[2025] WASAT 29
General information, not legal advice.
State Administrative Tribunal (WA)
2025-04-09
Original judgment source is linked above.
(a) the complaint was not in accordance with the BSCRA Act;
(b) the complaint was made more than 6 years after the alleged occurrence of the disciplinary matter;
(c) the complaint was vexatious, misconceived, frivolous or without substance;
(d) the matter was the subject of another complaint under the BSCRA Act;
(e) an arbitrator or other person or a court or other body has made an order, judgment or other finding about the matter; or
(f) the matter had previously been refused by the Commissioner.
(a) that after registration the registered building service provider has been convicted -
(ii) of an offence against this Act, the Building Services (Complaint Resolution and Administration) Act 2011, the Building Act 2011, the Building and Construction Industry (Security of Payment) Act 2021, the Local Government (Miscellaneous Provisions) Act 1960 or the Home Building Contracts Act 1991...
...
(i) that the registered building service provider has engaged in fraudulent conduct in connection with the carrying out or completion of a building service;
(j) that the registered building service provider has engaged in conduct that is harsh, unconscionable, oppressive, misleading or deceptive in connection with -
(i) a contract for the carrying out or completion of a building service or a variation of that contract; or
(ii) the carrying out or completion of a building service;
(a) On 27 December 2020 she and Intrinsic contracted for the construction of a house. The price was $339,000 and the contract included a 'turnkey finish' clause and a set of design drawings approved by Ms Wang.
(b) Without her consent, Intrinsic split this amount into the sum of $237,300 in the construction contract and a variation amount of $101,700 and removed from the contract the turnkey finish clause and the requirement to obtain a building permit within 45 days.
(c) Ms Wang signed the variation on 30 December 2020, but Intrinsic re-sent the variation on or about 1 February 2021 to attempt to change the date.
(d) On 25 November 2021 Intrinsic sent an invoice for the ground slab progress payment, although the work which should have been completed by that stage was not.
(e) On 25 February 2022, Intrinsic issued a variation by which it sought to increase the construction contract price by $26,099.70 in relation to the cost of bricklaying.
(f) On 22 April 2022, Intrinsic issued a variation due to changes in the design documents for which it sought an additional $99,499.95. Ms Wang had the following concerns:
(i) The changes in design had been requested prior to the grant of the building permit on 5 October 2021 and had been requested due to mistakes made by the designer.
(ii) The design changes, whilst visually distinct, would not have significantly contributed to an increase in the cost of construction.
(iii) The variation also removed work which had been previously valued at $46,047 by Intrinsic. Accordingly, the variation represented an actual price increase of $145,546.95.[11]
(g) Ms Wang terminated the construction contract on or about 22 November 2022 because between November 2021 and May 2022 Intrinsic had ceased work and refused to restart work unless Ms Wang agreed to the variations and because the time in which construction should have been completed had expired.
(a) On or about 19 July 2023 Ms Wang made a building service and home building work contract complaint to the Commissioner (the initial complaint). This was managed by the Complaints Branch. On or about 17 October 2023 the Commissioner referred the initial complaint to the Tribunal.
(b) On or about 20 December 2023, an officer from the Complaints Branch referred the initial complaint, or parts of it, to the Enforcement Branch.
(c) The Enforcement Branch considered whether there had been offences against various sections of the Home Building Contracts Act 1991 (WA).
(a) On 13 January 2024 Ms Wang and her partner Mr Chen lodged a disciplinary complaint against Intrinsic with the Commissioner.
(b) The complaint alleged Intrinsic had engaged in conduct which was fraudulent and harsh, unconscionable, oppressive and deceptive.
On 21 Apr 2022, the owner received a notice of contract variation cost from the builder for the design modification which all occurred before Building Permit granted date on 05 Oct 2021, whilst the ground slab has been executed in November 2021. The variation included a $90,454.50 plus GST cost increase and excluded a few items from the original contract ...
According to Section 409 of Criminal Code Act, the builder has engaged in fraudulent conduct.
(a) Intrinsic removed from the construction contract a clause which required it to obtain the building permit within 45 days of the contract date in order to have unlimited time to complete the design phase.
(b) Intrinsic removed the annotation 'turnkey finish', that was in the original costings quote, from the second cost estimate.
(c) Intrinsic split the construction contract for the purpose of reducing the premiums which were payable in relation to home indemnity insurance.
(d) Intrinsic was aware of the increasing cost of materials and labour but instead of factoring them into the contract price, planned to raise a variation and did so after receiving the ground floor slab progress payment.
(e) The effect of Intrinsic increasing the contract price and reducing the contractual scope of the work was akin to rise-and-fall clauses and cost plus contracts.
(a) the Commissioner's decision was wrong, or at least appears sufficiently open to doubt as to justify the grant of leave; and
(b) substantial injustice would occur if the decision were not reversed.
(a) Clause 2(a) of the construction contract made the contract conditional upon the grant of a building permit within 45 working days from the date of the contract[26]. Special Condition 2 purported to delete the words 'occurring within FORTY FIVE (45) working days from the date of this Contract'.[27]
(b) In deleting those words, Intrinsic contracted out of s 9(1)(a) of the Home Building Contracts Act 1991 (WA) (HBC Act) in breach of s 28(3) of the HBC Act. However, the time in which this breach could have been prosecuted had expired.
(c) The effect of s 9(1)(a) of the HBC Act was upon the parties' contractual rights. Even if Special Condition 2 had not been included in the construction contract, Intrinsic could have taken as much time as it considered necessary in the design phase.
(d) The inclusion of Special Condition 2 had no practical effect because Intrinsic did not seek to rely upon the modified clause 2(a) to levy price increases and the contractual time for completion was not affected due to the termination of the construction contract.
(e) These matters did not evidence the existence of a disciplinary matter.
(a) the three-year prosecution limitation did not apply because her complaint was made on or about 20 December 2023 and Intrinsic breached the HBC Act on or about 30 December 2020;
(b) there is a six-year limitation on disciplinary matters;
(c) the delay caused direct harm to her by reason of increased rental and mortgage costs;
(d) the insertion of Special Condition 2, coupled with the contractual obligation to commence work after receipt of all relevant approvals, constituted fraudulent conduct which is a disciplinary matter.
(a) The list of inclusions in both the quotation and contractual costs estimates appeared to be identical. Accordingly, the absence of the words 'turnkey finish' did not appear to have altered the scope of works.
(b) This did not evidence the existence of a disciplinary matter.
(a) The original costs quotation (quotation) and the costs estimate which formed part of the construction contract (estimate) were identical save for the words 'Turnkey Finish as the estimation and specification shown above $310,000.00 Include GST' in the quotation.[31]
(b) Both the quotation and estimate included internal painting, floor coverings, window treatments, cooktop, oven, rangehood, hot water unit, outdoor paving, clothes hoist and letterbox.
(c) The Macquarie Dictionary defines:[32]
(i) 'turnkey' to relevantly include 'of or relating to a complete product, system, etc., which is supplied or installed and ready for immediate use'; and
(ii) 'turnkey contract' to mean 'a contract in which the contractor undertakes to complete an installation or building to the point of readiness for operation or occupancy'.
(d) Therefore the scope of works had not altered and Intrinsic had contracted to supply a house which was turnkey, or in other words, ready to occupy.
(e) This in turn meant Ms Wang had not demonstrated that Intrinsic had (or might have) by omitting those words from the estimate:
(ii) been fraudulent, harsh, unconscionable, oppressive, misleading or deceptive pursuant to s 53(1)(i) or s 53(1)(j) of the BSR Act.
(a) section 25D(1)(e) of the HBC Act required a builder performing residential building work to obtain insurance cover for a sum which was the lesser of:
(i) $100,000 or $200,000 depending on the policy date; or
(c) there was no evidence the actions taken by Intrinsic caused Ms Wang any detriment;
(d) this did not evidence the existence of a disciplinary matter.
(a) Intrinsic 'split' the construction contract and used only the sum of $237,300 for the home indemnity insurance without notice to her;
(b) in this manner, Intrinsic saved on the premium payable but left her with lower insurance coverage, which was fraudulent; and
(c) Intrinsic charged her the cost of the insurance premium payable on a contract price of $339,000, paid the lower premium and 'kept the difference' which was stealing.
(a) The design cost variation appeared to reflect the additional cost of the various changes to the project design, most of which had been requested by Ms Wang. It was therefore not clear the variation reflected general increases in the cost of labour and materials.
(b) Perhaps Intrinsic should have calculated the cost of the design cost variation by the time of the ground floor slab invoice in November 2021, but it was not clear that it had done so.
(c) There were significant increases in the cost of labour and materials after the quotation on 27 December 2020. But there was no evidence that Intrinsic planned to recover these by way of the design cost variation or that it had planned to delay issuing that variation to the detriment of Ms Wang.
(d) This did not evidence the existence of a disciplinary matter.
(a) On 7 February 2021 Ms Wang advised Intrinsic she no longer wished the house design to be based on the plans by reference to which the construction contract had been priced. Intrinsic was instructed to create a new set of plans based upon another builder's plans which were subject to copyright protection.
(b) There were compliance issues with the design which included but may not have been limited to a request by the City of Stirling for amendments to the plans.
(c) In June 2021 the plans were approved by the City of Stirling. In July 2021, Ms Wang expressed dissatisfaction with the design.
(d) On 6 August 2021 Intrinsic advised Ms Wang the architectural drawings were complete and they were waiting on the structural drawings. During this time Ms Wang sought a further adjustment to the stair detail in the plans.
(a) The changes in the design were caused by Intrinsic in February 2021, mistakes by Intrinsic's designer in April 2021 and her requests between April and August 2021 which were necessitated by further mistakes by the designer. All changes were prior to the grant of the building permit on 5 October 2021.
(b) The design cost variation included the removal of work which had been valued by Intrinsic at $46,047 and so the actual price increase exceeded 40% of the contract price.
(c) Intrinsic applied 'inflated material and labour costs' in April 2022 to estimate the cost of the new design drawings when compared with the cost estimation in the contract. Intrinsic should have reestimated the original contract drawings with April 2022 costs to make a fair comparison.
(d) The changes cited by Intrinsic as justifying the design cost variation would not have contributed to increased costs.
(a) an owner wishes to vary the works to be performed or the contract documents and if the builder is prepared to agree - clause 12(a);
(b) there are circumstances which the builder could not have reasonably foreseen when the contract was made (except where the only change is an increase in the costs of labour or materials) - clause 12(b);
(c) any condition in clause 2(a) has not been met for reasons other than the builder's sole failure to comply with their obligations in clause 2(c) - clause 22.
(a) a builder may issue a variation or notice of a price increase which is ultimately held to be invalid without having acted in a manner which constituted a disciplinary matter; and
(b) the materials lodged by Ms Wang do not satisfy me the conduct of Intrinsic in issuing the design cost variation could fall within the definition of a 'disciplinary matter'.
(a) On their face, the variations did not purport to introduce a riseand-fall clause but were requests by Intrinsic to vary the contract.
(b) A price increase under s 13 of the HBC Act would not be a variation to a contract but would reflect a builder's right to increase the contract price for one or more of the reasons specified in s 13. The Commissioner called them variations because it appeared Intrinsic did not insist upon its entitlement when Ms Wang did not make payment in accordance with the variations.
(c) On their face, the variations did not purport to vary the terms of the fixed price contract so that it became a cost plus contract. Even if they had, they could only have so varied the contract from the date Ms Wang had agreed to it.
(d) There was no evidence the variations were by themselves a riseand-fall clause or that they varied the contract so that it contained a rise-and-fall clause or became a cost plus contract.
(e) This did not evidence the existence of a disciplinary matter.
(a) As noted above,[44] an increase in price is not entirely prohibited by the HBC Act or the construction contract.
(b) I do not consider the terms of the bricklayer and design cost variations were themselves suggestive of being intended to be a rise-and-fall clause or varying the construction contract to include a rise-and-fall clause or to become a cost plus contract.
(c) Ms Wang did not lodge or allude to any evidence which I consider suggestive of the bricklayer and design cost variations being in breach of s 13 or s 14 of the HBC Act.
(d) Even if the bricklayer and design cost variations were in breach of s 13 or s 14 of the HBC Act, I am not satisfied this was likely to constitute a disciplinary matter:
(i) the existence of a disciplinary matter is separate to there having been a breach of the Act;
(ii) a conviction for breach of the HBA Act appears unlikely because the 3 year time limit for prosecution expired in relation to the bricklayer variation on 25 February 2025 and will expire in relation to the design cost variation on 21 April 2025;[45]
(iii) the material lodged by Ms Wang does not satisfy me there is any reasonable likelihood of the Commissioner forming the view Intrinsic had acted in a manner which was fraudulent or harsh, unconscionable, oppressive, misleading or deceptive in the context of s 53(1)(i) or s 53(1)(j) of the BSR Act.
I certify that the preceding paragraph(s) comprise the reasons for decision of the State Administrative Tribunal.
[1] BSCRA Act, s 5(1), s 5(2) and s 15(1).
[10] Applicant's Statement of Issues, Facts and Contentions (ASIFC) lodged 27 January 2025 at paras 4 - 11.
[11] The amount in paragraph [11(e)] has been adjusted to include GST. It is unclear whether the amount of $46,047 is inclusive or exclusive of GST. It has been assumed to be inclusive.
[12] Respondent's Statement of Issues, Facts and Contentions (RSIFC) lodged 20 January 2025 at paras 12 -15; ASIFC at paras 12 - 15.
[15] ASIFC at paras 18 - 19; RSIFC at paras 18 - 19.
[16] RSIFC at para 20; ASIFC at para 20.
[17] RSIFC at para 21; ASIFC at para 21.
[18] Respondent's s 24 Bundle of Documents (RBOD) lodged 20 December 2024 at pages 143 - 144.
[21] DR Parry and B De Villiers, Guide to Proceedings in the Western Australian State Administrative Tribunal (2012) at [307].
[22] Wilson v Metaxas [1989] WAR 285 at 294.
[23] ASIFC at para 34; Annexure to the application entitled 'Appeal to the Decision made by Building Commissioner regarding the Disciplinary Complaint (B2024-121) on 4 September 2024' (AA) lodged 22 September 2024 at paras 5 - 9.
[24] These may have formed part of the initial complaint which was referred to the Tribunal.
[31] ABOD pages 1 - 5; RBOD pages 48 - 52.
[32] Macquarie Dictionary Online, 2025, Macquarie Dictionary Publishers, an imprint of Pan Macmillan Australia Pty Ltd, www.macquariedictionary.com.au.
[34] ASIFC at para 37(c); AA at para 12.
[35] See the Compilation Table to the Home Building Contracts Regulations 1992 (WA).
[43] AA at paras 9 and 13(f); ASIFC at para 34(e).
[45] BSR Act, s 53(1)(a)(i); HBC Act, s 31(3).
Wilson v Metaxas [1989] WAR 285