Determination of preliminary issue as to whether Tribunal has jurisdiction - Proper construction - s 5(2) of the Building Services (Complaint Resolution and Administration) Act 2011 (WA) - s 17 of the Home Building Contracts Act 1991 (WA) - Home building work contract complaint

Building Services (Complaint Resolution and Administration) Act 2011 (WA), s 3, s 5(2), s 11(1)(d), s 12(a), s 41(2), s 41(2)(d), s 43, s 43(1), s 43(1)(a), s 43(1)(b)

Home Building Contracts Act 1991 (WA), s 3, s 3(1), s 4(4), s 4(5), s 9(1), s10(4), s 14(3), s 17, s 17(1)(a)(i), s 19, s 20, Sch 1, cl 5, Pt 2

State Administrative Tribunal Act 2004 (WA), s 42(1), s 42(3)

Commissioner of Police v Thayli Pty Ltd [2020] WASC 43

Deshmukh and Distinctive Building Services Pty Ltd [2024] WASAT 15

Gemmill Homes Pty Ltd v Sanders [2018] WASC 179

The Owners of 52 Mill Point Road Strata Plan 62152 v Hanssen Pty Ltd [2021] WASAT 102

1. In November 2021, the applicants, Mr Kieran Phelan and Mrs Joanne Phelan engaged the respondent, Thompson Sustainable Homes (WA) Pty Ltd, to construct a residence for them on their property in Jane Brook, Western Australia.
2. Almost two years later, the applicants made a home building work contract complaint to the Building Commissioner against the respondent under s 5(2) of the Building Services (Complaint Resolution and Administration) Act 2011 (WA) (the BSCRA Act). The complaint was made in circumstances where there had been 'no shovels in the dirt', with the applicants claiming that the respondent had repudiated the contract for the reasons set out in a breach notice dated 14 April 2023 and in a termination notice dated 5 May 2023.
3. The applicants seek compensation for the loss and damage they claim they incurred because of the breach and subsequent termination of the contract. Specifically, their claim for loss and damage is on a 'loss of bargain' basis. They seek compensation for the difference between the cost to construct the residence with another builder and the contract price.
4. On 11 October 2023, the Building Commissioner referred the complaint to the Tribunal.[1]
5. The matter progressed through the Tribunal process and was listed for a final hearing on 8 October 2024.
6. However, the matter was not heard on this date. At the outset of the hearing, counsel for the respondent, Ms Horwood, indicated the respondent had, very late on 7 October 2024 lodged with the Tribunal, as well as provided the applicants with, a written submission raising the issue of the Tribunal's jurisdiction to determine the matter or award the compensation sought by the applicants.
7. The jurisdiction of the Tribunal to deal with the applicants' complaint was challenged having regard to:

(a) the basis for the application, being a repudiation of the contract resulting in a termination;

(b) the nature of the compensation sought, namely loss of bargain damages; and

(c) the applicants no longer being in a position to build on the site, given they have sold it.

1. The respondent, in disputing the jurisdiction of the Tribunal to deal with the applicants' complaint, seeks that the proceeding be dismissed.
2. Notwithstanding the late application, the applicants prepared and filed on the morning of the hearing, a written response to the jurisdictional arguments raised by the respondent. In their response, the applicants assert that there has been a breach of a clause of the home building works contract between the parties. They further assert that this brings their complaint within s 17 of the HBC Act and s 5(2) of the BSCRA Act, and therefore within the jurisdiction of the Tribunal to consider.
3. At the allocated hearing time, Ms Horwood and the representative of the applicants, Mr Will Vogt, presented oral submissions.
4. In the interests of affording natural justice to the applicants, we adjourned the proceeding to enable further material to be provided by the applicants relevant to the preliminary issue. This material, which included a statement prepared by the second named applicant, was provided by the due date of 29 October 2024.

1. The preliminary issue for determination in this proceeding is whether the Tribunal has jurisdiction to determine the applicants' complaint referred to it by the Building Commissioner.
2. For the reasons that follow, we conclude that the Tribunal does have jurisdiction to deal with the applicants' complaint. This means that the respondent's application should be dismissed.

1. The long title to the BSCRA Act sets out that it is an Act to provide for, among other things, a system for dealing with complaints about building services and home building work contract matters.
2. Section 5(2) of the BSCRA Act provides that an owner or builder under a home building work contract may make a complaint to the Building Commissioner about a matter referred to in the Home Building Contracts Act 1991 (WA) (HBC Act) s 17 or s 20 or Sch 1 cl 5. Such a complaint is defined as a 'HBWC complaint' in s 3 of the BSCRA Act.
3. 'Home building work' is defined in s 3 of the BSCRA Act and s 3 of the HBC Act to mean the whole or part of the work of, among other things, constructing or reconstructing a dwelling, placing a dwelling on land, or altering, improving or repairing a dwelling.
4. A 'home building work contract' is defined in s 3(1) of the HBC Act as a contract between a builder and an owner for the performance by the builder of home building work.
5. An 'owner' in relation to a home building work contract is defined in s 3 of the BSCRA Act and s 3(1) of the HBC Act to mean the person for whom or which home building work is to be performed under the contract.
6. Section 17 of the HBC Act relevantly provides that an owner under a 'home building work contract' may make a HBWC complaint if they claim that there has been a breach of: the contract, not being a breach in respect of which a building remedy order may be made; or a provision of Pt 2 of the HBC Act.
7. Section 20 of the HBC Act provides that if a home building works contract is terminated under s 4(5), s 10(4) or s 14(3) or Sch 1 of the HBC Act,[2] the owner may make a HBWC complaint claiming they are entitled to the return or repayment of the whole or part of any consideration, or the value of any consideration, given by them under or in relation to the contract.
8. Schedule 1 cl 5 provides that an owner may make a HBWC complaint if they consider that the amount of a price increase notified to them by a builder is excessive or unjustified.

The discretion of the Tribunal to deal with a HBWC complaint

1. Where a HBWC complaint is referred to the Tribunal by the Building Commissioner under s 11(1)(d) of the BSCRA Act, s 43(1) of the BSCRA Act gives the Tribunal the power to deal with it.
2. Section 43 (1)(a) of the BSCRA Act provides that the Tribunal may, if satisfied that the order is justified, make a HBWC remedy order. Or, if the Tribunal is not satisfied that a HBWC remedy order is justified, it may under s 43(1)(b), decline to make the order.
3. In Deshmukh and Distinctive Building Services Pty Ltd [2024] WASAT 15, the Tribunal considered the proper construction of the discretion to make a HBWC remedy order under s 43(1) of the BSCRA Act. Senior Member Aitken at [58] - [60] sets out, and we adopt his analysis, as follows:
   1. The ordinary meaning of the term 'justified' includes 'acceptable or having good cause or reason' and 'supported by reason, evidence, or right; warranted'.
   2. In my view the considerations concerning whether a HBWC remedy order is justified to resolve a HBWC complaint that a respondent has breached a home building work contract are as follows:

(1) Is there a valid home building work contract between the applicant and the respondent to the proceeding?

(3) Has the respondent breached the relevant terms of the contract?

(4) Has the applicant suffered loss, damage, or detriment which can be addressed by a HBWC remedy order?

1. In my view, if the Tribunal is satisfied that there is a valid home building work contract between the applicant and the respondent, and that the respondent has breached a relevant term of the contract which can be addressed by way of a HBWC remedy order then the Tribunal is required to make a HBWC remedy order. It then has a discretion regarding the HBWC remedy order it will make under the provisions of s 41(2) of the BSCRA Act.

1. Section 41(2) of the BSCRA Act sets out that a HBWC remedy order, in the context of a claimed breach of a HBWC, may consist of one or more of the following:

(a) an order requiring any specified work to be done;

(b) an order that a person pay a specified amount payable under the contract;

(c) an order declaring that a specified amount is not payable to a person under the contract and, if already paid, an order that the builder or owner repay that amount;

(d) an order that a person pay specified compensation for loss or damage caused by a breach of the contract or of a provision of Pt 2 of the HBC Act; and/or

(e) an order declaring that a specified amount of money claimed or money claimed for specific work is not payable by a person.

1. Accordingly, for the Tribunal to be conferred with jurisdiction under the BSCRA Act to determine the applicants claim for a HBWC remedy order under s 43 of the BSCRA Act, it will depend on whether the applicants made a complaint to the Building Commissioner, as owners under a home building work contract, about a matter referred to in either s 17 or s 20 or Sch 1 cl 5 of the HBC Act.

1. As set out earlier in this decision, the respondent's first jurisdictional objection is that the basis for the applicants' application, being a repudiation of the contract resulting in the termination, does not enliven the relevant provisions of the HBC Act. The respondent says that a HBWC complaint was not able to be made by the applicants to the Building Commissioner. And therefore, the complaint should not have been referred to the Tribunal for determination.
2. As an alternative objection, the respondent submits that the Tribunal can only award compensation for loss or damage caused by any breach of the contract pursuant to s 41(2)(d) of the BSCRA Act. This means, the respondent says, that the Tribunal is unable to award the compensation, namely 'loss of bargain' damages, sought by the applicants in this matter.
3. Third, in order to recover loss of bargain damages, the applicants need to be able to satisfactorily perform their obligations into the future. The respondent says that the applicants cannot do this, given that they have sold the site on which the house was to be constructed.
4. We consider that the second and third arguments expounded by the respondent in respect of the applicants claim for compensation for loss of bargain damages are not relevant to the issue of whether the applicants' application is within the Tribunal's jurisdiction. That is because whether the Tribunal has jurisdiction turns solely on the question of whether, pursuant to s 5(2) of the BSCRA Act, the applicants made a complaint to the Building Commissioner about a matter referred to in either s 17 or s 20 or Sch 1 cl 5 of the HBC Act.
5. If the applicants' complaint was properly made under s 5(2) of the BSCRA Act, the Tribunal will have jurisdiction to deal with the HBWC complaint in accordance with s 43(1) of the BSCRA Act. Adopting the approach of SM Aitken in Deshmukh and Distinctive Building Services Pty Ltd, that will then involve a consideration by the Tribunal of the following:

(b) Did the respondent breach the terms of the contract?

(c) Have the applicants' suffered loss, damage or detriment which can be addressed by a HBWC remedy order?

1. It is our view, therefore, that the respondent's arguments around the applicant's 'loss of bargain' damages claim and the impact of the sale of their Jane Brook property, are relevant to the Tribunal's task of deciding whether a HBWC remedy order is justified when it comes time to deal with the applicant's HBWC complaint.

Does the applicants' complaint enliven any of the relevant HBC Act provisions?

1. The respondent submits that the BSCRA Act contemplates three types of complaints about matters referred to in the HBC Act which may be made by an owner to the Building Commissioner:

(a) breaches of contract, where a contract remains on foot (under s 17);

(b) contracts terminated under specified provisions (s 20); and

1. The respondent explains that the meaning given to written laws is to be approached in accordance with the general principles of construction relevantly summarised in Commissioner of Police v Thayli Pty Ltd [2020] WASC 43 as follows:

The primary object of statutory construction is to construe the relevant provision so that it is consistent with the language and purpose of all the provisions of the statute. The importance of construction of legislation is to begin in the text itself by regard to its context and purpose. Statutory context within immediate provisions and the whole of an Act is to be considered from the beginning of the task.

...

...context includes the existing state of the law, the history of the legislative scheme and the mischief to which the statute is directed.

(Footnotes omitted)

1. The respondent also references the case of Gemmill Homes Pty Ltd v Sanders [2018] WASC 179 to explain the purpose of the BSCRA Act and the basis for the remedies provided under it.
2. The respondent's position is that having regard to the structure of the BSCRA Act, the applicant's complaint does not fall within any of the permitted categories of complaint that may be referred to the Building Commissioner.
3. It is submitted by the respondent that the applicants' complaint does not fall under s 17 of the HBC Act, as that section is intended to apply where an owner elects to confirm the contract and seek damages for breach. In this case, the respondent says that although the application before the Tribunal purports to relate to a breach of contract, by the date of the complaint to the Building Commissioner the applicants had elected to terminate the contract. Therefore, with the contract no longer on foot, s 17 of the HBC Act does not apply.
4. The respondent submits, as we understand it, that s 20 of the HBC Act governs a party's entitlements where a home building works contract has been terminated. The respondent clarifies, however, that s 20 of the HBC Act relates to contracts terminated under specified provisions: s 4(4), s 10(4), s 14(3) or Sch 1 of the HBC Act, and also limits the complaint an owner may make under s 5(2) of the BSCRA Act to claims that the owner is entitled to the return or repayment of the whole or any part of any consideration, or the value of any consideration, given by the owner under or in relation to the contract. In circumstances where the contract between the parties was not terminated under any of these specified statutory provisions, it is submitted that s 20 does not apply in this case.
5. The applicant's complaint does not concern any allegation relating to a price increase review. Given this, it is the respondent's submission that Sch 1 cl 5 does not apply either.
6. By way of response to this jurisdictional objection of the respondent, the applicants submit that there is nothing on the plain wording of s 17(1)(a)(i) of the HBC Act or s 5(2) of the BSCRA Act which confines the type of complaints which may be made in relation to home building works contracts which have not been terminated.
7. The applicants say that for this submission of the respondent to succeed, the Tribunal would be required to read s 17 of the HBC Act with an added gloss which is not supportable by reference to the plain words of the section.
8. The applicants submit that the fact that s 20 of the HBC Act is to operate in certain circumstances where a statutory right to terminate a home building works contract has been exercised is insufficient for the Tribunal to draw an inference that s 17 is to be reserved to scenarios where the home building works contract remains on foot.
9. The applicants also submit that the respondent proposes a construction of s 17 which is not consistent with the intentions, either stated or inferred, of the legislature.
10. It is the applicants' position that the respondent has breached its obligations under the terms of the HBWC contract, entitling the applicants to terminate the contract. Additionally, they assert that the breach of a clause of the HBWC contract brings it squarely within s 17 of the HBC Act and s 5(2) of the BSCRA Act, and therefore perfectly within the jurisdiction of the Tribunal to consider.

1. We understand it to be uncontroversial, and so accept, that this matter concerns a dispute relating to a home building works contract signed by the applicants as owners and the respondent as the builder in November 2021.
2. We also acknowledge that it is not in dispute that the home building works contract was ultimately terminated on the basis of a claimed breach of the contract. Noting however, that each party has their own position in respect of the termination, which is yet to be borne out by the evidence.
3. Accordingly, a specified statutory right to terminate the contract under s 19 due to a breach of s 4(5), s 10(4) or s 14(3) or Sch 1 of the HBC Act was not exercised by either the applicants or respondent. Therefore, s 20 of the HBC Act is not relevant for present purposes. Nor is it necessary for us to deal with Sch 1 cl 5 given that the applicants' complaint does not concern a review of the amount of a price increase matter.
4. That leaves us with the issue of deciding whether the applicants made a complaint to the Building Commissioner under s 5(2) of the BSCRA Act about a matter referred to in s 17 of the HBC Act. In determining this issue, we will have regard to the proper construction of these statutory provisions.
5. Principles of construction are summarised by the Tribunal in The Owners of 52 Mill Point Road Strata Plan 62152 v Hanssen Pty Ltd [2021] WASAT 102, at [51]:

In interpreting legislation the starting point for analysis is the text of the legislation and not judicial statements of the common law: Visy Paper Pty Ltd v Australian Competition and Consumer Commission [2003] HCA 59; (2003) 216 CLR 1. Further, the overall objective of statutory construction is to give effect to the purpose of Parliament as expressed in the text of the statutory provisions: Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 35; (1998) 194 CLR 355 at 381. Finally, in deriving meaning from the text, so as to fulfil the purpose of Parliament, it is a mistake to consider statutory words in isolation. The proper approach demands the derivation of the meaning of words from the legislative context in which those words appear. Specifically, it requires an examination at the very least the sentence, often the paragraph, and preferably the immediately surrounding provisions (if not a wider review of the entire statutory context) to identify the meaning of the words in the context in which they are used: Collector of Customs v Agfa-Gevaert Ltd [1996] HCA 36; (1996) 186 CLR 389 at 396 to 397, quoting R v Brown [1996] 1 AC 543 at 561; Minister for Immigration and Multicultural Affairs v Khawar [2002] HCA 14; (2002) 210 CLR 1 at 36 and [109; SGH Ltd v Federal Commissioner of Taxation [2002] HCA 18; (2002) 210 CLR 51 at 91 and [88].

1. As set out earlier, by its long title, the BSCRA Act identifies that it is to provide for, among other things, a system for dealing with complaints about home building work contract matters. It is in this context that we will consider what the proper construction of s 5(2) of the BSCRA Act is, as well as s 17 of the HBC Act referred to therein, to ultimately decide whether a HBWC complaint has been made by the applicants.
2. To determine and give effect to the legislative purpose of statutory provisions, the first step is to have regard to the text itself.
3. Section 17 of the HBC Act provides:
   1. Breach of contract or Part 2, or entitlement to compensation, procedure in case of

If an owner or builder under a contract claims that -

(i) the contract, not being a breach in respect of which a building remedy order may be made under the Building Services (Complaint Resolution and Administration) Act 2011;

(ii) a provision in Part 2;

then, subject to the Building Services (Complaint Resolution and Administration) Act 2011, the owner or builder may make a complaint under section 5(2) of that Act.

1. In our view, there is little need to go past the words of s 17, which include defined terms, to understand the preconditions which enable an owner or builder to make a complaint to the Building Commissioner under s 5(2) of the BSCRA Act. They are that if an owner or builder under a contract claims that there has been a breach of contract, not being a breach in respect of which a building remedy order may be made under the BSCRA Act, they may make a complaint under s 5(2) of the BSCRA Act.
2. The text of s 5(2) of the BSCRA Act is, in our view, also clear. The language identifies the expressed intention of the legislature to enable an owner or builder under a home building work contract to make a complaint to the Building Commissioner about a matter referred to in s 17 (or s 20 or Sch 1 cl 5) of the HBC Act.
3. Therefore, in our view, if an owner or builder under a home building work contract claims that there has been a breach of that contract, this is a matter under s 17 of the HBC Act which enables them to make a complaint to the Building Commissioner under s 5(2) of the BSCRA Act.
4. It is the respondent's submission that having regard to the structure of the BSCRA Act, s 17 of the HBC Act is intended to apply where an owner elects to affirm the contract and seek damages for breach. We consider this submission to be flawed because on the respondent's construction of s 17 of the HBC Act, additional words have been included, which invariably changes the meaning of the statutory language. This is because we have construed s 17 of the HBC Act to provide an avenue for either an owner or builder under a home building work contract to make a complaint in circumstances where there is a claimed breach of the contract. Having given careful consideration to the proper construction of s 17 of the HBC Act, in our view, there is nothing on a plain reading of it that excludes complaints being made about a breach of a contract that has subsequently been terminated.
5. As for the respondent's submission that s 20 of the HBC Act governs a party's entitlements where a home building works contract has been terminated, we observe that this provision is enlivened when a statutory right to terminate a home building works contract under a specified provision - either s 4(5), s 10(4) or s 14(3) or Sch 1 of the HBC Act - has been exercised. In our view, therefore, s 20 of the HBC Act has no bearing on the proper construction of s 17 of the HBC Act. Nor is it relevant to the circumstances of this case.
6. For these reasons, the Tribunal is satisfied, and so finds, that the applicants' claim that there has been a breach of the home building works contract, brings it within s 17 of the HBC Act and s 5(2) of the BSCRA Act. In addition, the Tribunal is satisfied and so finds that these provisions give the Tribunal jurisdiction to proceed to hear and determine the applicants' complaint under s 43 of the BSCRA Act, referred by the Building Commissioner pursuant to s 11(1)(d) of the BSCRA Act.
7. Accordingly, the Tribunal finds it has jurisdiction to determine the applicant's application.

1. The Tribunal is satisfied and so finds that the Tribunal has jurisdiction to hear and determine the applicants' complaint made to the Building Commissioner pursuant to s 5(2) of the BSCRA Act about a matter referred to in s 17 of the HBC Act.

1. On the preliminary issue, the Tribunal does have jurisdiction to deal with the applicants' complaint.
2. The respondent's application is dismissed.
3. By 1 April 2025, the parties must file with the Tribunal and give to the other party a written statement of all dates in April, May and June 2025 on which they or their witnesses will not be available to attend a final hearing of this matter.
4. After 1 April 2025, the Tribunal will list the matter for a final hearing.

I certify that the preceding paragraph(s) comprise the reasons for decision of the State Administrative Tribunal.

[1] Under s 11(1)(d) of the BSCRA Act the Building Commissioner may refer a home building work contract complaint to the Tribunal, which becomes a proceeding in the Tribunal pursuant to s 42(1) and s 42(3) of the State Administrative Tribunal Act 2004 (WA). Under s 12(a) of the BSCRA Act the person/s who have made the complaint to the Building Commissioner become the applicant/s in the proceeding.

[2] A termination under s 4(5) of the HBC Act may occur if a contract is not in writing, is unsigned, or a prescribed explanatory notice of the relevant provisions of the HBC Act is not given to an owner before they sign the contract. A contract can be terminated under s 10(4) of the HBC Act if it provides that the builder is entitled to demand or receive certain prohibited deposits and progress payments. Section 14(3) of the HBC Act enables an owner to terminate a cost plus contract that does not meet prescriptive requirements, including that it be in writing and clearly identified as a 'cost plus contract'. Schedule 1 provides for the consequences of non­fulfilment by either an owner or builder of conditions set out in s 9(1) of the HBC Act.