The respondent contends that these proceedings have been brought out of time.
On 8 November 2018 orders were made for a preliminary hearing on jurisdiction based on the respondent's position.
The parties filed submissions in support of their respective positions. The respondent's application was heard on 26 February 2019.
The respondent's position is that these proceedings were brought outside the time stipulated in s18E of the Home Building Act 1989 (the 'Act').
The proceedings were commenced on 4 October 2018.
The evidence in the application was:
1. Affidavit of J. White, exhibit A filed by the applicant; and
2. Affidavit of E. Maroun, Exhibit B filed by the respondent.
The parties agree that s18E(1) of the Act as it was before February 2012 applies to the issue of when the application was to be commenced. That section stated:
'Proceedings for a breach of a statutory warranty must be commenced within 7 years after:
(a) the completion of the work to which it relates, or
(b) if the work is not completed:
(i) the date for completion of the work specified or determined in accordance with the contract, or
(ii) if there is no such date, the date of the contract.' (emphasis added)
The parties also agree that what is meant by 'completion of the work' is determined by s3C(2) of the Act. S3C of the Act relates to residential building work comprising the construction of a new building in a strata scheme where the issue of an occupation certificate is required to authorise commencement of the use or occupation of the building. There is no dispute that those factors are present on the relevant facts in these proceedings, S3C(2) of the Act states:
'The completion of residential building work to which this section applies occurs on:
(a) the date of issue of an occupation certificate that authorises the occupation and use of the whole of the building'
There is no dispute that 3 occupation certificates were issued in connection with the building the subject of these proceedings. Interim occupation certificates were issued on 5 September 2011 (the 'first occupation certificate'), 9 September 2011 (the 'second occupation certificate') and on 12 October 2011 (the 'third occupation certificate').
If I find that the building work was completed on the date of either the first or second occupation certificate, then the proceedings were not brought within the time required by s18E(1) of the Act and the proceedings should be dismissed. If I find that the building work was completed on the date of the third occupation certificate, then the proceedings were brought within the time required by s18E(1) of the Act and may proceed in the Tribunal.
The first and second occupation certificates were Interim certificates which authorised the occupation and use of the 'Whole' of the building. The third occupation certificate was stated to be a 'Final' occupation certificate certificates which authorised the occupation and use of the 'Whole' of the building.
[2]
Respondent's submissions
The respondent submits that the first and second occupation certificates authorised the occupation and use of the whole of the building and therefore satisfied s3C(2) of the Act. It follows from this submission that the application was brought out of time.
The first and second occupation certificates indicated that certain of the conditions of the Development consent had not been satisfied. I infer that it was because of these matters the occupation certificates were not described as 'Final'. Despite the indication that certain of the conditions of the Development consent had not been satisfied, the respondent submitted that none of the matters the subject of the unsatisfied conditions affected or restricted the occupation and use of the whole of the building.
[3]
Applicant's submissions
The applicant submits that s3C(2) of the Act only applies to an occupation certificates that lawfully authorises the occupation and use of the whole of the building and that the first and second occupation certificates did not lawfully authorise the occupation and use of the whole of the building.
This submission relies on s109H(2) of the Environmental Planning and Assessment Act 1979 (the 'EPA') as it was at October 2011. That section states:
'An occupation certificate must not be issued unless any preconditions to the issue of the certificate that are specified in a development consent or complying development certificate, or any requirements of a planning agreement referred to in section 93F that, by its terms, are required to be complied with before such a certificate is issued, have been met.'
The Development Consent issued in connection with the construction of the building the subject of this application stated at page 20 that the conditions which followed, starting at 87 and ending at 116, were 'to be complied with prior to the issue of an interim/final occupation certificate'.
The applicant also submits that there were no final fire safety certificates attached to the first and second occupation certificate as stated on the face of those certificates.
[4]
Authorities
I have been referred to the decision of Cessnock City Council v Laila Investments Pty Ltd [2012] NSWLEC 206 which considered the effect of s109H(2). At [9] Pain J stated:
'I agree with the Council's submissions that s 109H(2) specifies a mandatory requirement that an occupation certificate must not be issued unless any preconditions to the issue of a certificate specified in the development consent are complied with. That did not occur in this case. That mandatory requirement is the same as the s 109J requirements considered in Northern Residential. The chapeau of s 109J and s 109H(2) is the same, "... must not be issued ...". The issuing of the occupation certificate by the Third Respondent was therefore a breach of the EPA Act. In these circumstances there is a basis for the declaration of invalidity of the occupation certificate the Council seeks in prayer 1 of the amended summons filed in Court. Under the broad powers the Court has under s 124 of the EPA Act to remedy breaches of the EPA Act, I consider that it is also appropriate that I exercise my discretion to make the declaration as sought by the Council today given the substantial nature of the work required by the development consent conditions, particularly concerning traffic access to the New England Highway, not complied with before the issue of the occupation certificate.'
I have also been referred to extracts from the decision of Craig J in Bankstown City Council v Ramahi (No 2) [2016] NSWLEC 34 which I do not find to be helpful.
In addition I have been referred to the decision of Senior Member Boyce in The Owners-Strata Plan 89023 v AT Building Pty Limited and Mowbray Road Pty Limited as trustee for Mowbray Unit Trust; Jayanthi and Shikaram v AT Building Pty Limited and Mowbray Road Pty Limited as trustee for Mowbray Unit Trust [2018] NSWCATCD 33. In that decision the Tribunal was required to ascertain which statutory warranty applied to the applicant's claims. The owners in that case asserted that the correct date for completion was the date of the issue of an interim occupation certificate. The decisions in Cessnock City Council v Laila Investments Pty Ltd and Bankstown City Council v Ramahi (No 2) were referred to.
In The Owners-Strata Plan 89023 v AT Building Pty Limited and Mowbray Road Pty Limited the Tribunal was not dealing with a situation where it was asserted that an interim occupation certificate had been issued in circumstances where there had been a failure to comply with conditions of the development consent which were required to be complied with before the issue of the occupation certificate. Paragraph [38] of that decision was based on the facts before the Tribunal Member and is not authority for the proposition that interim occupation certificates are in all circumstances to be determinative of when residential building work has been completed for the purposes of s3C(2) of the Act.
[5]
Determination of preliminary question
I find that the conditions referred to in the first and second occupation certificates were, as stated in the development consent, to be complied with before their issue. As a result I find that pursuant to s109H(2) of the EPA the first and second occupation certificates should not have been issued and were not validly issued. This finding is based upon an application of s109H(2) of the EPA giving it its literal meaning.
The issue which I am required to decide in this application is whether despite the first and second occupation certificates having been issued in breach of the EPA and being invalidly issued, they were nonetheless effective for the purposes of s3C(2) of the Act.
I find that the reference to an occupation certificate in s3C(2) of the Act should only apply to an occupation certificate which has validity under the EPA.
S3C(2) is an important provision of the Act because it operates to determine the date of the commencement of the time period in which claims for the breach of statutory warranties must be commenced. To allow that time period to commence based on a certificate that there was no proper power to issue, or which is not validly issued under the EPA would, I find, be detrimental to the interests of those who seek the benefit of a statutory warranty under the Act. To allow such a state of affairs to exist would in my view be contrary to the beneficial purpose of legislation such as the Home Building Act. My finding does not operate to invalidate the first and second occupation certificates as submitted by the respondent. All my finding does is to recognise that the first and second occupation certificates should not have been issued because of the mandatory requirement in s109H(2) of the EPA requiring the preconditions to their issue as stated in development consent to be complied with. As a result I have found that s3C(2) of the Act was not intended to operate on the basis of interim certificates not properly or validly issued under the EPA. To put it another way, an occupation certificate issued when the preconditions to its issue have not been met is, in my view, not a validly issued certificate.
By reason of my findings above, I find that the building the subject of these proceedings was completed on the date of the issue of the third occupation certificate, namely 12 October 2011. I further find that the proceedings having been commenced on 4 October 2018 were brought within the seven (7) year period as referred to in s18E(1) of the Act.
As a result I will dismiss the respondent's application for an order that these proceedings have been brought outside the time permitted by the Act.
As a result of the findings set out above it is unnecessary for me to dispose of the dispute between the parties concerning the final fire safety certificate.
I will request the Divisional Registrar of the Consumer and Commercial Division to relist the proceedings for directions to allow the necessary orders to be made to prepare the proceedings for hearing.
[6]
Costs
Any costs application associated with this application must be lodged in the Tribunal and served on the costs respondent within 14 days of the date of this order either attaching or referring to the documents relied upon in support of the application.
The costs respondent will have 14 days after the date it receives the application to lodge in the Tribunal and serve on the costs applicant its submissions, if any, in response to the cost applicant's costs application, such submissions either attaching or referring to the documents relied upon.
The parties must state in their submissions whether they consent to the costs application being determined on the basis of the parties written submissions and attached documents, if any, without the need for a hearing.
Subject to considering the parties submissions regarding a hearing on costs, the Tribunal will determine any costs application on the basis of the papers lodged in the Tribunal.
[7]
I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales.
Registrar
DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.
Decision last updated: 26 April 2021