Oslear v Commissioner for Fair Trading

Material before the Tribunal

1. In considering the application I have had regard to the following material: 1. the application for administrative review filed 27 May 2022 with attachments; 2. s 58 documents filed 6 July 2022; 3. the Commissioner's submissions filed 3 August 2022; 4. applicant's submissions filed 16 August 2022; 5. the Commissioner's submissions in reply received 24 August 2022; 6. the applicant's further submissions in response (undated); and 7. orders made by the Tribunal on 21 June 2022 and 19 July 2022.
2. I note that both parties have made submissions additional to those stipulated in the Tribunal's directions. For completeness, I have taken them into account.

Brief outline of the relevant statutory scheme

1. Among other things the HBA establishes and regulates a statutory scheme whereby builders of residential building work, their employees, tradespersons and contractors are required to be licenced or to hold a relevant tradesperson certificate in order to contract to do such work. Unlicensed contracting is prohibited: s 4.
2. The provisions of the HBA dealing with licensing and tradesperson certificates are set out in Part 3 of the HBA. Division 1 of Part 3 provides for contractor licences, while Division 2 is concerned with supervision and tradesperson certificates. Division 3 makes provision for owner-builder permits which authorise unlicenced persons, in defined circumstances, to do specified home building work. Section 32 provides: (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.
3. Section 31 is concerned with the circumstances in which an owner-builder permit may issue. It provides: (1) (Repealed) (2) The Secretary must refuse an application for an owner-builder permit if the Secretary is not satisfied - (a) that the applicant is an individual of or above the age of 18 years, or (b) that the applicant owns the land concerned, whether or not together with another or other individuals, or (c) that the single dwelling-house or one of the dwellings comprising the dual occupancy concerned will be occupied as the residence (being, in the case of a dual occupancy, the principal residence) of the applicant after the work authorised by the permit is done, or (d) that the applicant has completed any education or training, or holds any qualification, required by the Secretary or the regulations for eligibility for the grant of an owner-builder permit. (3) The Secretary must refuse an application for an owner-builder permit (the current application) if the applicant was an owner of other land when an owner-builder permit was issued in respect of that other land during the relevant period before the current application was lodged (whether or not that owner-builder permit was issued to the applicant), unless the Secretary is satisfied that special circumstances exist. (4) The relevant period is the period of 5 years or such other period as may be prescribed by the regulations.
4. The issue to be determined in this case is whether special circumstances exist under s 32(1A) that justify the issue of an owner-builder permit, authorising the applicant to do the proposed work. If not, s 31(2) provides that the application "must" be refused. The parties agree that the Commissioner has not issued any guidelines, "as to the circumstances that will be considered to be special circumstances." They differ as to the meaning of special circumstances in s 32(1A) and as to whether extrinsic material may be used in ascertaining their meaning.
5. Section 32(1A) was introduced into the HBA by the Home Building Amendment Act 2014 (NSW) (the HBAA 2014), as was s 31(2)(d) which is concerned with qualifications of owner-builders. Section 32(1A) was a completely new provision, whereas s 31(2)(d) replaced a similar provision but allowed for necessary qualifications to be prescribed by regulation.
6. Section 31(2)(c) requires that owner-builders occupy the principal residence of a dual occupancy as their own residence, once the construction work authorised by the permit is done. That section has been in its current from since the commencement of the HBA in 1990.

The construction of s 32(1A)

1. Both parties agree that in interpreting s 32(1A) of the HBA the Tribunal is required to interpret it in a manner that is consistent with the intent, purpose and context of the HBA as a whole. Section 33 of the Interpretation Act 1987 (NSW) (the IA) provides: 'In the interpretation of a provision of an Act or statutory rule, a construction that would promote the purpose or object underlying the Act or statutory rule (whether or not that purpose or object is expressly stated in the Act or statutory rule or, in the case of a statutory rule, in the Act under which the rule was made) shall be preferred to a construction that would not promote that purpose or object.'
2. The parties disagree with respect to whether, in interpretating the meaning of the section, regard should be had to extrinsic material and specifically to the second reading speech on the introduction of the HBAA 2014. The applicant relies on that speech to argue that s 32(1A) should be read so as to reflect what he says is the parliamentary purpose underlying the section, namely that owner-builder permits should not be a used as "means of circumventing the licencing requirements" under the HBA.
3. The Commissioner, on the other hand, says that recourse cannot be had to the second reading speech in interpreting the meaning of the words 'special circumstances' in s 32(1A) of the HBA. Section 34 of the IA provides: 34 Use of extrinsic material in the interpretation of Acts and statutory rules (1) In the interpretation of a provision of an Act or statutory rule, if any material not forming part of the Act or statutory rule is capable of assisting in the ascertainment of the meaning of the provision, consideration may be given to that material - (a) to confirm that the meaning of the provision is the ordinary meaning conveyed by the text of the provision (taking into account its context in the Act or statutory rule and the purpose or object underlying the Act or statutory rule and, in the case of a statutory rule, the purpose or object underlying the Act under which the rule was made), or (b) to determine the meaning of the provision - (i) if the provision is ambiguous or obscure, or (ii) if the ordinary meaning conveyed by the text of the provision (taking into account its context in the Act or statutory rule and the purpose or object underlying the Act or statutory rule and, in the case of a statutory rule, the purpose or object underlying the Act under which the rule was made) leads to a result that is manifestly absurd or is unreasonable. (2) Without limiting the effect of subsection (1), the material that may be considered in the interpretation of a provision of an Act, or a statutory rule made under the Act, includes - (a) all matters not forming part of the Act that are set out in the document containing the text of the Act as printed by the Government Printer, (b) any relevant report of a Royal Commission, Law Reform Commission, committee of inquiry or other similar body that was laid before either House of Parliament before the provision was enacted or made, (c) any relevant report of a committee of Parliament or of either House of Parliament before the provision was enacted or made, (d) any treaty or other international agreement that is referred to in the Act, (e) any explanatory note or memorandum relating to the Bill for the Act, or any other relevant document, that was laid before, or furnished to the members of, either House of Parliament by a Minister or other member of Parliament introducing the Bill before the provision was enacted or made, (f) the speech made to a House of Parliament by a Minister or other member of Parliament on the occasion of the moving by that Minister or member of a motion that the Bill for the Act be read a second time in that House, (g) any document (whether or not a document to which a preceding paragraph applies) that is declared by the Act to be a relevant document for the purposes of this section, and (h) any relevant material in the Minutes of Proceedings or the Votes and Proceedings of either House of Parliament or in any official record of debates in Parliament or either House of Parliament. (3) In determining whether consideration should be given to any material, or in considering the weight to be given to any material, regard shall be had, in addition to any other relevant matters, to - (a) the desirability of persons being able to rely on the ordinary meaning conveyed by the text of the provision (taking into account its context in the Act or statutory rule and the purpose or object underlying the Act or statutory rule and, in the case of a statutory rule, the purpose or object underlying the Act under which the rule was made), and (b) the need to avoid prolonging legal or other proceedings without compensating advantage.
4. The Commissioner submits that the words 'special circumstances' are words commonly found in legislation and that their ordinary meaning, in the context of the HBA, "is neither ambiguous or obscure nor, would its ordinary meaning applied to the facts of this case lead to a result that is manifestly absurd or is unreasonable."
5. It is now well established that at common law a court or tribunal may have regard to extrinsic material when ascertaining the mischief that legislation is enacted to address (and some cases suggest the purpose of the legislation). In CIC Insurance Ltd v Bankstown Football Club Ltd 187 CLR 384 at 408, [1997] HCA 2 Brennan CJ , Dawson , Toohey , Gaudron and Gummow JJ explained at 408: 'It is well settled that at common law, apart from any reliance upon s 15AB of the Acts Interpretation Act 1901 (Cth), the court may have regard to the reports of law reform bodies to ascertain the mischief which a statute is intended to cure … Moreover, the modern approach to statutory interpretation (a) insists that the context be considered in the first instance, not merely at some later stage when ambiguity might be thought to arise, and (b) uses 'context' in its widest sense to include such things as the existing state of the law and the mischief which … one may discern the statute was intended to remedy.' See also French CJ and Hayne J in Certain Lloyd's Underwriters Subscribing to Contract No IH00AAQS v Cross (2012) 248 CLR 378 at [25].
6. The issue that arises is whether beyond ascertaining the mischief sought to be addressed by s 32(1A), the Tribunal is able to have regard to extrinsic evidence when ascertaining the meaning of s 32(1A). Section 34(1)(b) if the IA defines the circumstances in which regard may be had to extrinsic evidence for the purpose of determining the meaning of a provision. In my view the fact that Parliament saw fit to allow guidelines as to the meaning of "special circumstances" to be issued, and that this has not occurred, leads to the meaning of the term being obscure. It requires clarification in the context of the HBA. Section 34(1)(b)(i) of the IA allows recourse to extrinsic material that is capable of assisting in the ascertainment of the meaning of the provision.
7. While the Commissioner is correct that the words 'special circumstances' appear in numerous statutes, the precise meaning of that term varies depending upon that statutory context in which they appear. The term, as it appears in s 32(1A), has been twice considered by this Tribunal in Hammoudi v Commissioner of Fair Trading [2016] NSWCATOD 57 and McGufficke v Commissioner for Fair Trading [2022] NSWCATOD 84.
8. In Hammoudi, the applicants had been refused an owner builder permit to build their dream, retirement home as a dual occupancy, on a site where there was an existing cottage. In the long term it would be occupied by their son. The cottage was being rented at the time. There was evidence that the applicants could not afford to engage a builder, and would have to build the dwelling in stages. They had purchased the block and planned their new home in the expectation that their existing home would be used solely for business purposes. They argued that there was no commercial purpose for the proposed construction and that their circumstances were 'special circumstances." Senior Member Scahill said, at [64 - 66]: 64 There are no guidelines issued as to the definition of special circumstances in the HBA context. The Tribunal refers to a number of factors in interpreting the meaning of special circumstances: • An understanding of the term "special circumstances" generally; • the purposes of the Home Building Act 1989; • the purposes of an owner-builder permit in the context of the HBA; • the legislative purpose behind the amendment to the HBA in section 32(1A) against the issue of owner builder permits for dual occupancies; • the scope of special circumstances as set out in the Minister's Second Reading Speech in May 2014; and • the Applicant's claim for special circumstances in the context of the permit sought. Meaning of special circumstances 65 A scan of case law shows that the concept of 'special circumstances" is known in the areas of criminal law, professional disciplinary matters in relation to costs, applications for security of costs and in the social security arena concerning beneficial exercise of a discretion. 66 In Topp's case, the AAT considered the meaning of the term "special circumstances" in relation to its use in section 1184K of the Social Security Act. Section 1184 allowed for the Secretary of the Department of Social Security to exercise a beneficial discretion "if it is appropriate to do so in the special circumstances of the case." Relying on a Full Federal Court decision in Beadle v Director General of Social Security [1984] AATA 176, the AAT considered that if something unfair, unintended or unjust had occurred which was out of the ordinary, (this Tribunal's bolding) this might constitute special circumstances justifying the exercise of the discretion - see Topp and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2010] AATA 99 paragraphs 21 and 38-40. 67 The AAT's analysis in Topp's case also indicates that the determination of the existence of "special circumstances" vested a broad discretion in the decision maker.
9. The Tribunal in Hammoudi went on to consider the Minister's second reading speech on the introduction of s 32(1A) and, identified the mischief sought to be addressed by its introduction, namely at [71]: … the amendment is aimed at avoiding the use of owner-builder permits to create a dual occupancy for commercial purposes such as immediate on selling or subdivision for financial advantage.
10. In McGufficke, Senior Member Mulvey was considering a refusal of an owner builder permit with respect to a dual occupancy, where the applicant was a licenced builder who undertook sub-contract work only. There was an existing cottage on the property concerned which was rented out. He said he wanted to build a retirement home.
11. In considering the meaning "special circumstances "Senior Member Mulvey distinguished the facts in McGufficke from those in Hammoudi and found there was no objective similarity between the two. The Tribunal again referred to the decision in Topp and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2010] AATA 99, relying on a Full Federal Court decision in Beadle v Director General of Social Security [1984] AATA 176, to find that the expression "special circumstances" vested a broad discretion in the decision maker and required that, at [46]: '… something unfair, unintended or unjust had occurred which was out of the ordinary, (my emphasis) this might constitute special circumstances justifying the exercise of the discretion …
12. The Tribunal went on to construe the meaning of special circumstances in the context of the HBA, which it found to be a consumer protection act: at [48]. Senior Member Mulvey then had regard to the second reading speech on the introduction of s 32(1A) and concluded: '51. I understand this to mean that the amendment is aimed at avoiding the use 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. 52. In this context the Second Reading Speech then refers to special circumstances as follows: "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. "
13. In the second reading speech on the introduction of the HBAA 2014 on 6 May 2014 the Minister for Fair Trading, Mr Stuart Ayres, explained: 'The amendment also addresses home builders. The Act currently allows home owners to do building work on their home by obtaining an owner-builder permit from Fair Trading. The owner-builder provisions are being reformed to help ensure that the permit system is not being used inappropriately for commercial reasons as a means of circumventing the licensing requirements. These reforms will also help manage health and safety risks associated with owner-builder work. Currently owner-builders are only permitted to undertake work relating to a single dwelling or a dual occupancy. There are concerns that some commercially orientated, unlicensed people may be using the permit system in order to undertake dual occupancy work on land with a view to subdividing the land and on-selling it at a profit. The owner-builder permit system is not intended for such commercial development work. 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.'
14. The Explanatory Note accompanying the Bill advised that the amendment operated: (g) by broadening the definition of owner-builder work to include residential building work on a secondary dwelling on land, (h) by providing that an owner-builder permit must not authorise its holder to do residential building work that relates to a dual occupancy unless there are special circumstances,
15. In submissions, the applicant argued that the purpose of s 32(1A) of the HBA is to prevent the owner builder provisions being used to circumvent the licencing provisions of the HBA, by enabling the holder of an owner builder permit to build a dual occupancy for commercial purposes. "Special circumstances" in s 32, he submitted, should be read in that context, so as to allow owner builders without a commercial purpose to build dual occupancy homes. In his final submissions the applicant submitted that: 'special circumstances' are satisfied, where an applicant demonstrates 'legitimate non commercial reasons'.
16. To accept this would be to confine the wide discretion which has been recognised in diverse areas of the law to flow from the statutory expression 'special circumstances'. In Re Bolton; Ex parte Beane [1987] HCA 12; (1987) 162 CLR 514; 70 ALR 225 Mason CJ, Wilson and Dawson JJ issued this cautioned that (at 518; 227-8): "The words of a Minister must not be substituted for the text of the law."
17. In this case the applicant pointed to his statement, that the residence would be used as his family home, as sufficient to demonstrate the absence of a commercial purpose and to constitute special circumstances for the purposes of s 32(1A). If the Tribunal accepted that "a family could demonstrate legitimate non-commercial reasons" for building a dual occupancy, then, the applicant submitted, that Parliament intended that constitute special circumstances. In making that submission the applicant elevated the words of the second reading speech to the point where they are to be read as expressing the meaning of amendment, rather than considering the words used by the statute itself. This is impermissible. Additionally, the fact that he and his family intend to reside in the new residence does not, of itself, constitute special circumstances. The applicant is, among other things, obliged to satisfy the Commissioner of his intention to reside in the principal dwelling of the dual occupancy as a residence before an owner builder permit can issue: see s 31(2)(c). This is separate and distinct from the requirement of s 32(1A) that an applicant for an owner builder permit with respect to a dual occupancy demonstrate special circumstances.
18. In my opinion the question of whether special circumstance exist under s 32(1A) which allow the Commissioner to issue an owner builder permit, in a dual occupancy situation, is not confined or defined by the wording of the Minister's second reading speech. Rather, I agree that the series of factors referred to by the Tribunal in Hammoudi at [64] and McGufficke, including the mischief addressed by the amendment, and its purpose, are all factors to be taken into account in determining when special circumstances exist. That individual hardship is relevant is also clear from the second reading speech.
19. I agree with Senior Member Mulvey in McGufficke at [51] that the mischief addressed by the amendment includes the creation of a dual occupancy for a commercial purpose, including sale, sub-division, or "renting part or the whole of the developed property for financial again." I reject the applicant's submission that, given what was said in the second reading speech, the parliamentary intention is that the commercial gain intended to be caught by s 32(1A) is "on-selling it for profit." By this the applicant submits Parliament intended to refer to the on-selling of the residence constructed pursuant to the owner builder permit only, not to any other residence on the property. This, it is said, is consistent with the purposes of the HBA, as the original dwelling is not owner builder built. While there is logic of the applicant's argument in this regard, I am not persuaded that the logic is necessarily of universal application. I am inclined to the view that there may be situations in which that submission is correct and others where a distinct commercial advantage may be gained by an owner-builder subdividing and selling a pre-existing dwelling. In my opinion, each case will have to be considered individually with the applicant bearing the statutory burden of satisfying the Commissioner that special circumstances exist. I am inclined to the view that this will usually require the applicant to adduce evidence of the financial arrangements surrounding the construction and subdivision, as well as personal and family circumstances. In this case the applicant has declined the opportunity to adduce further evidence.

Has the Commissioner conceded that the applicant has a non-commercial purpose in seeking the owner builder permit?

1. The applicant submits that in submissions received 24 August 2022 the Commissioner conceded that he has a non-commercial purpose. What the Commissioner submitted was: The Applicant may well have a legitimate non-commercial reason for wanting to obtain an owner builder permit, but having such a reason, does not in and of itself make out special circumstances. The Applicant in the application for the permit and in his submissions on 16 August 2022 indicates that he wants to build a family home and reside in such a home for 20 years or so. Whilst this is not a commercial reason, it is clear from the application and the submissions that that the application for the permit as envisioned will permit the construction of another dwelling on the same land which will be rented out or on sold if and when subdivision is permitted. In the Respondent's submission, there is indeed an immediate commercial reason underlying the application for the permit enabling the newly constructed property to be rented and there is also a potential future commercial reason underlying the application, being that the property may potentially be sold in the future once subdivision of the land is possible. These are conceded by the Applicant in his submissions. When this issue is considered in light of the second reading speech in so far as that speech refers to a permit being issued "inappropriately for commercial gain", it is entirely clear that what the Applicant is attempting to do is to make commercial gain by building two dwellings, one which can be rented out or later sold and one to live in.
2. I have some difficulties with elements of this submissions as it asserts that the applicant is building two dwellings on the property, rather than an additional dwelling only in which he intends to reside. The application and s 58 documents show that the applicant is seeking an owner builder permit to enable him to build an additional dwelling on the property, in which he and his family will reside. He proposes to rent the existing dwelling or sell it if subdivision is possible. Given the apparently mistaken facts in the Commissioner's submission, I do not accept that the Commissioner has conceded a non-commercial purpose on the applicant's part.

Conclusion

1. 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(1A) 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 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(1A), thereby elevating the words of the second reading speech to statutory status.
2. 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.
3. 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 the there is a commercial benefit likely to flow form the granting of the application for an owner builder permit.
4. In the light of all the above, I am not satisfied that special circumstances exist under s 32(1A) of the HBA meriting the issue of an owner-builder permit to the applicant that relates to a dual occupancy. In those circumstances, the section says that such a permit, "must not be issued."
5. Consequently, the decision under review is confirmed.

Orders 1. The decision under review is confirmed.

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: 30 September 2022