John Predl and Megan Predl v Dartanyon Pty Ltd and Greg Kellner

NCAT Consumer and Commercial|2015-03-24

REASONS FOR DECISION

The respondents seek an order from the Tribunal that pursuant to clause 6(1)(a) and (b) of Part 5 of Schedule 4 of the Civil and Administrative Tribunal Act 2013 that the application filed by the applicant be transferred to the District Court of NSW and that the proceedings continue in that Court as though the proceedings had been instituted there.
The applicant opposes the respondents' application.
Both parties have made submissions to the Tribunal in support of their positions.
The respondents make submissions in general terms that there are "legal and jurisdictional issues highlighted…concerning the Application, the Points of Claim, the Points of Defence and the overarching ability of the Tribunal to determine the subject matter of the dispute, it would appear for these matters be determined by a Court".
To consider the respondents' submissions the nature of the dispute needs to be identified.
The background of the dispute is as follows: 1. The first respondent was the builder of a display home at Harrington Park in about 2010. 2. The second respondent purchased the property from the first respondent in about October 2012. 3. The applicants purchased the property from the second respondent by contract dated 3 May 2013 for a price of $1,200,000. 4. The Contract provided for a three month defects warranty period from the date of the completion of the contract. 5. The Contract was completed on 17 May 2013. 6. The applicants claim that the residential dwelling is defective and that they are entitled to obtain the benefit of the statutory warranties contained in s 18B of the Home Building Act 1989. 7. The applicants filed their claim against the first respondent on 24 December 2013. 8. On 20 March 2014 the Tribunal made directions for the exchange of documents on which the parties intended to rely at the hearing and the filing and service of a Scott Schedule and response to the Scott Schedule. The Tribunal amended the respondent's name by replacing Dartanyon Pty Ltd with Greg Kellner. 9. The time for compliance with the Tribunal's directions was extended by the Tribunal on 29 April 2014. 10. The applicant sought a further extension of time to comply with the Tribunal's directions on 20 May 2014. 11. The time for compliance with the Tribunal's directions was extended again by the Tribunal on 30 May 2014. 12. The respondent sought an extension of time to comply with the Tribunal's directions on 19 June 2014. 13. The time for compliance with the Tribunal's direction was extended again by the Tribunal on 4 July 2014. 14. On 4 September 2014 the Tribunal vacated the earlier directions and a new timetable was set by the Tribunal. Dartanyon Pty Ltd was re-joined as a respondent with Greg Kellner. 15. On 22 September 2014 the applicants sought an extension of time to comply with the directions. 16. On 29 September 2014 the Tribunal refused the extension of time. 17. On 30 October 2014 the Tribunal reset the timetable for compliance with the directions and refused the respondents application to dismiss the application for want of prosecution.. 18. On 3 November 2014 the respondent filed their response to the Scott Schedule and on 20 November 2014 their defence to the applicant's points of claim. 19. On 21 November 2014 the Applicants filed the documents on which they rely. 20. On 28 November 2014 the applicants filed their points of claim. 21. On 6 February 2015 the respondents filed their submission in relation to the transfer of the proceedings to the District Court. 22. On 17 February 2015 the respondents filed their amended points of defence. 23. On 20 February 2015 the applicants filed their response to the application for the proceedings to be transferred to the District Court.

Legislation

Clause 6 of Schedule 4 of the Civil and Administrative Tribunal Act permits the Tribunal to transfer proceedings started in the Tribunal to a Court under certain circumstances, as follows: (1) If the parties in any proceedings for the exercise of a Division function so agree, or if the Tribunal of its own motion or on the application of a party so directs, the proceedings are: (a) to be transferred to a court (in accordance with the rules of that court) that has jurisdiction in the matter, and (b) to continue before that court as if the proceedings had been instituted there. (2) If the parties in any proceedings that have been instituted in a court so agree, or if the court of its own motion or on the application of a party so directs, the proceedings are, if the proceedings relate to a matter for which the Tribunal has jurisdiction to exercise a Division function: (a) to be transferred to the Tribunal in accordance with the procedural rules (if any), and (b) to continue before the Tribunal as if the proceedings had been instituted in the Tribunal.

Respondents' submissions

The respondents submit that no written contract was entered into concerning the residential building work that gave rise to the building claim.
As such the Tribunal will need to undertake a "forensic investigation in determining whether there was a contract for residential building work" and that the claim now pursued by the applicants is a claim for breach of a statutory warranty, the previous claim was a monies claim.
In support of their application to transfer the proceedings to the District Court, the respondent submit that the Tribunal must consider whether there is a bona fide claim arising that cannot be determined by the Tribunal; Ideal Waterproofing Pty Ltd v Buildcorp Australia Pty Ltd and Ors (2004) NSWSC 765.
The Tribunal must determine the terms of the Contract, whether the statutory warranties given by the respondents merged on settlement and whether the applicants had compromised the defects claim. Such matters being beyond the powers of the Tribunal to determine.
The respondents also submit that the Tribunal must be satisfied that the claim which is proposed to be transferred is otherwise maintainable at law: Draybi Bros Pty Ltd v Bede Diab John Maklouf Jihad Dib Mohammed Chahrouk [2014] NSWCATCD 67; and that to satisfy the definition of "residential building work" the work must be involved in co-ordinating or supervision of work involve in the construction of a dwelling: Provincial Homes v Doyle and Ors [2004] NSWSC 624.
The respondents assert that it is a fact that neither of the respondents were engaged to construct a property for the applicants at Harrington Park.

Applicants' submissions

The applicants oppose the application for transfer on the grounds of: 1. Waiver by the respondents; 2. The Tribunal is chiefly responsible for resolving building claims; 3. The claim against Dartanyon Pty Ltd is a claim in which the Tribunal has jurisdiction; 4. The claim against Kellner is a claim in which the Tribunal has jurisdiction
The applicants contend that the respondents ought to have brought their application to transfer the proceedings to a court before 30 October 2014. On that date they unsuccessfully moved to have the application dismissed. In doing so they waived their right to apply for the transfer of proceedings.
In their submission, the respondents say that their Points of Defence raised jurisdictional issues and concerns that have been expressed to the Tribunal on each occasion the matter has been listed before the Tribunal. They have until the present application failed to act on their concerns and as such have waived their right to make an application for transfer.
The applicants support their contention with the decision of in May v Christodoulou [2011] NSWCA 75. Sackville AJA at [124] and [125] quoted from Commonwealth v Verwayen [1990] HCA 39 quoted at 482 with approval of Darley CJ in Phillips v Martin (1890) 11 NSWLR 153, that: "a man may by his conduct waive a provision of an Act of Parliament intended for his benefit" Her Honour characterising this principle as neither election nor estoppel.
The applicants submit that the respondents by their inaction have waived their right to make the current application for transfer.
The applicants dispute the respondents' assertion that there was no written contract as required by s 7 of the Home Building Act. The applicants submit that s 7 mandates a written contract in certain circumstances. The penalty arising from a failure to comply with such an obligation is that the builder is unable to recover damages or enforce any other remedy in respect of a breach of the contract.
Section 48A is a claim for the payment of money arising from a supply of building goods or services whether under a contract or not. The applicants dispute the assertion by the respondent's that they can either make a claim for breach of statutory warranty or a money claim or say it is unsupported.
The applicants contend that Ideal Waterproofing supports the intention of parliament that "from time to time, the Tribunal will have to decide whether it has jurisdiction to hear and determine a matter. That is part of its role. The prospect that the Tribunal may be called upon to fulfil that role in a particular matter is not a good reason for transferring a case to the District Court".
The applicants assert that the respondents submission that the Tribunal will have to determine whether statutory warranties have merged on completion of the Contract for Sale of Land between the applicants and the second respondent is untenable as the statutory warranties given by s 18B Home Building Act to a home owner are extended by s 18D to a successor in title and s 18G prohibits the contracting out of the statutory warranties.
Further the applicants say that it does not follow that if the Tribunal is satisfied that an action is maintainable at law the matter it should be transferred to a Court. Draybi Bros does not assist to support the respondents' contention as it related to equitable estoppel and the limit in s 48K to the Tribunal's jurisdiction.
Provincial Homes should be distinguished as the relative issue in that matter was consideration of a feasibility study. Residential building work relates to the physical construction of a dwelling.
The Contract for Sale of Land is not a contract to carry out residential building work. The rectification work proposed by the Contract will involve physical rectification work.

Findings

The Tribunal is not satisfied that the applicants can sustain their argument that the respondents have waived their right to bring their application for transfer by their inaction. The conduct of the matter by the applicants, particularly before they retained their solicitors, was such that the respondent moved to have the matter struck out for want of prosecution. Although the Tribunal did not see fit to strike the matter out, the applicants have been tardy in the prosecution of their claim. The Tribunal does not find that the respondents have waived their right to bring their application for transfer.
The further argument propounded by the respondents in support of their application for the transfer of the proceedings to the District Court centres on the alleged lack of jurisdiction to fully determine the issues between the parties.
In particular: 1. There was no written contract between the applicants and the respondents for the carrying out of residential building work; and, 2. If the tribunal determines that there was a written contract between the applicants and the second respondent then it will need to determine the terms of that contract and whether the statutory warranties had merged on completion of that contract.
The applicants argue that the cause of action can be maintained against both the first and second respondents. That will ultimately be determined on the evidence and is a matter that the applicant will need to address at the hearing.
The applicants correctly refer to and respondents appear to have overlooked the provisions of s 18D and s 18G of the Home Building Act.
Section 18D provides that the statutory warranties in s 18B extend to a successor in title, now fully set out for ease of reference: (1) A person who is a successor in title to a person entitled to the benefit of a statutory warranty under this Act is entitled to the same rights as the person's predecessor in title in respect of the statutory warranty. (1A) A person who is a non-contracting owner in relation to a contract to do residential building work on land is entitled (and is taken to have always been entitled) to the same rights as those that a party to the contract has in respect of a statutory warranty. (1B) Subject to the regulations, a party to a contract has no right to enforce a statutory warranty in proceedings in relation to a deficiency in work or materials if the warranty has already been enforced in relation to that particular deficiency by a non-contracting owner. (2) This section does not give a successor in title or non-contracting owner of land any right to enforce a statutory warranty in proceedings in relation to a deficiency in work or materials if the warranty has already been enforced in relation to that particular deficiency, except as provided by the regulations.
Section 18D confers on the applicants as successors of title the benefits of the statutory warranties,that is the right to enforce the warranties: Allianz v Waterbrook [2009] NSWCA 224 at [65].
Section 18G provides that the statutory warranties in s 18B cannot be contracted out, as follows: A provision of an agreement or other instrument that purports to restrict or remove the rights of a person in respect of any statutory warranty is void.
At best, if the respondents can sustain an argument that a statutory warranty for a particular deficiency in work or materials has already been enforced, then that would be given consideration as a defence to an applicant's claim.
The Tribunal has jurisdiction for building claims under the Home Building Act not exceeding $500,000.00: s 48k; and that the Tribunal is to be chiefly responsible for resolving building claims: s 48L. Considerations of the terms of a contract are necessarily part of function of the Tribunal to exercise its jurisdiction under the Home Building Act.
The Tribunal has considered the respondents arguments in support of its contention that if there is a cause maintainable at law (i.e. the contractual issue) then the appropriate forum is the District Court.
The applicants oppose the transfer of the proceedings to the District Court. The Tribunal does not accept the respondents' argument.
The issues between the parties can be decided within the Tribunal's jurisdiction, notwithstanding the respondents' assertion that there is no contract, and if there is, it is the Contract for Sale of Land. The respondents have not placed before the Tribunal evidence in support of their contention sufficient to assist the Tribunal to support such a notion.
On the submissions before it, the Tribunal is satisfied that the appropriate forum for the determination of the applicants building claim is the Tribunal. The applicants are the successors of a land owner who had carried out building work. The applicants are entitled to seek orders for failure to comply with the statutory warranties in s 18B.
Accordingly, the respondents' application for the transfer of the proceedings to the District Court is refused. P Boyce Senior Member Civil and Administrative Tribunal of New South Wales 24 March 2015 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: 04 June 2015

At a glance

Court

Decision date

Source

Judgment (5 paragraphs)

Parties

Cases Cited (6)