The Owners-Strata Plan No.53094 v Fair Trading Administration Corporation & 1 Ors

CATCHWORDS : Appeal pursuant to s67 - narrow ambit of appeal - not synonymous with error in point of law or question of law - allegation of no evidence to support findings - time limitations - discretion to extend time - threshold requirement.

LEGISLATION CITED : Home Building Act 1989 (NSW) Consumer Trader and Tenancy Tribunal Act 2001 (NSW)

Alex Constructions Pty Limited v John Zavodnyik & Ors [2004] NSWSC 1152 Australian Broadcasting Tribunal v Bond and Others (1990) 170 CLR 321 at 356 CASES CITED : Fair Trading Administration Corporation v The Owners-Strata Plan No. 43551 [2002] NSWSC 624 Janos Hoey v Consumer Trader and Tenancy Tribunal [2002] NSWSC 1023 Kalokerinos v HIA Insurance Services P/L [2004] NSWCA 312 McCallum Developments Pty Ltd v The Owners-Strata Plan No. 53908 [2002] NSWSC 1103

The Owners-Strata Plan No.53094 PARTIES : Fair Trading Administration Corporation The Consumer, Trader and Tenancy Tribunal of New South Wales

COUNSEL : Mr I Jackman SC / Mr J.J.Young (Pl) Ms.M. Painter (Def)

SOLICITORS : Andreones Lawyers (Pl) Legal Services of Office of Fair Trading (Def)

LOWER COURT JURISDICTION : Consumer Trader and Tenancy Tribunal of NSW

• 1 - IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION

30112/06 The Owners-Strata Plan No.53094 v Fair Trading Administration Corporation & 1 Ors

JUDGMENT 1 HIS HONOUR: This appeal concerns claims made pursuant to the BSC Comprehensive Insurance Scheme (the scheme) established pursuant to the Home Building Act 1989 (NSW). The plaintiff is the Owners Corporation. It came into existence on 14 August 1996. The premises were located at 188 Chalmers Street, Surry Hills. The building work commenced on either 30 August 1995 or 10 November 1995. Claims were made on behalf of both the Owners Corporation and owners of individual lots. The claims concerned, inter alia, leaking bathrooms. It was common ground that these were to be regarded as major structural defects. 2 The claims were rejected in part because such part had been brought out of time. On 11 November 2005, an appeal was brought in the Consumer, Trader and Tenancy Tribunal (the Tribunal). At a directions hearing on 27 March 2006, the parties consented to the determination of preliminary questions as follows:- "(a) Did the respondent, in its determination dated 11 October 2005, correctly decline part of the applicant's insurance claim on the basis that such parts of the claim were notified to the respondent "after 1 August 2002" and are therefore out of time? (b) Did the respondent, in its determination dated 23 January 2006, correctly decline part of the owners corporation's insurance claim on the basis that the claim is outside the stipulated time frame under clauses 7 (1)(b) and 7)(1)(c) of the Comprehensive Insurance Scheme?" 3 A contested hearing took place before Tribunal member Deamer. A decision was made on 20 July 2006. The appeal was dismissed. Written reasons for decision were given on 10 August 2006 (the reasons). 4 The reasons contained, inter alia, the following [at p5]:- "So far as the first claim is concerned, accepting that the complaint form is correct, I find that the applicant became aware of the defects complained of on or about 30 October 1996. Notification should have been made by 30 April 1997. I find the notification to be 5 months out of time."

And [at p6]:- "I accept and find that the claims were notified outside the relevant time limits."

And [at p7]:- "I am not persuaded on the evidence that I should extend time for those claims of which the respondent has not already given approval in principle. I am not satisfied that there are any circumstances outside the control of the applicant that adequately explain the failure of the applicant to notify the respondent within the time limits imposed by the Act." 5 An application was made for a rehearing. The rehearing was not granted. 6 A Summons was filed in this Court on 8 September 2006. It purports to bring an appeal pursuant to s67 of the Consumer Trader and Tenancy Tribunal Act 2001 (NSW) (the Act). Such an appeal lies where the Tribunal decides a question with respect to a matter of law in any proceedings. There is an onus to satisfy the Court that the error justifies a disturbing of the decision. 7 The appeal was heard on 20 March 2007. Counsel for the parties relied on written submissions which were supplemented by oral argument. 8 The Summons contains a lengthy list of grounds. Fortunately, the plaintiff has distilled the areas of appeal as follows:- "THE QUESTIONS WITH RESPECT TO A MATTER OF LAW" 1. Is the finding that the owners corporation first became aware of the defects relating to leaking bathrooms on or about 30 October 1996 (rather than on or about 18 June 1997) (p 5.3 of the Reasons): (a) based on no evidence; and/or (b) an inference from facts which do not reasonably admit of the conclusion? 2. Is the finding that " the claims were notified outside the relevant time limits" (p 6.2 of the Reasons) irrelevant as a matter of law? 3. If the answer to Question 1 is "no", is the finding that the delay in notification was not due to circumstances outside the control of the owners corporation (p 7.6 of the Reasons) based on an erroneous construction of cl 7(2), in that cl 7(2) is not directed to whether timely notification was outside the control of the beneficiary, but whether the delay in notification was "due to circumstances" that were outside the control of the beneficiary?"

9 These questions and what was submitted by the plaintiff make no mention of a challenge to the rehearing. Presumably, this aspect of the appeal was not pressed because no appeal lies from a refusal of an application for a rehearing (s68(8) of the Act). 10 I will now briefly return to matters concerning the Scheme. There is no dispute that the plaintiff is a "beneficiary" within the meaning thereof. What the Court is presently concerned with falls within the losses specified in (d) and (e) of clause 5(1). Clause 7 deals with the matter of time limitations. The relevant provisions are as follows:- "7. (1) Subject to subclause (2), to qualify for the benefits under this scheme, the beneficiaries must notify the Corporation in writing of the matters that could give rise to the losses referred to in clause 5 or 5A within the following times: (a) for loss in relation to incomplete residential building work - within 12 months from: (i) the contract date; or (ii) the date provided in the contract for commencement of work; or (iii) the date work ceased on the project, whichever is the latest; (b) for loss relating to heads of claim in clause 5(1)(d) or (e) incurred in rectifying major structural defects or in repairing damage to the dwelling that has occurred in consequence of major structural defects - within 6 months after the beneficiary first becomes aware of the defect, but no later than 7 years from: (i) the commencement of insured building work which is not also insured owner-builder work; or (ii) the date of issue of the owner-builder permit for insured owner-builder work;" ….. 11 It can be seen that what must be done by a beneficiary within time is to notify, in writing, of the matters that could give rise to the losses referred to in, inter alia, clause 5. 12 The Scheme contains a provision enabling an extension of time. Clause 7(2) provides as follows:- "(2) The Corporation may extend the times specified in subclause (1) if it is satisfied that the delay in notification was due to circumstances outside the control of the beneficiary". 13 This provision confers a discretionary power to extend time. The discretion is available for exercise when and if the Corporation is satisfied that the delay in notification was due to circumstances outside the control of the beneficiary. This may be seen as a threshold requirement. 14 The attention of the Court has been directed to certain cases which have considered the application of the Scheme (Fair Trading Administration Corporation v The Owners-Strata Plan No. 43551 [2002] NSWSC 624 and McCallum Developments Pty Ltd v The Owners-Strata Plan No. 53908 [2002] NSWSC 1103). 15 Before dealing with the three questions that have been distilled by the plaintiff, I should first look at the question of the ambit of the avenue of appeal provided by s67 of the Act. It is a question that has been posed in numerous cases (inter alia, Kalokerinos v HIA Insurance Services P/L [2004] NSWCA 312). What has been said in the cases may still leave doubt. 16 Leaving aside what may fall within the category of the doubtful, certain aspects of the ambit of the appeal seem to be clear. 17 The ambit of the challenge is narrow. It has to concern the deciding of a question of the nature specified in the section. It is not synonymous with the common law concept of error in point of law or the like (which is a familiar form of limited right of appeal conferred by Statute). It has been said to be drafted in careful language and it has been distinguished from the familiar forms used in the granting of limited rights of appeal by Statute. It has been said that it is restricted to cases where the appeal involves a pure question of law. 18 The section has to be construed in context (inter alia, having regard to other provisions thereof and the provisions of s65). Section 67(8) provides that a reference in the section to a matter of law includes a reference to a matter relating to the jurisdiction of the tribunal. Section 65 provides an avenue of challenge in respect of matters of jurisdiction and denial of procedural fairness. 19 It seems to me that the first of the three questions inevitably fails on the facts. There was evidence before the Tribunal member to support the finding of awareness of defects on or about 30 October 1996 (rather that on or about 18 June 1997). The evidence is to be found, inter alia, in the complaint form dated 1 September 1997. It does not assist the plaintiff if there is merely error in the fact finding process. 20 Leaving that matter aside, I do not accept the plaintiff's submission that an absence of evidence to support a finding of fact constitutes a ground of appeal falling within the ambit of s67 of the Act. 21 On this question, the plaintiff has referred to passages to be found in two decided cases (what was said by Burchett AJ (at paragraph 25) in Fair Trading and what was said by Mason J (as he then was) in Australian Broadcasting Tribunal v Bond and Others (1990) 170 CLR 321 at 356). 22 In my view, Mason J (as he then was) was addressing the question of what constitutes error in point of law and the like (he used the expression "question of law"). He was not addressing the question of the proper construction of s67. 23 There were many cases which were decided some years ago on the basis that the ambit of s67 coincided with error in point of law. In certain of them there had been a consensus between Counsel as to the ambit of appeal and courts had proceeded on the assumption that the consensus correctly represented the ambit of appeal (see, inter alia, Janos Hoey v Consumer Trader and Tenancy Tribunal [2002] NSWSC 1023). Perhaps, what was said by Burchett AJ can be so explained. 24 However, the better view seems to be that he put his mind to what was contemplated by an "error of law" (rather than the unique language of s67). He erroneously took the view that s67 had the meaning of what had been the position at common law, and failed to address the particular provisions of the section. As a consequence he addressed the wrong question. Whatever be the position, I prefer a different view. 25 I consider that the narrow ambit of a s71 appeal excludes the "no evidence" ground (whether there is any evidence of a particular fact). It is a view that I have expressed in other cases (see, inter alia, Alex Constructions Pty Limited v John Zavodnyik & Ors [2004] NSWSC 1152).

26 The second of the three questions requires but brief mention. In the reasons, the Tribunal member did erroneously refer to the claims being notified outside the relevant time limits. What must be done to satisfy the time limitations is a notification in writing of the matters that could give rise to the subject losses. However, nothing turns on this error. It is regarded by the plaintiff as being irrelevant and the error does not justify the disturbing of what was done by the Tribunal member. 27 I now turn to the third of the three questions. This question labours under misconception. Apart from the matter of alleged erroneous construction, the Court was also directed to what was said to be irrelevant matters which were erroneously taken into account. 28 I do not accept the contention that the Tribunal member erroneously construed clause 7(2). In my view, she did not extend the limitation period because she was not persuaded that the threshold requirement had been satisfied. In those circumstances, the discretionary power could not be exercised. The fate of the application for extension of time turned on findings of fact. 29 This question threw up one further matter. That is, whether or not the taking into account of irrelevant material would constitute a ground of appeal pursuant to s67. As the matter was not argued, I need take it no further. It suffices to say, that there is a view that it would not. 30 The appeal fails. The Summons is dismissed. The plaintiff is to pay the costs of the proceedings. The exhibits may be returned. **********

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