Dyldam Developments Pty Ltd v The Owners - Strata Plan No 85305 - [2019] NSWCATAP 229 - NSWCATAP 2019 case summary

NCAT Appeal Panel|2019-05-31|Before: Armstrong J

on and Ethnic Affairs v Teo [1995] FCA 1203 NSW Breeding & Racing v Administrative Decisions Tribunal (NSW) (2001) 53 NSWLR 559 Northern Residential Pty Ltd v Newcastle City Council [2009] NSWCA 141 Ousley v The Queen (1997) 192 CLR 69 Owners Corporation Strata Plan 64757 v MJA Group Pty Ltd [2011] NSWCA 236 Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 R v Trade Practices Tribunal; ex parte Tasmanian Breweries Pty Ltd [1970] HCA 8; (1970) 123 CLR 361 Ritau v Commissioner of Police [2000] NSWADT 186 Technical Products Pty Ltd v State Government Insurance Office (Queensland) (1989) 167 CLR 45 Timothy Neil McQueen v Leduva Pty Limited [2008] NSWSC 284 The Owners Strata Plan 89023 v AT Building Pty Limited and Mowbray Road Pty Limited as trustee for Mowbray Unit Trust [2018] NSWCATACD 33 The Owners - Strata Plan No 82076 v Taricon Pty Ltd [2017] NSWCATCD 37 Visy Paper Pty Ltd v Australian Competition and Consumer Commission (2003) 216 CLR 1 Texts Cited: Aronson, Groves & Weeks Judicial Review of Administrative Action and Government Liability 6th ed, 2017 Category: Principal judgment Parties: Dyldam Developments Pty Ltd (Appellant) The Owners - Strata Plan No 85305 (Respondent) Representation: Counsel: L Shipway (Appellant) D Hand (Respondent)

Introduction

This appeal concerns the correctness of a decision of the Tribunal to dismiss an application by Dyldam Developments Pty Ltd (Dyldam) for an order to the effect that proceedings HB18/42848 brought by The Owners - Strata Plan No 85305 (the Owners) had been brought outside the limitation period specified in s 18E of the Home Building Act 1989 (NSW) (HB Act).
Order 1 made on 5 March 2019 was in the following terms: Dyldam Development Pty Ltd's application for an order that the time limit for The Owners - Strata Plan No 85305 to have commenced these proceedings expired on 5 September 2018 with the result that the proceedings have been brought out of time is dismissed.
Orders 2 to 5 made directions for determination of any costs application associated with that application.
It is not in dispute that the decision is an "ancillary decision" for the purposes of the Civil and Administrative Tribunal Act 2013 (NSW) (NCAT Act): s 4(1). An internal appeal against such a decision may be made as of right on any question of law: s 80(2)(b), NCAT Act.

Background

The relevant factual background is set out in the Agreed Statement of Facts, as well as in the decision of the Tribunal dated 5 March 2019.
Dyldam is a property developer and construction company. On 23 June 2004 Holroyd City Council issued a Notice of Determination of Application in relation to Development Consent No 2004/446 for the site located at 67-71 Bangor Street, Guildford (Development Consent). The Development Consent granted conditional approval for the demolition of three dwellings at the site and erection of a three-storey residential building containing 18 two-bedroom apartments and basement parking.
The Development Consent stated at page 20: PRIOR TO ISSUE OF OCCUPATION CERTIFICATE The following conditions are to be complied with prior to the issue of an interim/final occupation certificate: …
Following that heading are conditions 87 through to 116. Relevant conditions include:

Condition 94: Playground Equipment Certification, which required the installer of the playground equipment to provide certification that the equipment had been constructed and installed in accordance with relevant Australian Standards. This condition was expressly noted as not having been fulfilled in the first occupation certificate.
Condition 103: Fire Safety, which required submission of a Final Fire Safety Certificate pursuant to cl. 170 of the Environmental Planning and Assessment Regulation 2000 in respect of each essential fire safety measure or other safety measure listed in the Fires Safety Schedule attached to the Construction Certificate.
Condition 107: On-site detention certification and covenant, which required a positive covenant and restriction on use over the on-site stormwater detention system to be registered on title. This condition was expressly noted as not having been fulfilled in the first interim occupation certificate and the second interim occupation certificate.
Conditions 109 to 114: Road Works, which required the construction of certain road works including a vehicular crossing, kerb and gutter, concrete footpath and road and footpath widening, as well as removal of existing vehicular crossings and laybacks and compliance certificates. These conditions were expressly noted as not having been fulfilled in the first interim occupation certificate and the second interim occupation certificate.
Condition 116: Design Verification Statement, which required a design verification statement to be submitted to the certifier upon completion of all works. This condition was expressly noted as not having been fulfilled in the first interim occupation certificate.

In or about 2010-2011, Dyldam carried out the construction work for the development. In September 2011, two interim occupation certificates were issued by the Principal Certifying Authority (PCA), Dix Gardner, a private certifier engaged by Dyldam, in respect of the development - the first issued on 5 September 2011, and an amended certificate (the second) issued on 9 September 2011.
The first interim occupation certificate dated 5 September 2011 identified the land and provided details of the applicant and owner, the development consent and construction certificate, and details of the certifying authority, and stated: Type of certificate: Interim Determination: Approved … Whole/Part of building works: Whole Description of part (if applicable): Excludes Conditions #94, #107, #109 to #114, & #116 BCA classification: Class 2 & 7a ...
The second interim occupation certificate dated 9 September 2011 provided the same details, and stated: Type of certificate: Interim Determination: Approved … Whole/Part of building works: Whole Description of part (if applicable): Excludes Conditions #107 & #109 to #114 BCA classification: Class 2 & 7a ...
Both interim occupation certificates stated that the Attachments were: 1. Other certificates relied upon 2. Final Fire Safety Certificate
On 12 October 2011, Dix Gardner issued a final occupation certificate which stated that it applied to the "Whole" of the building works, and "N/A" for "Description of part (if applicable)".
On 31 October 2011, a s 88B Conveyancing Act 1919 (NSW) instrument was registered in respect of the development and deposited plan 1164325 was registered.
On 4 October 2018, the Owners filed a Home Building Application against Dyldam in the Consumer and Commercial Division in relation to the building works carried out at the site, alleging certain breaches of statutory warranties under the HB Act. The proceedings were listed for a preliminary hearing before Senior Member Goldstein on 26 February 2019 to determine whether the proceedings were commenced out of time.
On 8 March 2019, Senior Member Goldstein published his reasons for decision in relation to the preliminary question, finding that the proceedings had been commenced in time.
On 2 April 2019, Dyldam appealed from that decision.

The Decision under Appeal

The Tribunal noted that it was not in dispute that what was meant by "completion of the work" for the purposes of determining when proceedings for breach of statutory warranty had to be commenced under s 18E(1) of the HB Act was determined by s 3C(2) of that Act. That was "the date of issue of an occupation certificate that authorises occupation and use of the whole of the building". The Tribunal stated the issue for determination in the following terms: 10. If I find that the building work was completed on the date of either the first or second occupation certificate, then the proceedings were not brought within the time required by s18E(1) of the Act and the proceedings should be dismissed. If I find that the building work was completed on the date of the third occupation certificate, then the proceedings were brought within the time required by s18E(1) of the Act and may proceed in the Tribunal. 11. The first and second occupation certificates were Interim certificates which authorised the occupation and use of the 'Whole' of the building. The third occupation certificate was stated to be a 'Final' occupation certificate certificates which authorised the occupation and use of the 'Whole' of the building.
After considering the parties' submissions, including the authorities cited, the Tribunal continued: 22. I find that the conditions referred to in the first and second occupation certificates were, as stated in the development consent, to be complied with before their issue. As a result I find that pursuant to s109H(2) of the EPA the first and second occupation certificates should not have been issued and were not validly issued. This finding is based upon an application of s109H(2) of the EPA giving it its literal meaning. 23 The issue which I am required to decide in this application is whether despite the first and second occupation certificates having been issued in breach of the EPA and being invalidly issued, they were nonetheless effective for the purposes of s3C(2) of the Act. 24 I find that the reference to an occupation certificate in s3C(2) of the Act should only apply to an occupation certificate which has validity under the EPA. 25 S3C(2) is an important provision of the Act because it operates to determine the date of the commencement of the time period in which claims for the breach of statutory warranties must be commenced. To allow that time period to commence based on a certificate that there was no proper power to issue, or which is not validly issued under the EPA would, I find, be detrimental to the interests of those who seek the benefit of a statutory warranty under the Act. To allow such a state of affairs to exist would in my view be contrary to the beneficial purpose of legislation such as the Home Building Act. My finding does not operate to invalidate the first and second occupation certificates as submitted by the respondent. All my finding does is to recognise that the first and second occupation certificates should not have been issued because of the mandatory requirement in s109H(2) of the EPA requiring the preconditions to their issue as stated in development consent to be complied with. As a result I have found that s3C(2) of the Act was not intended to operate on the basis of interim certificates not properly or validly issued under the EPA. To put it another way, an occupation certificate issued when the preconditions to its issue have not been met is, in my view, not a validly issued certificate. 26 By reason of my findings above, I find that the building the subject of these proceedings was completed on the date of the issue of the third occupation certificate, namely 12 October 2011. I further find that the proceedings having been commenced on 4 October 2018 were brought within the seven (7) year period as referred to in s18E(1) of the Act.

Appellant's Notice of Appeal

The Appellant challenges orders (1) to (5) of the orders made on 5 March 2019 in proceedings HB18/42848. The grounds of appeal identified by the Appellant were, at the time of lodging the appeal: 1. The Tribunal made an error of law in [24] of the Reasons in finding that the reference to an "occupation certificate" in s 3C(2) of the HB Act should only apply to an occupation certificate which has validity under the Environmental Planning and Assessment Act 1979 (EPA Act). 2. The Senior Member made an error of law in [25] of the Reasons by finding that the first and second occupation certificates were not validly issued or should not have been issued in circumstances where the Tribunal did not have jurisdiction to: 1. consider or determine that issue; 2. make a finding to that effect; or 3. grant relief to give effect to such a finding.
At the Appeal Panel hearing on 31 May 2019, the Appellant sought leave to amend its Notice of Appeal, so that the first ground reads: 1. The Tribunal made an error of law in paragraphs [22] to [24] of the Reasons in finding that the reference to an "occupation certificate" in s 3C(2) of the HB Act does not apply to the first and second occupation certificates on the basis that they were issued in breach of s109H(2) of the EPA Act and therefore were not validly issued.
Leave to amend the grounds of appeal was granted.

Respondent's Reply to Appeal

On 12 April 2019 the Respondent filed its Reply to Appeal stating that it supports orders (1) - (5) made by the Tribunal at first instance for the reasons in that decision. In addition to the reasons given by the Tribunal, the Respondent contended that the orders are supported by the operation of s. 109I of the EPA Act, which provides that interim construction certificates are revoked when a final occupation certificate is issued.
In response to the first ground of appeal, the Respondent contended that the Tribunal was correct to construe s 3C(2) of the HB Act literally as requiring an occupation certificate that is validly issued under the EPA Act. That is, an occupation certificate issued where all mandatory conditions in the development consent that were required to be satisfied before any occupation certificate (interim or final) could be issued are satisfied.
In response to the second ground of appeal, the Respondent contended that the Tribunal did not make an error of law and that it was correct to construe s 109H(2) of the EPA Act literally. The Respondent noted the Tribunal did not invalidate the first and second interim occupation certificates, but merely recognised that they should not have been issued. The Respondent submitted that it was necessary for the Tribunal to determine the Tribunal's jurisdiction in the context of applying ss 3C and 18E of the HB Act and that it was correct to construe the statute having regard to the Act's beneficial purpose and established principles of statutory construction.

Material before Appeal Panel

The Appellant filed and relied on the following material which was before the Tribunal below: its written submissions dated 19 February 2019, and an affidavit of Elie Mouran sworn 13 December 2018 (which annexed the Notice of Determination of the Development Application, the Interim Occupation Certificate of 5 September 2011, and the Amended Interim Occupation Certificate of 9 September 2011).
In addition, the Appellant filed a copy of the transcript of the first instance hearing.
The Respondent filed and relied on the following material which was before the Tribunal below: written submissions dated 12 February 2019, an historical ASIC company extract for Dyldam Developments Pty Ltd (dated 10 September 2018), and the affidavit of Joel White sworn 25 January 2019 (which annexed: a copy of the Strata Plan 85305, Common Property Title Search for SP85305, Development Consent dated 23 June 2004 (2004/446), Dix Gardner memorandum dated 21 January 2011, Final Occupation Certificate Application Form; Section 88B Instrument, Deposited Plan 1164325, 9 September 2011 Checklist (and multiple associated documents including Interim Occupation Certificate dated 5 September 2011 and Fire Safety Schedule), 15 September 2011 Checklist (and multiple associated documents including Interim Occupation Certificate dated 9 September 2011 and Interim Fire Safety Certificate at p 141), and 14 October 2011 Checklist (and multiple associated documents including the final occupation certificate dated 12 October 2011 and the Final Fire Safety Certificate at p 227).
The parties prepared a Joint List of Authorities for the appeal hearing.

Submissions of the Appellant

On 8 May 2019, the Appellant filed its written submissions. The Appellant noted that it is undisputed that the relevant limitation period is contained in s 18E of the HB Act, which required, as it was before February 2012, that proceedings for breach of statutory warranty be commenced within 7 years after, relevantly, "the completion of the work to which it relates": s 18E(1)(a). The meaning of "completion of the work" is found in s 3C(2) of the HB Act, which provides: 3C Date of completion of new buildings in strata schemes (1) This section applies to residential building work comprising the construction of a new building in a strata scheme (within the meaning of the Strata Schemes Management Act 2015) where the issue of an occupation certificate is required to authorise commencement of the use or occupation of the building. Note. Section 3B provides for the date of completion of other residential building work. (2) The completion of residential building work to which this section applies occurs on: (a) the date of issue of an occupation certificate that authorises the occupation and use of the whole of the building, unless paragraph (b) applies, or (b) the occurrence of some other event that is prescribed by the regulations as constituting completion of the work. (5) In this section: building means any structure that, as a new building, requires the issue of an occupation certificate to authorise its use and occupation. occupation certificate means an occupation certificate under the Environmental Planning and Assessment Act 1979.
It was not in dispute that s 3C of the HB Act applied to residential building work at the time it was undertaken by Dyldam.
The Appellant contended that the issue for determination by the Tribunal was whether the interim occupation certificates issued in September 2011 were "occupation certificates" under the EPA Act which authorised the occupation and use of the whole of the building. If so, the limitation period expired on 9 September 2018 (at the latest) and the proceedings were commenced out of time.
In support of the first ground of appeal, the Appellant submitted that the Tribunal erred in finding that the occupation certificates did not establish the completion of the works because they were issued in breach of the EPA Act and therefore, did not trigger the running of time for the purpose of s 18E of the HB Act. The Appellant submitted that s 3C(2) of the HB Act should be understood as referring to any occupation certificate that, on its face, authorises occupation of the whole of the building.
The Appellant submitted that the Tribunal's conclusion that s 3C applies only to a "properly or validly issued" occupation certificate is not supported by the express words of the HB Act. The Appellant submitted that the proper approach to statutory construction requires the Tribunal to start with the text of the legislation, and to aim to give effect to the purpose of the provision as expressed in the text and in context (citing Visy Paper Pty Ltd v Australian Competition and Consumer Commission (2003) 216 CLR 1; Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 (Project Blue Sky); and Collector of Customs v Agfa-Gevaert Ltd (1996) 186 CLR 389).
The Appellant submitted that the Tribunal put "an impermissible gloss" on the provision by giving priority to the "beneficial purpose" of the HB Act over the text of the provision.
The Appellant submitted that the interim occupation certificates triggered completion and that it would be "inappropriate" in circumstances where the parties prior to the proceedings treated them as valid and did not seek to have them set aside, "to go behind" them to consider whether they are valid. The Appellant submitted that to challenge the validity of occupation certificates in the context of s 3C has "real practical significance", and that if it were sufficient to render an occupation certificate ineffective for the purposes of "completion" under s 3C to show that some condition of their issue had not been complied with, that would result in "considerable uncertainty" as any party seeking to avoid the limitation periods in the HB Act would seek to challenge the validity of the occupation certificate or its issuing.
The Appellant noted that development consents typically require works to comply with the Building Code of Australia (BCA). The Appellant contended that the consequence of the Tribunal's decision is that the validity of an occupation certificate may depend on compliance of the works with the BCA. The Appellant submitted that the primary consequence for a failure by certifiers to comply with their statutory obligations in issuing occupation certificates was the imposition of disciplinary sanctions, rather than rendering the occupation certificate void (citing Burwood Council v Ralan Burwood Pty Ltd (No 3) [2014] NSWCA 404). That decision supported the submission that the September occupation certificates triggered completion, irrespective of whether those certificates were issued strictly in accordance with the requirements of the EPA Act.
The Appellant submitted that the Tribunal's construction creates great uncertainty. The Appellant referred to the Second Reading Speech to the Home Building Amendment Bill 2014 (NSW) - being the Act that introduced s 3C of the HB Act - in support of the proposition that s 3C was inserted to create greater, not less, certainty for owners' corporations.
The Appellant submitted that even if the Tribunal had power to consider whether the occupation certificates were validly issued, the Tribunal did not apply the appropriate test, being that in Project Blue Sky, referring to Owners Corporations SP 82076 v Taricon Pty Ltd [2017] NSWCATCD 37 (Taricon). The Appellant contended that the mandatory requirement in s 109H(2) of the EPA Act is an important but not the only relevant consideration in determining validity. The Appellant contended that the Tribunal's analysis had no regard for the fact that the development conditions not yet satisfied did not limit the occupation or use of the building, which was an important factor weighing in favour of the occupation certificates as issued triggering completion.
In respect of the second ground, that the Tribunal lacks jurisdiction to determine the validity of occupation certificates, the Appellant argued that the EPA Act does not confer any jurisdiction on the Tribunal and that it is for the Land and Environment Court to determine if there has been a breach of the EPA Act.
The Appellant contended that the Tribunal may be permitted in some circumstances to make a collateral finding in order to make a final finding under an Act. The Appellant asserted that whether this is the case in these proceedings is determined by considering the "intention" of the NCAT Act and the HB Act in respect of this issue: Director of Housing v Sudi [2011] VSCA 266. The Appellant submitted that these are not circumstances in which the Tribunal has jurisdiction to make a collateral finding. This is because the validity of an occupation certificate does not come within the definition of "building claim" as defined in s 48A of the HB Act in respect of which the Tribunal has jurisdiction. This is because it does not have a "sufficient causal nexus" to the building work to be carried out: Grygiel v Baine & Ors [2005] NSWCA 218; Technical Products Pty Ltd v State Government Insurance Office (Queensland) (1989) 167 CLR 45. The Appellant submitted that the NCAT Act and the HB Act evince an intention that the Tribunal's powers in respect of building claims are to be limited. The validity of occupation certificates may have significant consequences reaching beyond limitation periods such as liability for penalties under the EPA Act, and thus should not be determined by the Tribunal.
The Appellant submitted that the Tribunal was required to treat the occupation certificates as valid unless and until they were found to be invalid by a court of competent jurisdiction, consistent with the Victorian Supreme Court's decision in Director of Housing v Sudi [2011] VSCA 266. The Appellant contended that the Tribunal did not have jurisdiction to determine the validity of the occupation certificates.
The Appellant agreed that s 109I of the EPA Act has the effect of revoking an earlier occupation certificate upon the issuing of a subsequent occupation certificate. The Appellant contended that notwithstanding this, completion is triggered on the date of issue of a certificate, here the first interim occupation certificate. The Appellant submitted that the use of the word "an" rather than the word "the" or "final" in s 3C of the HB Act supports this construction that completion can be triggered by an interim occupation certificate. The Appellant submitted that the phrase "authorises a person to commence occupation or use of" in s 109H of the EPA Act further supports this position.

Supplementary submissions of the Appellant

On 5 June 2019, the Appellant filed supplementary written submissions addressing two previous decisions in the Consumer and Commercial Division of the Tribunal, Taricon, and The Owners-Strata Plan 89023 v AT Building Pty Ltd [2018] NSWCATCD 33 (AT Building).
The Appellant submitted that its contention that even if the Tribunal had power to deal with the question whether the certificates were validly issued, the Tribunal had failed to apply the test in Project Blue Sky, was relevant only if the Appeal Panel rejected its primary submission that the Tribunal had erred in going behind the certificates. The question is whether if the Appellant's primary submission is accepted, Taricon was wrongly decided.
In Taricon the Tribunal held that an occupation certificate that did not comply with a requirement of form (not being signed by the certifier as required by the regulations) did not invalidate the certificate for the purposes of s 3C of the HB Act. The Appellant contended that it is not necessary to determine if Taricon was wrongly decided as the present case can be distinguished. This was because the current proceedings concern non-compliance with a proscription in the EPA Act rather than a requirement as to form. The Appellant submitted that it is not necessary for the Appeal Panel to find that Taricon was wrongly decided in order to find in favour of the Appellant.
The Appellant cited AT Building, in which the certificate misdescribed the owner of the land, as further authority for the proposition that the Tribunal may consider whether the formal requirements in the Environmental Planning and Assessment Regulation 2000 have been complied with to determine whether an occupation certificate has been issued for the purposes of s 3C of the HB Act.
The Appellant submitted that those decisions are consistent with the decision in Timothy Neil McQueen v Leduva Pty Limited [2008] NSWSC 284, that where the regulations require an occupation certificate to be accompanied by a fire safety certificate, and the occupation certificate on its face records that a fire safety certificate has been issued, the occupation certificate is valid; and the absence of a fire safety certificate does not make such a certificate a nullity.
On 28 August 2019 the Appellant filed further supplementary submissions, addressing the question whether the application of the High Court's approach in Project Blue Sky would alter the Tribunal's conclusion at [22] of the reasons that the interim occupation certificates were issued in breach of the EPA Act and were not validly issued. The Appellant submits that that approach would require the Tribunal to consider the particular non-compliance in light of the legislative purpose in determining whether the non-compliance invalidates the act done; and that if that approach is taken, the Tribunal would reach a different conclusion to that in [22].
That submission is based on the following factors: 1. While s 109H(2) of the EPA Act uses mandatory language, that language is limited to regulating the actions of private certifiers, and fails to state that an occupation certificate issued in contravention of s 109H(2) is invalid; 2. The purpose of the legislative requirement for an occupation certificate is to ensure that the building being certified is suitable to occupy or use, even if only partially completed, consistent with the object as stated in s 5 of the EPA Act to encourage the promotion and co-ordination of the orderly and economic use and development of land; 3. The enquiry mandated by Project Blue Sky would focus on whether a particular non-compliance with s 109H(2) would materially affect the suitability of the building for occupation or use; 4. If that were not the case, any minor or insignificant breach which did not affect the suitability of the building for occupation or use would invalidate the certificate, contrary to the purpose of the legislation and the particular provision; and 5. None of the consent conditions carved out from the interim occupation certificates affected whether the building was suitable to occupy or use.

Submissions of the Respondent

On 23 May 2019, the Respondent filed written submissions.
In respect of Ground one, the Respondent submitted that the Tribunal below did not err in its construction of s 3C(2) of the HB Act. The Respondent noted that the parties agreed that s 109H(2) of the EPA Act creates a requirement that an occupation certificate is not to be issued unless the development consent preconditions are met, citing Cessnock City Council v Laila Investments Pty Ltd [2012] NSWLEC 206 (Cessnock v Laila).
The Respondent submitted that the Tribunal below was correct to consider that an occupation certificate to indicate the completion of residential building work, and thus commence the limitation period for an action for breach of statutory warranties under s 3C of the HB Act, is one that has been issued in accordance with the requirements in the EPA Act. The Respondent submitted that this construction is consistent with the beneficial purpose of the HB Act as expressed by the text of the provision and thus with s 33 of the Interpretation Act 1987 (NSW).
The Respondent argued that the Appellant conflates the issues of whether the interim occupation certificates were issued "under" the EPA Act for the purposes of s 3C of the HB Act and whether they were valid for other purposes, for example the purposes of the EPA Act or other planning purposes.
Further, the Respondent submitted that the Tribunal did not seek to, nor in fact did, determine the question of the validity of the interim occupation certificates for the purposes of the EPA Act, and its findings did not invalidate the interim occupation certificates. What the Tribunal had to determine was whether for the purposes of s 3C(2), the interim occupation certificates had been issued under the EPA Act so that they had complied with the EPA Act and thus triggered the time under s 3C of the HB Act for bringing a claim for breach of statutory warranty. The Respondent submitted that this question was within the Tribunal's jurisdiction to determine. The status of the interim occupation certificates for the purposes of the EPA Act was not affected by the Tribunal's findings and orders; and for those purposes, each was automatically revoked by operation of the EPA Act on the date on which a later certificate was issued.
The Respondent submitted that the Land and Environment Court has determined that occupation certificates issued when mandatory preconditions of the relevant development consent are not satisfied are invalid for the purposes of the EPA Act (citing Cessnock v Laila; Bankstown City Council v Ramahi (No 2) [2016] NSWLEC 34).
The Respondent noted that s 109I of the EPA Act has the effect that each interim occupation certificate is automatically revoked when a later occupation certificate is issued. The Respondent submitted that as a final occupation certificate had been issued at the time the matter came before the Tribunal there were no interim certificates the validity of which could be determined.
The Respondent submitted that the fact that persons occupied the building on the basis of an interim occupation certificate that purported on its face to have been validly issued is not determinative of whether the works were complete within the meaning of s 3C of the HB Act. Neither is it relevant, it was submitted, that the development consent conditions which were not met did not place any restrictions on the occupation or use of the building.
The Respondent submitted that ground one of the appeal should be dismissed.
In responding to ground two, the Respondent submitted that the Tribunal did not determine the validity of the interim occupation certificates but determined whether they had been issued "under" the EPA Act. Section 3C of the HB Act incorporates the requirements in s 109H(2) of the EPA Act for the purpose of determining the date of completion of residential building works. The Respondent cites Albarran v Companies Board (2007) 251 CLR 350 and ACMA v Today FM (Sydney) Pty Ltd [2015] HCA 7 for the proposition that determining whether the occupation certificates were issued "under" the EPA Act was a necessary step in reaching its ultimate conclusion about the operation of s 3C of the HB Act. Such a question was within the Tribunal's jurisdiction to determine as a result of s 48K of the HB Act because it is a matter that has the required "causal nexus" to a "building claim".
The Respondent submitted that ground two of the appeal should be dismissed.
The Respondent contended that if the Appeal Panel allows the appeal, it should remit the matter to the Tribunal for redetermination on the as yet undetermined issue of whether the occupation certificates were accompanied by final fire certificates as required by the development consent condition.

Supplementary Submissions of the Respondent

On 4 June 2019, the Respondent filed supplementary written submissions on AT Building and Taricon. The Respondent submitted that whilst the Tribunal is not bound to follow its own decisions, the Tribunal should not depart from the approach taken earlier unless such an approach was "clearly wrong" (citing Ritau v Commissioner of Police [2000] NSWADT 186 as affirmed in NSW Breeding & Racing v Administrative Decisions Tribunal (NSW) (2001) 53 NSWLR 559 and cited in ALZ v Safework NSW [2017] NSWCATAP 51).
The Respondent contended that that this "comity of approach" goes towards consistency in the Tribunal's decision making and is in line with the Tribunal's objectives under s 3(e) and (g) of the NCAT Act "to ensure that the decisions of the Tribunal are timely, fair, consistent and of a high quality" and "to promote public confidence in tribunal decision-making in the State…" respectively.
On 27 August 2019 the Respondent filed further supplementary submissions addressing the question of whether application of the High Court's approach in Project Blue Sky would alter the Tribunal's conclusion at [22] of the reasons. The Respondent submits that it would not, for the following reasons: 1. Relying on the decision of Spigelman CJ in Chase Oyster Bar v Hamo Industries Pty Ltd (2010) NSWLR 393 at [39]-[40], that Project Blue Sky identifies a range of factors relevant to the process of statutory interpretation, the mode of expression in s 109H(2) being emphatic language is a factor that weighs in support of the finding of the Tribunal at [22]; 2. The conditions of consent not met in this matter were similar in character to those under consideration in Cessnock v Laila, which provides useful guidance in the circumstances of this case; 3. The scope and object of the provisions of the EPA Act relating to the issuing of occupation certificates demonstrate that the legislative purpose is to ensure compliance with the substantive statutory requirements and conditions including conditions of consent, before a building may be occupied, and in that context invalidity of the non-complying conduct is both necessary and desirable to ensure compliance with the statutory protections against the risks associated with the occupation of incomplete buildings; 4. A further relevant factor is that the finding of "invalidity" of the interim occupation certificates will not have any practical consequences for the parties because each of those certificates were automatically revoked by operation of s 109I of the EPA Act on the date on which a later certificate was issued; and since 12 October 2011 the building has been occupied pursuant to the final occupation certificate, the validity of which was not the subject of any challenge before the Tribunal; 5. The finding of the Tribunal did not operate to invalidate the interim occupation certificates, rather, all it did was recognise for the purposes of s 3C(2) of the HB Act that they should not have been issued because the mandatory preconditions in the development consent had not been satisfied.

Issues

The issues raised by the appeal are: 1. Does s 3C(2) of the HB Act require, in determining the date of completion of residential building work, that an occupation certificate be validly or properly issued under the EPA Act?; and 2. Does the Tribunal have jurisdiction to determine whether an occupation certificate has been validly issued under the EPA Act for the purpose of determining whether a building claim is made within time under the HB Act?

Relevant legislation

The Tribunal has jurisdiction under Part 3A Div 4 of the HB Act to hear and determine "any building claim" brought in accordance with that Part in which the amount claimed does not exceed $500,000: s 48K(1). A "building claim" is defined in s 48A(1) to mean a claim "that arises from a supply of building goods or services", the latter term also being defined in s 48A(1).
The jurisdiction of the Tribunal to hear and determine a building claim is limited by the requirements that the proceedings fall within the definition of a "building claim", and that the claim comply with the monetary limit in s 48K(1) and the various time limitations in s 48K(3), (4), (6), (7) and (8). The jurisdiction is shared with the courts, subject to s 48L which provides that the Tribunal is the preferred venue for determination of building claims in respect of which it has jurisdiction: 48L Tribunal to be chiefly responsible for resolving building claims (1) This section applies if a person starts any proceedings in or before any court in respect of a building claim and the building claim is one that could be heard by the Tribunal under this Division. (2) If a defendant in proceedings to which this section applies makes an application for the proceedings to be transferred, the proceedings must be transferred to the Tribunal in accordance with the regulations and are to continue before the Tribunal as if they had been instituted there. …
Clause 6(1) of Sch 4 to the NCAT Act enables the Tribunal to transfer proceedings to a court, if for example the amount claimed exceeds the monetary limit set by s 48K(1); and cl 6(2) enables transfer of proceedings commenced in a court to the Tribunal.
Subsection 48K(7) provides: (7) The Tribunal does not have jurisdiction in respect of a building claim arising from a breach of a statutory warranty implied under Part 2C if the date on which the claim is lodged is after the end of the period within which proceedings for a breach of the statutory warranty must be commenced (as provided by section 18E).
As noted above, it is common ground that the limitation period prescribed by s 18E for the building claim the subject of the proceedings in the Tribunal was 7 years after "the completion of the work", and that "completion of the work" was to be as determined by s 3C(2), namely the "date of issue of an occupation certificate that authorises occupation and use of the whole of the building".
Subsection 3C(5) defines an "occupation certificate" to mean "an occupation certificate under the Environmental Planning and Assessment Act 1979". The provisions for an application for and issue of an occupation certificate are now contained in Part 6: Building and Subdivision Certification of the EPA Act, as a consequence of the major amendments to that Act made by the Environmental Planning and Assessment Amendment Act 2017, which came into effect on 1 March 2018. The provisions applicable to the issue of the occupation certificates in September and October 2011 were those in the former Part 4A: Certification of Development. The relevant provisions were: 109C Part 4A certificates (1) The following certificates (known collectively as Part 4A certificates) may be issued for the purposes of this Part: … (c) an occupation certificate, being a certificate that authorises: (i) the occupation and use of a new building, or (ii) a change of building use for an existing building, ... 109H Restrictions on issue of occupation certificates (1) There are two kinds of occupation certificates, as follows: (a) an interim occupation certificate that authorises a person to commence occupation or use of a partially completed new building, or to commence a new use of part of a building resulting from a change of building use for an existing building, (b) a final occupation certificate that authorises a person to commence occupation or use of a new building, or to commence a new use of a building resulting from a change of building use for an existing building. It is not necessary for an interim occupation certificate to be issued before a final occupation certificate is issued with respect to the same building. (2) An occupation certificate must not be issued unless any preconditions to the issue of the certificate that are specified in a development consent or complying development certificate, or any requirements of a planning agreement referred to in section 93F that, by its terms, are required to be complied with before such a certificate is issued, have been met. (3) An interim occupation certificate must not be issued to authorise a person to commence to occupy or use a partially completed new building unless: (a) a development consent or complying development certificate is in force with respect to the building, and (b) in the case of a building erected pursuant to a development consent but not a complying development certificate, a construction certificate has been issued with respect to the plans and specifications for the building, and (c) the partially completed building is suitable for occupation or use in accordance with its classification under the Building Code of Australia, and (d) such other requirements as are required by the regulations to be complied with before such a certificate may be issued have been complied with. … 109I Effect of occupation certificate on earlier occupation certificates (1) A final occupation certificate for the whole of a building revokes any earlier occupation certificate for that building. (2) An interim occupation certificate for a part of a building additional to the part or parts in respect of which an earlier interim occupation certificate is in force: (a) revokes the earlier interim occupation certificate, and (b) applies to the part in respect of which it is issued and to the part or parts in respect of which the earlier interim occupation certificate was in force. (3) An occupation certificate (whether interim or final) for a part of a building revokes any earlier occupation certificate to the extent to which it applies to that part. 109M Occupation and use of new building requires occupation certificate (1) A person must not commence occupation or use of the whole or any part of a new building (within the meaning of section 109H) unless an occupation certificate has been issued in relation to the building or part. Maximum penalty: (a) in the case of a class 1a or class 10 building, as referred to in the Building Code of Australia - 5 penalty units, or (b) in the case of any other building - 1,000 penalty units. (2) This section does not apply to: … (b) the occupation or use of a new building at any time after the expiration of 12 months after the date on which the building was first occupied or used, or … 109P Satisfaction as to compliance with conditions precedent to the issue of certificates (1) A person who exercises functions under this Act in reliance on a Part 4A certificate or a complying development certificate is entitled to assume: (a) that the certificate has been duly issued, and (b) that all conditions precedent to the issuing of the certificate have been duly complied with, and (c) that all things that are stated in the certificate as existing or having been done do exist or have been done, and is not liable for any loss or damage arising from any matter in respect of which the certificate has been issued. (2) This section does not apply to an accredited certifier in relation to any Part 4A certificate or complying development certificate that he or she has issued. 109ZK Limitation on time when building action or subdivision action may be brought (1) Despite any Act or law to the contrary, a building action may not be brought in relation to any building work: (a) more than 10 years after the date on which the relevant final occupation certificate is issued, or (b) in a case where no final occupation certificate is issued, more than 10 years after: (i) the last date on which the building work was inspected by a certifying authority, or (ii) if no such inspection has been conducted, the date on which that part of the building in relation to which the building work was carried out is first occupied or used. (1A) Despite any Act or law to the contrary, a subdivision action may not be brought in relation to any subdivision work more than 10 years after: (a) in the case of work completed before the relevant subdivision certificate is issued, the date on which the relevant subdivision certificate is issued, or (b) in the case of work completed after the relevant subdivision certificate is issued, the date on which the compliance certificate that certifies that the work has been completed is issued. (2) This section does not operate to extend any period of limitation under the Limitation Act 1969.

Consideration

The issue for determination by the Tribunal was whether, by reason of the operation of ss 3C, 18E and 48K of the HB Act, the date of completion of the residential building work was the date of issue of either of the interim occupation certificates on 5 September 2011 and 9 September 2011. If so, the proceedings were out of time and the Tribunal had no jurisdiction to hear and determine the proceedings. If not, and if 12 October 2011, the date on which the final occupation certificate was issued, was the date the building work was completed, the proceedings were brought within time.
Section 48K imposes a jurisdictional barrier to the Tribunal's determination of a building claim, and s 41 of the NCAT Act does not apply so as to confer power on the Tribunal to extend the limitation period: Karan v Champion Homes Sales Pty Ltd [2016] NSWCATCD 84. The resolution of the issues in this appeal accordingly has significant practical implications for the hearing and determination of building claims in the Consumer and Commercial Division of the Tribunal.
There were two steps in the Tribunal's reasoning: first, the finding at [22] that pursuant to s 109H(2) of the EPA Act, given its literal meaning, the interim occupation certificates should not have been issued and "were not validly issued"; and secondly, the finding at [24] that the reference to an "occupation certificate" in s 3C(2) of the HB Act only applied to an occupation certificate validly issued under the EPA Act.
In reaching the finding on the first issue, the Tribunal relied on the decision of the Land and Environment Court in Cessnock v Laila, which is one of a limited number of judicial decisions concerning the circumstances in which an occupation certificate will be found to be invalid. In that matter Pain J found that issue of an occupation certificate before six conditions of the development consent had been complied with was a failure to comply with the mandatory requirement in s 109H(2) of the EPA Act, and therefore was a breach of that Act, and a basis for a declaration of invalidity. In reaching that conclusion Pain J relied on Northern Residential Pty Ltd v Newcastle City Council [2009] NSWCA 141 (Northern Residential), which concerned validity of subdivision certificates issued without the prior inspection required by s 109E(3)(d) of the EPA Act. Hodgson JA had contrasted s 109E(3) with s 109J, which provided that a subdivision certificate "must not be issued" unless a number of preconditions were satisfied, and concluded (at [57]) that those requirements were requirements of validity, whereas the satisfaction of the certifying authority under s 109E(3) was not.
Northern Residential was considered by Sackville AJA (with whom McColl and Barrett JJA agreed) in Burwood Council v Ralan Burwood Pty Ltd (No 3) [2014] NSWCA 404 (Ralan) at [185]-[189], where his Honour noted that the observations of Hodgson JA in Northern Residential as to the effect of non-compliance on which Pain J had relied were dicta; and further, that Hodgson JA's comments were not directed to a provision which incorporated requirements in the regulations, but to requirements specified in the sub-section itself, before the relevant certificate could be issued
Ralan was an appeal from the decision of Sheahan J in the Land and Environment Court dismissing the Council's application for declarations that six construction certificates issued by a private certifier were void and of no effect, and for declarations that Ralan (as developer) was in breach of the EPA Act. Section 109F(1)(a) of that Act provided that a construction certificate "must not be issued" with respect to plans and specifications for any building work unless "the requirements of the regulations referred to in section 81A(5)" had been complied with. Regulation 145 provided that a certifier "must not issue" a construction certificate for building work unless the design and construction of the building as depicted in the plans and specifications "are not inconsistent" with the development consent.
Sheahan J had found that there was no relevant inconsistency. The Court of Appeal held at [151] that that finding was affected by error, both on the ground of inadequacy of reasons and for failure to apply the correct test for determining whether the two sets of plans were "not inconsistent". Ralan had challenged by notice of contention Sheahan J's holding that if the construction certificates had been issued in breach of s 109F(1)(a), they would have been invalid. The Court of Appeal was of the view that if the question of inconsistency had to be determined afresh, the matter would have to be remitted to the Land and Environment Court so the requisite findings could be made. The Court went on to consider Ralan's contention, on the basis that if it was upheld it would resolve the proceedings since the construction certificates and any approved plans and certificates issued with respect to the construction certificates formed part of the development consent: s 80(12) EPA Act.
The Court of Appeal applied the principles in Project Blue Sky, the test as stated at (1998) 194 CLR 355 at [35] being: "to ask whether it was a purpose of the legislation that an act done in breach of the provision should be invalid. ... In determining the question of purpose, regard must be had to 'the language of the relevant provision and the scope and object of the whole statute'."
The Court of Appeal considered the legislative history, including the amendments made by the Environmental Planning and Assessment Act 2006 (NSW) to ss 109F and 109G to remove the reference to the state of satisfaction of the certifying authority and to provide an objective test, and noted (at [165]) that unlike s 109F(1A) which provided that a construction certificate issued after building work had commenced "has no effect", s 109F(1)(a) did not expressly provide for invalidity. The Court then considered (at [166]-[178]) the other considerations that suggested that the scope and object of the legislation, construed as a whole, did not require a construction certificate issued in breach of a 109F(1)(a) to be held invalid. Those considerations included that the prohibition in s 109F(1) was not directed to the person who had the benefit of the consent but to the person empowered to issue the construction certificate; the absence in s 109F(1)(a) of an express reference to invalidity; the range of requirements, from the clearly important to the relatively trivial, that might be imposed in regulations made pursuant to s 81A(5); the fact that validity might turn on the application of criteria expressed in the regulations in vague language or which contemplated the making of a contested judgment; and the inconvenient consequences, for example to a developer who authorises building work to commence without knowing that the construction certificate has been issued in breach of the regulations, or for a developer who could not obtain an occupation certificate if the construction certificate is invalid. The Court concluded at [182] that the statutory scheme suggested that the legislature had chosen to guard against the risk of accredited certifiers failing to comply with their statutory obligations by the accreditation and disciplinary regime.
On the assumption that the construction certificates were inconsistent with the development consent plans and had been issued in breach of s 109F(1)(a), they were "not void and of no effect" (at [193]). By operation of ss 80(12) of the EPA Act, the construction certificate once issued forms part of the development consent, and accordingly there was no contravention of s 76A which prohibits the carrying out of development otherwise than in accordance with a development consent.
In considering the Appellant's submissions based on Ralan, it must be noted that the provisions relating to construction certificates and occupation certificates under the former Part 4A of the EPA were not on all fours. One significant difference was that the plans and specifications issued by the certifier with respect to a construction certificate are part of the development consent: s 80(12) EPA Act. At [202] Sackville AJA held that as a consequence, to the extent that there was an inconsistency between the construction certificate plans and specifications and those approved in the development consent, the former prevailed, and: The legislation accommodates the possibility that an accredited certifier will issue a construction certificate in breach of cl 145(1) and s 109F(1) by according paramountcy to the plans and specifications referred to in the construction certificate.
There was no similar provision for occupation certificates under the former Part 4A. A further distinction is that s 109M made it an offence to occupy a building unless an occupation certificate had been issued; and as was the case in Northern Residential, the requirements to be complied with before the issue of an occupation certificate were specified in s 109H(2) itself, and not the regulations. Notwithstanding those differences, on the basis that the decision of the Court of Appeal in Ralan requires an analysis based on the principles in Project Blue Sky in consideration of the validity of a certificate issued under the former Part 4A of the EPA Act, doubt must be cast on the conclusion reached by Pain J in Cessnock for the reasons her Honour gave. That decision was not cited or discussed in Ralan, and it may be that the same result could in any event be reached on a Project Blue Sky analysis.
Whether or not invalidity follows from any breach of s 109H(2), or is a conclusion reached only after considering whether the legislative purpose was to invalidate any act that failed to so comply, the fundamental issue is whether the Tribunal can consider and determine that question. If, as the Appellant submits, all that s 3C(2) requires is the existence of a document that purports to be an occupation certificate, that question need not be answered.
The second part of the Tribunal's reasoning concerned s 3C(2) of the HB Act, which operates to determine the date of the commencement of the time period in which claims for breach of statutory warranties must be commenced. The Appellant takes issue with the Tribunal's finding that the reference to an occupation certificate is to an occupation certificate that is valid under the EPA Act.

Interpretation of s 3C(2) Home Building Act

The principles to be applied in interpretation of s 3C(2) are not in dispute. The approach endorsed by the High Court is to start with the text of the legislation, giving effect to the purpose of the legislature as expressed in the text, and interpreting the words used in context. In CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384; [1997] HCA 2, Brennan CJ and Dawson, Toohey and Gummow JJ held (at 408): Moreover, the modern approach to statutory interpretation (a) insists that the context be considered in the first instance, not merely at some later stage when ambiguity might be thought to arise, and (b) uses "context" in its widest sense to include such things as the existing state of the law and the mischief which, by legitimate means such as those just mentioned, one may discern the statute was intended to remedy. Instances of general words in a statute being so constrained by their context are numerous. In particular, as McHugh JA pointed out in Isherwood v Butler Pollnow Pty Ltd, if the apparently plain words of a provision are read in the light of the mischief which the statute was designed to overcome and of the objects of the legislation, they may wear a very different appearance. Further, inconvenience or improbability of result may assist the court in preferring to the literal meaning an alternative construction which, by the steps identified above, is reasonably open and more closely conforms to the legislative intent.
As the NSW Court of Appeal held in Dino Dinov v Allianz Australia Insurance Ltd [2017] NSWCA 270 at [8], the "legitimate means" by which the mischief which the statute was intended to remedy can be discerned include any explanatory note or memorandum in relation to the Act in question: s 34(2)(e), Interpretation Act.
Section 3C of the HB Act was inserted in 2014 by the Home Building Amendment Act 2014. At that time s 3B, which had been introduced by the Home Building Amendment Act 2011, referred to "completion" of building work, to be determined by the contract, or by reference to a number of presumptions as to when there is "practical completion" of the work. Prior to the introduction of s 3B, there was no statutory definition of the date of practical completion. The date of practical completion was dependent upon findings of fact pertaining to the contractual provisions between the parties, or if there were no applicable contractual provisions the date of practical completion was the date at which "all building work is complete, or all but completed, in accordance with the contract and the premises are reasonably fit for occupation": Owners Corporation Strata Plan 64757 v MJA Group Pty Ltd [2011] NSWCA 236; Concourt Pty Ltd v Kerr [2015] NSWCATAP 106.
The extrinsic material confirms that the purpose of introducing s 3C was to provide owners and owners corporations for strata schemes with certainty about the date from which building works are completed. Mr Stuart Ayres in the Legislative Assembly in the Second Reading speech (New South Wales Legislative Assembly, Parliamentary Debates (Hansard),6 May 2014 at p 28220) noted that: "A number of other amendments will further clarify aspects of the statutory warranty scheme. Owners corporations have expressed concern about the ease with which they can apply the existing definition of completion to trigger the statutory warranties and insurance. This is because they are not parties to the original contract. To provide owners corporations with greater certainty about their rights the bill will introduce a new definition of completion of building work for strata schemes. This will be the date an occupation certificate is issued that authorises the occupation and use of the whole of the building. The new definition will apply only to new contracts entered into after commencement of the Act."
The Minister for Fair Trading in the second reading debate in the Legislative Council (New South Wales Legislative Council, Parliamentary Debates (Hansard), 28 May 2014 at pp 29195-29196) made the following relevant comments: There were a number of comments in respect of the proposed completion date for strata schemes. All possible options that could assist owner corporations and lot owners to easily discover the completion date of building work for their building were explored in the development of this amendment. No stone was left unturned. The main aim was to establish a point closest to the time period when the majority of the scheme would be sold, owners would be moving in, and the owners corporation established. This would be the most likely time that owners would identify defects in the construction of the strata scheme. The date of registration of the strata plan was quickly rejected as this is done well before the building can be properly used for its intended purpose and occupied by residents. The bill provides that the occupation certificate issued must be one that allows the occupation and use of the building. This ensures that it is provided at a time when the work has been truly completed. This amendment will greatly improve the ability of owners corporations in determining the warranty periods for their building. It will enhance certainty across the industry. This bill provides amendments which will enhance existing protections for consumers. The homeowners of New South Wales will benefit from reduced risks in undertaking such a big investment as building a home or undertaking major renovations.
In providing certainty for owners of new strata developments as to the date from which their entitlement to bring proceedings in relation to breach of the statutory warranties would run, s 3C(2) also provides certainty for the builder as to when its potential liability for defects would end. To that extent it represents a balancing of the various competing interests involved: Minister for Immigration and Ethnic Affairs v Teo [1995] FCA 1203. The Appellant's reliance on the text of the provision accordingly has the advantage of certainty both for builders and for owners, since to determine completion by the date of issue of any occupation certificate that on its face authorises use and occupation of a building may either permit or preclude an action for breach of the statutory warranties.
However, s 3C(5) defines "occupation certificate" to mean an occupation certificate "under" the EPA Act, and the issue is whether any document that purports to be an occupation certificate can be so regarded, or whether the use of the word "under" means "in accordance with". Section 3C(2) is qualified by requiring that the certificate be a document "that authorises the occupation and use of the whole of the building". An occupation certificate issued for part of a building would not satisfy s 3C(2).
Having regard to the importance of the date of completion of building work for the purposes of the Tribunal's jurisdiction, and the introduction first of s 3B and subsequently s 3C for strata scheme development to assist in achieving a measure of certainty in determining the relevant date, the Appeal Panel is of the view that it is consistent with that purpose that an occupation certificate on which either the owners corporation or the builder seeks to rely is an occupation certificate that "authorises" the occupation and use of the whole of the building.
The question is whether an occupation certificate issued in contravention of the requirements of the EPA Act or Regulation is a document that "authorises" the occupation and use of the whole of the building. And further, whether the Tribunal has jurisdiction to consider whether the document in evidence is an "occupation certificate" for the purposes of s 3C(2).

Whether the Tribunal can consider the validity of an occupation certificate

It is common ground that the jurisdiction to determine whether an occupation certificate issued under the EPA Act is valid is conferred on the Land and Environment Court, formerly by ss 123 and 124 of the EPA Act and now ss 9.45 and 9.46, and that no such jurisdiction is conferred on the Tribunal by that Act. The issue is whether the Tribunal can consider the validity of an occupation certificate in determining a building claim in proceedings under the HB Act.
The Tribunal has jurisdiction to decide a "building claim" in accordance with Part 3A of the HB Act. As a general proposition, the jurisdiction to decide that particular class of matter includes the jurisdiction to decide "all other matters necessary for the exercise of its jurisdiction": Cachia v Isaacs (1985) 3 NSWLR 366 at 387 per McHugh JA. The extent to which the Tribunal can decide those other matters raises a question as to the Tribunal's power of collateral review, or collateral challenge.
The Appellant submitted that while the Tribunal may have jurisdiction to make collateral findings in some situations, findings in respect of the validity of an occupation certificate is not such a case, and the Tribunal was required to treat the interim occupation certificates as valid unless and until the certificates were found to be invalid by a court of competent jurisdiction. The Respondent's position was that in construing and applying s 3C the Tribunal was required to determine for the purposes of that section whether or not the interim occupation certificates had been issued "under" the EPA Act. Whether the occupation certificates triggered the running of time under s 3C fell squarely within the Tribunal's jurisdiction.
A collateral challenge has been described as one where "…the allegation of a jurisdictional flaw arises in a matter not designed specifically for handling it, nor necessarily focusing on that issue or involving the directly affected parties, and in a court or tribunal which may not have much administrative law experience": Aronson, Groves & Weeks Judicial Review of Administrative Action and Government Liability 6th ed, 2017, [10.280]. Collateral challenge in a court is permissible where the validity of an administrative decision is relevant to a finding of criminal guilt or civil liability: Ousley v The Queen (1997) 192 CLR 69 (Ousley). At pp 98-99 McHugh J described a "collateral attack" on an act or decision in the following terms: A collateral attack on an act or decision occurs when the act or decision is challenged in proceedings whose primary object is not the setting aside or modification of that act or decision…[It occurs] in proceedings where the validity of the administrative act is merely an incident in determining other issues.
Ousley concerned whether, in a contest as to admissibility of tape recordings of conversations, the trial judge could permit a collateral challenge to the validity of the warrants that authorised the recordings. Toohey J held that the issuing of each warrant was an administrative act open to collateral review, limited to the validity of the warrant on its face, and it was not open to the trial judge to adjudicate on the sufficiency of a warrant or whether the issuing authority was in fact satisfied as to any statutory requirements. Gaudron J (with whom Gummow J relevantly agreed) held that collateral challenge was limited, validity depending on the warrant having been regularly issued and not on the sufficiency of the material supporting the application for its issue. McHugh J held that a collateral challenge to a warrant could not be confined to defects appearing on the face of the document. While in dissent on the result, Kirby J agreed that collateral challenge was open, pointing to the possibility of fragmentation of the criminal process if the trial judge could not determine all the legal issues arising in the trial.
There is some debate as to whether the error must be patent, however there is authority for the proposition that it need not be: Federal Airports Corporation v Aerolineas Argentinas (1997) 76 FCR 582; Gray v Woollahra Municipal Council [2004] NSWSC 112.
There is limited authority on the extent to which a tribunal, as opposed to a court, can engage in collateral review.
In support of its position that the Tribunal does not have power to collaterally review an administrative decision, the Appellant relies on the decision of the Victorian Court of Appeal in Director of Housing v Sudi [2011] VSCA 266 (Sudi). That was an appeal from a decision of the Victorian Civil and Administrative Tribunal (VCAT), where Bell J, as President of VCAT, had held that in determining an application made by the Director of Housing for a possession order under s 344 of the Residential Tenancies Act 1997 (Vic) (the RT Act) VCAT had power to consider whether the Director's decision to make the application complied with the Charter of Rights and Responsibilities Act 2006 (Vic) (the Charter). The President's orders included an order that the Tribunal had jurisdiction to determine whether or not an application for a possession order which had been made in breach of the agency's obligations under s 38(1) of the Charter was valid; and an order that the Director had breached the human rights of the tenants to family and home under s 13(a) and had acted unlawfully under s 38(1) of the Charter in seeking to evict them and in making an application for a possession order under s 344 of the RT Act. The applications being thereby invalid, the Tribunal had no jurisdiction to hear and determine the applications, and the applications were dismissed
The Court disagreed, and allowed the appeal. Warren CJ held (at [43]) that the RT Act and the Victorian Civil and Administrative Tribunal Act 1998 (Vic) (VCAT Act) evinced an intention to deny VCAT power to collaterally review the validity of a purported administrative decision that happened to be material to the tenancy dispute before VCAT. Her Honour went on to say at [44] that different considerations may apply in respect of an administrative decision that is invalid on its face.
In the course of her reasons, Warren CJ noted the argument that if VCAT had no collateral review power, a person seeking to challenge an administrative decision material to a proceeding before VCAT would need to commence a separate proceeding in the Supreme Court to challenge that decision, leading to inconvenience and expense. Her Honour acknowledged at [39] that that was a necessary consequence of setting up a specialist forum of limited jurisdiction: the difficulties of fragmentation of proceedings, and the requirement for an assessment of the strength of a party's case in another forum if an adjournment were required, were the flipside of the policy benefits derived from limiting VCAT's jurisdiction, namely the quick, efficient, inexpensive and informal resolution of issues arising under the RT Act.
Maxwell P agreed (at [66]) that in determining whether collateral review is available the starting point is the legislation under which the governmental action is sought to be challenged. His Honour distinguished the reasoning in decisions including Collector of Customs (NSW) v Brian Lawlor Automotive Pty Ltd (1979) 2 ALD 1, holding at [89] that those cases had nothing to say on whether an administrative tribunal in the exercise of its original jurisdiction could determine by way of collateral review that an application by a public official was legally valid. His Honour noted that the proceedings under s 344 of the RT Act were not conditioned on the existence of a valid administrative act by a public official, but rather the existence of a right to possession of land, and it was immaterial whether the relevant premises were in public or private ownership (at [74]). That factor pointed strongly to exclusion of collateral review: in a scheme that applied without differentiation to public and private landlords it would be anomalous if the Tribunal were empowered to inquire into the lawfulness of the Director's decision to seek possession, and there was no basis for implying into the jurisdiction-conferring provisions a power in the Tribunal to conduct a collateral review.
Weinberg JA held that while VCAT's jurisdiction is broad, its powers were conferred by statute and there was nothing in the VCAT Act, the RT Act, or the Charter, that suggested that VCAT had the power to engage in broad-ranging collateral review on Charter grounds.
In the course of his reasons Weinberg JA noted (at [225]-[229]) the constraints on the ambit of collateral review, and that while Australian courts are wary of collateral review there is support for the view that collateral review should be restricted to cases where the validity of the government act sought to be attacked can be determined on the face of the documentary material. His Honour considered Ousley, concluding that that decision is authority for the proposition that accepting that administrative (as opposed to judicial) acts are presumptively susceptible to collateral challenge, there are limitations. While VCAT may well have some powers to engage in some form of collateral review, those were confined as were the powers of the courts to a narrow range of defects being challenges based on "facial" or "patent" invalidity (at [261]). His Honour referred to McHugh J's concern that unrestricted collateral review has disadvantages, which he considered more acute in relation to proceedings before tribunals than they are in relation to courts.
Sudi was considered in New South Wales Land and Housing Corporation v Quinn (No 2) [2018] NSWDC 161, where at [43] P Taylor SC DCJ noted that collateral challenge is limited to where the validity of a decision is "merely an incident in determining other issues" (Ousley at [99] per McHugh J). Referring to Sudi, his Honour held (at [47]) that the ambit of collateral review depended on the proper construction of the statute that supported the Corporation's claim in that case that its entitlement to recover a debt owed by a former tenant was based on its decision to cancel rental rebates.
Sudi is authority for the proposition that whether an administrative tribunal, exercising judicial power, can consider whether an administrative act which is an "incident" or element in determining the issues in respect of which it has jurisdiction, depends on the applicable legislation. Collateral challenge is not precluded, and is subject to the limitations identified in Ousley.
In the proceedings under the HB Act the Tribunal was exercising judicial power, consistent with the reasoning in Attorney-General for New South Wales v Gatsby [2018] NSWCA 254, relying on the description of judicial power by Kitto J in R v Trade Practices Tribunal; ex parte Tasmanian Breweries Pty Ltd [1970] HCA 8; (1970) 123 CLR 361 at 374-5: Thus a judicial power involves, as a general rule, a decision settling for the future, as between defined persons or classes of persons, a question as to the existence of a right or obligation, so that an exercise of the power creates a new charter by reference to which that question is in future to be decided as between those persons or classes of persons. In other words, the process to be followed must generally be an inquiry concerning the law as it is and the facts as they are, followed by an application of the law as determined to the facts as determined; and the end to be reached must be an act which, so long as it stands, entitles and obliges the persons between whom it intervenes, to observance of the rights and obligations that the application of law to facts has shown to exist. It is right, I think, to conclude from the cases on the subject that a power which does not involve such a process and lead to such an end needs to possess some special compelling feature if its inclusion in the category of judicial power is to be justified.
As noted above, the Tribunal's jurisdiction to determine a building claim, while limited under 48K of the HB Act, is shared with the courts.
The issue of an occupation certificate is an administrative, and not a judicial, act. The authority to issue an occupation certificate is conferred by s 109D(1)(c) of the EPA Act, whether issued by a public authority such as a local council or an individual or corporate certifier authorised by an accreditation under the Building Professionals Act 2005 in accordance with Sch 1 to the Building Professionals Regulation 2007.
There was no issue raised that the claim in HB 18/42848 was not relevantly a "building claim" as defined in s 48A of the HB Act, or with the amount claimed by the Owners. Determination of whether either interim occupation certificate was validly issued did not go to whether the substance of the claim met the requirements of the definition of a "building claim". Rather, whether the Tribunal had jurisdiction to hear and determine the building claim depended on whether it had been lodged in time, which depended on the date of issue of an occupation certificate meeting s 3C(2)(a). Determination of that question was a step necessary to the ultimate conclusion as to whether the claim could be pursued in the Tribunal: Albarran v Members of the Companies Auditors and Liquidators Disciplinary Board [2007] HCA 23 at [28]. If the Tribunal could not consider whether the two interim occupation certificates were effective to meet the requirements of s 3C(2) of the HB Act, the only recourse would have been, as acknowledged by Warren CJ in Sudi, for the party asserting invalidity to initiate proceedings in the Land and Environment Court, probably requiring an adjournment of the Tribunal proceedings.
In Jacobs v OneSteel Manufacturing Pty Ltd (2006) 93 SASR 568 Besanko J (with whom Duggan, Vanstone and Layton JJ agreed) identified principles relevant to whether a tribunal (in that case the SA Workers Compensation Tribunal) could, and should, entertain collateral challenges. Those principles included whether the grounds of challenge would likely involve the adducing of substantial evidence, whether all proper parties be heard, whether a collateral challenge would by-pass judicial review protective mechanisms such as standing, whether there was any relevant statutory provision, whether the issue raised was clearly answered by authority, whether other similar cases were pending, and whether there was a more appropriate forum in terms of expertise such that a collateral challenge should not be permitted. As Aronson et al note at [10.310], most of those criteria are discretionary.
Determination by the Tribunal of the question of whether the builder could rely on the interim occupation certificates to establish the date of completion did not require any evidence beyond what was recorded on the face of the documents, and the terms of the development consent specifying that conditions 87 to 116 had to be complied with before an occupation certificate could be issued. It did not require the Tribunal to consider whether in fact compliance with any or all of those conditions was required in order for the building to be habitable. It did not require, as Ralan would have required, detailed examination and comparison of the plans and specifications in the consent and in the construction certificate. It did not require the Tribunal to "go behind" the occupation certificates to consider whether they should have been issued. The Tribunal's consideration of validity limited to what was evident on the face of the documents is consistent with the limitations to collateral challenge discussed in Ousley.
While its determination could not be conclusive as to the validity of the certificates, as acknowledged by the Tribunal at [25] of the reasons, in order to satisfy itself that the application had been lodged within time, and that the Tribunal had jurisdiction to determine the building claim, the Tribunal was entitled to consider whether either of the documents was "an occupation certificate" for the purposes of s 3C(2) of the HB Act.

Whether the Tribunal erred in concluding that the occupation certificates were not validly issued

Each of the two interim occupation certificates purported to be "an occupation certificate" for the purposes of s 3C(2) of the HB Act , however both identified conditions of development consent that had not yet been satisfied. In identifying, and excluding, in response to the "description of part (if applicable)", those conditions by number, each occupation certificate contradicted the statement that it applied to the whole of the building. Those documents on their face disclosed that the precondition specified in s 109H(2) of the EPA Act for their issue had not been met.
The Appeal Panel is of the view that whether or not the reasoning in Cessnock v Laila (on which the Tribunal based its conclusion) remains authoritative, the conclusion that neither interim occupation certificate was "an occupation certificate that authorises the occupation and use of the whole of the building" as required by s 3C(2)(a) is not inconsistent with Ralan, or with the approach required by the High Court in Project Blue Sky. That approach, as noted above, requires consideration of whether it was a purpose of the legislation that an act done in breach of the legislative provision, in this case, s 109H(2), should be invalid; and that requires that regard be had to the language of the provision and the scope and object of the statute.
Applying the principles in Project Blue Sky, with the benefit of the further submissions of the parties, the Appeal Panel notes that the use of mandatory language is, as submitted by the Respondent, relevant while not being determinative. The Appeal Panel is satisfied that the object and purpose of the provisions for the issue of an occupation certificate can be characterised as being to ensure compliance with the relevant legislative requirements and conditions before a building can be occupied, in order to protect against the risks associated with occupation of incomplete buildings. Those requirements apply not only to private certifiers, as submitted by the Appellant, but to any certifier accredited to issue an occupation certificate. While directed at the certifier, the issue of an occupation certificate had consequences for those seeking to occupy a building, it being an offence to occupy a building unless an occupation certificate had been issued: s 109M EPA Act. The requirement to comply with readily identifiable conditions of consent was clearly stated in the legislation, and did not depend on criteria expressed in regulations in vague language. Further, it is relevant that when considering the consequence of failure to comply with the mandated legislative requirements, the Tribunal is doing so for the limited purpose of deciding whether the document on which the builder relies has effect for the purposes of s 3C(2) of the HB Act that time starts to run.
The Appeal Panel is satisfied that if, as the Appellant submits, the Tribunal erred in not considering whether the interim occupation certificates were invalid by application of the principles in Project Blue Sky, it would have made no difference to the conclusion reached in paragraph [22] of the reasons.
The Tribunal's conclusion that the interim occupation certificates had been issued in breach of the EPA Act and being invalidly issued were not effective for the purposes of s 3C(2) of the HB Act did not determine conclusively the validity of the certificates. Its conclusion that as a consequence it had jurisdiction to hear and determine the claim brought by the owners corporation for breach of statutory warranties was not conclusive as to that issue: Attorney General for New South Wales v Gatsby [2018] NSWCA 254 at [281], [284] per Leeming JA.

Conclusion

The Appeal Panel concludes that the Tribunal had jurisdiction to consider whether the interim occupation certificates issued in September 2011 had been validly issued under the EPA Act. The Tribunal did not err in finding that neither certificate had been validly issued, and that, as a consequence, the reference to an "occupation certificate" in s 3C(2) of the HB Act did not apply to those documents. There was no error in the Tribunal's conclusion that the claim was not barred by s 48K(7) of the HB Act, and the appeal should be dismissed.
The Appeal Panel notes that this conclusion follows from the proposition that in the absence of some clear legislative indication to the contrary, the Tribunal is not precluded, in proceedings in which its jurisdiction to hear and determine a matter involving the exercise of judicial power depends on the validity of an administrative act, to consider the validity of that administrative act. In the circumstances of this case, where the invalidity was apparent on the face of the document and required no further evidence, and the question was central to the Tribunal's jurisdiction, determination of the collateral challenge was both open and appropriate. There are, however, clearly limits to the availability of collateral challenge, as identified in Ousley and Jacobs v OneSteel Manufacturing Pty Ltd. It may be that in some matters under the HB Act, for example where the issue is whether the building works comply with the BCA, resolution of the jurisdictional issue would require consideration of whether the appropriate path would be to engage the jurisdiction of the Land and Environment Court to determine validity.
The Appeal Panel notes that the two occupation certificates in issue were issued under the legislation as in effect in 2011. Significant amendments were made to the EPA Act in 2018 by the Environmental Planning and Assessment Amendment Act 2017(NSW). The provisions for the issue of an occupation certificate are now contained in Part 6 Div 6.3 of the EPA Act, which are due to take effect from September 2019. In the amended provisions, the restriction on issue of an occupation certificate unless any preconditions to the issue of the certificate that are specified in a development consent have been complied with remains: s 6.10(1). However, there is no equivalent of s 109M(1), and s 6.4(c) now provides that when issued, an occupation certificate is taken to be part of the development consent to which it relates. There is no longer a distinction between an "interim" and a "final" occupation certificate. It is not necessary, in reaching the conclusion that the Tribunal did not err in determining the preliminary question as it did, to consider whether the same conclusion would be reached under the provisions of the new Part 6 Div 6.3.
The Appeal Panel further notes that both Taricon and AT Building, also decisions in the Consumer and Commercial Division of this Tribunal, concerned defects of form, and not substance, of the occupation certificate on which the builder relied to argue that the building claim was out of time. Neither required evidence beyond the relevant documents, and both were determinative, in the former case whether the Tribunal had jurisdiction, and in the latter whether the claim could extend to defects that were not major defects. It is not necessary to express a concluded view as to the correctness of either decision, neither of which was the subject of an appeal, other than to note that in both those matters the task for the Tribunal in considering where there was a validly issued occupation certificate was of a similarly limited compass to the present proceedings, and the approach of the Tribunal in both those matters is consistent with the approach adopted in this appeal.
It is not necessary to address in detail the Respondent's submission that in any event by operation of s 109I of the EPA Act the issue of the final occupation certificate on 12 October 2011, which revoked any earlier occupation certificate, meant that time did not run from the date of issue of the interim occupation certificates. We note, however, that the interpretation of s 3C(2) of the HB Act adopted by the Tribunal and confirmed in this appeal would mean that subsequent revocation of an occupation certificate valid at the date of its issue would not affect the Tribunal's application of s 3C(2), and thus s 48K(7) of the HB Act.
At paragraph [28] of the reasons the Tribunal stated that as a result of its findings it was unnecessary to determine the dispute between the parties as to whether or not the occupation certificates were accompanied by fire safety certificates as required by the conditions of the development consent. Given the outcome of the appeal, is it not necessary to address that issue.

Orders

The orders of the Appeal Panel are: 1. The appeal is dismissed. 2. If a party seeks an order for costs of the appeal, that party may file written submissions within 14 days of publication of these reasons seeking an order in relation to the costs of the appeal. 3. If a party files submissions in accordance with order 2, any other party may file submissions in response within a further 14 days. 4. Any submissions filed in accordance with orders 2 and 3 should address whether the question of costs may be determined on the papers and without a hearing pursuant to s 50(2) of the Civil and Administrative Tribunal Act 2013.

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 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: 16 September 2019

Building Professionals Act 2005(NSW)

Charter of Rights and Responsibilities Act 2006(Vic)

Environmental Planning and Assessment Amendment Act 2017(NSW)

Home Building Amendment Act 2011(NSW)

Home Building Amendment Act 2014(NSW)

Environmental Planning and Assessment Act 2006(NSW)

Dyldam Developments Pty Ltd v The Owners - Strata Plan No 85305

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