Mr Bicai Wu applied on 9 May 2024 for an owner-builder permit (OBP) under the Home Building Act 1989 (the HB Act). He applied for the permit so that he could build a dual occupancy (duplex) for himself and rent out the other. He needs to demolish an existing structure that is in Girraween in the Cumberland Council area, construct a two-story detached dual occupancy duplex and Torrens title the subdivision into 2 lots. The purpose for which he wishes to put this dual occupancy dwelling, he says, is not to sell either or both of the dwellings, but rather to live in one of them and rent the other out or to install his parents in law in the other. He has Council development approval to do so. That approval stated that the Development Approval expired in May 2023. Neither party addressed on the issue of whether that was a matter of any significance.
Wu v Commissioner for Fair Trading, Department of Customer Service [2024] NSWCATOD 161 | Case summary | Zoe
The applicant has lived at the current residence at the site for more than two decades. He has building qualifications himself. He says he is a builder and owns a construction company (BCW Construction) and it has builder's licence number 24963C. He apparently does not hold that licence himself. The material includes his NSW Fair Trading issued supervisor's certificate, noted as "builder electrician". He says that he can "easily get home warranty from icare". However, he says that he does not want to pay extra money on the Home Building Compensation Fund (HBCF) because he is building this property for himself.
On 28 May 2024, the Original Application was refused on the basis that as the subject residential building work relates to a dual occupancy and the Applicant did not meet the legislative requirement of demonstrating that special circumstances exist which is what is required to be shown to get an OBP to construct a dual occupancy residence. More specifically it concluded that the delegate was not satisfied that the information provided demonstrated special circumstances. The Original Application was refused in accordance with section 32(1A) of the HB Act.
Then on 3 June 2024, the Applicant requested an internal review of that decision. On 6 June 2024, under section 53(5)(a) of the Administrative Decisions Review Act 1997 the original decision to refuse the application was affirmed (the Internal Review Decision). The reasons provided concluded as follows:
The intent for family members to possibly reside in one of the dual occupancy dwellings whilst Mr Wu and presumably his wife live in the other dwelling is not an uncommon, unusual nor exceptional scenario, as dual occupancy dwellings are often constructed to enable family members to live near each other for support or cultural reasons,
Mr Wu also references renting one of the dual occupancy dwellings. It is not the intent of the owner builder scheme to enable development of property for financial gain through rental income,
The details listed on the application do not substantiate special circumstances exist to justify issuing an owner-builder permit for the construction of a dual occupancy.
No further information regarding possible special circumstances were included in the internal review submission, except Mr Wu stating he does not want to build the dual occupancy under his building authorities as he does not want to pay extra money on the Home Building Compensation Fund, Clearly, this preference does not actually prevent the construction of the proposed dual occupancy by Mr Wu under his company's licence or by another licensed builder.
Having regard to the information provided with the original application and internal review, I conclude that the original decision is correct in determining that Mr Wu has not demonstrated special circumstances exist to justify issuing an owner-builder permit authorising him to do residential building work that relates to a dual occupancy at
On 19 June 2024 the Applicant applied to this Tribunal for administrative review of the Internal Review Decision.
There is and was very little material in fact at all from the applicant. He has not filed evidence or a submission which responds to the grounds relied upon by the respondent in opposing the review. Orders were made permitting him to do so. No further information regarding possible special circumstances were included in his material in the Tribunal, except to state that the purpose for which he wishes to build this dual occupancy dwelling is not to sell either or both of the dwellings, but rather for himself to live in. If that is meant to suggest that he will live in both dwellings, he does not condescend to explaining how he will be doing so, and it is inconsistent with his earlier claimed intentions.
The applicant has not provided any documents other than his application and those contained in the section 58 material. Both parties requested that the matter be determined on the basis of the written materials submitted and that a hearing be dispensed with under section 50 of the Civil and Administrative Tribunal Act 2024.
The parties having been given the opportunity to make submissions as to whether the Tribunal should dispense with a hearing, and being satisfied that the matter can be adequately determined in the absence of the parties, I make an order dispensing with a hearing pursuant to section 50(2) Civil and Administrative Tribunal Act 2013.
[2]
Role of the Tribunal
The Tribunal has jurisdiction to review an administratively reviewable decision: section 55 of the Administrative Decisions Review At 1997 (the ADR Act). Section 83B of the HB Act provides that applications may be made to the Tribunal for administrative review under the ADR Act of decisions to refuse authorities under the HB Act. I am satisfied the Tribunal has jurisdiction to hear and determine this application for review.
When considering an application for review the Tribunal is to decide what is the correct and preferable decision having regard to the material before it (section 63(1) of the ADR Act). In doing so the Tribunal may exercise all of the functions that are conferred or imposed by any relevant legislation on the administrator who made the decision (section 63(2) of the ADR Act).
The time at which the correct and preferable decision is determined is when Tribunal makes its decision: YG and GG v Minister for Community Services [2002] NSWCA 247 at [25]. In conducting a review, the Tribunal is not restricted to consideration of the material that was before the Commissioner but may have regard to any relevant material before the Tribunal at the time of the review: Shi v Migration Agents Registration Authority [2008] HCA 31.
The Tribunal may decide to affirm or vary the administratively reviewable decision, or set it aside and either substitute a different decision or remit the matter to the administrator for reconsideration: see section 63(3) of the ADR Act.
[3]
Legal issues
The HB Act provides for an OBP which allows unlicensed persons to do and/or coordinate certain home building work as defined under the HB Act. (See sections 29, 30, 32 and cl 2 of Schedule 1 the HB Act). An OBP authorises its holder to do such residential building work as is described in the permit on the land specified in the permit.
Section 29 of the HB Act relevantly specifies:
29 Definitions
In this Act;
dual occupancy and secondary dwelling have the same meanings as in the principal local environmental planning instrument prescribed by the Standard Instrument (Local Environmental Plans) Order 2006.
owner-builder work means residential building work-
(a) the reasonable market cost of the labour and materials involved in which exceeds the prescribed amount, and
(b) that relates to a single dwelling-house, dual occupancy, or secondary dwelling-
(i) that may not be carried out on the land concerned except with development consent under Part 4 of the Environmental Planning and Assessment Act 1979, or
(ii) that is complying development within the meaning of that Act.
(2) If land is owned by a company that is wholly owned by individuals, the land is to be taken (for the purposes of this Division) to be owned by those individuals.
(3) In this Division, a reference to an owner of land includes a reference to a person who has a prescribed interest in the land.
The Standard Instrument (Local Environmental Plans) Order 2006 which is referred to in section 29 of the HB Act, defines dual occupancy and dwelling as follows:
"dual occupancy means 2 dwellings (whether attached or detached) on one lot of land"; and
"dwelling means a room or suite of rooms occupied or used or so constructed or adapted as to be capable of being occupied or used as a separate domicile."
Section 32(1A) of the HB Act provides:
32 Authority conferred by owner-builder permits
…
(1A) An owner-builder permit must not be issued to authorise its holder to do residential building work that relates to a dual occupancy unless the Secretary is satisfied that special circumstances exist that justify the owner-builder permit authorising its holder to do that work. The Secretary may issue guidelines as to the circumstances that will be considered to be special circumstances for the purposes of this subsection.
The Secretary has not in fact issued any such guidelines. The relevant question then is whether or not special circumstances have been shown by the applicant to exist.
What might comprise special circumstances in this context was considered by this Tribunal in Hammoudi v Commissioner for Fair Trading [2016] NSWCATOD 57 (Hammoudi); McGufficke v Commissioner for Fair Trading [2022] NSWCATOD 84 (McGufficke), Oslear v Commissioner for Fair Trading [2022] NSWCATOD 110 (Oslear) and Khouri v Commissioner for Fair Trading [2023] NSWCATOD 135 (Khouri).
In Hammoudi it was said at [64] that one should look at the purposes of the HB Act 1989; the purposes of an owner-builder permit in the context of the HB Act; the legislative purpose behind the amendment to the HB Act in section 32(1A) against the issue of owner builder permits for dual occupancies; and the scope of special circumstances as set out in the Minister's Second Reading Speech in May 2014.
In the Second Reading Speech in May 2014, the Minister stated that
Currently owner-builders are only permitted to undertake work relating to a single dwelling or a dual occupancy. There are concerns that some commercially orientated, unlicensed people may be using the permit system in order to undertake dual occupancy work on land with a view to subdividing the land and on-selling it at a profit. The owner-builder permit system is not intended for such commercial development work.
"Owner-builders will not be able to obtain a permit for work on a dual occupancy unless the commissioner is satisfied that special circumstances exist, such as where a family could demonstrate legitimate non-commercial reasons for the work or where refusing the permit could cause family hardship".
In each of the cases cited above the Tribunal had regard to Parliament's purpose in imposing the special circumstances limitation on owner-builder permits for dual occupancies, was to ensure appropriate controls on building and construction work and to avoid development of dual occupancies for commercial purposes and/or financial advantage by owner-builders.
In McGufficke, the Tribunal noted (at [48] and [55]) Parliament's intention also to protect consumers who might purchase these properties and that the burden of demonstrating special circumstances exist lies with an applicant.
[4]
Consideration
As Senior Member Molony said in Oslear at [36],
"each case will have to be considered individually with the applicant bearing the statutory burden of satisfying the Commissioner that special circumstances exist. I am inclined to the view that this will usually require the applicant to adduce evidence of the financial arrangements surrounding the construction and subdivision, as well as personal and family circumstances."
As also stated in Oslear at [40], and adopted in Khouri:
The fact that an applicant intends to live in the principal dwelling of the dual occupancy does not constitute a special circumstance. To be eligible to be issued with an owner builder permit with respect to a dual occupancy s 81(2)(c) requires that an applicant must intend to live there.
For special circumstances to exist, something beyond a non-commercial objective and continued residence must be shown to exist. What that something may be will depend on each case. It would be unwise to seek to anticipate such circumstances before they arise. In this case, beyond his insistence that no commercial purpose underlies the application, and that he will live in the new dwelling with his family, the applicant has not pointed to any other factor that amounts to a special circumstance.
In Manassa v Commissioner for Fair Trading [2024] NSWCATOD 81 it was held that there were special circumstances as follows; at [16]-[18];
Mr Manassa lives with his wife, children and parents at his parent's home in Merrylands. His intention is to build a duplex on land he owns nearby in Merrylands as his family's 'dream home'. He, his wife, a young child, a newborn and any future children would live in one half of the duplex and his parents, who require significant support, would live in the other half. He does not intend to sell any part of the duplex nor to subdivide the land.
Mr Manassa 's evidence was that the house currently on the land he owns does not suit this family and their preferred and needed living arrangements, in part because is not big enough for them to live together with appropriate privacy.
Mr Manassa has qualifications in building design. He has family members who are tradespeople who would give him discounts and access to trade prices, which is why he thinks being an owner-builder would be more affordable for him than using a builder. When questioned Mr Manassa, who was self represented, explained he did not have a financial plan for the proposed construction because he considered the first step to be obtaining a permit…
In Hammoudi it was said at [73]-[74] that
The Tribunal is satisfied that the reasons advanced by the Applicant for the work are to build a home on the property suitable for mobility in old age, near an existing property which is to be occupied by a family member with the responsibility of taking care of Mr and Mrs Hammoudi in their older age. The Tribunal does not consider this to be a commercial motivation. There is no immediate intention to sub-divide established in the Applicant's evidence.
The Tribunal understands the alternative to Mr Hammoudi obtaining an owner builder permit is to engage the holder of a building contractor licence to undertake the residential building work. Mr Hammoudi would not be prevented from constructing the dual occupancy by refusal of the owner-builder permit. However the Tribunal understands that Mr Hammoudi's special circumstances are that he could not afford to build the home as per the approved Development Application by using a contractor builder. The DA and plans were drafted and submitted prior to the change in section 32(1A). In this respect Mr Hammoudi advances special circumstances very specific to his own situation.
In the latter case a refusal of the owner builder permit would have caused financial hardship to Mr Hammoudi's family in that he would either not be able to proceed with the development or he must proceed with the increased costs and pace of a contracted builder.
There are no such factors present here. On the contrary the applicant has the capacity to build these dwellings by using his own building company. His unwillingness to build the dual occupancy homes using his company seems to relate only to not wanting to pay extra money on HBCF. That he has that preference does not amount to special circumstances, Clearly, this preference does not actually prevent the construction of the proposed dual occupancy by Mr Wu using his company's licence or by another licensed builder. Nor am I persuaded that at least in respect of the 2nd dwelling that there is not a commercial motivation. I am not persuaded that he has shown that there are special circumstances.
Having regard to those matters the decision under review is affirmed.
[5]
Orders
1. The Tribunal dispenses with a hearing pursuant to section 50(2) Civil and Administrative Tribunal Act 2013.
2. The decision under review is affirmed.
[6]
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: 01 October 2024
Parties
Applicant/Plaintiff:
Wu
Respondent/Defendant:
Commissioner for Fair Trading, Department of Customer Service