Lechowicz v Commissioner of Fair Trading

Background

1. The Applicant is a 69-year-old woman whose husband passed away unexpectantly on 30 April 2018. Prior to his death, the Applicant and her husband lived together. The Property the subject of the owner-builder permit is co-owned by the Applicant and her daughter. The Applicant has no other children.
2. The Applicant's daughter is married and has children being the Applicant's grandchildren.
3. The Applicant suffers from arthritis with hand numbness in her left hand, fingers and thumb. In 2009, she had a brain aneurysm. In 2010, she underwent surgery to a fracture in her right wrist and in 2020, she was diagnosed with hyperlipidemia (being high cholesterol).
4. In addition, the Applicant informed the Tribunal that since her husband's death she suffers from depression and anxiety for which she has been prescribed medication.
5. The Applicant's purpose in seeking the owner-builder permit is to build a duplex on the Property so that her daughter and her daughter's family could be close to the Applicant and assist the Applicant given her age, health concerns and the fact that otherwise, she is living alone. Such an arrangement would also allow the Applicant to spend time with her family which would improve her quality of life as well as allow her to assist her daughter, to the extent that she is able, with her grandchildren's care.

Legislation and jurisdiction

1. Section 32(1A) of the HB Act states that an owner-builder permit must not be issued to a person to do residential work that relates to 'dual occupancy' unless there are "special circumstances". Section 32 states: (1) An owner-builder permit authorises its holder to do such residential building work as is described in the permit on the land specified in the permit. (1A) An owner-builder permit must not be issued to authorise its holder to do residential building work that relates to a dual occupancy unless the Secretary is satisfied that special circumstances exist that justify the owner-builder permit authorising its holder to do that work. The Secretary may issue guidelines as to the circumstances that will be considered to be special circumstances for the purposes of this subsection. (2) The authority conferred by an owner-builder permit: (a) is subject to the conditions applicable to the permit for the time being, and (b) may, on the application of the holder of the permit, be varied by an order of the Secretary set out in a notice served on the holder of the permit.
2. Section 29 of the HB Act defines 'dual occupancy' as having the same meaning as in the principal local environmental planning instrument prescribed by the Standard Instrument (Local Environmental Plans) Orders 2006.
3. The jurisdiction of the Tribunal is as provided in s 9 of the Administrative Decisions Review Act 1997 (NSW) (ADR Act). Section 9 of the ADR Act provides that the Tribunal has administrative review jurisdiction over a decision (or class of decisions) of an administrator if enabling legislation provides that applications may be made to the Tribunal for an administrative review under this Act of any such decision (or class of decisions) made by the administrator. With respect to s 9: 1. Section 6(1)(c) of the ADR Act defines 'decision' as including a refusal to issue a licence. A decision made by the Commissioner pursuant to the HB Act is a decision made under an enabling legislation; s6(2). 2. Section 7(1) of the ADR Act defines the meaning of an 'administratively reviewable decision' to be a 'decision of an administrator over which the Tribunal has administrative review jurisdiction'.
4. Pursuant to s63 of the ADR Act, the Tribunal is required, in determining an application for an administrative review, to decide what is the correct and preferable decision having regard to the material before it. The Tribunal may then affirm, vary or set aside the administratively reviewable decision. If the Tribunal sets aside that decision, the Tribunal can make a substituted decision or remit the matter for reconsideration by the administrator who made the original decision.

Submissions and evidence

1. The Applicant relied upon and repeated the submissions made in support of her application as provided in her original application for an owner-builder permit, her internal review of that decision and her application to this Tribunal. These submissions are summarised below.
2. On 21 August 2023, the Applicant lodged her owner-builder permit application and provided the following additional information in a letter co-authored with her daughter: 1. The Applicant and her daughter are co-owners of the property. 2. The Applicant's husband passed away unexpectedly leaving her on her own. 3. The purpose of seeking an owner-builder permit is to build a duplex on the property so that Ms Le and her family can live close to the Applicant in order to take care of her, as is custom in Chinese culture; whilst maintaining their independence in two separate households. 4. The Applicant has ample experience in building and renovating work including building her current residence and a previous holiday home. 5. The Applicant has contacts with trusted professionals and has acquired knowledge and qualifications relevant to home building. A statement of attainment issued by Absolute Education was provided.
3. On 4 September 2023, the Applicant lodged an application for internal review of the decision refusing her owner-builder permit application and stated: I have thorough discussions with my only daughter and her family. We have come to this plan to build a complex. This way we can live close by with each other so she can look after me at times of need and I can help her with the growing family, all while maintaining our independence and space. My daughter has thus bought a part of ownership in the property to execute this plan. We are not doing this for financial gain but for the practicality and genuine needs of me being widowed and without any other family except for my only daughter and her family. I have ample experience in building and renovating work. I used to build a Bed and Breakfast lodge... together with my deceased husband. I work closely with the architect to come up with plans that meet both my needs and the council's requirements. My step-son-in-law works in drafting for the council for over 30 years and he is actively assisting me with the design of our new place. I have very good relationship with a team of trusted professionals to ensure everything will be built to the best standard... I have done all the learning and acquired qualification required for the home builder license. I wish to manage this project myself so to ensure I can meet all the safety standard and oversee the process...
4. On 8 October 2023, the Applicant lodged with this Tribunal an application for administrative review of the decision dated 19 September 2023, affirming the refusal of her owner-builder permit application. Providing the grounds for her Tribunal application, she stated: Since I lost my husband suddenly in 2018, it's been hard to cope with my life at my age as I am 68 yrs. I have been living alone since and have developed depression and anxiety lately.... My only daughter and her children have been my greatest support and highlight... We can only meet once per week. The … [P]roperty is my hope to keep them close to me... We did consider many possible alternatives, but the reality is that Sydney housing is getting more and more unaffordable. We have been searching but we cannot find two neighbouring properties that suits us. Plus, I am getting old, besides depression and anxiety, I had a brain aneurysm operated and my arthritis is getting worse. Has 1/12 h/o persistent left-hand numbness with all fingers and thumb. No sparing of little finger. Feeling of noise in headache, no tinnitus... The home I live in currently is a two-storey house and is too big, also getting harder for me to cope now. .. If I can downsize to … [the Property] with my daughter's family living next door, it's a great improvement for both my life and a big relief for my daughter so she can check on me easily. To achieve a certain level of quality of life to remain as independent as possible, 'age in place', for as long as possible by having my next of kin living nearby while still allowing them some privacy...
5. On 24 November 2023, the Applicant served on the Respondent her statement which she relies upon in these proceedings as well as the following documents: 1. Death certificate of her husband, Mr Andrew Lechowicz; 2. Statement of Hasim Cura and Muradie Cura; 3. Letter of Dr Clifford Tan dated 4 October 2023; and 4. Confirmation of appointment with Dr Stephen Duma dated 26 September 2023
6. In her statement the Applicant repeated what she had previously provided in her grounds for her application for administrative review on 8 October 2023, and additionally stated: "My stepson... is a draftsman, and my lifetime family friend[s] Hassim and Mora Cura... have been building their duplex house a[s] owner-builder[s). They have a lot of tradesmen already lined up for me. Hasim's son-in-law is in the building industry as well. With their help we have budgeted the project carefully. We have also consulted a few builders who submitted their tenders. Ultimately, I do not believe I can afford to use a builder for this project. ... This is the only way I can see to achieve a certain level of quality of life."
7. Alternatively, the Respondent submits that the Applicant's intentions of residing at the Property with her daughter do not constitute special circumstances and relies upon Oslear v Commissioner for Fair Trading [2022] NSWCATOD 110. The Respondent contends that the Applicant's intended purpose of keeping her daughter and family close while maintaining her independence does not constitute special circumstances and otherwise, no other "special circumstances" have been identified.

Consideration

1. While the Respondent's oral and written submissions have been of great assistance to this Tribunal in accurately summarising the alternate arguments as well as the legislative framework, for the reasons below, I reject the Respondent's contention that the circumstances are not "special circumstances" for the purposes of s 32(1A) of the HB Act and I set aside the decision under review.
2. While there are no guidelines as to the definition of "special circumstances", the Minister's Second Reading Speech dated May 2014 stated: …Owner-builders will not be able to obtain a permit for work on a dual occupancy unless the commissioner is satisfied that special circumstances exist , such as where a family could demonstrate legitimate non-commercial reasons for the work or where refusing the permit could cause family hardship.
3. In McGufficke v Commissioner for Fair Trading [2022] NSWCATOD 176 at [51], The Tribunal stated: I understand this to mean that the amendment is aimed at avoiding the issue of owner-builder permits to create a dual occupancy for commercial purposes such as immediate on-selling or subdivision for financial advantage. It could also include renting part or whole of the developed property for financial gain.
4. In Oslear v Commissioner for Fair Trading, the Tribunal concluded: I do agree with the Commissioner's submission that a non-commercial purpose alone does not constitute special circumstances for the purposes of s 32(1) of the HBA. Something more is required for special circumstances to exist. In this regard I agree with the previous decision of the Tribunal in Hammoudi and McGufficke. By the use of the words "special circumstances" in s 31(1A) Parliament has indicated that considerations of fairness and justice, as well as considerations of hardship, play a part in the Commissioner's exercise of the discretion as to whether or not special circumstances exist. So to[o] do considerations of whether there are commercial factors which the applicant can leverage to his or her advantage, if granted an owner builder permit with respect to a dual occupancy. I note that the applicant submitted that the second reading speech confined such commercial gains, to "inappropriate commercial gains only." I do not accept that this should be read into the meaning of words 'special circumstances' in s 32(1), thereby elevating the words of the second reading speech to statutory status. The fact that an applicant intends to live in the principal dwelling of the dual occupancy does not constitute a special circumstance. To be eligible to be issued with an owner builder permit with respect to a dual occupancy s 81(2)(c) requires that an applicant must intend to live there. For special circumstances to exist, something beyond a non-commercial objective and continued residence must be shown to exist. What that something may be will depend on each case. It would be unwise to seek to anticipate such circumstances before they arise. In this case, beyond his insistence that no commercial purpose underlies the application, and that he will live in the new dwelling with his family, the applicant has not pointed to any other factor that amounts to a special circumstance. With respect to whether or not there is a commercial purpose to be achieved if the applicant is granted an owner-builder permit, there is a dearth of evidence. The applicant has not put on any evidence, aside from the DA, which gives any indication of the size and uses of the land involved and its current value; the nature of the existing dwelling; its value and likely rent; the likely value of the new dwelling when completed (beyond is estimated cost); the rules relating to sub-division (beyond his statement that it is not currently subdividable, and concerning which there is no evidence); or of the proposed financial arrangements relating to the construction of the new home and the rental of the existing dwelling. In my view information of this kind is necessary to properly consider whether any and what commercial advantage is likely to arise from the issue of an owner builder permit of a dual occupancy. The applicant has said he will rent the existing dwelling, or sell it if he can, but has given no evidence of the likely rental. On the available evidence I cannot determine whether or not there is a commercial benefit likely to flow from the granting of the application for an owner builder permit.
5. In considering the competing submissions of the parties as well as the evidence, I find that "special circumstances" exist. I find that the Applicant's circumstances fall within the purpose of the provision as described in the Second Reading Speech and specifically, the Applicant has demonstrated that the application is made for a legitimate non-commercial reason and in circumstances where refusing the permit could cause family hardship.
6. In this regard, the reason why the Applicant applied for the permit was to build a dual occupancy dwelling for her family in the context of her old age and medical issues to ensure that she can continue to live independently without burdening the State and that the family unit may support each other. This inter-generational family unit is a clear example falling within the purpose of s 32(1A) of the HB Act. There is no evidence that the development is for financial gain and I am satisfied that the Applicant is not seeking the permit with commercial purposes in mind of subdividing the property or selling one or both of the dwellings. In this respect, the Applicant was not cross-examined nor challenged with respect to her evidence.
7. The Tribunal is satisfied that special circumstances have been demonstrated by the Applicant.

Identity of the Respondent

1. I note that the application filed by the Respondent identified the Respondent as "Department of Customer Service". The Respondent should be identified as the "Commissioner of Fair Trading". I have made an order accordingly.

Order 1. The decision by the Commissioner of Fair Trading to refuse the Applicant's application for an owner-building permit is set aside. 2. The decision is made that the Applicant's application for an owner-building permit is granted. 3. The Respondent's name for the purposes of this proceeding is amended to "Commissioner of Fair Trading".

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: 26 February 2024