New South Wales Supreme Court CITATION : Sneyers v Fair Trading Administration Corp [2001] NSWSC 771 CURRENT JURISDICTION: Common Law Division FILE NUMBER(S) : SC 13154/00 HEARING DATE(S) : 22/05/01 JUDGMENT DATE : 10 September 2001 PARTIES : Cornelis Johannes Sneyers (appellant) Fair Trading Administration Corporation (formerly Building Services Corporation) (respondent) JUDGMENT OF : Hidden J at 1 LOWER COURT Local Court JURISDICTION : LOWER COURT FILE NUMBER(S) : LOWER COURT M Shepherd LCM JUDICIAL OFFICER : COUNSEL : E M Ollson (appellant) J Smith (respondent) SOLICITORS : Breens (appellant) Hunt & Hunt (respondent) CATCHWORDS : LOCAL COURT - Appeal - action by respondent to recover money paid under BSC Comprehensive Insurance Scheme - question whether losses "reasonably incurred" Building Services Corporation Act 1989 LEGISLATION CITED : Home Building Act 1989 Local Courts (Civil Claims) Act 1970 CASES CITED : Builders' Licensing Board v Inglis (1985) 1 NSWLR 592 DECISION : Appeal dismissed THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION HIDDEN J Monday 10 September 2001 13154 of 2000 Cornelis Johannes Sneyers v Fair Trading Administration Corporation ( formerly Building Services Corporation) Reasons for judgment 1 HIS HONOUR: This is an appeal from the decision of a magistrate in a civil claim in which the respondent, now known as the Fair Trading Administration Corporation, was the plaintiff and the appellant, Cornelis Johannes Sneyers, was the defendant. 2 At the time of the events giving rise to the proceedings, the respondent was known as the Building Services Corporation and its functions were prescribed by the Building Services Corporation Act 1989 (now the Home Building Act 1989). The purpose of that Act was to regulate the residential building industry and, among other things, to provide for the licensing of building contractors and for an insurance scheme to which home owners who engaged a licensed contractor might have recourse if the building work proved to be defective. 3 Section 91(1)(a) of the Act enabled the establishment by regulation of the BSC Comprehensive Insurance Scheme, which was to be found in Form 4 of Schedule 1 to the Building Services Corporation Regulation 1990. Under that Scheme, an owner (termed a "beneficiary") might be indemnified by the Corporation for losses "reasonably incurred" in rectifying defects in building work undertaken by a licensed contractor because of bad workmanship, unsuitable materials, and the like: clause 5(1)(d) of the Scheme. By s98(1) of the Act, the Corporation was entitled to recover any amount paid under the Scheme from the building contractor in a court of competent jurisdiction. 4 The appellant is a licensed builder. In 1995 he was engaged by Peter Pace-Feraud and his wife, Jennifer Pace-Feraud to undertake renovations and additions to their home at North Ryde. Eventually, Mr and Mrs Pace-Feraud complained to the respondent about defective work and made a claim upon the Comprehensive Insurance Scheme for rectification of it. After investigation, the respondent met the claim in an amount of about $30,000. At the end of 1996 it commenced proceedings against the appellant for recovery of that amount. The matter came on for hearing in October 2000 at Fairfield Local Court and the learned magistrate gave judgment for the respondent. It is against that decision that this appeal is brought. 5 It is unnecessary to recite all the issues which were contested in the Local Court, or indeed, the various grounds of appeal which were advanced in this Court. The appellant was unrepresented in the Local Court. Some of the grounds of appeal challenged the adequacy of the evidence led by the respondent and questioned whether the learned magistrate had conducted the proceedings in such a way as to allow for the appellant's lack of legal representation. At the hearing of the appeal it was acknowledged that these grounds did not raise a question of law, which is necessary to found an appeal such as this: s69(2) of the Local Courts (Civil Claims) Act 1970. 6 Ultimately, the argument centred on one issue: did his Worship have regard to evidence suggesting that Mr and Mrs Pace-Feraud had repudiated the building contract before the appellant had had an opportunity to complete the required work? Evidence to that effect might have borne upon the question whether the losses for which the respondent indemnified Mr and Mrs Pace-Feraud were reasonably incurred, as clause 5 of the Comprehensive Insurance Scheme required: cf Builders' Licensing Board v Inglis (1985) 1 NSWLR 592. 7 Paragraph 5 of the grounds of defence in the Local Court asserted: Certain work which was unfinished could not be completed because of non-payment by the owners for earlier work and/or refusal by the owners of access to the site by the defendant. At one stage during the construction, complaints by Mr and Mrs Pace-Feraud about defective work led to their entering into mediation with the appellant. This led to an agreement requiring the appellant to rectify certain parts of the work. That agreement was in evidence before the learned magistrate but it is not before me. There was also a Scott Schedule, which is not before me. 8 The evidence was that the appellant set about the work required by the mediation agreement. It seems that, in the course of his doing so, he undertook some work on a balcony to which the owners' took exception. Mr Pace-Feraud ordered him off the property, threatening to call the police if he did not leave. The appellant gave evidence that he decided to leave "because the situation became unworkable". He said that he protested about this development to the mediator and, indeed, to the respondent. He also said that Mr Pace-Feraud was behind in payments for the work and he expressed his suspicion that he wanted to terminate the contract because he was in financial difficulty. 9 The appellant wrote to Mr Pace-Feraud, expressing his willingness to return to the site if Mr Pace-Feraud would allow him to continue the work and could assure him that funds were available to pay for it. However, Mr Pace-Feraud replied by terminating the contract. In evidence, the appellant said that he had endeavoured to do the work, but that Mr Pace-Feraud had "blocked my way into the property by way of threatening me with the police, making a work environment…which was impossible". 10 In giving judgment, the learned magistrate noted that the mediation agreement covered "only limited areas" and that it left "untouched" eight of the nine matters set out in the Scott Schedule. His Worship referred in terms to paragraph 5 of the grounds of defence but observed, "Completion of the work is not an issue, it's rectification of work that has already been done that's in issue…". For that reason, he concluded that the Pace-Ferauds' refusal to allow the appellant access to the site was not relevant. He added that the appellant had failed to produce evidence to demonstrate that "non-payment of instalments was somehow associated with him not carrying out the work". 11 While paragraph 5 of the grounds of defence alleged that "certain work which was unfinished could not be completed" because of the behaviour of the owners, the evidence leaves it unclear what that work was said to be. The most that can be said is that it was, or included, the work which the appellant was about to undertake on the balcony. That work, apparently, was not part of the respondent's claim. Certainly, the appellant did not give evidence that it was his intention, if he had been allowed back on the site, to carry out the rectification work which was the subject of the claim. 12 I have some concern that this deficiency in the evidence might have arisen from the fact that the appellant did not have the benefit of legal representation. Nevertheless, the learned magistrate's conclusion about this aspect of the matter, set out above, was clearly open on the evidence as it stood. While his Worship did not refer in terms to the question whether the Pace-Ferauds' losses were reasonably incurred, it is also clear that it was to that issue that this part of the judgment was directed. 13 Accordingly, I am not persuaded that his Worship fell into error of law in his approach to the matter. The appeal must be dismissed. If necessary, I shall hear the parties on costs. ********** Last Modified: 09/12/2001 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. 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