New South Wales Supreme Court CITATION : Grygiel v Baine & Ors [2004] NSWSC 308 HEARING DATE(S) : 30 and 31 March 2004 JUDGMENT DATE : 20 April 2004 JURISDICTION: Common Law Division Administrative Law List JUDGMENT OF : Master Malpass DECISION : The Summons is dismissed. The plaintiff is to pay the costs of the Summons. The Exhibits may be returned. The question of the basis on which those costs are to be payable is reserved. CATCHWORDS : Tribunal - joinder of parties - costs - interlocutory decisions on matters of practice - jurisdiction in relation to building claims and consumer claims. Architects Act 1921. Consumer Claims Act 1998, s 3, s 4, s 6. LEGISLATION CITED : Consumer, Trader and Tenancy Tribunal Act 2001, s 3, s 5 (2) s 21, s 26, s 26 (2) and (3), s 53, s 53 (1), s 65, s 67. Home Building Act 1989, s 3, s 48A, s 48K, s 92. Consumer, Trader and Tenancy Tribunal Regulation 2002, cl 20, cl 20 (4), cl 28. Collings Homes v Head & Ors [2002] NSWSC 1219. Coulton v Holcombe (1986) 162 CLR 1. CASES CITED : Ultra Modern Developments v Donmap Digital Images & Ors [2003] NSWSC 1079. W D & H O Wills (Australia) Ltd and Anor v The Consumer Claims Tribunal of New South Wales and Anor - BC 9803304. Woolcock Street Investments Pty Ltd v CDG Pty Ltd (HCt Unreported BC200401482 - 1 April 2004). Christopher Andrew Grygiel (Plaintiff) v Anthony J Baine (First Defendant) PARTIES : Janice Wiley (Second Defendant) Albion Design and Construction Pty Ltd (Third Defendant) Blakemore Electrical Services Pty Ltd (Fourth Defendant) S.A.Carroll, Michael O'Dea, M. Concannon, A.J.Baine, R.P.Higgins, H.G.Harrison, P.J.Punch, P.A.Carroll, D.B.Farah, G.M.Phillips, Maithri Panagoda, Timothy Concannon T/as Carroll & O'Dea (Fifth Defendants) Consumer Trader and Tenancy Tribunal (Sixth Defendant) FILE NUMBER(S) : SC 30088 of 2003 Mr B Zipser (Plaintiff) Mr M Pesman (First and Second Defendants) COUNSEL : Mr L G Stone (Third Defendant) N/A (Fourth Defendant) Mr S Goldstein (Fifth Defendants) N/A (Sixth Defendant) The Builders' Lawyer (Plaintiff) MasseyBailey (First and Second Defendants) PricewaterhouseCoopers Legal (Third Defendant) SOLICITORS : N/A (Fourth Defendant) Carroll & O'Dea (Fifth Defendants) I V Knight - Crown Solicitor - Submitting Appearance (Sixth Defendant) LOWER COURT Consumer, Trader & Tenancy Tribunal JURISDICTION : LOWER COURT HB 02/32025 FILE NUMBER(S) : LOWER COURT R Connolly, Member JUDICIAL OFFICER : IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION ADMINISTRATIVE LAW LIST Master Malpass Tuesday 20 April 2004 30088 of 2003 Christopher Andrew Grygiel v Anthony J Baine & Ors JUDGMENT 1 MASTER: The plaintiff is a builder. He has a company (Eastermead Pty Ltd). Discussions took place between the plaintiff on the one hand and the first and second defendants (who are husband and wife) on the other hand concerning building work on a house at Vaucluse. Certain contractual arrangements were made (the work was to be done on a "do and charge" basis) in or about September 2001. Building commenced in about October 2001. Later, the plaintiff and the first and second defendants fell into dispute. Some claims for progress payments were met. Others were not paid. The first and second defendants took the view that there had been defective work and that overpayments had been made. The contractual arrangements were brought to an end. 2 The plaintiff made a monetary claim against the first and second defendants founded on contract in the Consumer, Trader and Tenancy Tribunal (the Tribunal). 3 The first and second defendants responded by defending the application on various grounds (including breach of s 92 of the Home Building Act 1989). Further, whilst there is no cross-claim procedure in the Tribunal, the first and second defendants brought their own application in the nature of a cross-claim seeking relief in respect of the defective work and overpayments. The applications are yet to be heard by the Tribunal. At this stage, it has only dealt with certain procedural matters (including a Notice of Motion brought by the plaintiff on 7 March 2003). 4 The Motion sought to bring about a significant change in the proceedings. Hitherto, what could have been thought to be a relatively straightforward building claim dispute involving two sides was sought to be converted into multiple party proceedings of complexity with a potential for disproportionately expensive lengthy litigation. 5 The hearing of the Motion took up three days. The decision was given on 5 September 2003. 6 On 26 September 2003, the plaintiff filed a Summons in this Court. It purports to bring an appeal from certain of the matters determined on the Motion. The appeal was heard on 30 and 31 March 2004. The court had placed before it voluminous written submissions which were supplemented by oral argument. 7 The appeal embraces decisions on a variety of matters. All of them involve interlocutory decisions. I shall endeavour to deal with them in the order that they were presented during argument. 8 Firstly, the plaintiff had sought to join his company as a co-applicant. This seemed to have been inspired by the fact that the cross-claim had been brought against both the plaintiff and his company. In submissions, a concern has been expressed as to the possibility of the company being found to be the contracting party. If there be any such concern, it is because in responding to the cross-claim, the company has been identified as the contracting party. 9 The application was rejected. This was done on a variety of grounds (including findings of fact). 10 It might be said that this application had no utility for the plaintiff (he would lose the advantage of an admission and he would have created a further issue for himself). In my view, it was misconceived. Because of his response to the cross-claim he seems to have placed himself in an inconsistent position. This seems to have given rise to the misconception. It would seem to be advantageous to the plaintiff to have this problem promptly addressed. 11 The response made by the first and second defendants to the application does not bring about any issue as to the contracting parties. During the hearing of this appeal, counsel for the first and second defendants, on a number of occasions by way of further clarification, unambiguously restated that there was an admission in the plaintiff's proceedings to the effect that the plaintiff and the first and second defendants were the relevant contracting parties. 12 In the circumstances, there was no basis for the disturbing of the decision made by the Tribunal on this matter. Be that as it may, there was nothing that could be the subject of a successful challenge pursuant to s 67 of the Consumer, Trader and Tenancy Tribunal Act 2001 (the Act) which is the avenue for relief in this appeal. Under that provision, there can only be an appeal where the Tribunal decides a question with respect to a matter of law. In construing the ambit of this provision regard may be had to the relief available under s 65 where there is no jurisdiction or denial of procedural fairness. The avenue provided by s 67 is regarded as being narrower than showing error of law. 13 Little further need be said about this matter as it was abandoned during the course of argument. 14 The second matter concerns what was done in relation to Scott Schedules. An order had been made to file an Amended Scott Schedule. The plaintiff complains that what was provided by the first and second defendants was both defective and inadequate. The Tribunal refused to make an order that an amended document be filed and deferred dealing with the matter until the hearing. 15 The plaintiff complains that the Tribunal failed to examine the Scott Schedule and thereby denied him procedural fairness. 16 This Court is asked to set aside what was done by the Tribunal and grant the relief which it says the Tribunal should have given. 17 Traditionally, at an appellate level, courts have been loath to interfere with interlocutory decisions concerning what might be described as matters of practice. Interference in such decisions is the nature of the relief sought in respect of this matter. 18 In my view, this Court should be loath to interfere with practice decisions of the Tribunal. In any event, I am not satisfied that there was any error or denial of procedural fairness. Be that as it may, I am certainly not satisfied that the Tribunal has decided any question with respect to a matter of law. 19 I consider that it was not intended that the Act would provide an avenue of appeal in respect of practice decisions. I accept that there may be rare instances where such decisions may be seen as deciding a question with respect to a matter of law. This is not one of those instances. 20 The third matter concerned costs orders made by the Tribunal on 25 February 2004. The costs orders concerned the matters argued on the Notice of Motion. Orders were made against the plaintiff on an indemnity basis. In making orders on an indemnity basis, the Tribunal looked to various offers of compromise. 21 The making of the orders was challenged on a number of grounds. I shall expressly refer to just some of them. One looked to the costs regime set up by the Act and the Consumer, Trader and Tenancy Tribunal Regulation 2002 (the Regulation). Another saw error in founding the indemnity orders on the offers of compromise. By these grounds it was sought to disturb the orders regardless of the result in this appeal. There were other grounds which looked to questions of success on the many matters that were argued on the Notice of Motion. 22 The relevant statutory provisions are as follows:- " 53 Costs (1) Subject to this section and the regulations, the parties in any proceedings are to pay their own costs. (2) The Tribunal may, in accordance with the regulations, award costs in relation to any proceedings. (3) If costs are to be awarded by the Tribunal in accordance with regulations, the Tribunal may: (a) determine by whom and to what extent costs are to be paid, and (b) order costs to be assessed on the basis set out in Division 6 of Part 11 of the Legal Profession Act 1987 or on any other basis. (4) In this section, costs includes the costs of, or incidental to, proceedings. ………………………………….." 23 The effect of these provisions, whilst recognising the starting point set forth in subs (1), is to confer a discretionary power upon the Tribunal to award costs in relation to any proceedings in accordance with the Regulation (Ultra Modern Developments v Donmap Digital Images & Ors [2003] NSWSC 1079). Clause 20 of the Regulation sets out the relevant provisions. It is common ground that subclause (4) has application in this case. Under that provision, the Tribunal may award costs in relation to the proceedings in such circumstances as it thinks fit. 24 In the exercise of the discretionary power, the Tribunal must have regard to the provisions of the Act and the Regulation. The power should be exercised having regard to the relevant circumstances of the particular case before the Tribunal. 25 The Tribunal may have regard to the well-established principles upon which costs are awarded generally (inter alia it can place weight on the principle that costs may follow the event). It can determine by whom and to what extent costs are to be paid. 26 Accordingly, I am not satisfied that there was error in making an award as to costs in this Notice of Motion and I am not satisfied that orders as made should be disturbed. 27 I now turn to the challenge as to the basis on which the costs were ordered. There is no restriction as to basis. The plaintiff suffered a result that was less favourable than was offered in each of the various offers of compromise. I see no error on the part of the Tribunal in allowing indemnity costs in those circumstances. 28 However, assuming for present purposes that there may have been some error in what was done, I am not satisfied that the challenge brought in relation to costs falls within the ambit of s 67. 29 Accordingly, I am not satisfied that there is any basis whatsoever for disturbing any of the orders that were made. 30 Whilst the matters that I have mentioned took much of a day to be argued, the principal matter agitated by the challenge was the refusal to add the third defendant and the fifth defendants as parties to the proceedings before the Tribunal. 31 The third defendant is registered as a Chartered Architect under the Architects Act 1921. It provided architectural services for the first and second defendants (including providing drawings). A dispute arose as to fees and the services were terminated. This happened before any contract was made with the first and second defendants and before any work was done. The issues between the plaintiff and the first and second defendants include questions of whether or not these services were responsible for any defective work. 32 It is sought to bring a claim against the third defendant founded on negligence. It is alleged that it owed a duty of care to the plaintiff and that it had a duty to perform the services with all due care and skill. It is further alleged that in breach of the duty it failed to exercise due care in performing the work. It is further alleged that loss and damage has been suffered as a result of that breach. 33 The first defendant is a solicitor. At all material times, he has been a member of the firm of which the fifth defendants are the partners. It is sought to bring a claim against all partners (including the first defendant). 34 In respect to this matter, it may be helpful to invite attention to subss (2) and (3) of s 26 of the Act. 35 For some years prior to this contract, the first defendant had provided legal services for inter alia the plaintiff. The plaintiff had earlier done building work for him. 36 It is common ground that the plaintiff failed to take out home owner's warranty insurance as required by the Home Building Act 1989. His failure to do so is pleaded as a defence to any liability for his claim. 37 It is alleged that the insurance was not taken out because of representation made or advice given to him by the first defendant. The plaintiff seeks to maintain an action against the first defendant and his partners founded on either breach of an implied retainer or negligence. It is alleged that there was a breach of both the retainer and the duty of care said to be owed in that due care and skill had not been given in providing legal advice. It is further alleged that loss has been suffered as a result of that breach. 38 The proposed application concludes with a general claim made as against all defendants for damages, interest and costs. 39 In respect of the third defendant, apart from what has been earlier mentioned, the body of the application contains a claim for indemnity or contribution (which can be seen as referable to a sum of $39,739.29) as being either a further or alternative claim. 40 In respect of the fifth defendants, apart from what has been earlier mentioned, the body of the application contains a claim for indemnity. 41 The applications to join the third defendant and the fifth defendants were both rejected by the Tribunal on jurisdictional grounds. 42 The Tribunal has jurisdiction conferred inter alia by the Home Building Act 1989 and the Consumer Claims Act 1998. 43 The plaintiff propounds a number of arguments to support his contention that the Tribunal has jurisdiction to entertain these claims. It is said to be a building claim. It is said to be a consumer claim. It is also said that the joinder powers of the Tribunal can be used to enable these claims to be brought. 44 Section 48K of the Home Building Act 1989, confers on the Tribunal jurisdiction to hear and determine any building claim brought before it. A "building claim" is defined in s 48A of that Act to mean a claim for inter alia the payment of a specified sum of money (which is referred to therein as a remedy) that arises from a supply of building goods or services or that arises under a contract that is collateral to a contract for the supply of building goods or services. 45 It seems to be common ground that the term "arises" has a usage that should be given a wide meaning. In a general sense the authorities have treated the term "collateral" as meaning related to another contract. 46 Section 48A also defines "building goods or services" as meaning goods or services supplied for or in connection with the carrying out of inter alia residential building work or building consultancy work and supplied by the person who contracts to do or otherwise does that work. 47 The definition of "residential building work" may be found in s 3. It is in the following terms:- " residential building work means any work involved in, or involved in co-ordinating or supervising any work involved in: (a) the construction of a dwelling, or (b) the making of alterations or additions to a dwelling, or (c) the repairing, renovation, decoration or protective treatment of a dwelling. It includes work declared by the regulations to be roof plumbing work or specialist work done in connection with a dwelling and work concerned in installing a prescribed fixture or apparatus in a dwelling (or in adding to, altering or repairing any such installation). It does not include work that is declared by the regulations to be excluded from this definition." 48 At the time of the decision of the Tribunal "building consultancy work" was not defined. That is now not the position. 49 In the circumstances of this case, I am not satisfied that either claim (as presently presented) satisfies the requirement of claiming the remedy of the payment of a specified sum of money. In each claim, what is sought is indemnity or contribution and the relief claimed is damages. 50 It seems to me that this follows when regard is had to the language used by the statute and what was said in W D & H O Wills (Australia) Ltd and Anor v The Consumer Claims Tribunal of New South Wales and Anor – BC 9803304. Both claims, as presently pleaded, do not claim the payment of a specified sum of money. 51 It is said that both claims arise from either a supply of building goods or services or under the requisite collateral contract. I do not consider that either claim can be said to so arise. 52 It seems to me that, in this case, the resolution of the questions involves the court in looking at the manner in which each of the claims is presented by the plaintiff. 53 In respect of the third defendant, the claim presented against it is one founded on negligence involving breach of duty in and about the preparing of defective plans. In my view, in such a case, it arises from the architectural services provided by the third defendant to the first and second defendants some considerable time prior to any supply of building goods or services or any contract for the supply of building goods or services. What was contractually done between these parties was unrelated in any relevant sense to whatever subsequent contract came into being for the supply of building goods or services between the plaintiff and the first and second defendants. 54 The remedy which the plaintiff seeks to pursue against this defendant, in my view, does not arise from a supply of building goods or services. What was done was not supplied for or in connection with the carrying out of either residential building work or building consultancy work. See inter alia Collings Homes v Head & Ors [2002] NSWSC 1219. For present purposes, the changes made to the legislation since that decision are of no moment. The remedy does not arise under a requisite collateral contract. 55 What was done was not supplied by the person who had contracted to do or otherwise did the residential building work or the building consultancy work. 56 The claim made against the fifth defendants is based on alleged conversation had between the plaintiff and the first defendant. The allegations are a matter of contest but it does not seem to be in dispute that whatever was said took place some months after work had commenced. It is said that either an implied retainer or a duty of care came into being. It seems to me that it was from these matters that the claim arose. 57 Similarly the remedy which the plaintiff seeks to pursue against these defendants, in my view, does not arise from a supply of building goods or services or under a requisite collateral contract. 58 For completeness, I should mention a couple of matters in relation to these arguments. The plaintiff says that it was not argued before the Tribunal that the claim was not for the payment of a specified sum of money and that if it had been argued the plaintiff may have amended the proposed claim. This submission is not correct. A reading of the submissions made to the Tribunal reveals that it was raised at least by the fifth defendants. It also has been said that it is a matter that goes to the jurisdiction of the Tribunal and therefore should be entertained by this Court. It is unnecessary to further pursue these matters because the jurisdictional arguments can be otherwise disposed of (there is a lack of jurisdiction for other reasons). 59 The Tribunal has the power enabling it to join other parties (s 26 of the Act and cl 28 of the Regulation). It is a discretionary power to be exercised so as to enable all necessary parties to be before the Tribunal in respect of matters in which it is vested with jurisdiction. In my view, it cannot be seen as a power that enables the Tribunal to entertain matters that do not fall within its statutory jurisdiction. 60 One of the objects of the Act is to establish a tribunal to determine disputes in relation to matters over which it has jurisdiction (s 3). Section 5 (2) defines the jurisdiction of the Tribunal. It provides that the Tribunal has and may exercise such functions as are conferred or imposed on it by or under any Act (see also s 21). 61 The discretion is to be exercised having regard to the relevant circumstances of the particular case before the Tribunal. It can only be exercised after the Tribunal forms the opinion that the person to be joined has a sufficient interest in the dispute to which the application relates. A joinder would be futile if it was for a purpose that was outside jurisdiction. 62 The plaintiff also says that the claims are consumer claims within the meaning of the Consumer Claims Act 1998. It is common ground that the arguments advanced to support this contention were not ventilated before the Tribunal. Both the third defendant and the fifth defendants object to them now being entertained by this Court. 63 The court has been referred to various decided cases (including Coulton v Holcombe (1986) 162 CLR 1). In the present case, there are other relevant considerations. 64 It really is not a matter which needs to be ventilated in this appeal. The Tribunal has merely determined certain interlocutory matters. It has remained open to the plaintiff to make a further application on the basis that the claims are "consumer claims". 65 If he wishes to do so, the pursuit of that avenue would seem to be a preferable one. The exercise of the power of joinder is discretionary. If the matter had been brought before the Tribunal it could consider, not only the question of jurisdiction, but also take into account the various discretionary considerations which have formed part of the arguments put to this Court. 66 Such discretionary considerations may include what flows from the recent High Court decision in Woolcock Street Investments Pty Ltd v CDG Pty Ltd (HCt Unreported BC200401482 – 1 April 2004). 67 For the purpose of considering whether or not the court should allow such ground to be ventilated in this appeal, argument was heard on it. After hearing argument, I have come to the view that the plaintiff should not be allowed to ventilate it in this appeal. However, in deference to what has been argued, I will make certain observations. 68 The Consumer Claims Act 1998 enables a "consumer" to apply to the Tribunal for determination of a "consumer claim" (s 6). Definitions of "consumer" and "consumer claim" may be found in the Act (s 3). It also provides that a person who claims to be a consumer is to be presumed to be one with the onus to demonstrate that he is not being placed on the other party (s 4). 69 In my view, the third defendant is in a position to satisfy the onus that the plaintiff is not a consumer and the claim sought to be brought against it is not a "consumer claim". The claim made against the third defendant does not arise from a supply of goods or services by it to the plaintiff or under any requisite collateral contract. 70 Again, neither of the claims seeks the requisite remedy being for the payment of a specified sum of money. Whether or not this requirement of a "consumer claim" can be satisfied may be a contentious issue. It is an issue best dealt with when the presentation of the claim that is relied on is placed before the decision maker. 71 For completeness, I should add that numerous arguments have been debated during the course of this lengthy appeal. I have not sought to address all of the arguments. It has been unnecessary to do so. 72 The plaintiff bears the onus of satisfying the court of entitlement to relief. In my view, that onus has not been discharged. The Summons is dismissed. The plaintiff is to pay the costs of the Summons. The Exhibits may be returned. 73 The defendants have requested that the question of the basis on which those costs are to be payable should be reserved. Accordingly, I reserve that question. ********** Last Modified: 05/11/2004 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.