Wilderness Blue Pty Ltd v Frasers Putney Pty Ltd

NCAT Appeal Panel|2020-09-21

Background

This appeal arises out of a decision published on 12 June 2020 made in the Consumer & Commercial Division of the Tribunal in which the Tribunal determined that proceedings brought by the Appellant against the Respondent had not been commenced within the time imposed by provisions of the Home Building Act (NSW) (HB Act). Accordingly, the Tribunal dismissed the application.
The chronology of background facts is not in dispute and the following is a summary of the chronology taken from the decision under appeal (the Decision): 1. On 30 March 2012, a contract for the sale of land (the Sales Contract) was entered into. The parties to the Sales Contract were the Respondent (the vendor) and the Appellant (the purchaser). The Sales Contract required the Respondent to procure construction of a residential dwelling on the land the subject of the Contract. 2. On 10 October 2012, a homebuilding contract was entered into between the Respondent and a builder. The builder is not a party to this appeal, nor a party to the proceedings at first instance. 3. On 17 October 2013, the residential dwelling was completed (when a certificate of practical completion was issued) and the Tribunal found that that was the date of practical completion. An interim occupation certificate was issued on 14 October 2013. 4. On 3 November 2013, the parties completed the Sales Contract. We note that the Respondent submits that completion occurred on 4 November 2013, but there appears to be no consequence arising from the discrepancy between the 3 and 4 November 2013 as the date of completion. 5. On 1 November 2019 the Appellant lodged an application in the Tribunal against the Respondent alleging that the Respondent was liable for breach of statutory warranties under the HB Act. 6. In the Decision, the Tribunal determined that 17 October 2019 was the date that the warranty period ended for major defects under the HB Act. The Tribunal also held that the date on which the warranty period expired for other defects was in October 2015. The Tribunal made an order dismissing the application.

The Decision

The effect of the Decision can be discerned from the above paragraphs. However, a summary of the Tribunal's reasons is as follows: 1. The Appellant submitted that the Sales Contract is the contract into which statutory warranties contained in s 18B of the HB Act are implied. The settlement date of that contract was 3 November 2013 and that date is the date relevant to the calculation of time for the purposes of ss 3B and 18E of the HB Act. Section 3B provides that the completion of residential building work occurs on the date that the work is complete within the meaning of the contract under which the work was done, or if the contract does not provide for when the work is complete, completion occurs on "practical completion". The section contains a description of when practical completion occurs. Section 18E provides that proceedings for a breach of a statutory warranty must be commenced in accordance with the provisions contained in the section. This means that proceedings must be commenced before the end of the warranty period. It is not in dispute in this case that the warranty period is six years for a breach that results in a major defect or two years in any other case 2. The most important issue was whether the Sales Contract is a contract to do residential building work because s 18B describes the warranties that are implied into every contract "to do residential building work". 3. The jurisdiction of the Tribunal is set out in s 48K, which states that the Tribunal has jurisdiction to hear and determine any building claim brought before it in accordance with Part 3A of the HB Act and subject to other limitations not presently relevant. Section 48A contains a definition of "building claim". It means, in part, a claim for the payment of a specified sum of money or the supply of specified services that arises from a supply of building goods or services, whether under a contract or not. Section 48K(5) provides that the fact that a building claim arises out of a contract that also involves the sale of land does not prevent the Tribunal from hearing that building claim. 4. The Appellant contended that the Sales Contract was a contract for the supply of building services and that the application was a building claim. The Appellant's contention was that the obligation contained in the Sales Contract for the Respondent to procure the construction of the residential dwelling is the supply of building services. The Tribunal did not agree. 5. In explaining its reasons for rejecting the Appellant's contention, the Tribunal said that the Sales Contract does not have the elements of a building contract required under the HB Act. The Sales Contract did not include the name of the holder of a contractor licence, nor the number of the contractor licence, nor a sufficient description of the work to which the contract relates, nor any statutory warranties applicable to the work. Further, the Respondent did not have and has never had a contractor licence. These factors were said not to be determinative of whether a contract is a building contract into which the statutory warranties are implied. However, the Tribunal held that the "absence of most of the important legislative requirements of a building contract indicates to the Tribunal that the parties to the Sales Contract were not intending to enter, and indeed did not enter, a building contract." 6. The Tribunal also found that the absence of insurance as required under the HB Act was relevant to the finding that the Sales Contract was not a building contract. 7. Homeowners' warranty insurance was obtained by the builder in the builder's name six to seven months after the Sales Contract was entered into. This, the Tribunal found, "strongly suggests the building contract which was entered into between the Respondent and the builder on 10 October 2012 was the only building contract". 8. Because the Sales Contract is not a building contract, the date of settlement of the Sales Contract (3 November 2013) has no bearing on these proceedings for alleged breaches of the statutory warranties. 9. The fact that clause 38 of the Sales Contract required the Respondent to procure the construction of the residence does not meet the definition of building goods or services in s 48A which concerns services supplied by the person who contracts to do, or otherwise does, that work. 10. The Appellant alternatively claims that the Respondent was a developer and that the Appellant as the immediate successor in title was entitled to the benefit of the statutory warranties under the HB Act. The Tribunal held that that claim was out of time. The completion of the building works occurred on 17 October 2013, the date of practical completion. 11. The warranty period expired on 17 October 2019 (for major defects) and in October 2015 (for other defects). The application was lodged on 1 November 2019 and was thus out of time. 12. The Sales Contract is not a building contract and the Tribunal therefore has no jurisdiction to determine an application for a breach of the Sales Contract.

The Notice of Appeal

The Notice of Appeal was lodged on 25 June 2020 and the grounds of appeal may be summarised as follows: 1. The relevant building contract was the Sales Contract, which provides a definition of completion for the purposes of ss 3B and 18E of the HB Act. Completion occurred on 3 November 2013 and the application (lodged on 1 November 2019) was within time such that the Tribunal has jurisdiction to determine the application. 2. Alternatively, the Appellant is the immediate successor in title to the Respondent and by reason of s 18C the Appellant is entitled to the benefit of the warranties in s 18B. Section 18C provides that a person who is the immediate successor in title to an owner-builder, a holder of a contractor licence, a former holder or a developer who has done residential work on land is entitled to the benefit of the statutory warranties as if the owner-builder, holder, former holder or developer were required to hold a contractor licence and had done the work under a contract with that successor in title to do the work.

Reply to Appeal

The Reply essentially supports the Decision. In essence the Reply submitted: 1. The Sales Contract is not a contract to do residential building work referred to in s 18B. Completion of the residential building works occurred on 17 October 2013 under the design and construct contract between the Respondent and Strongbuild Commercial Pty Ltd dated 10 October 2012 (the Strongbuild Contract). 2. Alternatively, completion of the residential building works occurred on 14 October 2013 (the date of the interim occupation certificate). 3. The Notice of Appeal does not identify any error of law. 4. The Decision is an interlocutory decision and therefore leave to appeal is required. This submission was withdrawn at the hearing. 5. Alternatively, insofar as the appeal is not limited to questions of law, leave is required - see cl 12 schedule 4 of the Civil and Administrative Tribunal Act 2013 (NSW) (the NCAT Act). There is no basis for leave to be granted.

The Appellant's Submissions

These submissions may be summarised as follows: 1. The Decision was not an interlocutory decision. The appeal concerns a question of law and can be brought as of right. 2. A judgment will be final (as opposed to interlocutory) if the legal effect is to finally determine the rights of the parties (see Carr v Finance Corporation of Australia Ltd (No 1) (1981) 147 CLR 246 at 248 per Gibbs CJ). 3. The appeal concerns a question of law because it involves the proper construction of the HB Act and whether the Sales Contract was a contract to do residential building work within the meaning of the HB Act. 4. In the alternative if the Decision was an interlocutory decision leave to appeal is sought. It is appropriate to grant leave because the order made has led to the practical effect of finally determining the proceedings. The Decision is attended with sufficient doubt to justify giving leave. 5. The limitation period for breach of the statutory warranties is six years from completion of the works: s 18E(1)(b) of the HB Act. The completion date of the Sales Contract was 3 November 2013 and therefore the limitation period expired on 3 November 2019. The proceedings were lodged on 1 November 2019 and were therefore within time. 6. The Sales Contract involved the purchase of an "off the plan" residence by which the Respondent was required to procure the construction of the new building (see cl 38 of the Sales Contract). The Sales Contract included provisions for construction of the building, plans, finishes and colour schemes. Since completion over 200 defects were identified and the Respondent has rectified the majority of those defects. 7. The form of the contract is not determinative. As held by Henry J in Lawrence v Cianter [2019] NSWSC 464 at [177]: Contracts … come in many forms, and the Court must make a determination based on the particular terms agreed and the provisions of the Home Building Act, which exists to protect consumers." 1. In Lawrence at [90] her Honour held: "The question is, when read as a whole, did [the contract] also oblige Mr Lawrence to carry out, either by himself or through others, the major DA works in order to obtain a third party equity in the Property?" and at [174] her Honour held: "In my view, an agreement under which a person contracts to carry out work and complete works in return for a reward is a contract under which that person undertakes to do those works himself or by others unless there is evidence to show they were only supervising the works." 1. Clause 38 of the Sales Contract provided that the Respondent undertook to "procure the construction of the Building". The word "procure" is a plain English word and not a term of art. It means to obtain or get, to effect, bring about. It is equivalent to contracting to carry out and complete the relevant work either by oneself or through others. 2. Section 48K(5) provides that the "fact that the building arises out of a contract that also involves the sale of land does not prevent the Tribunal from hearing that building claim." 3. The Tribunal sought to distinguish Lawrence on the basis that the parties had entered into a joint-venture Contract. That was an irrelevant distinction. In any event, the court in Lawrence held that the agreement in Lawrence was not a joint-venture. 4. In Lawrence the court held that the obligation to do the residential building works did not expressly provide that Mr Lawrence was not to do the work himself or that they were to be done by a licensed builder under his supervision. Similarly, the Sales Contract required the Respondent to "procure" the residential building works and did not expressly provide that the Respondent was not to do the works itself or identify another builder. 5. The Sales Contract contained the usual hallmarks of a home building contract required by s 7 of the HB Act. These include: the contract was in writing, the names of the parties were stated, the contract price was in a prominent position, the contract contained detailed plans including a floor plan, schedule of finishes and a colour scheme. The Sales Contract provided a cooling off period. Clause 57 contained provisions requiring the Respondent to procure rectification of defects. A defects rectification clause is unique to construction contracts and rare in a contract for the sale of land. 6. When the physical building works were commenced (by the subcontracted builder) appropriate insurances were in place. Clause 54.2 of the Sales Contract provided for the provisions of a certificate of insurance and the Respondent provided the certificate. 7. Clause 30.1 of the Sales Contract defines the completion date as 14 days after the later of two nominated events and relevantly being 14 days after the Respondent gave to the Appellant a copy of the occupation certificate. The Sales Contract was completed on 3 November 2013. The Tribunal erred in finding that the date of practical completion occurred on 17 October 2013 (the date of issue of an interim occupation certificate). 8. In the alternative, if the application was brought out of time, the Appellant applies for an extension of time under s 41 the NCAT Act. The evidence of the Appellant was that it was not aware of the exact expiry date as it was never provided with a copy of the Strongbuild Contract. The delay is insubstantial. If the submissions of the Respondent are accepted and the six-year limitation expired on 17 October 2019, the application was lodged with the Tribunal only two weeks after the expiry date. An extension would not prejudice the Respondent.

The Respondent's Submissions

The submissions of the Respondent may be summarised as follows: 1. The question at the heart of the appeal is "when was the residential building work the subject of the proceedings completed?" That is a question of fact, not of law. The Tribunal made findings of fact regarding the date on which the completion of the residential building work occurred. The Tribunal found that completion occurred on 17 October 2013 or alternatively on 14 October 2013. These findings dispose of the application because completion occurred more than six years before the proceeding was commenced. Leave is required and ought not be granted. 2. It is necessary to determine when the work was completed. The Appellant says completion is determined by reference to when completion occurred under the Sales Contract (which was, according to the Appellant, 3 November 2013). 3. Under clause 38 of the Sales Contract the Respondent undertook to procure the construction of the building. The meaning of "procure" is to be contrasted with the effect the contract would have had if it obliged the Respondent to "construct" the building. That word (ie. procure) makes it clear that the Respondent was not to do the work. There was no need to state that the Respondent was only to supervise the work. 4. The observation by the Tribunal that the Sales Contract does not have the elements of a building contract required under the HB Act is correct. An example concerns the requirement under s 7(2) of the HB Act for the Contract to contain the name of the holder of the contractor license or the number of the contractor license. The Sales Contract did not do so because the Respondent was not licensed to do residential building work. 5. The Tribunal correctly found that the effect of the argument put by the Appellant was that the Respondent did the work without a contract of insurance that complied with the HB Act being in place. Such conduct is prohibited by s 92. It is not to the point that insurance was in place in respect of the work carried out by the subcontracted builder. On the argument of the Appellant the contract was a contract to do residential building work and insurance was required by s 92 in respect of the work done by the Respondent. The lack of such insurance was a significant factor weighing against the construction that the Sales Contract was a contract to do residential building work. 6. The Respondent submits that completion is determined by reference to the test in s 3B of the HB Act. The criteria in that provision are: 1. "the date that the work is completed within the meaning of the contract under which the work was done", 2. "If the Contract does not provide for when work is complete… On practical completion of the work, which is when the work is completed" except for omissions or defects that do not prevent use; and 3. unless an earlier date for practical completion can be determined, practical completion is presumed to occur on the earliest of handover, last attendance at site for the issue of an occupation certificate that "authorises commencement of the use or occupation of the work". 1. As to (i) above, the contract under which the work was done was the Strongbuild Contract, not the Sales Contract. 2. The Appeal Panel will need very clear words to construe the Sales Contract as requiring the Respondent to carry out residential building work given that doing so constitutes an offence under s 4 under the HB Act and makes the price unenforceable under s 10. 3. Even if the Appellant is correct and the contract under which the work was done is the Sales Contract (not the Strongbuild Contract) the result is the same because: 1. the test is when work is complete, not when the sale is complete. Clause 30.1 of the Sales Contract concerns completion of the sale transaction and does not relate to the work. Under clause 30.1 the completion date is 14 days after the date of the vendor notifying the purchaser of registration of the strata plan, and the vendor giving to the purchaser a copy of the occupancy certificate under clause 44.2. Both these events are probably consequent upon but not equivalent to completion of the work; 2. the requirements for completion of the sale transaction are set out in clause 44. 3. The Strongbuild Contract has detailed provisions dealing with the test for practical completion (see clause 34.6). Completion occurred on the date that practical completion was achieved under the Strongbuild Contract or alternatively when the interim occupation certificate was issued. 1. With respect to the application of the Appellant to have time extended under s 41 of the NCAT Act, the Respondent says that there are two obstacles. The first is that the Tribunal has no jurisdiction because there is no building claim and therefore the Tribunal has no jurisdiction to extend time. Jurisdiction is limited to building claims - see s 48K. A building claim can only arise from a "supply of building goods or services" (s 48A(1)) for or in connection with the carrying out of residential building work. These claims arise out of the Strongbuild Contract, not the Sales Contract. The Appellant does not purport to sue in respect of any building claims that might arise out of the Strongbuild Contract. It follows that the Tribunal does not have jurisdiction in respect of the matters the subject of the claims bought by the Appellant if the Tribunal upholds the Decision that the Sales Contract was not a contract to do residential building work. The second obstacle is that even if the claim is a "building claim", the failure to lodge in time means that the Tribunal lacks jurisdiction. The absence of jurisdiction cannot be cured by s 41: S & G Homes Pty Ltd t/as Pavilion Homes v Owen [2015] NSWCATAP 190 at [53]. Also see Owners Corporation SP 82076 v Taricon Pty Ltd [2017] NSWCD 37 at [27] 2. If, contrary to the above submissions, the Appeal Panel considers that the Tribunal does have jurisdiction to extend time, time should not be extended. No application to extend time was made at first instance, no application is made in the Notice of Appeal and the application is first raised in the submissions of the Appellant in this appeal. Further, the Appellant purports to rely upon evidence filed in the appeal and the Respondent has not had an opportunity to prepare evidence in response. In any event, circumstances warranting an extension of time have not been shown. Limitation periods are intended to give potential defendants certainty and there is no adequate explanation as to why the Appellant waited for six years before commencing proceeding. 3. The appeal ought to be dismissed with costs.

Submissions in Reply

The submissions of the Appellant in reply may be summarised as follows: 1. The Tribunal fell into error by adopting an incorrect construction of the HB Act and thereby incorrectly held that the contract was not a contract to do residential building work within the meaning of s 18B. The question raised in the appeal is therefore a question of law. 2. A contract to be caught by the HB Act does not need to expressly provide that the Respondent, and only the Respondent, would carry out the works: see Lawrence where it was decided that the question is whether the contract obliges the party to carry out the works through itself or others. 3. There is no relevant distinction between completion of the works and completion of the contract. Pursuant to clause 48.1 of the Sales Contract the "standard sale clause 15" regarding completion is not to apply. Completion under the Sales Contract was not simply concerned with the sale of the land but also with the contract as a whole. The date of completion under the Sales Contract is the date that the work is complete within the meaning of the contract for the purposes of s 3B(1) of the HB Act. 4. If it is held that the contract for residential building work was the Strongbuild Contract, the Appellant is nonetheless entitled to bring a claim against the Respondent for breach of statutory warranties pursuant to s 18C of the HB Act because the Appellant is the immediate successor in title to the Respondent that had "done" residential building work on the land. 5. There is authority that the Tribunal may extend time: see Aimee v Brealey [2017] NSWCATAP 141 at [136]-[141], Barnaby v Chamoun [2017] NSWCATCD 105 at [19]-[20] and also see Murphy v Pitt [2017] NSWCATACD 44 at [3]-[6]. 6. Section 41 of the NCAT Act provides that the power to extend time exists "despite anything to the contrary under that legislation". Therefore to the extent that there is any inconsistency between s 48K(7) of the HB Act and the power is s 41(1) of the NCAT Act it was the intention of Parliament that the power to grant an extension of time ought to prevail.
In respect of costs, the Appellant submits that there are no special circumstances that warrant an award of costs. The appropriate order is that each party pay their own costs.

Consideration

There are three issues to be determined in this appeal. The first is the construction of the Sales Contract and in particular whether the Sales Contract can be characterised as a contract to do residential building work into which the statutory warranties set out in s 18B of the HB Act are implied. The second issue is whether the Appellant can enforce the statutory warranties against the Respondent on the basis that the Respondent is a developer and if so, whether the application was lodged within time. The third issue is whether, if the application to the Tribunal is a building claim that has not been brought within the statutory time limitation period, the appellant should be allowed to raise this issue for the first time on the appeal. If so, the issue to be determined is whether time to bring the application can be extended under s 41 of the NCAT Act.

Construction of Sales Contract

In the proceedings below the Appellant sought to invoke the jurisdiction of the Tribunal contained in the HB Act. The jurisdiction of the Tribunal under the HB Act is confined to hearing and determining any "building claim brought before it in accordance with this Part B in which the amount claimed does not exceed $500,000" (see s 48K(1)). Section s 48K also provides in s 48K(5) that the fact that a building claim arises out of a contract that also involves the sale of land does not prevent the Tribunal from hearing that building claim. Section 48K(7) provides that the Tribunal does not have jurisdiction in respect of a building claim arising from a breach of statutory warranty implied under Part 2C if the date on which the claim is lodged is after the end of the period within which proceedings for a breach of the statutory warranty must be commenced (as provided by s 18 E).
The Appellant's application concerns alleged breaches of statutory warranties. Therefore 48K(7) limits the extent of the Tribunal's jurisdiction so that there is no jurisdiction to deal with the application if the date on which the application is lodged is after the end of the period provided for by s 18E.
A building claim is defined in s 48A, as follows: "building claim" means a claim for-- (a) the payment of a specified sum of money, or (b) the supply of specified services, or (c) relief from payment of a specified sum of money, or (d) the delivery, return or replacement of specified goods or goods of a specified description, or (e) a combination of two or more of the remedies referred to in paragraphs (a)‑(d), that arises from a supply of building goods or services whether under a contract or not, or that arises under a contract that is collateral to a contract for the supply of building goods or services, but does not include a claim that the regulations declare not to be a building claim.
It can be seen from the above definition of "building claim" that it concerns a claim that arises from a supply of building goods or services. Section 48(1) defines "building goods or services" as follows: "building goods or services" means goods or services supplied for or in connection with the carrying out of residential building work or specialist work, being goods or services-- (a) supplied by the person who contracts to do, or otherwise does, that work, or (b) supplied in any circumstances prescribed by the regulations to the person who contracts to do that work."
The Appellant alleges that it has brought a building claim because its claim was for the supply of specified services that arises from a supply of building goods and services. The Appellant claims that it has the benefit of the statutory warranties contained in s 18B. Those warranties are implied in every contract "to do residential building work". Accordingly, the central question (which the Tribunal addressed) was whether the contract relied upon by the Appellant (namely the Sales Contract) was a contract to do residential building work. The Respondent has not disputed that the work it agreed to procure was residential building work.
The Sales Contract is in the form approved by the Law Society of New South Wales and the Real Estate Institute of New South Wales for use as a contract for the sale of land (2005 edition). It also contains a number of special conditions. The provisions which are relevant to this decision are the following: 1. A description of the land which is the subject of the contract is contained on the cover page and it includes an "improvement" namely a "House". Clause 1 provides that the property is the "land, the improvements, all fixtures and inclusions, but not the exclusions". 2. Special condition 30.1 provides a definition for the "completion date" and it provides that that date is 14 days after the later of the vendors notifying the purchaser of registration of the plan under clause 44.2(b) and the vendors giving to the purchaser a copy of the occupancy certificate under clause 44.2(c). 3. Special condition 38 provides that the "vendor must procure the construction of the Building before completion in a proper and competent manner and in general accordance with" the development approval, development consent, plans and specifications, schedule of finishes, colour scheme and floor plan". Clause 30.1 contains a definition of "Building" and it means "the residential dwelling of which the vendor is to procure construction on the Land". 4. Special condition 54.1 provides that the purchaser acknowledges that under clause 77 of the Home Building Regulation the vendor is exempt from the requirement under s 96A of the HB Act to attach a certificate of insurance to this contract as work under a contract for the carrying out of residential building work has not commenced on the contract date and the HB Act requires residential building work (whether or not done under a contract for the carrying out of residential building work) to be insured. Clause 54.2 provides that the vendor must provide a certificate of insurance in respect of any residential building work (as required under s 96A(1) of the HB Act) to the purchaser within 14 days after the contract of insurance in respect of which of that work is made. 5. Special condition 57 deals with defects and provides that the vendor must procure the rectification of defects. Special condition 57.10 provides that the purchaser must give the vendor access to the property at all reasonable times to "allow it to make good any defect in the Property".
The particular point argued by the Appellant is that the Sales Contract was a contract "to do residential building work", whereas the Respondent argued that the Respondent's obligations under the Sales Contract did not require it to "do residential building work" as opposed to "procure" such work.
The Appellant relied upon the judgment in Lawrence v Cianter. In that case, the plaintiff was a licensed builder [1] and the defendants were the owners of real property. The issue before the court was whether the agreement entered into between the parties was a contract under which the plaintiff undertook to do, by himself or others, residential building work as defined by the HB Act [6]. The court held that the agreement obliged the plaintiff to carry out and complete certain work by himself or under his supervision and that the agreement was caught by the HB Act [7]. The court held that the proper interpretation of the contract between the parties was that the plaintiff was obliged to carry out and complete the works "either by himself or supervising others" [87]. At [126] the court held that the terms of the contract provided that the plaintiff was "contractually obliged to carry out and complete, by himself or by supervising others, the DA works in return for which it was intended that he was to receive a one third interest in the property".
The court then considered whether the contract was caught by the HB Act. The court considered the submission of the plaintiff that if the contract obliged the plaintiff to "carry out" the works it did not specify how they were to be carried out and it was open for the plaintiff to arrange for someone else to have carried them out under his supervision [152]. This submission went on to contend that supervision is excluded from the definition of "residential building work under sch 1 cl 2(3)(1)(iii) of the HB Act and therefore the court cannot (according to the plaintiff) be satisfied that the contract was caught by the HB Act. The plaintiff relied upon the decision of Windeyer J in Trend Properties v Casa Maria (20 August 1988 unreported). Windeyer J concluded that the contract in that case was not a contract to do residential building work because it did not specify or provide a general outline of what works were to be carried out and there were no plans of the building work. In addition, there was a term of the agreement that made clear that the party was not to do the work itself, but that it was to be done by a licensed builder under its supervision [154]. The court in Lawrence distinguished the facts from those considered in Trend Properties and at [158] the court held that the proper construction of the contract between the parties was that Mr Lawrence was obliged to pay for, carry out and complete the DA works and that therefore, there was a contractual obligation to do the work "whether by himself or supervising others, and specificity around what was to be done, and by when it was to be done."
In our view, the finding in Lawrence that the plaintiff was to "carry out" the work distinguishes it from the obligations set out in the Sales Contract. The submissions of the Appellant are to the effect that the verb "to procure" is a plain English word and not a term of art. It must be construed in the context in which it is used in the Sales Contract. In our view, it means to "obtain or get" or "bring about" but not to "carry out". We agree with the Decision where the Tribunal distinguishes the Lawrence case on the basis that in that case, the plaintiff was obliged to do residential work (ie. carry out such work) whereas under the Sales Contract the Respondent was not so obliged (see [7] of the Decision).
We are fortified in our view as to the meaning of the verb "to procure" by reference to aspects of the Sales Contract. The particular aspects to which we refer are: 1. The Sales Contract does not name the holder of the contractor licence as required by s 7(2) of the HB Act, nor the number of the contractor licence. It was not disputed that the Respondent does not hold and has not held a contractor licence. 2. Section 4 of the HB Act imposes a penalty upon a person who contracts to do residential building work if they do not hold a contractor licence. Section 10 of the HB Act provides that a person who contracts to do any residential building work in contravention of s 4 (unlicensed contracting) is not entitled to damages or to enforce any other remedy in respect of a breach of the contract. It is difficult to conclude that the parties entered into the Sales Contract (which was prepared by a firm of solicitors) intending it to be a contract to do residential building work in circumstances where the Respondent was at risk of prosecution under s 4 and at risk under s 10 of being held not entitled to damages or to enforce any remedy in respect of a breach of that contract. 3. In the context of considering the identity of the parties to a home building contract, Leeming J had regard to similar factors (see BH Australia Constructions Pty Ltd v Kapeller [2019] NSWSC 1086). His Honour took into account, in deciding the identity of the contracting builder, that the builder must be taken to have sought to comply with the law (at [112]). Here it is relevant to take into account that the Respondent must be taken to have intended to comply with the law by contracting on terms that did not constitute the contract to be one to do residential building work. In ascertaining whether the Sales Contract was a contract to do residential building work the Tribunal adopted the same approach by finding that that contract did not contain the "elements of a building contract required under the HB Act." In our view the Tribunal's approach was correct and in accordance with the principles stated in BH Australia and not inconsistent with Lawrence.
Counsel for the Appellant referred to the judgment in Owners - Strata Plan 81837 v Multiplex Hurstville Pty Ltd [2018], NSWSC 1488 and in particular to the fact that in that case the question was whether an agreement constituted a contract to do residential building work. The Court found that Multiplex was not engaged "to do" the work. It was engaged to procure that the work be done [277]. Counsel submitted that the agreement in that case contained provisions distinguishing that agreement from the Sales Contract including a provision that the parties acknowledged that Multiplex was not contracted to do work in contravention of the HB Act [279]. In our view although the two agreements (ie. the Multiplex agreement on the one hand and the Sales Contract on the other hand) contain distinguishing features, the task remains the same, namely how is the Sales Contract to be construed. In Multiplex the Court said, at [288]: If a contract is ambiguous, the construction of the contract which results in the parties (or one of them) acting lawfully is to be preferred to a construction which results in the party or parties acting unlawfully.
That principle has been applied by us (see in particular our comments concerning the operation of ss 7 and 10 of the HB Act).
The fact that the Sales Contract contained detailed plans, a schedule of finishes and an obligation to procure rectification of defects goes to explaining, in detail, what it was that the Respondent was to procure but those matters do not alter the nature of the Respondent's obligations which were to procure, but not to do, residential building work.
For the above reasons, we are of the opinion that the Decision was correct in finding that the Sales Contract is "not a building contract" [7].
The Appellant placed some reliance on s 48K(5). In our view, that provision is limited to providing that the fact that a building claim arises out of a contract that also involves the sale of land does not prevent the Tribunal from hearing the building claim. As the Decision states correctly, s 48K(5) does not state that a contract for the sale of land is a building contract.

Enforcement of statutory warranties against the Respondent as a developer

It remains necessary to consider the Appellant's claim under s 18C of the HB Act. The effect of s 18C(1) is that a person who is the immediate successor in title to "an owner/builder, a holder of a contractor licence, a former holder or a developer who has done residential building work on land is entitled to the benefit of the statutory warranties as if the owner/builder, holder, former holder or developer were required to hold a contractor licence and had done that work under a contract with that successor in title to do that work." Section 18C(2) provides that for the purposes of s 18C(1) "residential building work done on behalf a developer is taken to have been done by the developer".
Here, the Appellant contended that the Respondent was a developer. Accepting for present purposes that the Respondent is a developer within the meaning of s 3A of the HB Act, in determining whether the application of the Appellant to enforce the statutory warranties as successor in title was brought within the time required by s 18E (namely within six years from "completion of the works") it is necessary to decide when completion of the works occurred having regard to the requirements of s 3B. Section 3B(1) provides that completion of the works occurs when the work is complete within the meaning of the contract under which the work is done. The Sales Contract was not the contract under which the work was done. The Tribunal found that on 30 October 2013, the Superintendent under the Strongbuild contract issued a certificate of practical completion pursuant to the provisions of that contract and certified that practical completion was reached on 17 October 2013. The Appellant did not contend that the Strongbuild contract provided for a different date for practical completion but rather contended that the Tribunal should determine the date for practical completion by reference to the Sales Contract. As the Sales Contract is not a contract under which the work was done it cannot, in our view, be the contract by which the date for practical completion is determined.
In our view there is no error in the Tribunal's finding of fact as to the date of practical completion nor in its consequential finding that the application of the Appellant was lodged out of time because it was lodged more than six years after 17 October 2013, that being the period in respect of which a breach of a statutory warranty must be commenced under s 18E.
Accordingly, we are in agreement with the Tribunal that the application was lodged out of time.

Extension of time

The remaining question is concerns the Appellant's contention that time to make the application should be extended.
We note that the Decision records that the Appellant made no submissions, despite being expressly invited to do so in earlier Tribunal directions, that the warranty period should be extended by operation of s 18E(1)(e). That provision enables a short extension of six months where knowledge of the breach of warranty occurs six months prior to the end of the warranty period. The Notice of Appeal does not set out the extension of time issue as a ground of appeal and there is nothing in the material before us that leads us to conclude that the Appellant asked the Tribunal for an extension of time to lodge the application under s 41 of the NCAT Act. We are therefore satisfied that this application is being raised for the first time in the appeal.
Parties are generally bound by the course they adopted during the hearing at first instance. As stated by the High Court in University of Wollongong v. Metwally (No. 2) [1985] HCA 28; (1985) 59 ALJR 481, at p 483; [1985] 60 ALR 68, at p 71: It is elementary that a party is bound by the conduct of his case. Except in the most exceptional circumstances, it would be contrary to all principle to allow a party, after a case had been decided against him, to raise a new argument which, whether deliberately or by inadvertence, he failed to put during the hearing when he had an opportunity to do so".
This passage was cited with approval by the plurality in Coulton v Holcombe [1986] HCA 33; (1986) 162 CLR 1 (19 June 1986) at [10]. See also Drivas v Burrows [2014] NSWCATAP 87 in which the Appeal Panel observed at [32]: The considerations favouring finality of litigation are at least as strong, and probably stronger, in the case of the Tribunal given the importance attached to the expeditious and inexpensive disposition of proceedings [under the] Civil and Administrative Tribunal Act (the Act).
In our view there are no exceptional circumstances that would warrant the appellant now being given an opportunity to argue that an extension of time should be granted - even if the Tribunal had the power to do so in the circumstances of this case - when that argument was not put to the Tribunal below. In such circumstances, we are not prepared to allow the Appellant to raise that argument for the first time on the appeal. It is therefore unnecessary for us to consider whether the Tribunal has the power to do so in the circumstances of this particular case.
In any event, were we to consider the application to extend time we would not extend time for the reasons set out in the follow paragraphs.
At the time the Sales Contract was entered into S48K of the HB Act provided that 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 was more than seven years after the date on which the residential building work was completed. Here the application was lodged within the seven year period. At the same time (that is, the date when the Sales Contract was entered into) s18E provided that proceedings for breach of statutory warranty must be commenced before the end of the warranty period and that the warranty period is six years for major defects starting on completion of the works.
Therefore based on s48K( 7) as it was when the Sales contract was entered into the Tribunal may have had jurisdiction to consider the breach of warranty claim but, anomalously the warranty period had expired.
The anomaly referred to in the above paragraph was addressed by the Statute Law (Miscellaneous Provisions) Act 2012 No 42 by which Parliament amended s 48K(7) to provide that the Tribunal does not have jurisdiction in respect of a home building claim arising from a breach of a statutory warranty under Part 2C if the date on which the claim was lodged is after the end of the period within which proceedings for a breach of a statutory warranty must be commenced (as provided by s 18E ). As the footnote to that Act states this amendment aligns the period for the making of a claim in the tribunal in respect of a breach of statutory warranty with the period within which proceedings for the breaching of a statutory warranty must be brought.
In short hand language relevant to this case: if the Appellant had the benefit of a warranty for six years unless the above Act reduced the time for the Appellant to commence proceedings to six years the Appellant could have brought a claim until the seven year period had expired. By this analysis the Appellant may not have required an extension of time to commence proceedings, (unless the above Act had the effect of reducing the time to commence proceedings from seven to six years), but commencing proceedings after six years would have been pointless because the warranty period had expired. The issues referred to in this and the preceding paragraph were not raised by the parties either before or at first instance and we express no final view. It suffices to say that when the Appellant commenced the proceedings the Appellant was unable to enforce the warranty because it had expired.

Conclusion

Having regard to the above reasons the orders we propose to make are the following: 1. Appeal dismissed. 2. If the Respondent seeks costs of the appeal it must file and serve submissions and evidence in support of such an application within 21 days of the date of these orders. 3. The Appellant must file and serve submissions and evidence in opposition to the Respondents submissions within 14 days thereafter 4. The submissions of the parties should state whether it will be appropriate for the Appeal Panel to dispense with the hearing on costs and determine costs on the papers.

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: 05 May 2021

Administrative Tribunal Act 2013(NSW)

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Judgment (13 paragraphs)

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Cases Cited (11)