Peace v McIntosh Electrical Pty Ltd

Appeal Panel's Jurisdiction

1. The Appeal Panel's powers are set out in s 80: 80 Making of internal appeals (1) An appeal against an internally appealable decision may be made to an Appeal Panel by a party to the proceedings in which the decision is made. Note : Internal appeals are required to be heard by the Tribunal constituted as an Appeal Panel. See section 27 (1). (2) Any internal appeal may be made: (a) in the case of an interlocutory decision of the Tribunal at first instance-with the leave of the Appeal Panel, and (b) in the case of any other kind of decision (including an ancillary decision) of the Tribunal at first instance-as of right on any question of law, or with the leave of the Appeal Panel, on any other grounds. (3) The Appeal Panel may: (a) decide to deal with the internal appeal by way of a new hearing if it considers that the grounds for the appeal warrant a new hearing, and (b) permit such fresh evidence, or evidence in addition to or in substitution for the evidence received by the Tribunal at first instance, to be given in the new hearing as it considers appropriate in the circumstances.
2. This appeal relates to a decision of the Consumer and Commercial Division in its home building list and is an internally appealable decision within the meaning of s 32 of the NCAT Act.
3. The appeal was lodged with the Tribunal on 23 December 2015, within the time specified by clause 25 (4)(c) of the Civil and Administrative Tribunal Rules 2014 (NSW) (NCAT Rules).

Background

1. In the initial application to the Tribunal, made on 21 July 2015, Mr Peace had sought a total amount of $2542.00 for damages he claims he became liable for after the respondent ruptured a strata water pipe while drilling into a common property wall to bring cabling in from a Foxtel box which serviced other units in the strata scheme.
2. Mr Peace's application was made pursuant to the Home Building Act 1989 (NSW) (HBA). The matter had initially been heard and determined by the Tribunal on 12 October 2015. The contractor did not attend the hearing and orders were made on that day for the contractor to pay Mr Peace an amount of $1,695.10.
3. The contractor subsequently applied to stay the order and set aside the decision. The set aside application was granted. Neither the orders made on the set aside application nor the initial orders were the subject of this appeal. After the granting of the set-aside application, the matter again came before the Tribunal on 14 December 2015 and the order made at that hearing are the subject of this appeal.
4. Mr Peace claims that the Tribunal made an error of law in determining that he had no standing to bring the application. He is also seeking that the orders made on 12 October 2015, which were set aside, be 'validated' and 'reinstated'.
5. Mr Peace stated that pursuant to his tenancy agreement he was responsible for the damage caused to the premises. He stated that he was liable to indemnify the owner and that the owner, pursuant to his responsibilities in the strata scheme, was liable for any damage to the common property caused as a result of the use of the unit. Mr Peace made submissions that the fact that damage had occurred to common property did not prevent him from making a claim and was irrelevant
6. The respondent did not provide any written submissions in reply to the appeal. He made oral submissions at hearing that there had been no breach of contract and that he agreed with the Member's finding that as a tenant Mr Peace had no standing and that he was not liable for damages because the damage was caused to common property. The respondent did not provide any basis for those submissions.

Standing to Make the Application

1. S 48K of the HBA sets out the Tribunals jurisdiction in relation to 'building claim'. (1) The Tribunal has jurisdiction to hear and determine any building claim brought before it in accordance with this Part in which the amount claimed does not exceed $500,000 (or any other higher or lower figure prescribed by the regulations). (2) The Tribunal has jurisdiction to hear and determine any building claim whether or not the matter to which the claim relates arose before or after the commencement of this Division, except as provided by this section. (3) The Tribunal does not have jurisdiction in respect of a building claim relating to building goods or services that have been supplied to or for the claimant if the date on which the claim was lodged is more than 3 years after the date on which the supply was made (or, if made in instalments, the date on which the supply was last made). (4) The Tribunal does not have jurisdiction in respect of a building claim relating to building goods or services that are required under a contract to be supplied to or for the claimant on or by a specified date or within a specified period but which have not been so supplied if the date on which the claim was lodged is more than 3 years after the date on or by which the supply was required under the contract to be made or, if required to be made in instalments, the last date on which the supply was required to be made. (5) The fact that a building claim arises out of a contract that also involves the sale of land does not prevent the Tribunal from hearing that building claim. (6) The Tribunal does not have jurisdiction in respect of a building claim arising out of a contract of insurance required to be entered into under this Act if the date on which the claim was lodged is more than 10 years after the date on which the residential building work the subject of the claim was completed. (7) The Tribunal does not have jurisdiction in respect of a building claim arising from a breach of a statutory warranty implied under Part 2C if the date on which the claim is lodged is after the end of the period within which proceedings for a breach of the statutory warranty must be commenced (as provided by section 18E). (8) The Tribunal does not have jurisdiction in respect of a building claim relating to: (a) a contract for the supply of goods or services to which none of subsections (3), (4), (6) and (7) applies, or (b) a collateral contract, if the date on which the claim was lodged is more than 3 years after the date on which the contract was entered into. (9) This section has effect despite clause 5 (Relationship between Tribunal and courts and other bodies in connection with Division functions) of Schedule 4 to the Civil and Administrative Tribunal Act 2013 .
2. Section 48A provides the definition of a "building claim': "building claim" means a claim for: (a) the payment of a specified sum of money, or (b) the supply of specified services, or (c) relief from payment of a specified sum of money, or (d) the delivery, return or replacement of specified goods or goods of a specified description, or (e) a combination of two 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 or services, but does not include a claim that the regulations declare not to be a building claim.
3. "Building goods or services" are defined under s 48A as; "building goods or 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: (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.
4. "residential building work" is defined in sch 1, cl 2 of the HBA. The relevant parts are set out below: …. (2) Each of the following is included in the definition of "residential building work" : (a) roof plumbing work done in connection with a dwelling, (b) specialist work done in connection with a dwelling, (c) work concerned in installing in a dwelling any fixture or fixed apparatus that is designed for the heating or cooling of water, food or the atmosphere or for air ventilation or the filtration of water in a swimming pool or spa (or in adding to, altering or repairing any such installation). (3) Each of the following is excluded from the definition of "residential building work" : (a) any work (other than specialist work) the reasonable market cost of the labour and materials involved in which does not exceed the amount prescribed by the regulations, …. (7) The regulations may: (a) declare any work to be included in the definition of "residential building work" , or (b) declare any work to be excluded from the definition of "residential building work" .
5. Reg 12 of the Home Building Regulations 2014 (NSW) sets the prescribed amount in relation to clause 2 (3) (a) of Schedule 1 to the Act as being $5,000.
6. The definition of "specialist work" is contained in sch 1 cl 1 of the HBA and includes 'electrical wiring work'.
7. The Appeal Panel finds that the Tribunal has incorrectly determined the issue of whether the appellant had the requisite standing to initiate proceedings. The issue of the applicant being a tenant or damage caused to common property is irrelevant to a determination of whether the appellant has standing or more relevantly whether the Tribunal has jurisdiction to decide the matter. In light of the legislative framework and consistent with the approach of Basten JA in Grygiel v Baine & Ors [2005] NSWCA 218 (para's 55-63) the necessary questions the Tribunal would need to ask determine if it had jurisdiction are: 1. Is this a building claim within the meaning of s48A of the HBA? In this particular case, the answer would be in the affirmative as the applicant was seeking payment of a specified sum of money. 2. Does the claim arise out of a supply of building goods or services whether under a contract or not? To determine the questions the Tribunal would need to consider the definition of 'goods and services' as defined in s 48A of the HBA and whether those services have being supplied in connection with the carrying out of residential building work. 3. Was the work residential building work? In relation to Mr Peace's application, this question raises two issues in particular. First, whether the work is specialist work, specifically 'electrical wiring work' and second whether the reasonable market cost of the labour and materials exceeded $5000.00. If the work was found to be 'electrical wiring work' then it would be residential building work regardless of the market cost. In the event that the reasonable market cost of labour and materials involved did not exceed $5000.00, then the work would not be residential building work unless it is "specialist work" as defined under the Act. In that case the appellant would not have been entitled to bring the application in the Home Building List, however may have been entitled to proceed in the Consumer and Commercial Division's general list , as a "consumer" for the purpose of s 3A and s 7 of the Consumer Claims Act 1998 (NSW) (CCA) as it applied at the time. 4. Does the building claim come within the time and monetary limits in s 48K?
8. It was not open to the Appeal Panel to come to a conclusion in relation to most of the questions as the evidence of the parties was not properly before it.
9. In the decision of John Prendergast & Vanessa Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69 the Appeal Panel helpfully identified and summarised a non-exhaustive list of matters which may give rise to an error of law. Relevantly, it included the following: (2) Whether the Tribunal identified the wrong issue or asked the wrong question: Craig v State of South Australia (1995) 184 CLR 163 at 179; Minister for Immigration and Multicultural Affairs v Yusuf (2001) 206 CLR 323 at [82]. (3) Whether a wrong principle of law had been applied: Chapman v Taylor [2004] NSWCA 456 at [33], per Hodgson JA (Beazley and Tobias JJA agreeing). …. (5) Whether the Tribunal failed to take into account relevant (i.e., mandatory) considerations: Minister for Aboriginal Affairs v Peko-Wallsend Limited (1986) 162 CLR 24. This was recently the subject of consideration by the Appeal Panel in Director General, Department of Finance & Services v Porter. It was said at [26] to [29] as follows: .… (6) Whether the Tribunal took into account an irrelevant consideration, as explained in Peko-Wallsend per Mason J at 40: In the context of judicial review on the ground of taking into account irrelevant considerations, this Court has held that, where a statute confers a discretion which in its terms is unconfined, the factors that may be taken into account in the exercise of the discretion are similarly unconfined, except in so far as there may be found in the subject-matter, scope and purpose of the statute some implied limitation on the factors to which the decision-maker may legitimately have regard
10. The Appeal Panel finds the error of law established. The Tribunal erred in deciding that the appellant did not have standing based on his status as a tenant or by reason of the fact that damage was occasioned to common property. In coming to that decision, the Tribunal applied the wrong principles of law and took into account irrelevant considerations.
11. By limiting it's enquiries to the fact that the applicant was a tenant and the damage that resulted was to common property, the Tribunal failed to properly identify the correct questions in determining whether the appellant had standing to make the claim and whether the Tribunal had jurisdiction to decide the claim. Nothing in either the HBA or CCA would prevent a tenant who has engaged a contractor or supplier from bringing an application simply because they are a tenant.
12. The Appeal Panel notes that the application as first filed with the Tribunal discloses causes of actions in both negligence and breach of contract. The issue of whether, while doing the contract works, the contractor or supplier damaged lot or common property, is an issue relating to damages and loss. If the applicant could demonstrate that he is liable for any damage caused by the respondent as a result of negligence, breach of contract or any other cause of action under the relevant legislation, then it would be open to the Tribunal to award damages even if the damage occurred to common property.

Reinstatement and Validation of the Orders made on 12 October 2015

1. Mr Peace sought orders from the Appeal Panel that the orders made by the Tribunal on 12 October 2015 which were subsequently set aside be validated and reinstated. Those orders were made in the absence of the contractor and the contractor's set aside application was granted. Mr Peace did not appeal the set-aside application. On those grounds, the Tribunal cannot reinstate or validate the orders as they have now been set aside.
2. Accordingly the Appeal Panel finds that the matter must be remitted to properly determine the Tribunal's jurisdiction and decide the application accordingly.

Orders 1. The appeal is allowed. 2. The decision made on 14 December 2015 is set aside. 3. The matter is remitted for hearing by a differently constituted Tribunal

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: 07 June 2016