the Tribunal must contain the following particulars: (a) the name and address of the applicant, (b) the name and last known address of each other party, (c) a description of the order or orders sought by the applicant, (d) a concise statement containing particulars sufficient to enable each other party to know the nature of the claim or dispute, (e) if an amount of money is claimed or in dispute, the amount claimed or disputed, (f) if the application relates to a claim or dispute arising from the occupation of any premises - the address of those premises, (g) if the applicant is a corporation - the applicant's ACN. 11Section 14(1)(b) of the Limitation Act 1969 (NSW) ("the Limitation Act") provides the following: An action on any of the following causes of action is not maintainable if brought after the expiration of a limitation period of six years running from the date on which the cause of action first accrues to the plaintiff or to a person through whom the plaintiff claims: ... (b) a cause of action founded on tort, including a cause of action for damages for breach of statutory duty, ... 12On 27 November 2008, the plaintiff lodged with the Tribunal a Home Building Division Application by which it applied to have a matter dealt with by the Tribunal. 13The application is a printed standard form ("the form") with provision for the insertion of information. 14Paragraph 14 of the form is as follows: What is your dispute about? This form will be sent to the other party. Therefore you must provide details so that the other party can understand the problem. For example, you could list the defect, its location and an estimate of the cost to repair eg leaks/roof/$5,000. Additional information may be attached to this application eg copy of rectification order. 15The plaintiff inserted the following response: This is a claim for defective works in the construction of the premises for breaches of the statutory warranties under the Home Building Act and Negligence. 16Paragraph 15 of the form requires the applicant to specify what orders it wants and states that " You must include a dollar amount for the order(s) you want " . It identifies a number of different types of orders with boxes to be ticked as well as a box where "Other" may be ticked, with space for that other to be specified. One of the options is "An order to pay me the amount of $____". The plaintiff ticked this box and inserted the words "To be advised". 17There is provision in the form for the insertion of a figure representing "Total value of claim". The plaintiff inserted the words "In excess of $50,000 but less than $500,000". 18Beneath para 15 the following words appear: "The limit of jurisdiction of the Tribunal in this Division is $500,000 (If your claim is for more you may wish to seek legal advice)". 19On 21 January 2009, the matter was first listed in the Tribunal for directions. There were a number of subsequent directions hearings and a site meeting. It became clear that the amount claimed by the plaintiff would exceed the jurisdictional limit of the Tribunal and on 26 October 2009, the proceedings were, under s 23(1) of the CTTT Act, transferred to this Court. 20A Summons and Technology and Construction List Statement were filed on 29 January 2010. The Technology and Construction List Statement pleads breach of the warranties implied by s 18B of the Act and also pleads that the defendant owed to the plaintiff a duty of care, which it breached, not to carry out the work negligently. 21In March 2010, the plaintiff provided a "Scott Schedule of alleged Defective Construction". 22Section 1 of the Scott Schedule is entitled "Exterior Elevations". It comprises some 29 separate claims, one of which (para 1.0.1) is for "cracked render/waterproofing finishes" in respect of "whole of building generally". The description goes on to state, "Cracked skim-coating to Hebel panel (AAC) external wall skin allows water penetration into the external skin" and describes the cause of the defect as "Failure to construct in accordance with manufacturer's recommendations/instructions". 23Under a sub-heading "Particulars Sought" the following appears: