Red Design Pty Ltd v Department of Customer Service [2025] NSWCATOD 67

(a) involved a significant number of defective works and was not done with due care and skill and in accordance with the plans and specifications set out in the contract (s 18B(1)(a))

(b) was not done with due diligence and within reasonable time (s 18B(1)(d)).

1. On 5 December 2024, the Respondent found that the Applicant was guilty of improper conduct for breaching a statutory warranty under s 51(1)(c) of the Home Building Act. As a result of this finding, the Respondent decided to take the following disciplinary action under the Home Building Act:

(1) Reprimand the Applicant (s 62(1)(b)).

(2) Require the Applicant to pay a penalty in the sum of $2,500 within the period set out on the penalty notice (s 62(1)(c)).

(3) Vary the authority held by the Applicant by imposing the following conditions on the Applicant's contractor licence for a period of three years:

(a) The Authority Holder is required to, within three months of this condition, create and implement a documented quality assurance system to ensure that the Authority Holder complies with all relevant legislative obligations in relation to the Authority Holder's operations as they relate to carrying out operations as an Authority Holder. The documented quality assurance system must meet the requirements of ISO 9001:2015 - Quality management systems.

(b) The Authority Holder is required to, within 12 months of this condition, and on an annual basis thereafter, engage a suitably qualified independent expert to audit the documented quality assurance system referred to in the condition above in relation to the following:

(i) Whether the documented quality assurance system will ensure the Authority Holder's operations comply with the Authority Holder's legislative obligations as an Authority Holder.

(ii) Whether the documented quality assurance system is being implemented in practice by the Authority Holder.

(iii) Whether there are best practice improvements that can be made to the Authority Holder's documented quality assurance system and a description of those improvements.

(c) Keep and retain records of compliance with the above conditions and provide those records on request to the Secretary.

1. After considering the submissions made by the Applicant, the Respondent noted the following in its reasons for this decision:

(a) The Applicant did not contest that the works were defective and stated that the defects had been rectified.

(b) The Applicant submitted that any incomplete or defective work that remained outstanding was either outside the scope of work in the contract, or as a result of damage caused by a third party.

(c) The Applicant submitted the delays were caused due to the homeowners taking early possession of the property, an Apprehended Violence Order (AVO) matter and an ongoing mediation matter with the homeowners. However, there had been no evidence produced by the Applicant that either Director took reasonable steps to ensure the rectification order was complied with. The AVO permitted contact with the homeowners through their lawyers.

(d) The Applicant submitted that the rectification work was carried out in November 2023, however, did not provide evidence to verify this claim. The rectification work could not have been carried out by that time as the initial inspection was conducted on 8 February 2024 with the rectification order issued on 14 February 2024 and due to be complied with by 15 April 2024.

(e) The Applicant stated that they have robust systems in place to monitor compliance and were not aware of any breaches. However, the breaches of statutory warranties were set out in the rectification order and the Building Investigation Report. There was no evidence provided of what robust systems were in place to monitor compliance.

(f) The Applicant indicated that the homeowners failed to make the final progress payment, which delayed the rectification work. However, the rectification order outlined that the homeowners were required to provide reasonable access to the site, and there was no evidence to suggest that access to the property was not granted. There were also no conditions in the rectification order specifying that progress payments were to be made before complying with the rectification order.

(g) There were no details submitted by the Applicant that specifically took accountability for the defective work or the identified lack of due care, due diligence and completion within a reasonable timeframe.

1. The Respondent found the harm associated with the conduct to be major as a consumer was impacted by the conduct of the Applicant. The Respondent found that the conduct resulted in delays in the rectification and completion of the building works, which posed a risk to public confidence in the regulatory regime. The Respondent considered that the Applicant's conduct was negligent because the Applicant failed to take necessary steps to avoid the outcome and the Applicant's conduct fell short of the standards expected by members of the public.
2. On 2 January 2025, the Applicant sought an internal review of this decision. The internal review was completed and sent via email to the Applicant on 22 January 2025. The internal review affirmed the decision of 5 December 2024 with no variation to the disciplinary action imposed.
3. The Applicant filed an application for administrative review with the Tribunal on 28 March 2025, which was 29 days late. In the application the Applicant submits the following reasons for why the application was lodged outside the time allowed:

(a) Justice between the parties:

(i) The delay is not so significant as to cause prejudice to the Respondent.

(ii) There is no identifiable prejudice to the Respondent if an extension of time is granted.

(iii) As a result of the decision, the Applicant has been subjected to substantial penalties, including formal reprimands, pecuniary sanctions and the imposition of onerous conditions which have adversely affected them personally, professionally and financially.

(iv) Refusal of an extension of time would operate disproportionately and unjustly against the Applicant by effectively foreclosing any opportunity to seek review of the Respondent's decision, which would deny the Applicant procedural fairness.

(v) The Applicant has actively cooperated with the Respondent since the issuing of the Notice to Show Cause on 3 September 2024.

(b) Reasonable explanation for not lodging the application within the time permitted:

(i) Personal circumstances outside of their control.

(ii) Applicants were not legally represented at the time and were unfamiliar with the procedural requirements and repercussions of not lodging the application in time.

(iii) When engaged, the legal representative was unavailable due to personal circumstances outside of their control.

(iv) Delay was not deliberate or indicative of any disregard for the process.

(c) Strong prospects of success (of the application for administrative review).

1. A preliminary hearing was held on 15 May 2025 in relation to both the Application's application for extension of time and a stay of the decision. The Applicant relied on written submissions and an Affidavit by Mandeep Singh. Neither of the Applicant's Directors were present at the commencement of the hearing. Mandeep Singh was contacted after the commencement of the hearing, appeared via AVL and was cross-examined. When asked by the Tribunal, Mandeep Singh and Counsel for the Applicant were not able to confirm whether Generative AI was used in the preparation of the Applicant's submissions or evidence. The Applicant's solicitor, who had prepared these documents, was overseas at the time of the hearing and not contactable. The Respondent relied on written submissions. Both parties made oral submissions.

1. The Respondent's decision in this matter was made under the Home Building Act. In Secretary, Department of Customer Service v Bob Building Services Pty Ltd [2025] NSWCATAP 48 at [30], in relation to the purpose of the Home Building Act, the Appeal Panel stated:

The Home Building Act is generally regarded as consumer protection legislation. The Tribunal in McGufficke v Commissioner for Fair Trading [2022] NSWCATOD 176 at [48] noted that the overall purpose of the Home Building Act is to "protect consumers in the contracting for and the construction of residential buildings". There is thus a broad public interest in the integrity of the residential building sector and ensuring compliance with the regulatory regime. Housing is, after all, an important aspect of people's lives and a properly functioning building industry is needed to protect the community.

1. The objectives of the Home Building Act are not set out in the Act, however the functions of the Secretary in s 106 do give an indication as to the objectives of the legislation:

(a) to promote and protect the interests of owners and purchasers of dwellings (including the purchasers of kit homes) and users of water supplies, sewerage systems, gas, electricity, refrigeration and air conditioning,

(b) to set, assess and maintain standards of competence of persons doing residential building work or specialist work,

(c) to complement the work of industry organisations, public authorities and educational institutions in promoting standards,

(d) to give general advice and guidance to the public,

(e) to monitor the operation of insurance provided for the purposes of this Act.

1. Section 36(1) of the Civil and Administrative Tribunal Act 2013 (NSW) (NCAT Act) provides that the guiding principle for this Act and the procedural rules, in their application to proceedings in the Tribunal, is to facilitate the just, quick and cheap resolution of the real issues in the proceedings.

1. Rules 24(3) and 24(4) of the Civil and Administrative Tribunal Rules 2014 (NSW), provide that unless the Tribunal grants an extension under s 41 of the NCAT Act, an application for review of an administratively reviewable decision is to be made within 28 days after the day on which the Applicant was notified of the making of the administratively reviewable decision.
2. Pursuant to s 41 of the NCAT Act, the Tribunal may, of its own motion, or on application by any person, extend the period of time for the doing of anything under any legislation in respect of which the Tribunal has jurisdiction despite anything to the contrary under that legislation. Such an application may be made even though the relevant period of time has expired.
3. The grant of an extension of time is not automatic. Time limits are set to promote the orderly and efficient conduct of proceedings in the Tribunal, to provide certainty for the parties to proceedings, and to achieve finality in litigation. For these reasons, time limits should generally be strictly enforced unless the interests of justice require that the extension be granted: BKW v Department of Family and Community Services [2014] NSWCATAD 205, [18].
4. In Jackson v Land and Housing Corporation [2014] NSWCATAP 22 at [18] the Appeal Panel noted that the discretion in s 41 of the NCAT Act is unfettered but must be exercised judicially and having regard to the statutory command in s 36 of the NCAT Act that the guiding principle for the Act "is to facilitate the just, quick and cheap resolution of the real issue in the proceedings".
5. In Jackson at [22], the Appeal Panel set out the relevant considerations in deciding whether to grant an extension of time in which to lodge a Notice of Appeal. In BKW at [21], the Tribunal modified these principles for application to matters involving an administrative review (and referring to Hunter Valley Developments Pty Ltd v Cohen [1984] FCA 176; (1984) 3 FCR 344, from [18]):

(a) the length of the delay.

(b) the reason for delay.

(c) the nature of the decision the subject of review and whether there is an arguable case that the decision the subject of review is not the correct and preferred decision and should be set aside or varied, and

(d) prejudice to the respondent and any other interested person if strict compliance with the rules is applied.

1. In Tomko v Palasty (No 2) (2007) 71 NSWCA 369 at [14], the Court of Appeal stated that it may be appropriate to go further into the merits of a case if the explanation for the delay is less than satisfactory or if the opponent has a substantial case of prejudice and, in such a case, it may be relevant whether the Applicant seeking an extension of time can show that his or her case has more substantial merit than merely being fairly arguable.

1. Section 60(1) of the Administrative Decisions Review Act 1997 (NSW) (ADR Act), provides that subject to this section, an application to the Tribunal for an administrative review under this Act of an administratively reviewable decision does not affect the operation of the decision under review or prevent the taking of action to implement that decision.
2. Section 60(2) of the ADR Act provides that on the application of any party to proceedings for an application for an administrative review under this Act of an administratively reviewable decision, the Tribunal may make such orders staying or otherwise affecting the operation of the decision under review as it considers appropriate to secure the effectiveness of the determination of the application.
3. Section 60(3) of the ADR Act provides that the Tribunal may make an order under this section only if it considers that it is desirable to do so after taking into account:

(1) The interests of any persons who may be affected by the determination of the application, and

(2) Any submission made by or on behalf of the administrator who made the decision to which the application relates, and

(3) The public interest.

1. In AVS Group of Companies Pty Ltd v Commissioner of Police [2010] NSWCA 81 the Court of Appeal in considering s 60 of the ADR Act, stated at [21]:

A stay is commonly granted to preserve the status quo or the subject matter of an appeal (or review), pending a final determination of the appeal. It is granted in the course of an appeal (or review) as a step in the process of determining the subject matter of the appeal (or review).

1. In People with Disability Australia v Australian Human Rights Commission and Ors [2015] AATA 416 at 27, the former Administrative Appeals Tribunal stated in relation to a similar (but not identical) provision contained in s 41 of the Administrative Appeals Tribunal Act 1975 (Cth):

In many decisions exercising this power, the Tribunal generally has considered the merits of the application, any prejudice to the parties and/or others, the public interest in the grant of or refusal to grant a stay, the question of whether or not the review application will be rendered nugatory if a stay is not granted and also whether it is appropriate to preserve the status quo.

1. The Tribunal's decision as to whether or not to grant a stay does not determine the substantive review application of an applicant: DFS and DFT v Challenge Community Services [2017] NSWCATOD 177 at [18].

1. As noted above, the length of delay is 29 days.
2. The Applicant concedes in its submissions that the length of delay is not insignificant. The Applicant submits, however that the length of delay is not of such magnitude as to be disqualifying in the absence of serious prejudice of procedural obligations.
3. In relation to the length of the delay, the Respondent submits that:

(a) The delay of lodgement of the application for a month outside the 28-day prescribed period is significant.

(b) The internal review determination of 22 January 2025 provided sufficient information as to the right to lodge an application with the Tribunal and that this must be made within 28 days of the date of the determination.

(c) The Applicant had from 22 January 2025 to 20 February 2025 to apply to the Tribunal for an administrative review, however during this period, the Applicant did nothing, did not seek legal advice and did not approach the Tribunal.

(d) This behaviour should not be rewarded by the Tribunal.

1. The Tribunal is of the view that the length of delay is significant, particularly in circumstances where the Applicant had clear notice from the Respondent of the statutory time limit of 28 days in which an application for administrative review had to be made to the Tribunal.

1. Mandeep Singh stated in his affidavit, and during cross-examination, that the reasons for the delay included:

(a) That his 23-year-old son, who resides with him and his wife, underwent reconstructive knee surgery on 3 February 2025 following an accident that occurred in July 2024, and that this surgery required significant post-operative care, rehabilitation and consistent personal support from him. He had to attend chiropractic appointments (standard consultations) with his son on 17, 24 and 26 February 2025.

(b) That his son had turned to substance abuse after the knee surgery to cope with the pain, which had been difficult for their family.

(c) That his wife, who is employed full-time, was not able to provide substantial support to their son during work hours.

(d) That he has suffered severe psychological distress following a near-miss incident on 27 January 2025 in his employment as a train driver. He attended two psychology sessions between the date of the near-miss incident and 27 February 2025. His treating psychiatrist reported that he suffers from Post Traumatic Stress Disorder including anxious mood and loss of concentration. The psychiatrist also noted that he has a history of PTSD/adjustment disorder following a train track fatality in 2013 when he was driving the train.

(e) That he and his wife had their wedding anniversary on 25 January 2025, and they went out with their family to celebrate the occasion.

(f) That he attempted to delegate the task of managing the "appeal process" to his co-director, Pardeep Singh, however Pardeep Singh has limited proficiency in English and his "exclusive focus as a site-based builder supervising contractors rendered him unable to effectively handle administrative and legal responsibilities". Consequently, this attempt at delegation was unsuccessful.

1. Also, during cross-examination, Mandeep Singh stated:

(a) The impending internal review decision had been at the forefront of his mind, prior to 22 January 2025.

(b) He could not remember why he had not sought legal advice between 22 January 2025 and 25 January 2025.

(c) He had first contacted their solicitor about the internal review determination in the first week of February 2025.

(d) His brother, Pardeep Singh, ran the day-to-day operations of the company, and he (Mandeep Singh) did the administrative work. Pardeep Singh had not put on any evidence to support the application.

(e) He was working four hours a day, Monday to Friday in an administrative role with his other employment as a train driver, while under workers compensation due to the near-miss incident. He had five days off work after the near-miss incident and then returned to administrative work on reduced hours.

1. There is no reliable or corroborate evidence before the Tribunal as to why the other Director, Pardeep Singh, or anyone else on behalf of the company, did not have the ability to file the application within time. There is no evidence as to what prevented the Applicant's solicitor from filing the application within time, after being contacted by his client in the first week of February 2025. Mandeep Singh was clearly able to undertake administrative work in his other employment for four hours a day, five days a week from 3 February 2025. The care that Mandeep Singh was providing to his adult son in the aftermath of his son's knee surgery was not full-time care and did not prevent him from undertaking administrative work. There was evidence of a few appointments that Mandeep Singh had to attend after 22 January 2025, but these did not appear to be full-day appointments.
2. The Tribunal is therefore not satisfied that the reasons for the delay justified the Applicant filing the application 29 days late.

1. The Applicant has not filed any material yet in relation to the substantive application for administrative review. The Respondent is yet to file documents in accordance with s 58 of the ADR Act.
2. The Applicant submits that the decision under review "imposes significant licence conditions that carry commercial and reputational consequences." The Applicant submits that its "challenge raises serious questions as to the proportionality and reasonableness of those conditions, and whether they were imposed in accordance with law and procedural fairness." These are submissions that are made without any reliable evidence to support those submissions, even though the Applicant has had ample opportunity to file evidence in support of its application for extension of time and a stay. The Applicant was first directed to do this by 4 April 2025, and then after this direction was not complied with, by 24 April 2025. The submissions and affidavit of Mandeep Singh were not filed, however, until 14 May 2025.
3. During cross-examination, Mandeep Singh was asked about the impact of the Respondent's decision to impose disciplinary action against the Applicant and why he was contesting the decision. Mandeep Singh stated that:

(a) The reprimand was unfair and heavy handed and had resulted in reputational damage. The Applicant was losing clients. The Applicant obtains clients through word of mouth and from people checking online. The Applicant had been operating for more than eight years and had a clean record.

(b) The penalty of $2,500 had not been paid by the Applicant as they were hoping to get the decision overturned. The Applicant had no problem in paying this amount. The Applicant had an annual turnover of $7 million in sales, although he was not aware of the profit.

(c) In terms of the conditions on the Applicant's contractor licence to create and implement a quality assurance system within three months and have an independent expert conduct an annual audit of this system, this would cost "hundreds of thousands" and he had spoken with other builders who had never heard of this condition.

(d) He had not obtained any quotes in relation to a quality assurance system or the conduct of independent expert audits.

1. The Respondent submits that the Applicant has "very little" prospects of being successful in this matter. The Respondent submits that the disciplinary action imposed considered the seriousness of the Applicant's breaches, the subjective factors relevant to an assessment of culpability, the objective seriousness of the conduct from the viewpoint of the affected consumers and the Applicant's disciplinary history.
2. The Respondent also submits that the penalty amount of $2,500 (which had been reduced from a starting amount of $4,000) has not been paid yet by the Applicant. This is in circumstances where the payment would be reimbursed immediately by the Respondent if this part of the decision was stayed or set aside or varied by the Tribunal. The Respondent also submits that the amount of the penalty is at the lowest end of the scale.
3. In the absence of any evidence in support of the substantive application, the Tribunal is not able to assess to any significant extent whether the Applicant has an arguable case. On the evidence before the Tribunal, the Tribunal is not persuaded by the Applicant's argument that the disciplinary action was unreasonable in the circumstances. The Applicant has not provided any reliable evidence of financial hardship or adverse financial consequences or reputational damage caused by the disciplinary action. Despite having sufficient time since 5 December 2024 to do so, the Applicant has not properly enquired into the costs or practical requirements of the conditions imposed on the Applicant's contractor license.
4. As the explanation for the delay is less than satisfactory, the Applicant is obliged in the circumstances of this matter to demonstrate that its case has substantial merit rather than being fairly arguable and has not so demonstrated.

Prejudice to the Respondent/other interested persons if there is not strict compliance with the rules

1. The Applicant submits that there is no material prejudice to the Respondent if the Tribunal were to grant an extension of time. The Applicant submits that, on the other hand, the Applicant would suffer substantial prejudice if denied an opportunity to challenge the decision, including the ongoing operation of adverse licensing conditions, commercial disruption and reputational damage.
2. The Respondent submits that the Respondent would be prejudiced by incurring costs if the matter further proceeds and an administrative decision is reviewed out of the statutory time period of which the Applicant was aware.
3. The Respondent submits (in relation to the application for a stay, which would also be applicable if the application were to further proceed with an extension of time granted) that it would suffer prejudice as it takes a measured approach in all disciplinary actions and the facts establish that disciplinary action should have been taken in this matter to protect the public and ensure compliance with the Home Building Act.
4. The Respondent submits that there is prejudice to the Respondent in not having decisions it makes enforced, and that its decisions are to protect the public. The Respondent submits that the Applicant turned a blind eye to the rectification order which was legitimately issued, and the majority of the Applicant's claims about the homeowner's conduct occurred after the expected date of completion of the building works.
5. The Tribunal is not satisfied that there would be prejudice to the Applicant in terms ongoing operation of adverse licensing conditions, commercial disruption and reputational damage if an extension of time was not granted. This is because the Applicant has not provided any reliable evidence to establish that the disciplinary action has had or will have an adverse effect on the Applicant in terms of these matters.
6. The Tribunal accepts the Respondent's submissions that it would be prejudiced by ongoing costs of litigation particularly in circumstances where the Applicant has not made out that it has an arguable case for administrative review.
7. The Tribunal also accepts that given the overall purpose of the Home Building Act is to protect consumers and ensure compliance with the regulatory regime, there is significant prejudice to the Respondent and consumers if the Applicant and other home builders disregards the Respondent's regulatory actions and if there is not strict compliance with the requirements for commencement of administrative review applications. Noting that the administratively reviewable decision takes effect notwithstanding the application before the Tribunal, the Applicant did not provide any good reason or reliable evidence for why it had not paid the minimal penalty amount or made any proper enquiries to comply with the conditions imposed.

1. The Applicant submits that the "balance of justice and fairness favour the grant of an extension", and that it is "fair and equitable to extend the time for filing the application for administrative review."
2. In its practice and procedure, the Tribunal is required to give effect to the guiding principle of the NCAT Act and to facilitate the just, quick and cheap resolution of the real issues in the proceedings as required by s 36(1) of the NCAT Act.
3. Having considered the factors above in determining whether an extension of time should be granted, the Tribunal is satisfied that refusing to grant an extension of time is consistent with the guiding principle of the NCAT Act to facilitate the just, quick and cheap resolution of this matter.

1. In all the circumstances and for the reasons above, the Tribunal is not satisfied that it is an appropriate exercise of discretion for the Tribunal to extend the time for the Applicant's administrative review application to be filed. The Tribunal therefore refuses the application for extension of time and dismisses the application.
2. As the Tribunal has decided to refuse to extend the time and therefore dismiss the application, it is not necessary for the Tribunal to consider the Applicant's application for a stay of the Respondent's decision.

1. The Tribunal refuses to extend time for the filing of the Applicant's administrative review application filed on 20 March 2025.
2. The Applicant's administrative review application filed on 20 March 2025 is dismissed.

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.