Grygiel v Baine & Ors

Grygiel v Baine & Ors - [2005] NSWCA 218 - NSWCA 2005 case summary — Zoe

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29 June 2005 CHRISTOPHER ANDREW GRYGIEL v ANTHONY J. BAINE & JANICE WILEY & ORS Judgment 1 MASON P: I agree with Basten JA. 2 BRYSON JA: The claimant Mr Grygiel seeks leave to appeal from the decision and orders of Master Malpass of 20 April 2004 [2004] NSWSC 308 which dismissed Mr Grygiel's appeal from the decision of Member R Connolly in the Consumer, Trader and Tenancy Tribunal (Home Building Division) made on 29 August 2003. The Tribunal decision relates to several claims in a Notice of Motion by Mr Grygiel for various procedural orders and directions; the motion was heard by the Tribunal on three days, and later significantly amended under leave granted at the hearing. There is a right of appeal to the Supreme Court under s 67(1) of the Consumer, Trader and Tenancy Tribunal Act 2001 (NSW) where "…the Tribunal decides a question with respect to a matter of law…" Mr Grygiel attempted to appeal as of right from the decision of the Master, but the Court of Appeal (Mason P) held that leave is necessary (see [2004] NSWCA 377). 3 One matter on which Mr Grygiel seeks leave to appeal relates to a challenge to the Tribunal's decision that Eastermead Pty Ltd (hereinafter Eastermead), a company closely associated with Mr Grygiel, should not be joined as a co-applicant with him. Eastermead is not a claimant in the Court of Appeal. The application to the Tribunal began when Mr Grygiel claimed payment of $39,739 from Mr Baine and Dr Wylie, the opponents, for building work which he claimed he had done on their house. Mr Grygiel was a licensed builder, but he did not have home owners warranty insurance. Mr Baine and Dr Wylie defended Mr Grygiel's application on grounds which included Mr Grygiel's failure to take out home owners warranty insurance, and Mr Grygiel contended that he did not take out insurance because of advice which Mr Baine, who is a solicitor, gave him in the course of a conversation about the building work and its costs. 4 Before the Tribunal, nothing that was put forward was a positive reason for supposing that it was Eastermead and not Mr Grygiel which contracted with Mr Baine and Dr Wylie and did the building work, and the question of Eastermead joining in or making a claim seems to have been suggested by the form of Mr Baine and Dr Wylie's Cross-claim for $121,752, in which Mr Grygiel and Eastermead were both named as cross-defendants. Eastermead was neither licensed nor insured, and was alleged to have issued progress claims and tax invoices, which Mr Baine and Dr Wylie claimed they paid at Mr Grygiel's direction. Mr Baine and Dr Wylie's defence conceded the claim, as first made, that their contractual dealings were with Mr Grygiel. 5 Mr Grygiel commenced his application to the Tribunal as sole applicant. He later lodged a Statement of Claim which named Eastermead as sole applicant, and applied by Notice of Motion for an order that Eastermead be substituted for himself as applicant in the proceedings. He then by Amended Notice of Motion applied for an order that Eastermead be joined as a co-applicant with him. Eastermead should be understood to have applied to be joined as a co-applicant with Mr Grygiel in the Tribunal, so as to make the same or similar claims in the alternative to those Mr Grygiel made. In the application for leave to appeal, Mr Grygiel has not shown that the Tribunal decided a question with respect to a matter of law when it disposed of the application to join Eastermead as a co-applicant, and should not be granted leave to appeal for that reason. 6 Mr Grygiel also seeks leave to appeal to challenge the decision of the Tribunal to dismiss applications for orders to these effects:

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The Tribunal did not fully consider the application of the terms of s 48A(1) to the claim for professional negligence, which required consideration of two different possible grounds of connection between the claim and the jurisdiction under s 48A(1) set out in two limbs in the last passage or tailpiece of the definition of "building claim." It is well established that, as the language of the Act shows, supply of building goods or services refers to the physical construction or alteration of a dwelling: see Woolfe v Sussman Construction Consulting Services [2001] NSWCSC 702 (McClellan J). The Tribunal treated this reference to physical construction or alteration of a dwelling as carrying through to all cases referred to in the second limb of the tailpiece of s 48A(1), which refers to a claim that arises under a collateral contract. Whether a claim falls within the first limb and arises from a supply of building goods or services is a question to be decided by applying those words to the facts, in a process of construction which produces a decision special to the terms of the claim under consideration in its factual setting. In the first limb the process includes assessing what nexus there is between the claim and the supply so that it can be said whether or not the claim arises from the supply. 8 The second limb requires an address to the terms and factual settings of both the supposed collateral contract and the supply contract to produce a decision whether or not the supposed collateral contract is collateral to the supply contract. The question whether a contract is collateral to the supply contract requires reference to the terms, express or implied, of both contracts and consideration of how the terms of the first bear on the operation of terms of the supply contract; collaterality is a characteristic of the collateral contract, not a reference to acts done in performance of it, nor a reference to contemporaneity of the two contracts. It seems that consideration is required of the bearing of the supposed collateral contract and the rights and obligations under it on the supply contract and the rights and obligations under it; and that some commonality of parties is necessary. 9 The Tribunal did not address the task of application of the terms of s 48A(1) to the claim for professional negligence in detail, but applied a general principle derived from Woolfe v Sussman Construction Consulting Services. It is doubtful whether the general principle could provide the answer to the question under the second limb, and it may well be that the Tribunal's approach to the decision that it had no jurisdiction over the claim for professional negligence is erroneous. 10 To my mind however it is very unlikely that further consideration of the application of s 48A(1) would produce an outcome different to that which the Tribunal reached. If the Tribunal did address that application again, it would have to consider whether the claim for professional negligence sought payment of a "specified sum of money" so as to constitute a "building claim" within the meaning of s 48A. The Tribunal did not deal with this and might not have been asked to, but on any reconsideration it would be a large difficulty as no specified sum can be recognised on the face of the proposed Further Amended Statement of Claim. If it should be possible to piece together what the sum claimed is from various references in the Further Amended Statement of Claim, the conclusion could not be said to be a "specified sum of money." 11 In argument in the Court of Appeal s 7(1) of the Consumer Claims Act 1998 (NSW) was referred to as a possible source of jurisdiction of the Tribunal over the claim for professional negligence; but the Tribunal was not asked to consider the matter on that basis and hence did not consciously make a decision with respect to a matter of law under s 7(1); and it is not surprising that that source of jurisdiction did not come to the Tribunal's attention because that jurisdiction is subject to a cap on the amount of claim which Mr Grygiel could sue for. The claim, which was unclear as to amount, was evidently for a higher amount than the Tribunal could award when acting on that basis and Mr Grygiel did not indicate readiness to accept that limitation. It seems possible that in deciding that it did not have jurisdiction the Tribunal decided a question with respect to a matter of law and was in error, in that it did not consider whether the claim for professional negligence was within its jurisdiction under the Consumer Claims Act 1998. However it would not be appropriate to grant leave to appeal on a point which was not taken before the Tribunal. 12 Similarly it is unlikely, to my mind, that further consideration of the application to join the twelve partners of Carroll & O'Dea would produce an outcome different to that which the Tribunal reached. Mr Baine is already a party to the litigation, and the joinder of his partners would add complexity without any countervailing advantage. There might be fewer difficulties if Mr Grygiel had asked the Tribunal to allow an amendment claiming professional negligence against Mr Baine only; but he did not do so.

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13 Overall it appears to me to be unlikely that success for Mr Grygiel in the appeal would achieve anything; it could only lead to further consideration by the Tribunal of discretionary decisions, the outcome of which cannot be fully foreseen, on which Mr Grygiel's position would not be strong. 14 This application well illustrates the wisdom of keeping interlocutory appeals on a tight rein. The interlocutory applications have already had more attention than is warranted by any importance they could have. They were heard over three days in the Tribunal followed by written submissions; the appeal before Master Malpass was heard on two successive days. Additional grounds of controversy have been introduced which the Tribunal was not told were involved. More hearing time and professional attendance were used in the Tribunal and on appeal than seem reasonably required to dispose justly of the whole controversy. In retrospect it seems unfortunate that the Tribunal did not impose restrictions to ensure that the interlocutory hearing occupied no more than an hour or two. The Tribunal is empowered to control procedure under s 28 of the Consumer, Trader and Tenancy Tribunal Act 2001. 15 The Tribunal's decision does not conclude the rights for which the parties contended, and subject to time limits the rights could be sued for in other proceedings in the Tribunal or elsewhere. (However I offer no encouragement.) A professional negligence claim is not the only vehicle for Mr Grygiel to bring evidence of his alleged conversation with Mr Baine about obtaining home owners warranty insurance under the consideration of the Tribunal; he can contend (and I do not predict the outcome) that the conversation is relevant to a quantum meruit claim under s 94(1) of the Home Building Act 1989, and he can claim the benefit of s 28(3) of the Consumer, Trader and Tenancy Tribunal Act 2001, which refers to substantial merits. These are arguments he can put whether or not there is a further appeal and a decision of the Court of Appeal will not affect them. 16 As leave should not be granted what I have said does not dispose of any question and can have no authority. I have said no more than that it is well arguable that the Tribunal made an error of law. There was some discussion in the course of argument about circumstances in which Eastermead's opportunity to bring separate proceedings could be extended. I see no need for this Court to concern itself with such an arrangement. The time and patience of the Court of Appeal have been abused by discussion of matters extraneous or peripheral to a proposed appeal from decision of a question with respect to a matter of law. My concern is not to consider how the Tribunal should or might deal with some application which was not made, or with some modified form of an application which was made, or with some argument which it was not asked to consider. An application for leave to appeal requires debate on the decision which the Tribunal actually did make and the supposed error of law in it, and is not a general review of the possible problems of the controversy. The application was encrusted with barnacles in the Tribunal, and grew more with its decelerating progression. 17 In my opinion the Court of Appeal should order:

Leave to appeal is refused with costs. 18 BASTEN JA: These proceedings arise out of a building dispute which is currently unresolved in the Consumer, Trader and Tenancy Tribunal ("the Tribunal"). The Claimant builder originally commenced proceedings in his own name against two individuals (the First Opponents) for whom he had undertaken certain home building works. His services were terminated without the work being completed. He alleged that money was owing for work undertaken under a "do and charge" arrangement; the First Opponents cross-claimed, alleging that the work was defective. The cross-claim was brought not only against the Claimant personally, but also against his company, Eastermead Pty Ltd ("the Company"). 19 At that point the Tribunal, which is intended to operate as expeditiously, informally, and without reference to procedural technicalities, as the statutory scheme and the rules of procedural fairness allow, became embroiled in applications, pleadings and interlocutory proceedings which mirrored civil practice in this Court. No doubt it is not always easy for the Tribunal to walk the fine line between the competing statutory injunctions: see Italiano v Carbone [2005] NSWCA 177. Nevertheless, the present case demonstrates an accretion of procedural complexities which make a mockery of the presumed intention of Parliament in establishing such a tribunal, in which the general rule is that parties must present their own cases, without representation: Consumer, Trade and Tenancy Tribunal Act 2001 (NSW) ("the CTTT Act"), s 36. 20 The Claimant's response to the cross-claim was four-fold. First, he sought to include the Company as a co-applicant, on the basis that the Opponents thought it might have been the true supplier of the services. Secondly, he sought to join the architect and the electrician. Thirdly, in response to a claim that he was entitled to no payment because he (and his Company) were unlicensed and lacked the requisite statutory insurance, he sought to join a fresh claim against one of the First Opponents, Mr Baine, who was a solicitor, alleging negligent provision of legal advice in relation to the provision of building services. Finally, he sought to join the firm of solicitors of which Mr Baine was a partner ("the law firm"). 21 Why the Claimant sought to add a fresh cause of action with respect to the alleged legal advice is unclear. His entitlement to recover for building services was, absent insurance, limited to a claim for work done on a quantum meruit basis, in circumstances where he was able to persuade the Tribunal that payment was "just and equitable": Home Building Act 1989 (NSW), s 94(1A). It is difficult to suppose that any representation made, or advice given, by Mr Baine to the Claimant would not have been relevant in that regard. What more he would recover if successful on a separate cause of action is at least doubtful, in practical terms. 22 The legal and practical benefits of joining the law firm are even more obscure. His claims against Mr Baine's partners are entirely dependent upon success against Mr Baine. There is no suggestion that Mr Baine is without the means to meet any sum likely to be payable, if the Claimant were successful. On the other hand, adding parties adds cost and complexity to the existing proceedings. Perhaps the strategy was to force a commercial settlement from the law firm, which might be thought unwilling to face an adverse finding, or even incur the costs of defending itself. 23 The next question is to identify what the Tribunal did, in relation to these proposed changes. The Tribunal -

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Issues 26 The jurisdiction of the Court was invoked pursuant to s 67 of the CTTT Act, which, so far as relevant, reads as follows: " 67 Appeal against decision of Tribunal with respect to matter of law (1) If, in respect of any proceedings, the Tribunal decides a question with respect to a matter of law, a party in the proceedings who is dissatisfied with the decision may, subject to this section, appeal to the Supreme Court against the decision. (2) An appeal is to be made in accordance with the rules of the Supreme Court. The rules of the Supreme Court may provide that an appeal (or such classes of appeal as may be specified in the rules) may be made only with the leave of the Court." This Court has held that this terminology should not be given an unduly wide construction, in part because it does not lend itself to such a construction and also because there is separate provision in s 65 in relation to prerogative relief: see generally Kalokerinos v HIA Insurance Services Pty Ltd [2004] NSWCA 312 at [38]-[58] (Bryson JA). There is no provision in the Supreme Court Rules requiring leave: the fact that prerogative relief is discretionary and not generally available in relation to decisions which are not final and determinative, suggests that a requirement for leave to appeal under s 67(2) would have much to commend it. 27 An argument might be available that the reference to "the decision" in s 67(1) is a reference to final and operative decisions. However, such an argument would need to address the reasoning of this Court in Custom Credit Corporation Ltd v Commercial Tribunal of New South Wales (1993) 32 NSWLR 489. That case dealt with the right of appeal under s 20 of the Commercial Tribunal Act 1984 (NSW), now repealed. The current provision is in very similar, though not identical terms to s 20. One difference, which may be significant, is that s 20 of the Commercial Tribunal Act included a subsection to the following effect: "(10) For the purposes of this section, a reference to a matter of law includes a reference to a matter relating to the jurisdiction of the Tribunal and a matter as to the admission or rejection of evidence." In Custom Credit, Gleeson CJ placed some emphasis on the clear implication to be derived from this last provision that interlocutory rulings on questions of evidence might be the subject of appeal. By contrast, subsection 67(8) in the CTTT Act omits reference to the admission or rejection of evidence. 28 A more restricted approach would also be consistent with the authority of the Full Court of the Federal Court in Director-General of Social Services v Chaney (1980) 31 ALR 571, in relation to appeals under the Administrative Appeals Tribunal Act 1975 (Cth). Deane J (Fisher J agreeing) held that, subject to two qualifications, "an appeal under s 44(1) of the Act lies only from a decision of the Tribunal which constitutes the effective decision or determination of the application for review": 31 ALR at 393(25). One qualification concerned a specific statutory exception, the other being "the case where the proceedings before the Tribunal can properly be divided into two or more separate parts in respect of which independent 'decisions' may properly be given." That conclusion was applied by a later Full Court in Geographical Indications Committee v The Hon Justice O'Connor [2000] FCA 1877, the Court also holding that directions given by the AAT pursuant to s 33 of the AAT Act did not constitute "the making of a decision" within the meaning of s 3 of the Administrative Decisions (Judicial Review) Act 1997 (Cth). A clear example of a separate decision, of the kind discussed above, may be identified in the determinations made by the Court pursuant to s 7A of the Defamation Act 1974 (NSW). In relation to the earlier practice of this Court with respect to such issues, see David Syme & Co Ltd v Lloyd [1984] 3 NSWLR 346 at 348-349 (Glass JA), referred to in Gerlach v Clifton Bricks Pty Ltd (2002) 209 CLR 478 at [8], in considering an appeal from the decision of a trial judge dispensing with a jury. See also Lloyd v David Syme & Co Ltd (1985) 3 NSWLR 727, 729G (PC). How broadly the net should be cast need not be determined in the present circumstances, but may be illustrated by cases in which leave to appeal from interlocutory decisions is granted, with the result that an order is made which is binding on the parties and the Court below: see O'Toole v Charles David Pty Ltd (1991) 171 CLR 232 at 245 (Mason CJ) and see also Amalgamated Television Services Pty Ltd v Marsden [1999] NSWCA 313 at [34] (Mason P). 29 Whilst no challenge to Custom Credit was presented in this case, the conclusion that s 67 permits an appeal with respect to interlocutory decisions of the Tribunal supports the conclusion in Kalokerinos that s 67(1) should not be given an expansive construction: see [26] above. Further, as the judgment of Bryson JA in Kalokerinos demonstrates, the terms of s 67(1) require that an appellant must identify with precision a decision of the Tribunal with respect to a matter of law, in order to invoke the jurisdiction of the Court. It is not necessary that the matter of law be separately identified by the Tribunal and expressly addressed as such: it is sufficient that the Tribunal reaches a conclusion with respect to some matter which requires for its determination the identification of a relevant matter of law and that error is alleged with respect to that matter of law. However, as noted by Handley JA, in brief remarks in agreeing with the President in Smith v Collings Homes Pty Ltd [2004] NSWCA 75 at [61]: "It does seem clear, on any view, that the section prevents a new point of law being taken for the first time on appeal." Of course, a decision of the Tribunal could be seen to depend expressly upon a matter of law, even though the issue had not been argued before the Tribunal in those terms: I do not understand his Honour to be referring to such a case, which must be common in a Tribunal where the parties frequently have no legal representation. However, a matter which was not addressed by the Tribunal, because a decision within jurisdiction was made on other grounds, cannot be the subject of an appeal pursuant to s 67. 30 The issues sought to be agitated in this Court were by way of challenge to the failure of the Tribunal:

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Joinder of the Company 33 The first issue concerns the joinder of the Company as an applicant in the proceedings before the CTTT. Whether the proper form is to join it as an applicant in the existing proceedings or to treat the application for joinder as the filing of a fresh application was not a distinction addressed by the parties, but as there is a broad power in the Tribunal to join a person if it is of the opinion that the person "should be joined as a party in the proceedings" that would appear to be a sufficient course: CTTT Act, s 26(4). 34 The First Opponents in this Court (the homeowners) commenced proceedings against the Company as a cross-defendant, by way of alternative to their cross-claim against the Claimant personally. At a hearing before the Tribunal in relation to the joinder of the Company as a second applicant, the First Opponents resisted the application, apparently on the basis that the Company neither purported to contract with them nor did the work which was carried out on their house. It appears to be common ground that the finding of the Tribunal in relation to that aspect of the matter was an interlocutory finding for the purposes only of the joinder application. It would remain open to the Tribunal to reach a different conclusion in making final orders. That possibility may be reflected in the fact that the First Opponents have not withdrawn their cross-claim against the Company. 35 In practical terms, there are only two legal persons who could have undertaken the building work: the Claimant himself and the Company. Neither of them could have enforced a contract to supply building services because of non-compliance with mandatory statutory requirements, particularly in relation to insurance. Nevertheless, either might be able to maintain a claim in quantum meruit for the value of the work done, if able to satisfy s 94(1A) of the Home Building Act and if he or it in fact did the work. If it remains open to the Tribunal to make a finding in relation to one or other, being the person who did the work, each should arguably be a party to the proceedings. Although an early version of the proposed amended statement of claim filed by the Claimant purported to replace himself with the Company as the "applicant", the later version of the claim included both names. As there is much to be said for both being joined where there are alternative possible outcomes, and they appear in the same interest, it is difficult to see any purpose in refusing joinder of the Company as a preliminary step in the proceedings. 36 The proceedings on the notice of motion (which was not limited to this issue) took some three days. This issue should arguably have been dealt with on the papers without any hearing. 37 That is not, however, a reason why the Court should interfere with the decision of the Tribunal not to join the Company. It was presumably a decision which could be reversed at any time if a different factual situation arises on the evidence. However, the complaint made before the Master was that the Tribunal's decision in this respect was infected by a material error of law. 38 The Master held that the Tribunal had decided this issue without making any decision on a matter of law, let alone one tainted by error. In my view the decision of the Master on this issue was correct. No leave should be granted with respect to this ground of appeal. 39 Something was sought to be made during the hearing of the fact that the First Opponents had not withdrawn their cross-claim against the Company. On my understanding of the facts, the finding by the Tribunal that the Company neither did the work nor purported to contract with the First Opponents would render their cross-claim futile. If the Tribunal, in further considering the cross-claim were minded to change its view of the facts, it would be necessary for it to reconsider its position in relation to the joinder of the Company as an alternative applicant.

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Claim with respect to legal advice 40 The second matter of substance raised on this application concerns the claim sought to be made against Mr A.J. Baine as a solicitor. The allegation concerned the fact that the building had proceeded without insurance. The issue was summarised by the Master in the following terms at [37]: "It is alleged that the insurance was not taken out because of representation made or advice given to him by the first defendant. The plaintiff seeks to maintain an action against the first defendant and his partners founded on either breach of an implied retainer or negligence. It is alleged that there was a breach of both the retainer and the duty of care said to be owed in that due care and skill had not been given in providing legal advice." 41 The claims against the law firm being derivative, it is helpful to focus on the claims against Mr Baine as a solicitor. Further, the discussion in the judgment of the Master treats together the claims against the law firm and those against a company which provided architectural services, although no claim is now pursued against the architect. No separate and independent argument was put in favour of the proposition that, if such a claim could properly be made against Mr Baine, the Tribunal nevertheless had no jurisdiction in relation to the law firm of which he was a partner. 42 The Tribunal held that it had no jurisdiction to deal with those claims. It continued: "Having determined it does not have the requisite jurisdiction to deal with claims against the proposed third and fifth respondents. The Tribunal makes no comment on the reasonableness of the proposed claims." (That statement should presumably be one sentence rather than two.) The reason for finding lack of jurisdiction in relation to the claim with respect to legal services arose from the Tribunal's conclusion that it was bound to reach that result pursuant to three decisions of single judges in the Supreme Court. In respect of the first two, the Tribunal noted "the apparent conflict" between those decisions and the decision of this Court in Boghossian v Warner (2000) NSWCA 27. These authorities are addressed in the next section below. 43 In order to understand the nature of the issues before the Tribunal, it is necessary to note the terms of the amended statement of claim which was sought to be filed in so far as it relates to the claim for breach of duty in giving legal advice. In that pleading, Mr Baine, the solicitor and joint homeowner, was identified as the first respondent and his firm was identified as the fifth respondents. The additional pleadings asserted that the first respondent was a legal practitioner and a partner of the fifth respondents (although he was also included as a fifth respondent). It was then alleged that there was a contract of retainer between the builder and Mr Baine and the firm for the provision of legal advice to the builder in relation to obligations under the Home Building Act in relation to the construction work. That retainer was said to have arisen in September 2001, when agreement was reached that building work would be done on a 'do and charge' basis. A further contract of retainer was alleged to have arisen in December 2001 in relation to homeowner's warranty insurance. Both a contractual and a common law obligation to exercise due care and skill in providing legal advice, and a breach of those obligations, were further alleged. The builder claimed an entitlement "to be indemnified" by the solicitor and the law firm for any loss suffered as a result of the negligent advice. 44 The basis upon which the Master upheld an absence of jurisdiction was in substance an affirmation of the ground accepted by the Tribunal, namely that the claims did not fall within the definition of a "building claim" in s 48A of the Home Building Act, upon which the jurisdiction of the Tribunal under s 48K depended. The primary statement of reasons in this respect concerned the architectural services. Of those services the Master stated at [53]: "In respect of the third defendant, the claim presented against it is one founded on negligence involving breach of duty in and about the preparing of defective plans. In my view, in such a case, it arises from the architectural services provided by the third defendant to the first and second defendants some considerable time prior to any supply of building goods or services or any contract for the supply of building goods or services. What was contractually done between these parties was unrelated in any relevant sense to whatever subsequent contract came into being for the supply of building goods or services between the plaintiff and the first and second defendants." 45 The Master dealt with the claim with respect to legal services in two short paragraphs as follows at [56] and [57]: "The claim made against the fifth defendants [the firm of solicitors] is based on an alleged conversation had between the plaintiff and the first defendant. The allegations are a matter of contest but it does not seem to be in dispute that whatever was said took place some months after work had commenced. It is said that either an implied retainer or a duty of care came into being. It seems to me that it was from these matters that the claim arose. Similarly the remedy which the plaintiff seeks to pursue against these defendants, in my view, does not arise from a supply of building goods or services or under a requisite collateral contract." 46 The Tribunal made no factual findings in relation to the nature or extent of the legal advice sought. As it appears to have been common ground that the proceedings before the Master were by way of a statutory appeal pursuant to s 67(1) of the CTTT Act, and were therefore limited to "a question with respect to a matter of law", in the absence of any factual findings by the Tribunal, the question had to be dealt with on the claim as pleaded.

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The "building claim" issue: authorities 47 The earliest of the three authorities relied on by the Tribunal was a decision of McClellan J in the Common Law Division, Woolfe v Sussman [2001] NSWSC 702. In that case the defendant had contracted with the plaintiff (the owner of a dwelling on a large parcel of land) to provide the plaintiff with services in relation to a proposed redevelopment of her property, by way of a proposed duplex. His Honour stated at [2]: "The first defendant was brought in to assess the feasibility of such a project and to give other advice. That project did not proceed but the first defendant continued to provide services by way of valuations, feasibilities, potential cash flows, inquiries as to finance and quotes from project builders. Generally, he was called upon, and did advise, in relation to the 'best use' of the property." The primary question for consideration was whether a claim for payment in respect of those services was a "building claim" within in s 84(1) of the Home Building Act, as then in force, but which has subsequently been repealed. The change in legislative form is of no consequence: the definition now contained in s 48A is in identical terms. The definitions of "residential building work" and "specialist work" have not changed: see [56] below. 48 The reasoning in his Honour's judgment focused on the definition of "residential building work" and its inclusion of "specialist work". His Honour stated at [17] and [18]: "Although the expression 'in connection with' is an expression of wide meaning and would give the Tribunal a broad jurisdiction, it is nevertheless necessary that the goods or services be supplied in relation to residential building work or specialist work. In my opinion, residential building work is, as the definition makes plain, confined to building work in pursuance of the physical construction or alteration of a dwelling. It does not extend to goods or services provided in the course of considering the feasibility of the redevelopment of a property or the means by which utilising suitable valuations and cash flow projections the redevelopment of a property may be financed." His Honour held that the work performed by the first defendant could not give rise to a building claim for the purpose of attracting the jurisdiction of the Tribunal. 49 Before the present Tribunal, the Claimant sought to distinguish this case on the basis that it involved a circumstance where no residential building work had been undertaken: preliminary inquiries which led to actual work, as in the present case, fell in a different category. The Tribunal however, declined to adopt that distinction and considered itself bound to find against the Claimant on the basis of that authority. 50 The second authority relied on by the Tribunal was Collings Homes Pty Ltd v Head [2002] NSWSC 1219, a decision of Master Malpass in the Common Law Division. As noted by the Master at [2]: "The plaintiff designs project homes which can be modified to meet individual requirements. It provides costings for building work. It obtains development approval. It introduces a licensed builder who is prepared to enter into a building contract for a fixed price and procures execution of such building contract." The Tribunal in that case had the decision in Woolfe drawn to its attention, but had distinguished it. The Master concluded that the case was not distinguishable, that accordingly there was no "building claim" and that the Tribunal had no jurisdiction to consider the matters before it. 51 Thirdly, the Tribunal followed the decision of Master Harrison in Brett Wolinski Building Pty Ltd v HIA Insurance Services Pty Ltd [2003] NSWSC 475. That case involved a claim against an insurer by a homeowner in relation to the homeowner's warranty insurance which, it was alleged, the second defendant had agreed to provide upon the plaintiff paying the relevant insurance premium. The plaintiff asserted that he had prepared a quote to carry out certain building work at a property in Roseville and had completed "a project application to insure the works". There were also conversations with the insurer, but a certificate of insurance did not issue. Apparently as a result, the plaintiff did not enter into a building contract with the party seeking to renovate the Roseville property: ibid at [18]. It may be inferred that the claim related to loss or damage suffered as a result of the failure to issue a certificate of insurance. Following Woolfe and Collings Homes, the Master concluded at [23]: "A contract of insurance between a builder and an insurer does not fall within the definition of building work as being in pursuance of physical construction or alteration of a dwelling. The plaintiff's claim does not fall within the definition of 'residential building work'. It follows that the claim is not one which can be defined as 'building goods or services'." This matter appears to have differed from Woolfe and Collings Homes to the extent that a separate argument was put before the Tribunal that the insurance contract was collateral to a contract between the builder and the homeowner, for the purposes of the second limb of the definition of "building claim". The Tribunal had rejected that claim on the basis that to be a collateral contract, the parties to the two contracts had to be the same. The Master, whilst apparently concerned that the construction of the term "collateral" might be too narrow, noted that there was only one contract, no contract having been concluded between the builder and the homeowner. 52 Before leaving this line of authority, it is necessary to note two decisions of this Court which touch tangentially on the scope of the definition of a "building claim". The first matter, Boghossian v Warner [2000] NSWCA 27, predated all of the cases referred to above. The case commenced before the Tribunal as a claim by Mr Warner against a builder who had suspended the carrying out of the building works. Mr Boghossian was either a partner or a joint venturer with Mr Warner. In the Common Law Division, Smart J held that the evidence pointed towards a joint venture rather than a partnership: ibid at [33]. In any event, the defence of the builder was that Mr Boghossian had demanded "secret payments" from the builder, before handing over progress payments on the works. Having made some payments, the builder demanded repayment of the sums from Mr Boghossian, a demand which was refused. When Mr Warner became aware of the builder's allegations, he in effect made common cause with the builder against Mr Boghossian. The Tribunal ordered Mr Boghossian to pay a sum of $25,000 to Mr Warner. The Tribunal found that there was a contract between the builder and Messrs Warner and Boghossian and a collateral agreement between Mr Boghossian and Mr Warner under which Mr Boghossian was to make payments to the builder on their joint behalf. Mr Boghossian was found to have breached that collateral agreement. 53 The matters agitated in relation to the findings of the Tribunal concerned the alleged unfairness of the procedures by which Mr Boghossian was joined in the proceedings and given notice of the claims against him. No issue was taken with respect to the finding of the Tribunal that there was a collateral contract between the joint venturers, a breach of which could give rise to a building claim. 54 More recently, this Court considered circumstances closely analogous to those addressed in Collings Homes Pty Ltd v Head (discussed above) in Smith v Collings Homes Pty Ltd [2004] NSWCA 75. The services provided by Collings Homes, appear to be very similar to those which were the subject of the earlier proceedings. The claim made by the homeowners was based upon a breach of contract and misleading and deceptive representations made by Collings prior to execution of the contract. No issue arose as to whether the Tribunal had jurisdiction to hear the matter as a building claim, because the orders made in favour of the homeowners treated the claim as a consumer claim. No issue arose in relation to that aspect of jurisdiction, on appeal, although Collings Homes had, apparently, sought to raise a cross-claim seeking payment of the contract price: see [2004] NSWCA 75 at [18].

[43]

It is not suggested in the present case that there is any relevant regulation. 56 Section 48A also contains a definition of "building goods or services" in the following terms: " building goods or services means goods or services supplied for or in connection with the carrying out of residential building work, specialist work or building consultancy work, being goods or services: (a) supplied by the person who contracts to do, or otherwise does, that work, or (b) supplied in any circumstances prescribed by the regulations to the person who contracts to do that work." The Act now contains a definition of "building consultancy work", which it did not contain at the time of the decision of the Tribunal. However, the Act did, at that time, contain definitions of "residential building work" and "specialist work". There is some overlap between the two definitions; it is sufficient for present purposes to note the substantial part of the former definition in s 3(1) of the Home Building Act, which was in the following terms: " residential building work means any work involved in, or involved in coordinating or supervising any work involved in: (a) the construction of a dwelling, or (b) the making of alterations or additions to a dwelling, or (c) the repairing, renovation, decoration or protective treatment of a dwelling." 57 It is not necessary to determine whether, in relation to the first limb of the definition, services can be supplied "for or in connection with" the carrying out of residential building work, for the purposes of the definition of "building goods or services", where no residential building is in fact carried out. On one view, the definition of "residential building work" is not limited to activities, such as laying foundations and painting a building, on site, but extends to work of a preparatory nature. Alternatively, preparatory work could be said to have a sufficient connection with the carrying out of building work because its purpose was to give rise to residential building work and it had a sufficient causal nexus with such work: see generally, Technical Products Pty Ltd v State Government Insurance Office (Qld) (1989) 167 CLR 45 at 47-48 (Brennan, Deane and Gaudron JJ). Accordingly, it is at least arguable that project management arrangements, of the kind address in both Collings Homes cases, would fall within the definition of "building claim". Were that not the case, distinctions would need to be drawn which might have an arbitrary result, at least from the perspective of the homeowner. Thus, where an architect or project manager provides plans and designs, locates a builder and coordinates and supervises the actual building work, any loss suffered as a result of inadequate coordination and supervision would fall within the building claim, but other conduct would not. 58 That is not to say that the jurisdiction of the Tribunal under the Home Building Act should be expanded beyond the proper construction of the terms used in Part 3A. The fact that the Tribunal has a jurisdiction under that Part up to $500,000, whereas its current jurisdiction under the Consumer Claims Act is limited to $25,000, demonstrates the need to maintain proper limits on the jurisdiction. Nevertheless, to the extent that the statutory terminology permits, those limits should not be arbitrary, nor should an unduly restrictive construction be given to the words of the statute, especially to the extent that they mirror the terminology of the Consumer Claims Act. Of particular concern would be a construction which meant that services of a project manager might fall within the definition of "building claim" where residential building works actually eventuated, but not otherwise. Such a distinction can be avoided if the phrase "the carrying out of residential building work" is treated as adjectival, in the sense that it is descriptive of the services with which a connection must be established, rather than being treated as a factual pre-condition to the necessary connection. 59 By reference to the first limb of the definition, the question in this case was whether the claim for damages might be said to "arise from" a supply of building services, in circumstances where the loss allegedly suffered flowed from the failure of the solicitor to advise that, without compliance with the statutory pre-conditions of the Home Building Act, the builder would not be able to recover for the services provided. Precisely how the claim is formulated is a matter of some importance. In the absence of any finding by the Tribunal as to the services in question, it must be dealt with on the basis of the "claim", which is to be found in the proposed pleadings before the Tribunal. The causal relationship between the legal advice and the supply of services for which a contractual price could not be recovered is apparent from those pleadings. Without establishing that causal relationship, the Claimant must fail. However, if the causal relationship is established, it is clearly arguable that the loss suffered would "arise from" the supply of building services. 60 If this reasoning is correct, the same result would presumably apply where the solicitors who advised the builder had nothing to do with the homeowner. It might also apply where the advice given did not relate to the Home Building Act, nor obligations under it, but rather concerned doubts the builder had as to the assets of the other contracting party and, for example, the failure of the solicitor to ascertain whether the other party in fact owned the premises on which the work was to be undertaken. If the builder is not paid for the supply of building services, it is equally possible to say that the claim will arise from the supply of the building services and from the negligent legal advice. In the case where, as a result of negligent legal advice, the contract under which the building services were supplied is not in writing the connection will be closer. 61 Similar questions will arise on the other side of the record. Thus, if a homeowner obtains legal advice in relation to a contract entered into with a builder, which does not allow for recovery in the case of defective work, the loss suffered by the homeowner may equally be said to arise from the defective work and from the negligence of the solicitor. 62 The question is whether each of these cases gives rise to a "building claim" for the purposes of s 48A. In my view, the cases in which the section is satisfied include those which specifically involve the terms of the contract between the homeowner and the builder. The case where the negligence of the solicitor was in failing to comply with a request to search the title to see if the occupant having the work done was in truth the homeowner, would not involve a "building claim" because, whilst the supply of building services provides the occasion on which the builder suffers a loss, the claim against the solicitor gives rise to no substantial dispute about the nature of the supply or the terms on which the building services were supplied. In such a case the claim should not be characterised as a claim for a specified sum arising from the supply of building services. This construction may be understood to flow from a reading of the definition of "building claim" as a whole and adopting a purposive approach, consistent with the objects and scheme of the Home Building Act. 63 Whilst such a line must be drawn in an appropriate case, in my view the claim in the present case is a building claim because, as pleaded, it related to the terms on which the builder supplied building services.

[44]

Collateral contract issue 64 The Claimant also put his case on the basis of the second limb of the definition, namely that the legal advice was given "under a contract that is collateral to a contract for the supply of building goods or services". Although the contract for the supply of building services was not only unenforceable (Home Building Act, s 10) but also unlawful (Home Building Act, s 7A) the Opponents did not argue that it was not "a contract" for the purposes of this part of the definition. (The language used in s 10 itself may well make such a concession inevitable.) What they did dispute was that a contract to provide legal services of the kind referred to in the pleadings was "collateral" to the contract for the supply of building services. 65 If the causal relationship could be established between defective legal advice and the carrying out of the building services, a close relationship would be established between the contract with the solicitor and the contract to supply services. In those circumstances, it is clearly arguable that the former contract could properly be described as "collateral" to the latter. 66 The question is whether the statutory reference to a contract being "collateral to" another contract invokes a term of art, having a particular legal connotation. The concept of a collateral contract was developed in relation to a promise or representation by one party to another, as a result of which the latter either enters into a separate contract with a third party, or enters into a contract with the representor. In each case, the promise or representation is the consideration for the subsequent contract: see generally Heilbut Symons & Co. v Buckleton [1913] AC 30 at 47; Kavanagh v Blissett [2001] NSWCA 79 and Matland Holdings Pty Ltd v NTZ Pty Ltd [2004] FCA 710 (Kenny J). It follows that a "collateral contract" cannot be formed after the main contract has come into existence, as otherwise that contract would constitute an inadequate (past) consideration for the new contract: see Hercules Motor Pty Ltd v Schubert (1953) 53 SR(NSW) 301. 67 The term "collateral contract" may be used in relation to a contract involving at least one third party, namely a person not party to the principal contract, to which the other was collateral. As is illustrated by State Rail Authority of New South Wales v Heath Outdoor Pty Ltd (1986) 7 NSWLR 170, pre-contractual representations could attract equitable relief where "the enforcement of strict rights is unconscionable because the assurances given before the execution of a written contract were made orally": per McHugh J at p.195C. Relief of a similar kind may now be obtained under the Trade Practices Act 1974 (Cth) or the Fair Trading Act 1987 (NSW). Indeed, these considerations suggest that reliance on a collateral contract will rarely be necessary if the supplier or recipient of building services has some claim for payment of money (or other relevant relief) arising from the supply. Where services are supplied which fail to meet some expectation based upon a representation, the supply will be an inevitable element of the claim and the claim will, in that sense arise from the supply, as well as from breach of the representation. 68 Even if there are some cases in which it is necessary to rely upon a contract collateral to the contract for supply, this reasoning suggests that no constrained meaning should be given to the word "collateral" in this statutory context. In this regard, counsel for the Claimant took the Court to David Securities Pty Ltd v Commonwealth Bank of Australia (1992) 175 CLR 353, where the High Court considered the meaning of the term "collateral agreement" in s 261(5) of the Income Tax Assessment Act 1936 (Cth). That section related to payment of income tax on interest payable under a mortgage and defined the term mortgage to include "any charge, lien or encumbrance to secure the repayment of money, and any collateral or supplementary agreement …". The case involved loan agreements and securities by way of mortgage, and the argument below had turned upon whether the concept of a collateral agreement involved the notion of primacy and, if so, which agreement was primary and which subordinate. In the course of rejecting such a notion, the joint judgment of Mason CJ and Deane, Toohey, Gaudron and McHugh JJ stated, at 365: "Collateral contracts are so-called not because they are subordinate or of lessor importance (although they may well be, depending on the facts of the case), but because they impinge upon and are related to another contract. … Once the notion of primacy is jettisoned, 'collateral' must be understood in the sense of 'related to' or even 'in addition to'." There is no reason to be derived from the present statutory context not to apply a similar analysis. (See also Spigelman CJ in Solution 6 Holdings Ltd v Industrial Relations Commission of NSW [2004] NSWCA 200 at [41].) 69 This conclusion is supported by the fact that the definition in s 48A expressly makes provision for the supply of services "whether under a contract or not", and uses the term "arises" both in relation to a supply and in relation to a contract. Further, where there are both services for residential building work and services "in connection with" residential building work there may be, as already noted, a causal nexus which is not directly dependent upon contract. For these reasons, the concept of a collateral contract, in this statutory context, will be satisfied where there is an appropriate connection with the supply of building services. In my view, that connection will exist, as a matter of law, in a case where a representation is made, or legal advice provided, in relation to the terms or conditions upon which building services are, or are to be, supplied. The distinction drawn at [62] above must limit the operation of those principles, but not so as to exclude the present case.

[45]

Other issues: (a) Consumer claim 70 The second way in which the Claimant put his complaint was that the claim against the solicitor could constitute a "consumer claim" within the meaning of that term within the Consumer Claims Act 1998 (NSW). The definition of "consumer claim" reads as follows: " consumer claim means: (a) a claim by a consumer for the payment of a specified sum of money, or (b) a claim by a consumer for the supply of specified services, or (c) a claim by a consumer for relief from payment of a specified sum of money, or (d) a claim by a consumer for the delivery, return or replacement of specified goods or goods of a specified description, or (e) a claim by a consumer for a combination of two or more of the remedies referred to in paragraphs (a)-(d), that arises from a supply of goods or services by a supplier to the consumer, whether under a contract or not, or that arises under a contract that is collateral to a contract for the supply of goods or services. 71 Section 7 of the Consumer Claims Act relevantly provides as follows: "7(1) The Tribunal has jurisdiction to hear and determine any consumer claim brought before it under this Part … ." Although there is a cap on the quantum of the order for payment of money which the Tribunal can make in exercising jurisdiction with respect to a consumer claim, a claim for an amount in excess of the cap would not be an invalid claim: see s 14(1). Accordingly, if the claim against the solicitor could constitute a consumer claim, in relation to which the Tribunal had jurisdiction, the Claimant says it was wrong for the Tribunal to reject this aspect of his claim. 72 Before the Master, the point was made that no such basis was put to the Tribunal. The Master, on a discretionary basis, thought it appropriate that, if he wished to do so, the Claimant could pursue the matter before the Tribunal in the future. Not having been raised and determined before the Tribunal, I do not accept that it can be raised in the Court.

[47]

Relief: discretionary factors 75 The matter before this Court involves an application for leave to appeal. The need for leave was determined by the President at a separate hearing: see Grygiel v Baine & Ors [2004] NSWCA 377, upholding a decision of Registrar Schell that the appeal brought as of right was incompetent. The President upheld that conclusion, partly on the basis that the proceeding in the Supreme Court was an appeal from an interlocutory order of the Tribunal and thus would not dispose of the "principal cause pending between" the parties. It may have been important in that regard, as his Honour noted at [12], that there was "no invocation of the prerogative jurisdiction of the Supreme Court." Had that jurisdiction been invoked, it would have been more clearly arguable that the cause in the Court was the application for judicial review, on whatever grounds were available in the Court and not the whole of the matter which had been agitated in the Tribunal: see Abebe v The Commonwealth (1999) 197 CLR 510. 76 Even though leave is not required by the Supreme Court Rules to bring an appeal from an interlocutory decision of the CTTT, leave may yet be required to bring an appeal to this Court from a judge of the Supreme Court. An appeal against a decision by which "the Tribunal decides a question with respect to a matter of law", requires that there be an identified question of law and a judgment of the Court with respect to that matter which will finally determine the rights of the parties to the full extent of the Court's jurisdiction, as presently invoked. It is possible that such a decision may not be an interlocutory judgment for the purposes of s 101(2)(e). It would, perhaps, be unfortunate if the grant of prerogative relief in a Division of the Court gave rise to a right of appeal, whereas a decision with respect to an appeal pursuant to a statutory right of appeal did not: there would no doubt be a tendency for parties to invoke both heads of jurisdiction in circumstances where that would be unnecessary except to establish a right of appeal to this Court. 77 In one sense the answer to this question does not matter, because, as the President also held, the Claimant required leave pursuant to s 101(2)(r) of the Supreme Court Act. The only relevance of the issue is that different considerations may be apposite if leave is required because the judgment is treated as interlocutory. The disinclination to interfere in what is an undoubtedly interlocutory decision of the Tribunal might be heightened in such circumstances. If leave is required only because the amount in issue is below the statutory threshold, the establishment of a significant question of law might more readily attract a grant of leave. Even so, in Custom Credit, the Chief Justice noted that there were two matters which mitigated the manifest inconvenience which would arise if an appeal lay as of right against an interlocutory decision. The first was that the lodgement of an appeal did not stop the Tribunal proceeding to finality; the other was expressed as follows at 493G: "Secondly, the Supreme Court is not obliged to deal with an appeal in such a manner, and at such a time, as suits the party instituting the appeal. An appeal against a ruling on evidence, for example, might well be one which the Supreme Court would decline to entertain pending a final order or decision of the Tribunal." The range of circumstances in which the Court would decline to entertain an appeal brought as of right, need not be further pursued here. 78 In circumstances where leave is required, the potential for disruption of the orderly despatch of the business of the Tribunal is a weighty factor against permitting an appeal at an interlocutory stage. As noted by Spender J in the Federal Court in Cook v ASP Ship Management [2001] FCA 598 at [3]: "It is wholly undesirable that the process contemplated by the Administrative Appeals Tribunal Act should be fragmented by applications seeking to challenge intermediate directions or determinations made along the way to reaching an ultimate determination of the issue before the Tribunal. Just in the same way that the Federal Court should be reluctant to fragment the criminal process by entertaining applications under the AD(JR) Act in relation to committal proceedings or trials and in particular intermediate rulings and determinations made in the course of committal proceedings for criminal trials, so too the Court should be very careful not to contribute to delay in the process that the AAT is statutorily charged to deal with." That view applies with equal force to the CTTT Act generally, and in this particular matter, where the costs and delay resulting from these proceedings are grossly disproportionate to the amounts in issue. Nevertheless, this Court is not in a position to allocate blame as between the parties or indeed as between the parties and the Tribunal. A refusal to correct a perceived error will have no predictable consequence of putting the litigation on a sensible course to an early resolution. 79 In the present case, the simple statutory process for the making of a claim under the Home Building Act, or the Consumer Claims Act, has fallen prey to procedural questions about joinder of parties in civil proceedings. Further, in seeking to determine whether a claim satisfies the statutory definition, the Tribunal has adopted a test which is overly restrictive. These are matters of general principle, which invite correction. 80 Nevertheless, an important limit on the right of appeal is that it does not extend to matters which have not been the subject of decision by the Tribunal. 81 In my view that latter consideration prevents an assertion that the claim in the present circumstances lay outside the jurisdiction of the Tribunal because it did not seek payment of a "specified sum". However, since even a claim for unliquidated damages can be made if a specified sum is sought, if there is a difficulty caused by this requirement, it could presumably be remedied by making an amended or fresh claim. It also prevents the Claimant relying upon an alternative jurisdictional basis to that provided by Part 3A of the Home Building Act, namely a claim under the Consumer Claims Act. 82 In relation to this point, it may be necessary to distinguish between a conclusion upholding jurisdiction on a ground which is legally flawed, where there is an alternative basis for that conclusion and a decision denying that the Tribunal had jurisdiction in circumstances where there was an alternative basis to that considered, which could have given rise to a different conclusion. The present case falls into the latter class: the Claimant accordingly cannot obtain relief on the basis of the alternative argument. Nor, in the context of a limited appeal, does the existence of an alternative argument render the legal error of the Tribunal immaterial. Whether it would do so in the former category of cases, where the Tribunal may be said to reach the right conclusion, but for the wrong reason, may depend upon the particular circumstances. For example, a tribunal which fails to uphold a claim based on material presented by the applicant, because the material did not support the claim as put, but would have supported a claim differently formulated, may be distinguishable from the case where, although the Tribunal had before it material which would have supported the claim on the alternative basis, that material was not known to the applicant and was not adverted to by the tribunal: see Re Minister for Immigration and Multicultural and Indigenous Affairs; Ex parte Applicants S134/2002 (2003) 211 CLR 441. 83 In my view the decision of the Tribunal with respect to what is a "building claim" was in error in holding that a claim for loss arising from circumstances where the First Opponent had made a representation, or given legal advice, was not a claim for a payment that "arises from" a supply of building services. In addition, to the extent that there was an allegation of a contractual arrangement between the builder and the First Opponent for the supply of legal advice, the second limb of the definition, properly construed, would allow such a contract to be "collateral to a contract for the supply of building … services". In the present case, unlike the cases relied upon by the Tribunal, there was a contract for the supply of building services, to which the legal service contract could be collateral. 84 If a claim against Mr Baine, in relation to legal advice, could fall within the definition of a "building claim", no separate submissions were put in this Court to suggest that there was no jurisdiction in relation to the law firm of which he was a partner. Accordingly, the Tribunal erred in law in holding that it had no jurisdiction with respect to a claim against the law firm. 85 However, it does not follow that the claims with respect to legal services should be allowed to proceed. That was a matter entirely within the power of the Tribunal to determine. As the Tribunal stated in relation to its finding with respect to the law firm, it made "no comment on the reasonableness of the proposed claims". What steps should be taken in that regard is a matter for the Tribunal, and not for this Court.

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