Huxley Homes Pty Ltd v Bunnings Group Limited [2014] NSWCATCD 200 | Case summary

NCAT Consumer and Commercial|2014-07-29

Application

There are related proceedings in this Tribunal in relation to this application.
They are an application by the Builder against the Home Owner in proceedings HB 13/16053.
The Home Owner has filed an application by way of further claim against the Builder in proceedings HB13/29645.
This is an application by the applicant Builder against the respondent Supplier of frames, trusses and red tongue flooring used in the construction of a home for the Home Owner by way of further cross claim.
For the avoidance of doubt in these reasons a reference to: 1. "The Builder" is a reference to the applicant in these proceedings. The Builder is also the applicant in HB 13/16053 and the respondent in HB 13/29645; 2. "The Home Owner" is a reference to the respondent in proceedings HB13/16053 and the applicant in HB 13/29645; 3. "The Supplier" is a reference to the respondent in these proceedings;
Before the substantive application (HB 13/56246) now before the Tribunal can be determined a finding must be made as to the jurisdiction of the Tribunal to hear such an application by the Builder against the Supplier.
On 3 June 2014 Senior Member Smith gave directions on behalf of the Tribunal for the parties to file and serve short written submissions on the jurisdiction of the Tribunal to determine the claim by the Builder against the Supplier and if there is jurisdiction whether the proceedings should and can be transferred to the appropriate jurisdiction for determination.
Both parties filed submissions in relation to the directions albeit late, 3 and 5 days respectively. No objection was taken as to the late filing of the submissions by the other party. The Tribunal is satisfied that neither party is prejudiced by the lateness of filing the respective submissions. Leave is granted by the Tribunal to accept the submissions.

Legislation

S48A of the Home Building Act 1989 ("HBA") defines: "building claim" means a claim for: The payment of a specified sum of money, or The supply of specified services, or Relief from payment of a specified sum of money, or The delivery, return or replacement of specified goods or goods of a specified description, or A combination of 2 or more of the remedies referred to in paragraphs (a)-(d) that arises from a supply of building goods or services whether under a contract or not, or that arises under a contract that is collateral to a contract for the supply of building goods and services, but not include a claim that the regulations not to be a building claim". "building goods and services" means goods or services supplied for or in connection with the carrying out of residential building work or specialist work, being goods or services: Supplied by the person who contracts to do, otherwise does, that work, or Supplied in any circumstances prescribed by the regulations to the person who contracts to do that work.
S3 of the HBA defines: "residential building work" means any work involved in, involved in co-ordinating or supervising any work in: The construction of a dwelling, or The making of alterations or additions to a dwelling, or The repairing, renovation, decoration or protective treatment of a dwelling".
S3A of the Consumer Claims Act 1998 ("CCA") defines: "(1) for the purposes of this Act a "consumer claim" is: A claim by a consumer for the payment of a specified sum of money, or A claim by a consumer for the supply of specified services, or A claim by a consumer for relief for payment of a specific sum of money, or A claim by a consumer for delivery, return or replacement of specified goods or goods of a specified description, or A claim by a consumer for a combination or 2 or more of the remedies referred to 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. (2) for the avoidance of doubt, a reference in this Act to a consumer claim includes a reference to a claim by a consumer against a supplier (for example, a manufacturer or wholesaler) who is not the direct supplier of goods and services to the consumer if the claim arises from or in connection with the supply of those goods by the direct supplier to the consumer".
S3 of the CCA defines: ""Consumer" means: An actual person, or A firm, or A small proprietary company, or An owners corporation constituted under the Strata Management Act 1996, or A company that owns an interest in land and has a memorandum or articles of association conferring on each owner of shares in the company a right to occupy under a lease or licence a part or parts of a building erected on the land, or An incorporated association, or An unincorporated body whose members are associated for a common purposes, or A company limited by guarantee (not being a company limited both by shares and guarantee) To whom or to which a supplier has supplied or agreed to supply goods or services, whether under a contract or not, or with whom or to which a supplier has entered into a contract which is collateral to a contract for the supply of goods or services".
Reg 4 of the Consumer Claims Regulation 2014 ("CCR") provides: In relation to claims arising under the Act (other than claims relating to commission fees charged by agents licensed under the Property, Stock and Business Agents Act 2002 ), the prescribed amounts for the purposes of section 14 (1), (2) and (2A) of the Act are: (a) $25,000 in respect of an application for determination of a claim made, but not finally determined, before 1 September 2007, and (b) $30,000 in respect of an application for determination of a claim made, but not finally determined, on or after 1 September 2007 but before the commencement of this Regulation, and (c) $40,000 in any other case.
S9 of the Corporations Act 2001 (Cwlth) ("CA") defines: "small proprietary company" has the meaning given by subsection 45A (2)".
S45A(2) of the CA provides: "(2) A proprietary company is a small proprietary company for a financial year if it satisfies at least 2 of the following paragraphs: The consolidated revenue for the financial year of the company and the entities it controls (if any) is less than $25 million, or any other amount prescribed by the regulations for the purposes of this paragraph; The value of the consolidated gross assets at the end of the financial year of the company and the entities it controls (if any) is less than $12.5 million, or any other amount prescribed by regulations for the purposes of this paragraph; The company and the entities it controls (if any) have fewer than 50, or any other number prescribed by the regulations for the purposes of this paragraph, employees at the end of the financial year".
The Corporations Regulations 2001 do not prescribe any other amounts or employee number for the purpose of s45A (2).

Builder's submissions

The Builder submits that the claim in these proceedings is a building claim as defined in the HBA and that the claim does not exceed the monetary jurisdiction of the Tribunal, which is $500,000.00.
The claim by the Home Owner is that the Builder installed timber framing and flooring which is infected with mould growth because it was exposed to lengthy periods of rain and which requires costly remediation works. The amount claimed for the cost of remediation is $131,000.00.
The Builder's claim against the Supplier arises from both the supply of the timber trusses and materials and that the Builder relied on "the representations by [the Supplier] that it was fit for purposes as the presence of mould would have no effect on the performance or suitability of its use in circumstances where the materials had been exposed to a significant amount or rain for more than three months".
The Builder alleges that by making those representations the Supplier "effectively denied [the Builder] the opportunity to replace the [timber trusses and flooring] during construction thus avoiding the matters giving rise to the mould claim [by the Home Owner]".
The Builder claims that the claim of $131,000.00 against it by the Home Owner is the quantum of its claim against the Supplier. The Builder submits that amount that is within the Tribunal's jurisdiction under the HBA.
In support of its submission it refers the Tribunal to Grygiel v Baine [2005] NSWCA 218 at [47]-[63] and submits that the Court's approach in Grygiel "suggests that the ambit of the definition "building claim' under section 48A of the Home Building Act should be drawn widely and generously". Basten JA (Mason , agreeing) considered that residential building work extended beyond actual physical works to include activities of a preparatory nature where there was a sufficient causal nexus to the carrying out of building work. In Grygiel the dispute arose as to whether the provision of legal advice concerning the purchasing of a home owner's warranty insurance came within the ambit of a "building claim". The court found that "it was as it related to the terms on which the builder supplied the building services".
In addition, the Builder submits that the claim should be dealt with by the Tribunal either concurrently with the Home Owner's claim or determined in light of any resolution of that claim. To do so would be consistent with objects of the Civil and Administrative Tribunal Act 2013 in s 3(4) "to enable the Tribunal to resolve the real issues in proceedings justly, quickly and cheaply and with as little formality as possible".

Supplier's submissions

The Supplier submits the claim as "pertaining to the supply of frames, trusses and floors" is not within the definition of "residential building work" for the purposes of s3 of the HBA.
The Supplier submits that if the claim is not a claim under the HBA and not within the jurisdiction of the Home Building Division of the Tribunal then consideration must be given to whether it is within the jurisdiction of the Consumer and Commercial Division of the Tribunal.
The Home Building list is within the Consumer and Commercial Division of the Tribunal as is the Consumer Claim List.
The Supplier has referred to a consumer claim as an alternative to the home building claim and the Tribunal will address the Suppliers submissions as submissions in relation to an alternative claim in the Consumer Claim List.
The Supplier submits that the Builder is not a consumer for the purposes of the definition of "consumer" in s3A of the CCA.
The Supplier submits that the Builder is not a "small proprietary company" and therefore does not qualify as a consumer within the definition.
The Tribunal gave directions on 29 July 2014 for the Builder to provide the Tribunal with submissions as to the consolidated revenue for the financial year of the Builder, the value of its gross assets at the end of the financial year in the year and the number of employees it and its entities that it controls has.
The Builder's submission establishes that the Builder is a small proprietary company.

Building Claim

The Builders brings its claim against the Supplier as a building claim under s48K of the HBA.
For the Builder to be able to bring such a building claim it must satisfy the Tribunal that the claim is for a matter listed in S48A under the definition of "building claim" and that the claim arises from a supply of building goods or services.
The Supplier supplied trusses frames and flooring to the Builder.
S48A defines "building goods or services" as meaning goods or services supplied for or in connection with the carrying out of residential building work [emphasis added].
S3 of the HBA defines "residential building work" as any work involved in the construction of a dwelling, amongst other things.
The Builder submits that Grygiel supports its contention that the supply of goods is a building claim for the purposes of the HBA as it is captured by the Courts approach to the definition in s48A of "building claim" as it should be "drawn widely and generously".
There is no doubt that the effect of Grygiel is to read the definition of "building claim" as a whole and adopting a "purposive approach, consistent with the objects and scheme of the Home Building Act"; Basten JA at [62].
However, for a supply of goods to be a "building claim" it must also satisfy the definition that they were supplied for or in connection with the carrying out of residential building work, that is, they included work provided by the Supplier involved in the construction of a dwelling.
There is no doubt the Supplier supplied the goods, however, it did not carry out the work to erect the frames and trusses and flooring it provided. For the supply of the goods to be a building claim for the purposes of the HBA the supplier must have carried out residential building work.
The Supplier did not carry out residential building work. Therefore, the supply of goods is not a building claim for the purposes of the HBA. There is no jurisdiction under the HBA granted to the Tribunal to hear and determine a claim such as the Builder makes against the Supplier

Consumer Claim

In the alternative, the Builder claims that it may bring the claim against the Supplier as a consumer claim.
The Supplier contends that the Builder is not a small proprietary company and as such is not a consumer for the purposes of the Consumer Claims Act.
On the evidence before it the Tribunal is satisfied that the Builder is a small proprietary company for the purposes of the Corporations Act and therefore a small proprietary company for the purposes of the definition of a consumer under the Consumer Claims Act
The Builder's claim that it is entitled as a consumer for the purposes of the Consumer Claims Act is sustained and it may bring a consumer claim.
However, to bring a consumer claim the Builder must also satisfy the monetary jurisdictional limits of the CCA. At the time of the supply of the goods Reg 4(b) of the CCR applied and the limit of a consumer claim was $30,000.00.
On the evidence adduced by the Builder the claim is not quantified and is likely to be more than $100,000.00 and less than $150,000.00. The amount of the claim exceeds the jurisdictional limit of the Tribunal for consumer claims.
The Builder is precluded from bringing its claim as a consumer claim in the Tribunal as there is no jurisdiction.

Conclusion

The Tribunal has neither jurisdiction pursuant to the HBA or the CCA to hear and determine the Builder' claim.
The application is dismissed. (signed) P Boyce Senior Member Civil and Administrative Tribunal of New South Wales 14 October 2014

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: 02 February 2015

Huxley Homes Pty Ltd v Bunnings Group Limited

At a glance

Court

Decision date

Source

Judgment (8 paragraphs)

Parties

Cases Cited (1)