Home Building Act warrantiesapplication out of timecompletion of building worksHB 14/13132
Publication restriction: Nil
Judgment (7 paragraphs)
[1]
Background
The applicant is the Owners Corporation of Strata Plan 78670 at 68-70 " - "Street Mona Vale. The respondent is the developer.
The application, as filed, concerned alleged defective works in relation to the concrete driveway, part of the common property which the applicant is liable to maintain pursuant to s 62 of the Strata Schemes Management Act 1996 ("the SSMA"). It was alleged that the driveway was so defective that it required demolishing and rebuilding at a cost of perhaps between $20,000.00 and $30,000.00.
The application was filed on 7 March 2014.
Earlier applications had also been filed in relation to the same defective works.
On 23 July 2013 a Mr Richard Chang filed an application in similar terms. It is agreed that Mr Chang, as an occupier, did not represent the Owners Corporation and had no standing to bring the application in respect of common property. That application was therefore withdrawn.
On 2 December 2013 another application ("the initial application") was filed by the current applicant (HB 13/63874), again seeking similar orders to the current application. In accordance with the usual procedures of the former Consumer Trader and Tenancy Tribunal, that matter was set down for a conciliated hearing on 15 January 2014. According to the Tribunal file, the notice of hearing was posted to the applicant at the street address of the premises. On 15 January 2014 the matter was dismissed by Member Sarginson as there was no appearance by the applicant and no satisfactory explanation for non-attendance was provided to the Tribunal.
As noted, the current application ("the second application") was filed on 7 March 2014. It was listed for Directions before me on 2 May 2014. It was noted on that date that the respondent alleged the subject works were completed more than 7 years prior to the application. Orders were made for the service of evidence and written submissions in relation to the preliminary jurisdictional issue and the applicant was ordered to file any amended application no later than 9 May 2014.
The amended application, which was filed on 12 May 2014, seeks orders that this matter be heard together with HB 13/63874 and sought additional orders in relation to allegations of defective works regarding rectification works apparently carried out by the respondent in relation to a telephone cable and a communications box in the basement car park in the scheme, during 2011 and 2012.
The amended application also sought the following order:
"The applicant asks that the Order dismissing proceedings HB 13/63874 be set aside pursuant to Regulation 9 of the Civil and Administrative Tribunal Regulations 2013 on the basis that the decision was made in the absence of the Applicant and has resulted in the Applicant's case not being adequately put to the Tribunal."
According to the Tribunal's file, the matter was then listed for a hearing on the papers on 22 July 2014. Despite that, it appears that on that date the respondent appeared before Senior Member Paull who was conducting a hearing list, and advised Senior Member Paull that the applicant's solicitor was not aware of the need to appear because the hearing was to be on the papers. It appears there was some confusion between the parties as to what was to occur on 22 July 2014. In any event, Senior Member Paull made detailed orders for the filing of further submissions in relation to s 3B of the Home Building Act 1989 ("the Act") and also that on the next occasion the parties were to appear in person.
The matter was listed for hearing before me on 15 September 2014. The parties made submissions in relation to the preliminary jurisdictional issue and the matter was then adjourned. Orders were made in relation the applicant filing further submissions. By consent, the decision on the preliminary issue was to be on the papers. This is that decision.
I also noted on 15 September 2014 that the respondent indicated it will not require reasons for the preliminary decision and both parties indicated costs will not be sought for the preliminary hearing. Because the issues raised are significant and quite complex, I consider it appropriate to provide written reasons.
[2]
Date of Completion of the Relevant Works
Under this heading I refer to the "original works", not the "rectification works" conducted in 2011 and 2012. As the parties agree in their submissions, there is little evidence on which to make a finding of the date of completion. The respondent's evidence is limited to payments made to subcontractors, at the latest 1 December 2006, as founding an inference that the work must have been completed prior to that date. However, there is no actual evidence as to the date the driveway was completed.
The applicant points to the Occupation Certificate, dated 7 March 2007, as the most probative "signpost" of the date of completion, and submits that time begins to run, for the purposes of s 48K of the Home Building Act, from that date.
In my opinion, the evidence of the respondent is at least suggestive that the subject works were completed by December 2006, provided I can be satisfied that there are no further invoices after that date. In any case, the effect of the date of the Occupation Certificate is to suggest the works were completed prior to that date. It would be unusual, in my experience, for the Occupation Certificate to be completed on the day the works were completed. Even if I were to accept the subject works were completed on 7 March 2007, the respondent submits the second application is filed late by one day: the time limitation expired on 6 March 2014: Griffith v Gates [2013] NSWCTTT 301 per Senior Member J Smith at [72]-[73].
Section 3B of the HB Act applies. Pursuant to that section, I make the following findings.
First, there is no evidence of a completion date in any relevant contract for the subject works.
Second, there is no evidence of the date of practical completion.
Third, there is no evidence of the date the respondent handed over possession of the work to the owner, or as to the last date the respondent attended the site to carry out work (other than work to remedy any defect that does not affect practical completion).
Fourth and finally, the only matter relevant to s 3B in regard to which there is evidence, is the date of issue of an occupation certificate under the Environmental Planning and Assessment Act 1979 that authorises commencement of the use or occupation of the works.
As I previously noted, I cannot accept that the evidence of the respondent in relation to the work being completed by 1 December 2006 does actually prove that submission.
Therefore, I find the date of completion of the works pursuant to s 3B of the HB Act was 7 March 2007. I do not need to consider the submissions of the parties in relation to determining the date of completion of the works as may be gleaned from decisions prior to the commencement of s 3B of the HB Act.
[3]
Second Application Filed Late?
It is now necessary to determine whether the second application, filed on 7 March 2014, was filed late.
In Griffith v Gates (supra), Senior Member Smith stated:
"[72] I am satisfied therefore that the correct interpretation to be placed on the facts of this case is that practical completion occurred (pursuant to s 3B(3)(d)) on 14 May 2003 which was 18 months after the issue of the owner-builder permit on 14 November 2001.
[73] The seven year warranty ran from that date and expired on 13 May 2010.
[74] The application was filed on 22 February 2013 which is outside of the warranty period provided by s.18E. Accordingly, pursuant to the HBA s 48K(7) the Tribunal lacks jurisdiction in respect of the claim.
[75] The application is therefore dismissed."
Senior Member Smith gave no reasons, nor was there any discussion by him or, apparently, submissions by the parties, as to the calculation of the warranty period.
The warranty periods are provided by s 18E of the HB Act. At the relevant time, this section was as follows:
18E Proceedings for breach of warranties
Proceedings for a breach of a statutory warranty must be commenced within 7 years after:
1. the completion of the work to which it relates, or
…
Section 48K(7) of the HB Act is in the same terms:
48K Jurisdiction of Tribunal in relation to building claims
(1) …
(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 was lodged is more than 7 years after:
(a) the date on which the residential building work the subject of the claim was completed, or
(b) …
In my opinion, the phrase "7 years after" means that time commences to run from the day following the date of completion of the works. "7 years after" 7 March 2007 is calculated by adding 365 days (or 366 days if that year includes February 29) to 7 March 2007. This complies with s 36 of the Interpretation Act 1987 (NSW):
36 Reckoning of time
If in any Act or instrument a period of time, dating from a given day, act or event, is prescribed or allowed for any purpose, the time shall be reckoned exclusive of that day or of the day of that act or event.
…
This interpretation accords also with Rule 1.11 of the UCPR. There is no definition or method of calculation of time otherwise relevant in the HB Act or the CAT Act.
It follows, therefore, that adding 365 days 7 times, plus the extra days for 29 February 2008 and 29 February 2012, the last day for filing the claim was 7 March 2014 and these proceedings are therefore within time.
In case I am wrong in that conclusion, I turn to consider whether it is appropriate to exercise my discretion to grant an extension of time to file an application to set aside the decision dismissing HB 13/63874 and then whether that decision should be set aside.
[4]
The Set Aside Application
Such an application is brought pursuant to Regulation 9 of the Civil and Administrative Tribunal Regulation 2013 which is relevantly as follows:
9 Additional power to set aside or vary decision determining proceedings
(1) In addition to any power that is expressly conferred on the Tribunal by the Act or enabling legislation to set aside or vary its decisions, the Tribunal may order that a decision it has made that determines proceedings be set aside or varied in either of the following circumstances:
(a) if all of the parties to the proceedings have consented to the making of the order to set aside or vary the decision,
(b) if the decision was made in the absence of a party and the Tribunal is satisfied that the party's absence has resulted in the party's case not being adequately put to the Tribunal.
…
(2) The Tribunal may make an order under this clause of its own motion or on the application of a party.
(3) Unless the Tribunal grants an extension under section 41 of the Act, an application for an order under this clause must be made within 7 days after the decision concerned was made.
(4) Except where the parties have consented to the making of the order, the Tribunal may not make an order under this clause unless the Tribunal has first:
(a) afforded the parties an opportunity to make submissions about the proposed order, and
(b) taken any such submissions into account.
(5) …
(7) If the Tribunal sets aside a decision under this clause, it may also set aside any orders that it made consequent on the decision that has been set aside.
Note. An example of such a consequent order may be an order for costs in the proceedings.
(8) …
The Appeal Panel of the Tribunal has recently considered the factors to be taken into account in relation to an application to extend time to file an appeal: Jackson v NSW Land and Housing Corporation [2014] NSWCATAP 22 in which the following summary was provided:
"22. The considerations that will generally be relevant to the Appeal Panel's consideration of whether to grant an extension of time in which to lodge a Notice of Appeal include:
(1) The discretion can only be exercised in favour of an applicant upon proof that strict compliance with the rules will work an injustice upon the appellant;
(2) The discretion is to be exercised in the light of the fact that the respondent (to the appeal) has already obtained a decision in its favour and, once the period for appeal has expired, can be thought of as having a "vested right" to retain the benefit of that decision and, in particular, where the right of appeal has gone (because of the expiration of the appeal period) the time for appealing should not be extended unless the proposed appeal has some prospects of success;
(3) Generally, in an application for an extension of time to appeal the Appeal Panel will be required to consider:
(a) The length of the delay;
(b) The reason for the delay;
(c) The appellant's prospects of success, that is usually whether the applicant has a fairly arguable case; and
(d) The extent of any prejudice suffered by the respondent (to the appeal); and
(4) It may be appropriate to go further into the merits of an appeal 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 appellant seeking an extension of time can show that his or her case has more substantial merit than merely being fairly arguable. [Citations omitted.]
Jackson also provides a valuable exposition of the principles giving a court or tribunal a discretion to extend time. There are two main principles: the object of the discretion is to prevent injustice, and there must be evidence to prove the fact that enforcement will lead to injustice. As stated by McHugh J in Gallo v Dawson [1990] HCA 30, 93 ALR 479 at [2]:
"The grant of an extension of time under this rule is not automatic. The object of the rule is to ensure that those Rules which fix times for doing acts do not become instruments of injustice. The discretion to extend time is given for the sole purpose of enabling the Court or Justice to do justice between the parties: … . This means that the discretion can only be exercised in favour of an applicant upon proof that strict compliance with the rules will work an injustice upon the applicant. In order to determine whether the rules will work an injustice, it is necessary to have regard to the history of the proceedings, the conduct of the parties, the nature of the litigation, and the consequences for the parties of the grant or refusal of the application for extension of time."
There is no reason why the above principles and the factors to be taken into account should not apply equally to the case of an application to extend time to set aside a decision of the Tribunal.
The applicant's case in relation to its application to extend time is that the applicant did not receive the notice of hearing of 15 January 2014 and therefore did not have an adequate opportunity to put its case to the Tribunal: Regulation 9(1)(b). If the applicant establishes that fact (that is, lack of an adequate opportunity), I am satisfied it would amount to an injustice upon the applicant, subject to consideration of the other factors set out in Jackson.
The applicant's evidence for its lack of opportunity is contained in Mr Latham's affidavit of 19 September 2014. Mr Latham (the applicant's solicitor) points out that in the initial application, as filed, he nominated his own email address as the address for service of correspondence, including any notice of hearing. That is correct. Despite that, Mr Latham asserts that no notice of hearing was sent to his email address and no such notice was ever received by him at his email address. I accept that evidence. The notice of hearing was in fact sent to the postal address of the applicant Owners Corporation as contained in the application form.
Mr Latham goes on to assert that never having received a notice of hearing (nor, apparently, the Notice of Order dated 15 January 2014 dismissing the application for non-appearance) and having received emails to him from members of the Owners Corporation inquiring as to what is happening to their application, he requested one of his employees to inquire with the Tribunal as to the delay, which I infer to mean the delay in receiving some notice of the first hearing. The attachments to Mr Latham's affidavit include a file note dated 28 February 2014 alleged to be made by that employee confirming the matter had been dismissed on 15 January 2014 for not-attendance.
I note that neither the notice of hearing nor the notice of order were returned undelivered to the Tribunal.
The applicant's evidence also includes an affidavit from Mr Robert Shaw dated 19 September 2014. Mr Shaw, who states he has been the Chairperson of the Owners Corporation since September 2013, gives evidence that the scheme's mailbox at the nominated postal address is cleared regularly by executive committee members and neither the notice of hearing, nor the notice of order, was received at that mailbox in the period after December 2013. I note the Tribunal has the correct postal address details.
The evidence of Mr Latham and Mr Shaw is not challenged. I accept that evidence and I find that the applicant did not receive notice of the hearing of the first application on 15 January 2014, nor did it receive any notice of the order made on that date until the telephone inquiry of 28 February 2014.
The second application having been filed on 7 March 2014, the delay in the applicant taking any steps in relation to the dismissal of the first application is one week only. The steps taken were to file the second application, rather than to apply to have the dismissal set aside. By 28 February 2014 the applicant would already have been required to apply for an extension of time as the relevant 7 day period within which to file an application for a set aside expired on 22 January 2014.
The explanation for the "first delay" between 15 January 2014 and 28 February 2014, a period just over 6 weeks, is that the applicant was unaware of the decision on the earlier date. Paragraph 22(4) of Jackson does not lay down a principle that there must be a reasonable explanation for the delay but that in the absence of such an explanation it may be appropriate to go into the merits of an appeal (as in that case), or the application to set aside in this case.
Before considering that point, I note that there are two further periods of delay: that between 28 February 2014 and 07 March 2014, and that between 7 March 2014 and the filing of the amended application on 12 May 2014. In my opinion, the "second delay" of 1 week does not require any further explanation as it is so brief and some little time was required to obtain instructions to file, and to prepare, the second application. The amended application, and the preliminary issue itself, were raised at the first hearing of the second application before me on 2 May 2014. The amended application was ordered by me to be filed on 9 May 2014 and was actually filed on 12 May 2014. The extra time is not consequential, in my opinion, and no further explanation is required for this "third delay".
In any event, supposing that the Tribunal considered it was necessary to consider the merits of the set aside application, in my opinion it has great merit in that the applicant can readily assert that Regulation 9(1)(b) applies and that, as discussed above, the applicant will suffer an injustice if the set aside application is not granted.
For these reasons, I set aside the decision in HB 13/63874 and order that that application be heard together with HB 14/13132, but subject to the consideration of prejudice below.
[5]
Prejudice to the Respondent
The remaining issue to be considered is the prejudice suffered by the respondent, who previously had the benefit of the dismissal of the first application. In my view that consideration is fully answered by my first finding above, that the second application is within time. However, as I am considering the issue of the dismissal of the first application, it is appropriate that I consider the issue of prejudice without relying on that finding.
I am unable to discern any prejudice to the respondent beyond the unavoidable prejudice of having to defend the claim. In my opinion that prejudice applies in every case of a discretion to extend the time for filing an appeal or, as in this case, an application to set aside a decision. It is not sufficient to decide not to extend time in the absence of some further prejudice to be suffered by the respondent. Examples include the passing of so much time that the respondent has assumed its possible liability is finished and has gone about its business on that basis, or that evidence which may have been available, or witnesses who may have been available, are now lost because of the passage of time. No such prejudice applies in this case in my opinion.
The respondent makes the following submissions in relation to the exercise of the discretion to extend time:
(a) it has already been subjected to 2 previous proceedings in the CTTT which have either been withdrawn or dismissed;
(b) the subject of the Application has been considered by the Office of Fair Trading's Senior Building Inspector who has assessed that it is not a defect having regard to applicable Australian Standards;
(c) the Respondent has already been put to considerable expert costs in responding to the repeated, unsustainable claims by the Applicant and related lot owners at the Property which have resulted in expert reports consistent with the OFT's assessment that there are no defects; and
(d) the Respondent diligently addressed defects alleged during the statutory warranty period.
(e) There will be a want of natural justice in continuing to subject the Respondent to this claim, outside of the applicable statutory warranty period and in circumstances where the Applicant have already had an opportunity to prosecute this claim (as had a separate lot owner) and resulted in the Dismissed Application.
(f) Re-agitation of the claims the subject of the Dismissed Application in the Application is an abuse of process and warrants the Respondent recovering its legal and expert costs incurred in the proceeding.
The fact that the respondent has already conducted certain rectification works and has obtained expert evidence in relation to liability for defective works is not in my opinion relevant prejudice in relation to a consideration of the discretion to extend time: that is part of ordinary litigation in this Division of the Tribunal and does not amount to the kind of prejudice discussed by me above. I disagree with submission (a): the respondent has not in fact been "subjected to 2 previous proceedings" as neither Mr Chang's application nor the first application proceeded to a formal hearing. The reference to the OFT inspector is not relevant to proceedings brought in the Tribunal (except as they may be mandatory, such as seeking mediation). Submission (e) has been addressed above in paragraphs 34 ff. In relation to submission (f), if I exercise my discretion to extend time and to set aside the dismissal of the first application, then this is not an "abuse of process". The costs issue is therefore not relevant in light of the findings I have made.
Out of deference to the parties' detailed and learned submissions in relation to the difficulties of ascertaining the relevant date of completion, and more particularly the applicability of the principle in Owners Corporation Strata Plan 64757 v MJA Group Pty Ltd [2011] NSWCA 236 and the other cases referred to in that connection, I note that those issues do not directly arise in these proceedings, in my opinion. The issue of the date of completion is resolved as I have set out above, and in those circumstances the problems raised in MJA and the other cases do not arise.
For the above reasons, I find the Tribunal has jurisdiction to hear and determine HB 13/63874 and HB 14/13132.
Both matters are to be listed for directions at the earliest opportunity for orders to be made in relation to a timetable for the service of evidence.
In view of the concessions made by both parties and noted at paragraph 12 above, there is no order as to costs.
[6]
Civil and Administrative Tribunal of New South Wales
[7]
29 October 2014
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
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Decision last updated: 05 February 2015