THOMPSON SUSTAINABLE HOMES (WA) PTY LTD -v- PHELAN [2025] WASC 444 (20 October 2025)

1. The appellant contends that the Tribunal erred in finding that it had jurisdiction. It's grounds of appeal can be summarised as follows:

(a) the Tribunal ought to have found that s 17 of the HBC Act did not confer jurisdiction to determine the respondents' complaint (Ground 1);

(b) further and in the alternative, the Tribunal ought to have found that s 41(2)(d) of the CRA Act does not confer power to award 'loss of bargain' damages (Ground 2);

(c) further and in the alternative to the first two grounds, the Tribunal ought to have found that s 41(2)(d) of the CRA Act does not confer power to award 'loss of bargain' damages where the works the subject of the home building contract can no longer be constructed on the land identified in the contract (Ground 3).

1. The applicant requires leave to appeal. The principles governing the grant of leave to appeal under s 105 of the State Administrative Tribunal Act were summarised by the Court of Appeal in SH v Chief Executive Officer of Department of Communities.[2]
2. I have applied those principles in determining the application for leave to appeal without repeating them here, but in particular, leave to appeal will only be granted if it is in the interests of justice to do so.[3]

1. Parliament enacted the CRA Act in 2011. The long title of the CRA Act states that the Act is to provide for a system for dealing with complaints about building services, home building works contracts and disciplinary matters, and a public officer with functions relating to building services and complaints.
2. Part 6 of the CRA Act created the statutory office of 'Building Commissioner' as the principal regulator of building standards and services in Western Australia.
3. Part 2 of the CRA Act created a new system for handling and resolving building complaints, replacing the former Building Disputes Tribunal and providing for a two-stage dispute resolution process. The CRA Act contemplates that complaints will be made to and dealt with by the Building Commissioner, but with the ability for the Building Commissioner to refer complaints to the Tribunal for determination.
4. Part 10 of the CRA Act amended the existing HBC Act to give the Tribunal jurisdiction to determine those complaints referred to the Tribunal by the Building Commissioner.
5. Section 5(2) of the CRA 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' s 17, s 20 or Sch 1 cl 5 of the HBC Act. A complaint of that type is defined as a 'HBWC complaint' by s 3 of the CRA Act.
6. Section 3 of the CRA Act provides that the terms 'builder', 'home building work', 'home building work contract' and 'owner' have the same meaning as in the HBC Act.
7. Section 3(1) of the HBC Act defines a 'home building work contract' as a contract between a builder and an owner for the performance by the builder of home building work, with certain specified exclusions.
8. The phrase 'home building work' is defined in s 3 of the HBC Act to mean the whole or part of the work of, amongst other things, constructing or reconstructing a dwelling, placing a dwelling on land, or altering, improving or repairing a dwelling.
9. An 'owner' in relation to a home building work contract is 'the person for whom or which home building work is performed under the contract', while a 'builder' is 'a person who carries on, or 2 or more persons who together carry on, a business which consists of or includes the performing of home building work for others'.[4]
10. The term 'contract' is defined by s 3(1) of the HBC Act to mean a 'home building work contract'.
11. The contract between the respondents and the applicant was therefore a home building work contract.
12. Section 17 of the HBC Act provides:

If an owner or builder under a contract claims that -

(a) there has been a breach of -

(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; or

(ii) a provision in Part 2;

(b) the owner or builder is entitled to compensation under Schedule 1,

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. A building remedy order under the CRA Act comprises an order that a person who carried out defective building work remedy that work; an order made by the Building Commissioner or the Tribunal that a person who carried out defective building work pay the reasonable costs of remedying that work; or an order that a person who carried out defective building work pay compensation for the failure to carry out that work in a proper and proficient manner or for faulty and unsatisfactory building work.[5]
2. Section 20 of the HBC Act provides:

If a contract is terminated under section 4(5), 10(4) or 14(3) or Schedule 1, the owner or builder may make a complaint under the Building Services (Complaint Resolution and Administration) Act 2011 section 5(2) claiming that the owner or builder is entitled to -

(a) the return or repayment of the whole or part of any consideration, or the value of any consideration, given by the owner under or in relation to the contract; or

(b) payment to the builder in respect of -

(i) any materials supplied by the builder; or

(ii) any home building work or other services performed by the builder; or

(iii) costs, including overhead expenses and loss of profit, incurred by the builder,

1. The applicant submits that 'it is clear that s 17 of the HBC Act is intended to apply where an owner elects to affirm the contract and seek damages for breach, s 20 is to apply to complaints relating to terminated contracts, and Schedule 1 is to apply to adjust the rights of the parties in the event of a price increase (which may not constitute a breach of the contract)'.
2. That construction is said to be clear because:

(a) s 17 (so it is said) uses the language of breach of contract and provides that 'an owner ... under a contract and claims ... there has been a breach of ... the contract'. The applicant submits that the reference to 'under a contract' must refer to a contract which remains in effect, a construction reinforced, it is said, by the latter reference to 'the contract' in s 17(a)(i);

(b) the text of s 17 is to be contrasted with that of s 20, where there is an absence of any reference to contractual breach, s 20 referring only situations where a 'contract is terminated'. (emphasis original)

1. The principles of statutory construction are well settled. The process of construction involves the attribution of objective meaning to the statutory text, having regard to that text, the context in which it appears and the purpose of the legislation to be construed.[6]
2. The task is to construe the language of the statute, not individual words.[7] It is therefore impermissible to divide a composite phrase into its constituent words, select a meaning for each word divorced from the context in which it appears, and then reassemble the provision.[8]
3. Further, the usual process of statutory construction requires the statutory definition of a term or phrase to be read into the provision or provisions in which the term as defined is used, assuming it is not expressly or impliedly excluded in that context.[9]
4. Inserting the statutory definition of 'contract' into s 17, in order for a complaint to be made to the Building Commissioner, the text of s 17 requires only that an owner or builder under a home building work contract claim that there has been a breach of their home building work contract not capable of being remedied by a building remedy order or of a provision contained in Pt 2 of the HBC Act, or compensation under Sch 1 to the Act.
5. There is therefore nothing in the text of s 17 itself which supports a construction that a complaint can be made only where the contract has not been terminated or otherwise come to an end. The word 'under' in the phrase 'owner or builder under a contract' in s 17 serves to specify who may make a complaint, and means, in the context of that section, 'party to' the contract, consistent with the references to a person being 'party to' a contract elsewhere in the HBC Act.[10]
6. That construction is supported by the manner in which the terms 'owner' and 'builder' are defined in s 3 of the HBC Act, with only the definition of 'owner' expressly referring to a contract, and the use of the term 'builder' in contexts other than a home building work contract elsewhere in the HBC Act.[11]
7. There are also a number of provisions of the CRA and HBC Acts which are inconsistent with the applicant's proposed construction.
8. First, s 9(1)(a) of the HBC Act provides that every home building work contract is conditional upon a building permit being granted in respect of the home building work included in the contract within 45 working days from the date of the contract. Section 9(4) provides that the consequences of a failure to fulfil a condition implied in the contract by s 9(1) are set out in Sch 1 to the Act.
9. Clause 1 of Sch 1 provides that the home building contract is unaffected and remains in force on the same terms and conditions if the failure to fulfil that condition is solely due to the builder's failure to comply with its obligations under the contract.
10. The clause therefore operates to pre-empt any argument that the non-fulfillment by the builder of what might otherwise be regarded as a condition precedent to the performance of the parties' obligations under a home building works contract affects a party's obligation to perform or entitles a party to terminate the contract without more.[12]
11. As the contract remains in force on the same terms and conditions, the builder remains in breach of the term incorporated in the contract by s 9(1)(a) of the HBC Act. In those circumstances, the effect of cl 1 of Sch 1 is to give the owner, as the person injured by the builder's breach of contract, the right to decide whether to take steps to terminate the contract for that breach or to affirm it and seek damages for its breach.[13]
12. Section 9 and cl 1 of Sch 1 of the HBC Act are therefore crafted to avoid what might otherwise be uncertainty arising from a builder's failure to obtain a building permit within the specified time. The preservation of the owner's right to choose to terminate the home building contract in those circumstances is inconsistent with a construction of s 17 of the HBC that requires the contract remain on foot in order for the owner to be entitled to make a complaint.
13. Secondly, contrary to the applicant's submissions, s 20 of the HBC offers no support for the proposed construction.
14. Section 20, in its terms, is limited in its operation to situations where a statutory right to terminate has been exercised. It says nothing about the termination of a home building contract in accordance with the general law.
15. Nor do the specific provisions identified in s 20 support the applicant's proposed construction.
16. Each of s 4(5), s 10(4) and s 14(3) of the HBC Act confers a right of termination in circumstances where the builder has failed to comply with certain requirements specified in the HBC Act concerning the form, entry into and terms of a home building contract.
17. The effect of cll 2, 3 and 4 of Sch 1 to the HBC Act, read together, is to allow the builder the right to give a notice increasing the price for the works stipulated in the home building contract where a condition incorporated in the contract by s 9(1) of the HBC Act is not fulfilled without any failure on the builder's part to perform its obligations.
18. Similarly, s 13(4)(c) of the HBC Act provides that a home building work contract may permit a builder to increase the price for the works where there is a delay of more than 45 working days in the commencement of the works, again without any failure on the builder's part to comply with its obligations.
19. In either case, the owner may terminate the home building contract if the increased amount is more than 5% of the original price stipulated in the contract.[14] No other right of termination is conferred by Sch 1.
20. Clause 5(1) of Sch 1 permits an owner to make a HWBC complaint if the owner considers the amount of the price increase to be excessive or unjustified, in which case the builder is required to show that the increased price reflects actual increases in costs.[15]
21. Section 20 of the HBC Act therefore has no application where an owner or builder alleges that there has been a breach of the home building work contract between them. Its operation is limited to the specific circumstances identified in the section itself. The section therefore does not bear upon the proper construction of s 17 of the HBC Act.
22. Thirdly, the applicant's proposed construction is inconsistent with the absence of any requirement that the contract remain on foot in s 6(3)(b) of the CRA Act, which provides that a HBWC complaint about a matter identified in s 17 of the HBC Act need only be made within three years of 'the cause of action arising'.[16]
23. Further indications that the applicant's proposed construction should not be accepted are contained in s 54(1)(b), s 55(2) and s 55(3) of the CRA Act.
24. Section 54(1)(b) provides that the matter to which a HBWC complaint relates is, subject to certain presently irrelevant exceptions, not justiciable by a court that would otherwise have jurisdiction to determine the matter.
25. Section 55(2) of the CRA Act provides that a court may order that a matter before the court which could be dealt with as a building service complaint or a HBWC complaint be transferred to the Building Commissioner, while s 55(3) gives the Tribunal discretion to transfer a complaint before it to a court of competent jurisdiction.
26. Those provisions demonstrate that a purpose of the CRA Act and the 2011 amendments to the HBC Act were to confer jurisdiction to determine disputes regarding home building work contracts upon the Building Commissioner and the Tribunal, and to reduce the role of the courts in doing so.
27. Although the applicant submits that complex questions relating to repudiation and the availability of damages frequently arise in the context of termination of contracts, and, implicitly, that it was not Parliament's intention that the Building Commissioner and the Tribunal determine those complex questions, those submissions are inconsistent with the statutory regime established by s 54(1)(b), s 55(2) and s 55(3) of the CRA Act, and Parliament's evident intention that allegations of breach of home building work contracts be generally dealt with other than by the courts.
28. Assuming for the sake of the argument that Parliament had any concern that either the Building Commissioner or the Tribunal might have difficulty in determining any complex question in a particular case, those concerns are adequately addressed by the Building Commissioner's power to refer a complaint to the Tribunal and the Tribunal's power to refer a complaint to a court of competent jurisdiction.
29. The construction of s 17 advanced by the applicant would split the jurisdiction to determine complaints made about a breach of a home building work contract between the Building Commissioner and the Tribunal where the contract remained on foot, and the courts where the contract had come to an end. The applicant's proposed construction is therefore inconsistent with the text of s 17 and the context and purpose of the CRA and HBC Acts, and is therefore to be rejected.
30. The Tribunal has jurisdiction to determine the respondents' complaint, because they have claimed that the applicant breached the terms of their home building works contract with the applicant, the claimed breach cannot be remedied by the making of a building services order, and the Building Commissioner has referred the complaint to the Tribunal.
31. There is no merit in ground 1.

the Tribunal erred in law by not determining that it does not have the jurisdiction to order payment of loss of bargain damages where no home building work has been undertaken, whereas the Tribunal ought to have found that it does not have jurisdiction under section 41(2)(d) of the BSCRA Act to order damages for loss of bargain.

1. Where the Building Commissioner refers a HBWC complaint to the Tribunal, s 43(1)(a) of the CRA Act gives the Tribunal power to make a HBWC remedy order if the Tribunal is satisfied that the making of that order is justified.
2. A HBWC remedy order in respect of a complaint made under a home building work contract about a matter referred to in s 17 of the HBC Act[17] is defined by s 41(2) of the CRA Act to consist of one or more of:

(a) an order -

(i) restraining any specified action in breach of the contract or of a provision in the Home Building Contracts Act 1991 Part 2;

(ii) requiring any specified work to be done in the performance of the contract;

(iii) requiring any specified work to be done to ensure compliance with a provision of the Home Building Contracts Act 1991 Part 2;

(iv) requiring any specified work to be done to remedy a breach of the contract or of a provision of the Home Building Contracts Act 1991 Part 2;

(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 -

(i) caused by any breach of the contract or of a provision of the Home Building Contracts Act 1991 Part 2; or

(ii) referred to in the Home Building Contracts Act 1991 Schedule 1;

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

1. Although ground 2 is framed in terms of jurisdiction, it raises the question whether s 41(2)(d)(i) gives the Tribunal power to order that the applicant pay compensation for the respondents' loss and damage, calculated by reference to 'loss of bargain' damages.
2. 'Loss of bargain' damages reflect the difference between the position that the injured party would have been in had the contract been performed and the actual position. They are equivalent to the value of the performance of the contract that has not been received.[18]
3. The applicant submits in support of ground 2 that s 41(2)(d)(i) only permits compensation to be awarded for loss or damage 'caused by' a breach of the home building work contract, and that compensation for 'loss of bargain' damages therefore cannot be awarded pursuant s 41(2)(d)(i), because a loss of that type is not caused by a breach of the contract, but the injured party's decision to terminate the contract.
4. It is well established that loss of bargain damages are recoverable only if the contract has been terminated, because only then is the bargain lost.[19]
5. In Wardley Australia Ltd v Western Australia,[20] the High Court stated that the use of the word 'by' in s 82 of the Trade Practices Act 1974 (Cth) 'clearly [expressed] the notion of causation without defining or elucidating it',[21] and 'should be understood as taking up the common law practical or common sense concept of causation recently discussed by this court in March v Stramare (E & MH) Pty Ltd,[22] except in so far as that concept is modified or supplemented expressly or impliedly by the provisions of the Act'. Although March v Stramare concerned a case in negligence, the principles expressed in that case regarding causation apply to claims for breach of contract.[23]
6. The words 'caused by' have been held, in the context of motor vehicle third party insurance legislation, to require a direct or proximate relationship of cause and effective agent, [24] or that there be an 'effective and dominant cause of the occurrence'.[25]
7. However, under the general law a plaintiff's loss of its bargain is regarded as being caused not by the plaintiff's decision to terminate, but by the wrongful conduct of the defendant giving rise to the right to terminate. Once the contract is terminated, any provable loss is regarded as having been caused by the defaulting party's breach of contract, not the termination of the contract.[26]
8. In essence, the applicant submits that s 41(2)(d)(i) is to be construed so that the injured party's decision to terminate the contract is to be regarded as the sole cause of a loss suffered by that person.
9. That construction should be rejected.
10. First, it is unsupported by the text of s 41 of the CRA Act. Accepting that the words 'caused by' in s 41(2)(d)(i) require that the entitlement to compensation be directly or proximately caused by the defaulting party's breach of contract, that requirement is still satisfied where the injured party's right to terminate the contract arises from the conduct of the defaulting party.
11. It is ordinarily unnecessary to establish that the defaulting party's breach of contract was more than a cause, as opposed to the sole cause, of the loss suffered.[27]
12. That approach to the construction of the section is consistent with the approach to causation identified by the High Court in March v Stramere. In the circumstances being considered, it would be contrary to common sense to regard the injured party's decision to terminate the contract as having caused that party's loss.
13. Secondly, the general rule is that the courts will construe a statute in conformity with the common or general law, and will not attribute an intention to alter general law principles unless that is necessary to give effect to the statute.[28]
14. Assuming for the sake of argument and favourably to the applicant that the construction it advances is open, a construction of s 41(2)(d)(i) that is consistent with the general law of contract, including the principles relating to causation, is to be preferred unless there are clear words indicating that the legislature intended to alter the operation of those principles.[29]
15. The long title of the HBC Act describes the Act as providing for the regulation of contracts between consumers and builders for the performance of certain home building work. There is nothing in the CRA or HBC Acts which provides a clear indication that Parliament intended to vary the general law of contract in enacting the CRA Act and its amendments to the HBC Act, and the terms of both Acts are consistent with the general law principles governing claims for damages for breach of contract, including those governing causation.
16. Ground 2 is therefore without merit. For the purposes of s 41(2)(d)(i), loss or damage can be caused by a breach of the contract which entitles the injured party to terminate the contract, not the injured party's decision to terminate the contract.

1. As framed, ground 3 is that the Tribunal ought to have found that it 'lacked jurisdiction to order damages for loss of bargain where the [respondents] cannot construct the dwelling the subject of the contract', since they no longer own the land on which the dwelling was to be constructed.
2. Ground 3 as framed is therefore misconceived, as the Tribunal has jurisdiction to determine the respondents' complaint, and s 41(2)(d) confers power to award compensation for loss and damage assessed on a 'loss of bargain' basis. The question raised by ground 3 does not involve any question of either jurisdiction or power.
3. A further difficulty with ground 3 is that it incorrectly assumes both that the Tribunal is required to assess damages as at the date of the sale of the land by the respondents, and, in doing so, is obliged to award no or nominal damages for the builder's alleged failure to construct the dwelling, since the respondents can no longer have the dwelling constructed on the land.
4. Neither of those assumptions is necessarily correct.
5. Loss of bargain damages are ordinarily assessed as at the date of termination of the contract, although the Tribunal has a discretion to award damages as at another date.[30] As these proceedings involve an appeal from the determination of preliminary issues and the liability of the applicant is yet to be determined, it is inappropriate for this court to make any finding as to the date at which the Tribunal ought to assess compensation.
6. Nor is it open to this court in these proceedings to determine what compensation the Tribunal might ultimately award the respondents, if they ultimately succeed.
7. In particular, it cannot be determined at this stage that the Tribunal will inevitably award the respondents no or nominal compensation because they no longer own the land on which the dwelling was to be built. By way of example, the respondents' claim might ultimately be framed on the basis that, had the applicant performed the contract, the respondents would have owned their land with the dwelling constructed upon it for the contract price.
8. In those circumstances, the respondents might be said to have been deprived of the opportunity to sell the land at a greater price and therefore (possibly) for a greater profit than was realised from the sale of the land alone. Subject to determination of the particular facts, an assessment of the compensation to be awarded in respect of that claim might well be made as at the date of the sale of the land by the respondents, rather than the date of termination of the contract.
9. Ground 3 therefore conflates the question whether the Tribunal has jurisdiction to determine the respondents' claim with the manner in which the Tribunal might exercise that jurisdiction once it has determined the facts.
10. Ground 3 is without merit for that reason as well.
11. As none of the proposed grounds have merit, leave to appeal will be refused. The appeal will be dismissed.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.

[1] Phelan v Thompson Sustainable Homes (WA) Pty Ltd [2025] WASAT 25.

[2] SH v Chief Executive Officer of Department of Communities [2019] WASCA 31 [49] - [53].

[3] SH v Chief Executive Officer of Department of Communities [26].

[5] See s 36(1), CRA Act, read with the definitions of 'building service', 'regulated building service', 'registered building service provider', 'home building work' and 'home building work contract' in s 3, CRA Act.

[6] Pearson v Connor [2024] WASCA 49 [50], citing Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; (1998) 194 CLR 355 [69]; Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue [2009] HCA 41; (2009) 239 CLR 27 [47]; SZTAL v Minister for Immigration and Border Protection [2017] HCA 34; (2017) 262 CLR 362 [14]; Mohammadi v Bethune [2018] WASCA 98 [31] - [36].

[7] Collector of Customs v Agfa-Gevaert Ltd [1996] HCA 36; (1996) 186 CLR 389, 397; Victoria v Intralot Australia Pty Ltd [2015] VSCA 358 [95].

[8] Lorimer v Smail [1911] HCA 44; (1911) 12 CLR 504, 508 - 510; R v Carter; Ex parte Kisch [1934] HCA 50; (1934) 52 CLR 221; Biga Nominees Pty Ltd v Commissioner of Taxation (1991) 21 ATR 1459, 1468 - 1469.

[9] Kelly v R [2004] HCA 12; (2004) 218 CLR 216 [103]; Wilkie v Brown [2016] NSWCA 128 [41].

[10] See, for example, s 4(4), s 5(2), s 7(3), s 19(1) and 25J(3), HBC Act.

[11] See, for example, the different definition of the term 'builder' in s 25A of the HBC Act, the definitions of 'building contract' and 'residential building work contract' in that section, and the power to make regulations conferred by s 32 of the HBC Act, particularly s 32(2)(b).

[12] As to which see Perri v Coolangatta Investments Pty Ltd (1982) 149 CLR 537, 551 - 552.

[13] See, for example, Gemmill Homes Pty Ltd v Sanders [2018] WASC 179 [130].

[14] cl 4(b), Sch 1, read with s 13(5), HBC Act where the right to increase the price arises by virtue of s 13(4)(c).

[17] Other than a complaint about a breach of s 15 of the HBC Act: see s 41(2), CRA Act.

[18] See, for example, Sunbird Plaza Pty Ltd v Maloney (1988) 166 CLR 245, 260; Nelson v Bellamy [2000] NSWSC 182 [157].

[19] Sunbird Plaza Pty Ltd v Maloney, 260; Upper Hunter Timbers Pty Ltd v Forestry Commission of NSW [1999] NSWCA 125 [48]; Scott v Ennis-Oakes [2020] NSWCA 239 [38] - [43].

[20] Wardley Australia Ltd v Western Australia [1992] HCA 55; (1992) 175 CLR 514.

[22] March v Stramare (E & MH) Pty Ltd [1991] HCA 12; (1991) 171 CLR 506.

[23] BGC Residential Pty Ltd v Fairwater Pty Ltd [2012] WASCA 268 [41] - [55].

[24] Dickinson v The Motor Vehicle Insurance Trust [1987] HCA 49; 163 CLR 500, 505; State Government Insurance Commission v Stevens Bros Pty Ltd [1984] HCA 32; (1984) 154 CLR 552, 555, 559.

[25] Speno Rail Maintenance Australia Pty Ltd v Hamersley Iron Pty Ltd [2000] WASCA 408, [134].

[26] Sotiros Shipping Inc v Samelet Solholt [1983] 1 Lloyd's Rep 605, 607; Castle Constructions Pty Ltd v Fekala Pty Ltd [2006] NSWCA 133; (2006) NSWCA 133 [28].

[27] Simonius Visscher & Co v Holt [1979] 2 NSWLR 322, 346; Wylie v ANI Corp Ltd [2000] QCA 314; [2002] 1 Qd R 320, [27], [50].

[28] Bropho v Western Australia [1990] HCA 24; (1990) 171 CLR 1, 18.

[29] Balog v Independent Commission Against Corruption [1990] HCA 28; (1990) 169 CLR 625 at 635 - 636.

[30] Johnson v Perez [1988] HCA 64; (1988) 166 CLR 351, 355 - 356, 367.