District Court New South Wales Medium Neutral Citation: Michael & Rosemary Foy v Calliden Insurance Limited [2017] NSWDC 33 Hearing dates: 9 – 10 March 2016; 1 April 2016 (directions); 3 June 2016; 19 August 2016 (directions); and 4 November 2016 Date of orders: 03 March 2017 Decision date: 03 March 2017 Jurisdiction: Civil Before: Hatzistergos DCJ Decision: 1. Verdict for the Defendant; and 2. The Plaintiffs are to pay the Defendant's costs. Catchwords: CONTRACT LAW – INSURANCE – home building insurance – last resort policy – whether insurer breached contract – whether notification of loss was adequate – whether grace period applied –– whether failure to advise as to change in legislation amounts to misleading or deceptive conduct – unconscionable conduct – estoppel – whether insurer failed to pay claim contrary to s 54 of the Insurance Contracts Act CONSTITUTIONAL LAW – whether Home Building Act 1989 (NSW) s 103BB inconsistent with Insurance Contracts Act 1984 (Cth) s 54 Legislation Cited: Australian Securities and Investment Commission Act 2001 (Cth) ss 12BB, 12CB, 12CC and 12DA Bell Group Companies (Finalisation of Matters and Distribution of Proceeds) Act 2015 (WA) Commonwealth of Australia Constitution Act 1901 (Cth) Home Building Act 1989 (NSW) ss 103B, 103BA, 103BB, sch 4 cl 86 and sch 4 cl 106 Home Building Amendment (Claims) Regulation 2008 (NSW) cl 63A Home Building Amendment (Insurance) Act 2009 (NSW) Home Building Amendment Act 2011 (NSW) Home Building Regulation 2004 (NSW) r 53(2) Insurance Contracts Act 1984 (Cth) ss 7 and 54 Interpretation Act 1987 (NSW) ss 30, 31 and 39 Judiciary Act 1903 (Cth) s 78B(2) Trade Practices Act 1974 (Cth) ss 51AC and 52 Cases Cited: Australian Competition and Consumer Commission v Allphones Retail Pty Ltd (No 2) [2009] FCA 17 Australian Competition and Consumer Commission v Dukemaster Pty Ltd [2009] FCA 682 Bell Group NV (in liq) v The State of Western Australia (2016) 90 ALJR 655; [2016] HCA 21 Commonwealth v Verwayen (1990) 170 CLR 394; [1990] HCA 39 Con-Stan Industries of Australia Pty Ltd v Norwich Winterthur Insurance (Australia) Limited (1986) 160 CLR 226; [1986] HCA 14 Edgar v Farrow Mortgage Services Pty Ltd (in liq) (1992) ASC 56-186 FAI General Insurance Company Ltd v Australian Hospital Care Pty Ltd (2001) 204 CLR 641; [2001] HCA 38 Gosford City Council v GIO General Limited (2003) 56 NSWLR 542; [2003] NSWCA 34 Grundt v Great Boulder Pty Gold Mines Ltd (1937) 59 CLR 641 Johnson v Triple C Furniture & Electrical Pty Ltd (2010) 243 FLR 336; [2010] QCA 282 Kopriunjak v Vero Insurance Ltd (Home Building) [2008] NSWCTTT 1520 Maxwell v Highway Hauliers Pty Ltd (2014) 252 CLR 590; [2014] HCA 33 Michell & Thomas v Calliden Insurance Limited (Home Building) [2011] NSWCTTT 300 Morton v Hampson [1962] VR 364Ward v Walton (1989) 10 MVR 537 Nigel Watts Fashion Agencies Pty Ltd v GIO General Ltd [1994] NSWCA 365 Prepaid Services Pty Ltd & Ors v Atradius Credit Insurance NV [2013] NSWCA 252 Puckeridge v Calliden Insurance Limited (Home Building) [2013] NSWCTTT 450 Susiatin v Minister for Immigration and Multicultural Affairs (1998) 83 FCR 574 The Owners Strata Plan 57504 v Building Insurers' Guarantee Corporation [2008] NSWSC 1022 Thompson v Palmer (1933) 49 CLR 507 Tobacco Institute of Australia Ltd v Australian Federation of Consumer Organisations Inc (1992) 38 FCR 1 Walton Stores (Interstate) Ltd v Maher (1998) 164 CLR 387; [1988] HCA 7 Category: Principal judgment Parties: Mr Michael Foy (First Plaintiff) Ms Rosemary Foy (Second Plaintiff) Calliden Insurance Limited (Defendant) Representation: Counsel: Mr J Sleight (Plaintiff) Mr P Bambagiotti (Defendant) Solicitors: Knight Lawyers (Plaintiff) Mills Oakley (Defendant) File Number(s): 2014/365958 Judgment 1. This matter came on for hearing before me on 9 March 2016 as a one day hearing. It came to consume three further hearing days and two directions days. At the outset, the Plaintiffs foreshadowed seeking leave to rely on an Amended Statement of Claim. Following argument, I granted the Plaintiffs leave to do so, subject to the Defendant being able to ventilate any issue as to its ability to meet the proposed amendments. [1] 2. On 10 March 2016, the Defendant indicated that the proposed paragraph [20](A) of the Amended Statement of Claim had raised issues which required the calling of further evidence on its part. Further argument then took place as to the state of the proposed Amended Statement of Claim which resulted in concern about the state of readiness, [2] and the capacity of the proposed Amended Statement of Claim to reflect the case which the Plaintiffs wished to pursue as set out in a document entitled "Outline of Argument" presented at the commencement of the hearing. The Plaintiffs then proposed to proceed by way of an Amended Reply. That course was opposed by the Defendant on the basis that the matter should have been pleaded in the Amended Statement of Claim. [3] Ultimately, leave was granted by consent for the Plaintiffs to rely on a Further Amended Statement of Claim incorporating an amendment in the form indicated in paragraph [1](a) of the proposed Amended Reply. [4] 3. During the course of the hearing, further amendments to the Further Amended Statement of Claim were sought by the Plaintiffs. [5] Leave was granted for the Plaintiffs to proceed on a Second Further Amended Statement of Claim filed 16 March 2016. For its part the Defendant relied on an Amended Defence filed on 22 March 2016 and an Amended Reply was filed by the Plaintiff dated 16 March 2016. 4. In light of the amendments, the Defendant sought to rely on further evidence which comprised an affidavit from Mr Matthew David Curry dated 18 March 2016. 5. When the matter came on for submissions on 3 June 2016, it became apparent that the Plaintiffs, although intending to proceed with a constitutional issue raised in paragraph [9] of the Amended Reply, had not given notice as required under s 78B(2) of the Judiciary Act 1903 (Cth). In these circumstances, directions were given requiring the Plaintiffs to give the relevant notifications by 10 June 2016 and to require responses by 12 August 2016. 6. On 19 August 2016, an affidavit from Mr Robert Peter Kalde, sworn 18 August 2016 was filed, indicating compliance with the orders and directions made on 3 June 2016; and further advising that no Attorney-General had elected to intervene. In the circumstances, the matter proceeded by the hearing of submissions (excluding the constitutional issue) pursuant to s 78B(2)(c) of the Judiciary Act 1903 (Cth), with the constitutional issue being subject to separate submissions on 4 November 2016. 7. These matters and the availability of suitable dates to reschedule regrettably led to a lengthening of time taken for the resolution of the proceedings. Evidence 1. The Plaintiffs purchased the subject property located at Hurstville Grove, on or about 23 April 2008 and obtained a certificate of insurance issued by the Defendant when they settled. [6] 2. The First Plaintiff, Mr Michael Foy gave evidence that the settlement took place on 4 July 2008. [7] On settlement, the Plaintiffs were also provided with a copy of the policy. [8] 3. It is not in issue that the relevant policy was for home building works performed by the vendor on the said property as owner builder. Further it was not in issue that the beneficiary under the policy was "the purchaser." [9] He stated that within the first six months of occupation, he became aware of various defects in the premises. 4. Mr Foy gave evidence that in mid to late January 2009, he telephoned either the broker or the Defendant directly, as he considered them one in the same organisation, and wherever possible used a telephone landline rather than the 1300 number. [10] He stated that he believed he called the broker. [11] Mr Foy's evidence was that between 9 December 2008 and 30 January 2009, his telephone records indicate that he made three local calls which were non-itemised on his telephone records. [12] He informed the Court that it was not possible to obtain an itemised list of calls made from his telephone during January 2009. [13] The text of the phone call he said that he made, was described as follows:- "[21] When I made the Call, I spoke with a customer service/claims representative (the "Representative"). I recall that the person I spoke to was a male person, however I did not record the name of the person or the precise details of the conversation. However, I do recall that we had a conversation to the following effect:- Me: I have an issue with a house at East Crescent Hurstville Grove that is covered under your policy. There are some defects which I have discovered, where do I go from here? Representative: What is the policy number? Me: The policy number is BBAU1325. Representative: The policy does not operate unless the builder has died, disappeared or become insolvent. Are any of those circumstances the case? Me: No, I believe he still exists, but beyond that I don't know. Can you send me a claim form to fill out of something please? Representative: No. It is too early and you can't claim until the policy is activated in the circumstances I have told you. You should contact us again when one of those things occur." [14] 1. Subsequent to receiving that information, Mr Foy and his wife (the Second Plaintiff) commenced the proceedings earlier referred to, against the vendor Mr Anthony Grubisic. 2. Mr Foy stated that in advising the broker of the state of affairs relating to the defective building work by telephone and asking for a claim form, he believed he was complying with his obligations under the policy. [15] He stated that he was surprised by the advice that he received, however on the basis of that advice together with his wife, decided to commence proceedings against the vendor, Mr Grubisic. Those proceedings were brought in the then NSW Consumer and Tenancy Tribunal. [16] They were determined favourably to the Plaintiffs in the sum of $222,591 on 12 December 2011 [17] . 3. Mr Foy stated that on 15 September 2010, he instructed his then solicitor, Ms Wang from "The Builders' Lawyers" to contact the Defendant on his behalf. That letter is to be found in Exhibit A. [18] It refers to the earlier contact with the Defendant in February 2009. 4. The letter of 15 September 2010 was responded to on 29 September 2010 by Claims Services Australia Pty Ltd who had been appointed as agents in administrating claims lodged in respect of insurance policies issued or underwritten by the Defendant. [19] 5. As a consequence of Mr Grubisic not making payment, pursuant to the judgment, a sequestration order was obtained in the Federal Magistrates Court on 21 March 2013. [20] Mr Foy's evidence was that he had not received a dividend from the bankrupt estate of the vendor. [21] Eventually the Plaintiffs assembled documentation and completed a claim form which was forwarded on 10 May 2013. [22] On 13 June 2013, the Plaintiffs were informed that the claim had been rejected. The letter stated:- "We refer to your recent claim form received on 17 May 2013 in relation to the above property. We advise that the policy of insurance provides cover for various breaches of statutory warranties by the builder for the duration of the period of cover, which is six years from completion of the work as referred to under clause (a) of "Period of Insurance" on page 6 of the policy (wording enclosed). We confirm that the Period of Cover commenced on 14 May 2003, being completion of the property as detailed in the Inspection Request (attached) and expired six years later on 14 May 2009. We note that the initial correspondence to our office was received on 20 September 2010, more than six months after the Period of Cover expired. We also note that you advised us of the items of claim on 17 May 2013, more than three years from the Period of Cover expiring. Accordingly, as we were not notified during the Period of Cover, which expired on 14 May 2009, indemnity is not available and your client's claim is denied." 1. In cross-examination, Mr Foy conceded that the conversation earlier recounted represented his recollection. [23] He conceded that from the time he made the telephone call in January 2009 until he spoke to his former lawyer, he did not make any note of the conversation. [24] He said that he rang about an enquiry about the defects of the house and he was put on the phone to an individual who he cannot remember, although he knows them to be a male. [25] Mr Foy stated that he gave the person he contacted his name and address, address of the house and the policy he had been given. [26] When it was drawn to his attention that paragraph [21] of his affidavit did not include a name or address, he responded by stating that he did provide this to the person. [27] Notwithstanding this, Mr Foy conceded that the conversation as recited above did not contain a reference to an email address, telephone number or address. He conceded that he did not in the conversation, detail the various defects. [28] He was then questioned about his solicitor's letter referring to his conversation having occurred in February, rather in January 2009. Mr Foy stated that might have been their mistake. [29] He admitted that he did not write to them to correct it. [30] Later he stated that he: "… can't say I did, I can't say I didn't" write a letter. [31] Mr Foy specifically denied that he re-constructed the version of the conversation to suit his case. [32] He conceded that there was no statement to him that the insurer would contact him or follow up, stating that he was to follow up when he either, the builder was bankrupt, deceased or had absconded. [33] 2. In re-examination, Mr Foy stated that if the insurance company subsequently wanted him to tell him about the defects, he would have expected the insurance company to have given him the procedure to follow. [34] 3. The Defendant relied on an affidavit from Mr Martin White, sworn 7 February 2014. Mr White was a director of Don Hutton Insurance Brokers Pty Ltd being the broker for the Defendant. In his affidavit, Mr White states that he has checked the records of the company and was unable to find any record of a telephone call from Mr Foy from mid-late January 2009 as alleged in Mr Foy's affidavit. Any records of telephone conversations in relation to the policy were recorded on the computer system, and annexed to Mr White's affidavit at Annexure A. [35] None of the documented conversations appear to be relevant to the proceedings. 4. The Defendant further relied on an affidavit from Mr Stephen Molcik sworn 11 August 2015. Mr Molcik was an officer in the employ of Innovation Group Pty Ltd, holding the position of technical manager warranty. Innovation Group Pty Ltd was previously known as Claims Services Australia Pty Ltd who handled claims management of home building warranty claims for the Defendant since before 2008. Mr Molcik stated that any enquiries regarding claims, or people seeking to make claims in early 2009 would, from his experience, would have been directed by the Defendant or the relevant broker to Innovation Group Pty Ltd. This was a matter of usual practice. [36] He stated that the recording of claims notifications by Innovation Group in relation to home warranty claims commenced in 2009 with the earliest being in February 2009. [37] Mr Molcik stated that prior to 2009, Innovation Group's procedure in dealing with home warranty claims from 1 July 2002, was based on an understanding that a claim had to be made within the relevant period of insurance, meaning that the builder had to be dead, disappeared or insolvent before a claim could be lodged. The insurance claims were not administered on the basis that it was a claims made and notified policy. Accordingly Innovation Group's records did not contain a record of a telephone conversation although Mr Molcik conceded that if was such a call was made it would not recorded by Innovation Group in light of its policy at the time. [38] 5. Notwithstanding the fact that the Second Further Amended Statement of Claim was for an amount of $307,263.46, I was informed at the commencement of the hearing that damages were agreed save as to the issue of interest in a sum of $246,079.20. 6. The proceedings against the Defendant were argued on five bases. Each is considered below in this judgment. Contractual claim 1. The Plaintiffs acknowledge that under the terms of the policy giving rise to the claim, a prescribed cause has to occur within the period of the insurance. "Prescribed clause" is defined in the policy as follows:- "Prescribed cause: means a breach of any of the warranties implied by ss 18B, 18C and 18D of the Act, being that the owner builder warrants that:- (a) the owner builder work has been performed in a proper and workman like manner; (b) all materials supplied by the owner builder were good and suitable for the purpose for which they were used and that, unless otherwise stated in the contract of sale, all Report required by the insurer to be obtained before the insurance contract is entered into; and (c) owner builder work was carried out with all the laws and legal requirements." [39] 1. It was not in issue between the parties that the relevant period of insurance commenced on 14 May 2003 [40] and expired six years thereafter. The Defendant acknowledged as much. [41] The defects discovered by the Plaintiffs were particularised in the NSW Consumer, Trader and Tenancy Tribunal [42] proceedings between the Plaintiffs and the previous owner-builder, Mr Anthony Grubisic. [43] The Defendant did not dispute the Plaintiffs discovery of defects in the property within six months of the insurance. [44] No issue was raised that these constituted a prescribed cause within the terms of the policy. 2. The terms of the policy did not require notification of a prescribed cause, nor did the policy specifically provide a time limit for the making of a claim, a fact which was acknowledged by the Defendant in argument. [45] However, the policy did specify claims procedures as follows:- "General provisions [2] Despite clause (1), the Insurer shall not reduce its liability under the policy or to reduce any amount otherwise payable in respect of a Claim made by reason only of any delay in a Claim being notified to the Insurer if the person making the Claim against the Insurer has notified the Insurer in writing, within 180 days after the date when the Insured first became aware, or ought reasonably to have been aware, of the death, Disappearance or Insolvency of the Owner Builder. [3] Upon becoming aware of the death, Disappearance or Insolvency of the Owner Builder, the Insured shall: (a) notify the Insurer in writing; (b) not undertake or cause to be undertaken any rectification works without notifying the Insurer, unless such works are reasonably necessary to prevent or minimise any further loss or damage; and (c) provide the Insurer or any person nominated by the Insurer with reasonable access to the building site for the purpose of inspection and/or rectification of the Owner Builder Work; provided however, that the Insurer may only reduce its liability to the Insured by reason of a failure on the part of the Insured to comply with any requirement of this clause to the extent that the Insurer can prove that such failure increased the liability of the Insurer under the policy." [46] 1. In this instance there is no issue of the Plaintiffs making the claim on 10 May 2013 [47] which was within 180 days of the orders being made against Mr Grubisic in the Federal Magistrates' Court on 21 March 2013. [48] By the nature of the claim, the Defendant had drawn to its attention the insolvency of Mr Grubusic within the terms of the claims procedure. 2. Although the Defendant concedes that the insurance claim was lodged on 10 May 2013, it contends that it was necessary for the Plaintiff to comply with s 103BB of the Home Building Act 1989 (NSW). [49] The Plaintiffs for their part contended that the phone call by Mr Foy in January 2009, as it stood constituted valid notice in the context of the requirements of s 103BA of the 1989 Act in its 2009 amended form, although in written and oral submissions, it was conceded that by reason of the Home Building Amendment Act 2011 (NSW), [50] s 103BB of the 1989 Act also had to be complied with. In order to determine whether the Plaintiffs' contractual claim can succeed it is therefore necessary to consider the relevant statutory intervention that occurred. Home Building Amendment (Claims) Regulation 2008 (NSW) 1. The policy in question effectively required that the prescribed cause occur during the period of insurance. The policy would then respond, in the event that compensation could not be recovered because of the death, disappearance or insolvency of the owner-builder. In this sense the policy can also be described as a "last resort" policy. 2. This was in contrast to home warranty insurance policies between 1 May 1997 and 30 June 2002 which were described as a "first resort" policies. 3. On 3 October 2008 the Supreme Court of NSW determined the case of The Owners Strata Plan 57504 v Building Insurers' Guarantee Corporation. [51] The effect of that decision was to render void provisions in policies which required claims to be made within the period of insurance. It appears that concern arose from this decision that although s 103B of the 1989 Act specified a minimum period of insurance cover, there was no explicit statutory limit on when a claim could be made. [52] 4. The initial response thereafter was to proclaim Clause 63A of the Home Building Amendment (Claims) Regulations 2008 (NSW). [53] This Regulation provided:- 63A Period within which insurance claim must be made (1) A claim under a contract of insurance must be made no later than 6 months after the beneficiary first becomes aware, or ought reasonably to have become aware, of the fact or circumstance under which the claim arises or no later than 6 months after the end of the period of cover, whichever is the earlier. (2) Despite subclause (1), if the claim is a claim for loss arising from non-completion of work, the claim must be made: (a) in the case of a claim arising from a failure to commence the work—no later than 12 months after the contract date or the date provided in the contract for commencement of work, whichever is the later, or (b) in any other case—no later than 12 months after the date work ceased. (3) A claim cannot be made later than as permitted by this clause. (4) This clause applies only to a claim made after the commencement of this clause and extends to a claim made after that commencement in respect of a loss arising before that commencement. (5) In this clause: period of cover means the period for which the contract of insurance provides insurance cover as required by section 103B of the Act. 1. The Plaintiffs contended that in respect of "last resort" policies such as that in the instant case, it was almost impossible to give the clause a meaningful interpretation, as it would require all claims to be made within 6 months from the end of the period of cover. It contended that if it applied to "last resort" policies, Clause 63 A would be draconian to the point of being nonsensical as the Plaintiffs could only make a claim when the builder disappeared, died or became insolvent within the prescribed 6 month period. 2. Although a Minister's subsequent Second Reading Speech, stated that "the interim amendment was limited in that it could not retroactively address existing insurance contracts, [54] the clause itself referred to loss arising before commencement of the clause. Such loss could only relate to insurance contracts for a period of cover prior to the commencement of the clause. s 39 of the Interpretation Act 1987 (NSW) does not provide for back-dating of regulations. There is nothing in the 1989 Act that provides for the making of regulations other than prospectively. However except as indicated, the validity and operative effect of Clause 63A was not challenged. It significance pertains to the subsequent legislative changes incorporated in the Home Building Amendment (Insurance) Act 2009 (NSW). [55] Home Building Amendment (Insurance) Act 2009 (NSW) 1. Clause 63A was repealed on 19 May 2009, with the commencement of the 2009 Act. This inserted s 103BA into the 1989 Act. Pursuant to Clause 83 of Schedule 4 of the 1989 Act, s 103BA was deemed to extend to:- 1. Contracts of insurance entered into before the commencement of that section (despite any provision of the contract); and 2. A claim under any such contract of insurance; and 3. Proceedings on such a claim (including proceedings commenced but not finally determined before commencement of that section). 1. s 103BA as introduced by the 2009 Act read as follows:- 103BA Limitations on policy coverage—claims made and notified policy (1) A contract of insurance provides insurance cover in respect of loss only if: (a) in the case of cover for loss arising from non-completion of work—the loss becomes apparent and is notified to the insurer within the period of insurance, or (b) in any other case: (i) the loss becomes apparent and is notified to the insurer within the period of insurance, or (ii) the loss becomes apparent during the last 6 months of the period of insurance and is notified to the insurer within 6 months after the loss becomes apparent. (2) A loss becomes apparent when a beneficiary under the contract first becomes aware (or ought reasonably have become aware) of the loss. (3) In this section: loss means loss indemnified by a contract of insurance. period of insurance means the period for which a contract of insurance provides cover. 1. s 103BA of the 2009 Act did not distinguish between pre-1 July 2002 and post, 30 June 2002 policies. It was intended to operate in respect of policies including those in the Plaintiffs' case. The rationale for doing so was expressed as follows:- "Home warranty insurance contracts entered into since 1 July 2002 differed from previous insurance contracts by providing what is known as last resort insurance. This style of insurance contract indemnifies beneficiaries for loss or damage arising from a breach of statutory warranty, being loss or damage in respect of which the beneficiary cannot recover compensation or have rectified because of the insolvency, death, or disappearance of the building contractor. These contracts also continue to provide insurance against loss or damage resulting from non-completion of the work because of the insolvency, death, or disappearance of the contractor. The retroactive application of proposed section 103BA to home warranty insurance contracts entered into since 1 July 2002 confirms that these contracts provide insurance cover only when a loss indemnified by a contract of insurance becomes apparent and is notified within the minimum periods specified by section 103B or any longer period that may be specified in the contract." [56] 1. To understand the impact that this had on the Plaintiffs, requires a consideration of whether the "loss" requires the death, disappearance or insolvency of the builder to have occurred before the notification requirement is invoked. 2. The Plaintiffs made reference to the decision in Coprivngak v Vero Insurance Ltd (Home Building) 2008 (NSW), [57] where Member Smith held that "loss" under a last resort policy meant loss arising from the builder's breach of statutory warranty, rather than arising from the death, disappearance or insolvency of the builder. The Member's conclusion however related to terms of the policy and not the statutory provision. 3. Indeed subsequently in Puckeridge v Calliden Insurance (Home Building) Limited, [58] Member Smith stated in reference to s 103BA and the policy there in question:- "[17] … 'loss' as defined relates to the indemnified event which must mean: (a) defective or incomplete work by the builder plus (b) death, disappearance or insolvency of the builder because this is the only set of circumstances to which the indemnity applies." 1. During submissions, Counsel for the Defendant initially contended that "loss" in terms of s 103BA as it stood in its initial 2009 form was loss occasioned by an inability to recover from the builder because of insolvency. [59] Following argument and further consideration, Counsel for the Defendant recanted from this position stating:- "Before the break, we were exploring the version of s 103BA as enacted in the 2009 amendment and you asked me what was loss and I pointed out that loss under the last resort policies, were - and 103BA in 2009 applied to both first and last resort. Loss was a reference to an inability to recover compensation. But of course, your Honour, that doesn't make a lot of sense or a lot of utility in the context of the way that 103BA is expressed. So given that 103BA is about notification and the critical feature your Honour, is in 103BA(1)(b)(i): "The loss becomes apparent and is notified". It says: 'The curiosity of the phrase 'Loss becomes apparent and is notified' becomes apparent - has an explanation although not necessarily a definition and loss seems to be loss indemnified under the insurance.' Your Honour, we would say that the proper construction of that clause is that providing the notification of the incidence or the trigger of the loss; that is, the deficiency in the building work is notified, then it doesn't matter when - subject to two qualifications - the actual trigger arises." [60] 1. Bearing in mind the effect of the 2009 amendments was to repeal Clause 63A, transitional provisions were inserted which enabled a period of grace for notifying the loss. In this respect Clause 86 of Schedule 4 of the 1989 Act read as follows:- 86 Repeal of clause 63A of Regulation – period of grace for notifying loss (1) If clause 63A of the Regulation prevented a claim for loss from being made during any part of the loss notification period for the loss, there is to be a period of grace for notifying the loss. (2) The period of grace starts on the repeal of clause 63A of the Regulation and continues for a period that is equal in length to that part of the loss notification period for which clause 63A of the Regulation prevented the claim from being made. (3) A loss notified to an insurer during the period of grace is deemed to have been notified during the loss notification period for the loss. (4) If an insurer has refused a claim on the basis of clause 63A of the Regulation: (a) the insurer must notify the claimant of any period of grace for notifying the loss to which the claim relates that results from the operation of this clause, and (b) the period of grace for notifying the loss concerned starts (despite subclause (2)) when the claimant receives the insurer's notification under paragraph (a) and continues for the period provided for by subclause (2). (5) The refusal of a claim for loss on the basis of clause 63A of the Regulation (being a claim that would have been validly made had clause 63A of the Regulation not been made): (a) does not prevent the claimant from resubmitting the claim or submitting the claim as a new claim (without the need to appeal against the decision to refuse the claim), and (b) does not prevent the insurer from proceeding to accept and assess the refused claim as a claim now properly made. (6) An insurer is not entitled to refuse or reduce liability on a claim for loss on the grounds of a failure to notify the loss during the loss notification period if the loss is notified during the period of grace. (7) The period of grace provided by this clause does not apply in a case in which the loss notification period ended before the commencement of clause 63A of the Regulation. (8) In this clause: "loss notification period" for a loss means the period within which loss must be notified to the insurer under a contract of insurance in order for the loss to be covered by the contract of insurance (as provided by section 103BA). Note: Section 103BA extends to existing contracts of insurance. "the Regulation" means the Home Building Regulation 2004 . 1. It is not in issue that the period of grace was not utilised. The Plaintiff contends that the phone call in January 2009 provided the relevant notification within the terms of s 103BA(1)(b)(i) as inserted in the 1989 Act, and further Clause 86 could not apply to provide a period of grace as Clause 63A as it stood, had not prevented the claim from being made during any part of the loss notification period. 2. The Plaintiffs further contend that a claim could not be made under the policy until the owner builder was dead, disappeared or insolvent. They argued that if Clause 63A of the Home Building Amendment (Claims) Regulations 2008 (NSW) applied to the present policy, a claim could never had been made under the policy as the builder did not die, disappear or become insolvent until six months after 14 May 2009, being the expiration of the period of cover. [61] That concession appears to acknowledge that the effect of Clause 63A would have been to prevent a claim from being made. The Plaintiffs submitted however that the prevention of the making of a claim would not be during any part of the loss notification period as the Plaintiffs could never have made a claim under their "last resort" policy during the legislative life of Clause 63A, and therefore the clause could never have prevented a claim from being made on the policy. [62] 3. The Defendant for its part contended, in its submissions, as follows:- "[9](h) [O]n 19 May 2009, the HBA was amended with the introduction of the then sec 103BA (and cl 63A of the HBR was repealed). Sec 103BA was a claims made and notified provision turning on notification during the period of insurance. That provision was also subject to a 'period of grace' (see cl 86 of Schedule 4 of the HBA). The Plaintiffs failed to utilise that 'period of grace' which was available to them and was intended to deal with just such a situation, both to protect the rights of beneficiaries and also provide certainty to insurers to allow them to record notices that previously would not have been recorded as notice was irrelevant under the insurance scheme in place prior to 19 May 2009." [63] 1. The Defendant further responded to the Plaintiff's reference to Clause 63A of the Home Building Amendment (Claims) Regulation 2008 (NSW) being "draconian" [64] by referring to the fact that the clause was subsequently repealed with transitional provisions including a "period of grace" so that debate on this clause (other than as to the state of knowledge at the time of the January 2009 telephone call) was not relevant. [65] 2. I accept that s 103BA of the 2009 Act has retrospective effect in light of the provisions of Clause 83(1)(b) of Schedule 4 of the 1989 Act. [66] 3. Notwithstanding the Defendant's observations earlier referred to in relation the Plaintiff's failure to utilise the period of grace provided in Clause 86 of Schedule 4, the Defendant orally submitted that Clause 86(1) could only provide a period of grace if Clause 63A had prevented the claim. [67] The Defendant submitted that the effect of Clause 86(7) and Clause 63A was not what prevented the claim and further the loss notification period had ended before the commence of Clause 63A. It argued that the relevant loss notification period ended on 14 May 2009 when the six year cover period expired pursuant to s 103BA. [68] 4. The Defendant's submission in this respect was put as follows:- "BAMBAGIOTTI: They couldn't take advantage of the period of grace because 63A hadn't been the reason that they couldn't make the claim in 2009. The reason they couldn't make the claim in 2009 was because the DDI trigger event had not occurred and the transitional provision was provided only to people who'd been disadvantaged because of the harshness of 63A. Your Honour we then - I'm sorry - when your Honour's ready. HIS HONOUR: So you say the loss notification period had ended before the commencement of cl 63A? BAMBAGIOTTI: Well the loss notification period had ended - I haven't gotten the date of the proclamation of 63A. The answer need only be 86(1), and that is that 63A wasn't the reason for denial of the claim, and that's the only basis upon which you can claim a period of grace entitlement. None of these provisions were ever and you'll see when we get to it HIS HONOUR: The first real operative provision is 103BA(1)(b)(1), that is that the loss was apparent and needs to be notified to the insurer within the period of insurance. So they would've had to have notified within the period of insurance, this being a claim that's not captured by sub para (2). So that means they should've notified then, but then 103BA BAMBAGIOTTI: And we've given you that date at para 9(d). The plaintiff alleges the completion occurred on 14 May 2003 and so the six year insurance period HIS HONOUR: Sorry, I've just got to find your submissions. BAMBAGIOTTI: I'm sorry, 9(d) on p 2. HIS HONOUR: I see that. 19 May 2009, cl 63A was repealed. 103BA comes into force. What do you mean by the plaintiff's failed to utilise the period of grace? BAMBAGIOTTI: Well they didn't HIS HONOUR: Was it available to them? You say it wasn't. BAMBAGIOTTI: I've said which was available to them, but on reflection it wasn't because of 86(1). So I apologise, that part of my submission is in error. The period of grace was not available to them because of the specific terms by which the period of grace was provided under 86." [69] 1. The Defendant's submissions if accepted, would mean that by the time of the repeal of Clause 63A on 19 May 2009, the Plaintiff no longer had an ability to make a notification as was required under s 103BA (assuming that the January 2009 notification was insufficient) as the period of the insurance provided by the policy, and the relevant notification period had expired on 14 May 2009. 2. Whilst the submissions of both parties was that Clause 86 did not provide a period of grace to the Plaintiffs, the Defendant's contention was that Parliament had given specific consideration to providing relief consequent to the repeal of Clause 63A, and in this instance, the relief granted did not extend to the circumstances of the Plaintiff. 3. With great respect to the parties I am doubtful that Clause 86(1) of Schedule 4 of the 1989 Act is to be interpreted so that the preclusion brought about by Clause 63A only applied in circumstances which otherwise would have entitled the insured to bring a claim under the policy. Clause 63A (3) was specific in preventing a claim that was later than as permitted by the clause. 4. Clause 63A operated from the 18 December 2008 to 18 May 2009, a period of five months. Any period of grace would have consequently have commenced on 19 May 2009 pursuant to Clause 86(2) of Schedule 4 of the 1989 Act. 5. Notwithstanding the terms of the policy the effect of Clause 63A was also to prevent a claim for loss in this extended sense from being made during part of the loss notification period referred to in s 103BA of the 2009 Act. This would mean the period from 18 December 2008 to 14 May 2009 being when the cover expired. If this is correct it would have provided a period of grace under Clause 86 of Schedule 4 for an equivalent period, pursuant to Clause 86(2). This would have enabled a loss to be notified (as opposed to a claim being made) during a period of 21 weeks commencing on 19 May 2009. If that occurred then the Plaintiff would have met the requirements of s 103BA as it stood in the 2009 amendments. 6. Accordingly for my own part, I would not be inclined to accept the contention that Clause 86(1) of Schedule 4 cannot apply to "last resort" policies that had no contractual notification period such as the present policy. [70] 7. However, a concluded view is not necessary for the determination of this case, as it is not in issue that the period of grace was not utilised. Home Building Amendment Act 2011 (NSW) 1. What happened thereafter was that on 25 October 2011, a further set of amendments were passed by the Home Building Amendment Act 2011 (NSW). [71] The effect of the 2011 Act was to amend s 103BA of the 2009 Act so that it specifically applied to policies issued between 1 May 1997 and 30 June 2002. The Plaintiffs did not contend that by reason of their notification in January 2009 and the amendments to the s 103BA of the 2009 Act they accrued rights based on the previous provisions pursuant to s 30 of the Interpretation Act 1987 (NSW). Nor could they in light of the 2011 amendments. 2. The effect of the new s 103BB was confined to policies issued from 1 July 2002, which included the policy in the Plaintiff's case. The section provided: 103BB Time limits for policies issued from 1.7.2002 (1) A contract of insurance under the Home Building Compensation Fund entered into on or after 1 July 2002 provides insurance cover in respect of loss only if a claim in respect of the loss is made to the insurer during the period of insurance. Note. Subsection (1) is the general rule but there are exceptions to this general rule, as provided by this section. (2) A loss that becomes apparent in the last 6 months of the period of insurance has an extended claim period, which permits a claim in respect of the loss to be made within 6 months after the loss becomes apparent. There is no extended claim period for a loss that arises from non-completion of work. (3) When a loss becomes apparent during the period of insurance but a claim cannot be made during that period because an insured event has not occurred, a claim can be made after the period of insurance (as a delayed claim) but only if: (a) the loss was properly notified to the insurer during the period of insurance (or within 6 months after the loss became apparent in the case of a loss that became apparent in the last 6 months of the period of insurance), and (b) the beneficiary under the contract of insurance making the claim diligently pursued the enforcement of the statutory warranty concerned after the loss became apparent. (4) A delayed claim can also be made when the insured event occurs in the last 6 months of the period of insurance (as if the insured event did not occur until after the period of insurance) subject to compliance with the other requirements of this section for a delayed claim. (5) (Repealed) (6) The regulations can make provision for or with respect to what constitutes or does not constitute diligent pursuit of the enforcement of a statutory warranty for the purposes of this section. (7) A loss is properly notified to an insurer only if the insurer has been given notice in writing of the loss and the notice provides such information as may be reasonably necessary to put the insurer on notice as to the nature and circumstances of the loss. The regulations can make provision for or with respect to the form and content of such a notice. 1. The Plaintiffs accept that these provisions have retrospective operation by reason of Clause 106 of Schedule 4 of the 1989 Act. They contend that the phone call of January 2009 amounted to oral notification which was perfected by the solicitor's letter of 15 September 2010. As such, they argue that they are entitled to the period of grace provided for in Clause 115 of Schedule 4 of the 2011 Act. That clause reads as follows:- 115 Period of grace for proper notification of losses (1) The requirement under section 103BB(3)(a) that a loss be properly notified to an insurer during the required notification period is satisfied in the case of a loss that was notified (but not properly notified only because it was not notified in writing) to the insurer during the required notification period and before the commencement of that section if the loss is properly notified to the insurer within 6 months after the commencement of that section. (2) The required notification period is the period of insurance or the period of 6 months after the loss became apparent in the case of a loss that became apparent in the last 6 months of the period of insurance. 1. In short, the Plaintiffs claim that their case falls within s 103BB(3) of the 1989 Act as a "delayed claim." They contended that they suffered a loss but did not make a claim because of the lack of an insured event being the death, disappearance or insolvency of the builder. There was no issue raised that the Plaintiffs did not diligently pursue enforcement of the statutory warranty. Accordingly they contend that they complied with the statutory notice requirements by virtue of Mr Foy's telephone call of January 2009, this being a notification that was not "proper" because it was not in writing within the period of insurance. The Plaintiff s contended that the letter was prior to the commencement of the 2011 Act and therefore fell within the requirements that it be within six months within the commencement of the section. It asserted that the section was retrospective in respect of a notification of a loss prior to the by reason of Clause 106 of Schedule 4. They argue that the written notification identified the property and the proceedings in the NSW CTTT as being the proceedings which the insurer had agreed to be bound by as per the terms of the policy. [72] 2. The Defendant argues that the Plaintiffs' notification in January 2009 overlooks the fact that the telephone conversation referred to did not amount to a notification within the terms of the policy as it was not in writing. 3. The policy itself did not require notification of loss ahead of making a claim. The provisions which required notification of the claim specifically are the statutory provisions I have referred to. Clause 115 specifically envisages a period of grace in circumstances where notification was given but not in writing for the purposes of s 103BB(3)(a) of the 1989 Act. No exception is made in circumstances where the contract of insurance provided for any notification to be in writing. In the circumstances, I do not accept the Defendant's argument. 4. Next the Defendant argues that the phone call of January 2009, needed to meet all the requirements of s 103B(7) of the 1989 Act in order for Clause 115 to potentially provide a period of grace. It contends that it is little more than the type of phone call which was rejected in Michell & Thomas v Calliden Insurance Ltd. [73] It contends that whatever else the call was, it could not have realistically have been a notice of the nature and circumstances of loss sufficient for the purposes of notifying the insurer. 5. As to the purpose of requiring a person who had otherwise given notice but not within six months to resubmit the Defendant contended: "BAMBAGIOTTI: It would be required because that was the time at which, on one view of it, the legislation had introduced a paper driven scheme, whereas before if there was no requirement for notification, notifications in writing or otherwise received could've been cast at the four winds, it was not necessarily a signal to the insurer that the written documents had the effect that they have under s 103BB. That would be why you'd have to resubmit." [74] 1. The Plaintiff seeks to distinguish the decision in Michell & Thomas. It argues that Mr Foy outlined the cause of the claim being the existence of the defects, specified his intention to make a claim, but was told that he could not do so until the contingency eventuated. [75] In Michell & Thomas, the relevant conversation agreed to between the parties was comprised and agreed in the facts as follows:- "The Applicants' solicitor telephones the Respondent and requests a copy of the Certificate of Insurance and policy wording in respect of the Insurance and advised the insurer that the insured had a dispute with the owner/builder". [76] 1. The decision in that case centred on the words of s 103BA(1)(b)(i) of the 1989 Act, inserted by the 2009 Act, to specify:- "The loss becomes apparent and is notified to the insurer within the period of insurance." 1. Member Buckley in rejecting the communication of 21 February 2008 as constituting a notification of loss, referred to the heading of s 103BA as it stood reading: "Limitations on policy coverage – claims made and notified policy" before concluding that the communication was nothing more than a communication which did not refer to loss, any claim, contingent or otherwise, nor any defect apparent or otherwise. [77] 2. The decision in Michell & Thomas is of little assistance in this case as s 103BB of the 1989 Act is a different section, and to the extent that it is relevant, has a new heading although not part of the section which reads "Time limits for policies issued from 1 July 2002." Further, the requirement of proper notification is specified in s 103BB. The requirement that the loss be properly notified, requires notice to provide such information as may be reasonably necessary to put the insurer on notice as to the nature and circumstances of the loss. Even accepting that the call was made and met the purposes of the section, Clause 115(1) of Schedule 5 required proper notification to the insurer within six months of the commencement of s 103BB(3)(a). That section commenced on 25 October 2011. The six months expired on 25 April 2012. The meaning of the term "within" was considered by the Full Court of the Supreme Court of Victoria in Morton v Hampson [78] where the plurality stated:- "The modern rule in relation a period of time fixed by statute 'within' which an act is to be done after a specified event is the day of the event is to be excluded; the next day is the first day of the stipulated period and the time expires on the last day of the period, counting from and of course including, the first day." [79] 1. Whatever else can be said about the letter of 15 September 2010, it cannot be said that it constituted notification within six months of the commencement of s 103BB of the 1989 Act. That letter was an invitation to the insurer to join in the proceedings in the NSW CTTT. Nor does it appear that the Plaintiffs saw it as notification of a claim, since the letter from Claims Services Australia Pty Ltd dated 29 September 2010 enclosed a notification of loss form, [80] and there was no evidence that this was completed before the claim was ultimately submitted. I do not accept that the effect of Clause 106 of Schedule 4 was to make s 103BB retrospective in respect of a notification of a loss prior to the amendment. [81] The provisions of Clause 115 specifically applied where the requirements under s 103BB(3)(a) that the loss properly notified to the insurer during the required notification period is satisfied, but not in writing, and required the notification to the insurer be properly made within six months of the commencement of the section. In my view, Clause 106 does not have the effect for which the Plaintiff contends. 2. In the circumstances I accept the Defendant's argument that the Plaintiffs failed to respond or take advantage of the specific statutory provisions that were available to them and the contractual claim must fail. [82] Misleading or deceptive conduct s 52 of the Trade Practices Act 1974 (Cth) and s 12DA of the Australian Securities and Investment Commission Act 2001 (Cth) 1. In its claim, the Plaintiff has also pleaded reliance on s 52 of the Trade Practices Act 1974 (Cth) [83] and to the extent that financial services were involved, the parallel provisions in, s 12DA of the Australian Securities and Investment Commission Act 2001 (Cth). [84] To understand the allegation made, the Plaintiffs rely on the phone discussion of January 2009, namely the response provided to the First Plaintiff's question: "Where do I go from here?" being, "You should contact us again if one of those things occur." It was argued that this was a reference to the events which activated the indemnity, the death, disappearance or insolvency of the owner builder. [85] 2. The Plaintiffs pleaded that the Defendant's responses amounted to a representation to the following effect: "[9] In response to the matters raised by the First Plaintiff, the employee or agent of the Defendant made representations to the First Plaintiff to the following effect: (a) That the Insurance Policy does not operate unless the Builder has died, disappeared or become insolvent; (b) That a claim cannot be made under the Policy until it is activated in the circumstances outlined at (a) above; (c) The First Plaintiff should contact the Insurer again when one of the events outlined in (a) occurs." [86] 1. The Plaintiff pleaded that these representations were misleading and deceptive, for the reasons stated at [12] of the Second Amended Statement of Claim. 2. Firstly, the Plaintiff pleaded that the Defendant's agent was aware of or had constructive notice of the Defendant's requirements as to the need for notice of defects to be put in writing within the period of cover, and to be provided with further or more specific details of the defects discovered in the property. No submission in this regard was ultimately pursued. The Defendant correctly argued that paragraph [12](a) of the Second Further Amended Statement of Claim refers to terms of the policy which were equally known to the Plaintiff. To the extent that notice was required, this was a factor which arose with the enactment of s 103BB of the 1989 Act in 2011. 3. In relation to paragraph [12](b) of the Second Further Amended Statement of Claim it was contended that the employee or agent did not notify the Plaintiff at the time of the Defendant's requirement for written notice or further details in response to the notification. This was also not pursued in argument by the Plaintiff. At the time of the phone call there was no notice requirement either in the Home Building Act or under the terms of the policy. This changed with the 2009 and 2011 amendments. 4. In relation to paragraph [12](c) of the Second Further Amended Statement of Claim, the First Plaintiff contended that he was not advised in the phone call as to there being time limitations in relation to the making or notifying under the insurance policy. That of course, is correct. The conversation at the time did not purport to deal with time limitations. Furthermore, circumstances were not at that point such that a claim could be made, as the circumstances engaging indemnity had not been arrived at. 5. In [12](d) of the Second Further Amended Statement of Claim the Plaintiffs contended that the First Plaintiff was misled or induced into a false belief that he should not contact the Defendant again unless and until the builder had died, disappeared or had become insolvent. In fact the First Plaintiff was not given negative advice as asserted to "not to make contact." But in any event, the obligation to notify in respect of the policy arose when the 2009 amendments came into force. In January 2009 when the phone call is said to have been made, there could be no such "false belief". 6. Plainly enough the Plaintiffs could not have made a claim until the circumstances engaging indemnity under the policy had arisen. 7. The Plaintiff next alleged that the First Plaintiff was induced into not reporting the defects in writing within six years of completion of construction of the property, as specified in paragraph [12](e) of the Second Further Amended Statement of Claim. 8. The Plaintiffs contend that at the time of the telephone call, Clause 63A of the Home Building Regulations was in force. That expressed an obligation to make a claim within six months of knowledge of the fact or circumstance under which the claim arises, or the end of the cover (whichever occurred earlier). The Plaintiffs argue that if this applied at the time to the policy, then the conduct of the representative was misleading and deceptive 9. The allegation in paragraph [12](e) of the Amended Statement of Claim cannot be sustained. There was nothing in the January 2009 conversation which could be said to have "induced" the Plaintiffs. The Plaintiffs needed to have continuing regard to the terms of the policy, any statutory provisions and the circumstances that were in their best interests. [87] The terms of the conversation were not recorded by the First Plaintiff. The First Plaintiff acknowledged that if anybody wanted to do any following up, it was to be him. [88] The conversation further to did not refer to any time limits and there was nothing in it which altered the Plaintiff's obligations under the law or under the policy. 10. The Plaintiffs refer to the statement of the Defendant's agent: "You should contact us again when one of those things occur" and put their submissions as follows:- "[63] This is an express representation as to what the Foy's [sic] need to do in the future. It is a continuing representation on behalf of the defendant who owes the Foys a duty of good faith as to what they should do in the future. It is a continuing representation. Whilst it may be accurate at the time, it imports with it first, a representation that there is no likelihood of change of circumstances, or, if there is that the Foys will be notified. It thus becomes misleading if Calliden remains silent in the face of legislative change when it has created in the Foy's [sic] an expectation that the representation would be corrected if circumstances changed. [64] The representation became misleading on the 19th May 2009 on the commencement of the 2009 amendments. Calliden took no steps to disabuse the Foy's [sic] of the intent of the representation. This they had a duty to do if Calliden chose to give advice to as to when the policy would respond." [89] 1. The Plaintiffs contend that the fact that a person who had been misled could have discovered the fact, does not absolve the maker of the representation for liability of the breach, [90] nor did it matter that the representation concerned an opinion as to law [91] with the representations alleged by the Plaintiff to have been made by its representative. 2. The Plaintiffs contended that the representation effectively was that there was no likelihood of change of circumstances or if there was, the Plaintiffs would be notified. It was submitted that this became misleading if the Defendant remained silent in the face of legislative change when it created in the Plaintiffs, an expectation that the representation would be corrected if circumstances change. It was contended that the representation became misleading on 19 May 2009 due to the requirement of s 103BA of the 1989 Act. The Plaintiffs further contended that insofar as the representations were in respect of future matters, they relied on s 51A of the 1974 Act or s 12BB of the 2001 Act. It further relies on s 51A(2) of the 1974 Act or s 12BB(2) of the 2001 Act to contend that a person is taken not to have reasonable grounds for the representation unless there is evidence adduced to the contrary. 3. In referring to the argument as to future representation the Plaintiffs did not plead the representations they relied upon, being that: "[t]here is no likelihood of change of circumstances or if there is, the Plaintiffs would be notified." 4. Beyond this, it is necessary for the Plaintiffs to establish that at the time any such representation is made, the Defendant knew that it did not have reasonable grounds. [92] The basis it is contended that the Defendant knew was by reference to the Second Reading Speech in respect of the 2009 amendments where the Minister stated:- "Following the Supreme Court decision, approved insurers began assessing whether it was commercially viable to continue providing insurance cover. Some approved insurers advised the Office of Fair Trading that they may withdraw from the home warranty insurance market. The Insurance Council of Australia also advised the Office of Fair Trading that the capital adequacy requirements for a home warranty insurance would need to increase significantly for any insurers that remained in the market. This would have resulted in significant increases in the cost of home warranty insurance. It quickly became evident that the Supreme Court decision had placed the future availability of home warranty insurance into jeopardy. As a worst-case scenario, all insurers would leave the market and home building activity in New South Wales would come to a virtual halt. It would not be possible for a builder to enter into new building contracts requiring insurance. Even if some insurers continued in the market, the price of home warranty insurance would increase significantly." 1. The Defendant contends that the statement: "You should contact us again when one of those things occur" was not a representation about a future matter, as it referred to future conduct but did not make a representation about it and none was alleged. 2. I accept that the statement "You should contact us again when one of those things occur" refers to future conduct, but makes no representation about it. It is only in the form which the Plaintiffs submit in its submissions, that a representation as to future can be said to arise. Irrespective of what belief the First Plaintiff had the statement in my view does not import a representation that there was no likelihood of change of circumstances or that if there was, that the Plaintiffs would have been notified. The statement reflected no more than what was the requirement of the policy at the time. The policy did not provide indemnity for a prescribed cause. The risk indemnified was specified in Clause 1 of the policy under the heading "The indemnity" as being:- "The Insurer will indemnify the Insured against the risk of being unable, because of the Insolvency, death or Disappearance of the Owner Builder: (a) to recover compensation from the Owner Builder for loss arising from a Prescribed Cause. (b) to have the Owner Builder rectify the breach or breaches specified in the Prescribed Cause where the Prescribed Cause occurs during the Period of Insurance." [93] 1. The policy in question was not one which in January 2009, the Defendant anticipated it "would" as opposed to "could" have been required to provide cover. Whether it ultimately did so depended on the success or otherwise of the action that the Plaintiffs brought against the owner builder. Accordingly there could be no expectation or indeed obligation to follow up any change of circumstances with the Plaintiffs. There was nothing stated in the phone conversation that would suggest that this were to occur. 2. Nor I do not accept that the Plaintiffs relied on any such statement to this effect. There was no recording of it. The First Plaintiff disclosed providing his contact details in the course of oral evidence not his affidavit. I do not accept that he in fact did so in the phone call of January 2009. In the context of that call no purpose in providing such details at that time was identified or is apparent. The policy itself did not record the Plaintiffs' contact details so that they could be contacted if circumstances arose. [94] The impact of legislative changes which ultimately took place were variable depending on the circumstances of various potential claimants. It follows in my view, that there was no basis for any expectation let alone what the terms of it would be. 3. As to the Plaintiff's contention that the representations became misleading on 19 May 2009, due to the requirements of s 103BA of the 1989 Act, giving rise to an expectation in the Plaintiffs, that the Defendant would communicate this to them, no basis is identified as to the source or terms of any duty that the insurer has to this effect. In January 2009, there was no notice requirement in either the Home Building Act 1989 (NSW) or the Regulations or the policy. The requirements which were brought about by the 2009 and 2011 amendments were brought about by legislation. 4. There was no basis advanced either in the pleadings or in the evidence as to why an insurer should be tasked with fulfilling the expectations the Plaintiff alleges, even more so where the allegation of misleading or deceptive conduct arose by silence as to a future matter where there is no evidence that this was contemplated when the statement was made. The evidence of Mr Curry does not support that there was any knowledge or expectation in relation to what might have transpired. Nor are the comments in the Second Reading Speech material which could be brought home to the Defendant. In the circumstances, I am unable to find that this aspect of the Plaintiffs' claim has been established. Unconscionability 1. The Plaintiffs next rely on an assertion that it would be unconscionable to allow the Defendant insist on any right to written notice or further detail because of the Defendant's failure to inform the Plaintiffs of those requirements. Specifically, reliance is placed on unconscionability at common law and pursuant to s 51AC of the 1974 Act or ss 12CB and 12CC of the 2001 Act. In written submissions, the Plaintiff appeared to advance only the statutory claim for unconscionability stating as follows:- "Further, for Calliden to now rely upon the strict requirements of the statutory notification provisions would be unconscionable conduct within the meaning of s 12CB and 12CC [of the] ASIC Act or s 51AC [of the] Trade Practices Act." [95] 1. The Plaintiff did not articulate its allegations and what aspects of "serious misconduct" or "no regard for conscience" or pejorative "moral judgment" or "fault or moral responsibility" was involved in this case. [96] Nor does the Plaintiff identify in any terms, the terms of s 51AC of the 1974 Act or s 12CC of the 2001 Act as they are said to arise in this case. 2. I accept the Defendant's contention that it is impossible to see how the label could be properly applied in the context of circumstances where the defeat of the Plaintiffs' claim arose from a statutory amendment which was expressed to be retrospective. [97] Estoppel 1. The Plaintiffs further alleged that the Defendant was estopped from enforcing any rights that they might have otherwise had to require written notice or further detail. [98] In support of its argument, the Plaintiff relies on the principles referred to by Brennan J in Walton Stores (Interstate) Ltd v Maher, [99] and Dixon J in both Thompson v Palmer [100] and Grundt v Great Boulder Pty Gold Mines Ltd. [101] 2. The Plaintiffs' case was that they relied on the representation that they need not contact the insurer until after the builder had died, disappeared or become insolvent, to change their position to their detriment by not contacting the insurer again and pursuing the builder in the NSW CTTT. They contended that if Defendant's contentions were correct, there being no proper notification, this came about by the Plaintiffs' reliance upon the representation that there was no need to contact the insurer again until death, disappearance or insolvency, and had they not relied on such a representation and contacted the insurer, then the evidence of Mr Molcik is that this would have been recorded as a notification. The Plaintiffs further contend that if the phone conversation was found not to be a notification, then the Plaintiffs, in reliance on the representation, made no further attempt to notify in a manner that would have complied with the statutory requirements in accordance with the statutory notice provisions. Further in reliance on those representations, to the effect that the policy would respond when the builder had died, disappeared or was insolvent, the Plaintiffs prosecuted a builder in the NSW CTTT to recover compensation for the defects and then petitioned for Mr Grubisic's bankruptcy. 3. What the Defendant is alleged to have done in January 2009 is stated the form and effect of the policy as it then applied. The Plaintiffs failure to have regard to the subsequent legislative amendments was something which was their own responsibility. In my view, there was no suggestion by the Defendant that it understood or promised, or that the Plaintiffs could legitimately expect that the Defendant would unilaterally contact and inform the Plaintiffs of changes to the law. There is no basis for the various assumptions or suppositions. Nor did the Defendant make any clear or unequivocal representation as the Plaintiff asserts. The statement that was made was factual and correct at the time. 4. The suggestion that the representation can be seen as the equivalent of a party not asserting its legal rights in accordance with Commonwealth v Verwayen [102] has no substance. In that case, the Commonwealth did not plead that the action was barred by limitation laws or that it owed no duty of care to the Plaintiff because he was injured as a serviceman in the course of combat exercises. In the course of litigation the Defendant sought to resile from its position following a change in policy. The Defendant is right to draw attention to the fact that the facts in Verwayen showed a wide gulf between that, and the circumstances that confront the Plaintiff. 5. The Plaintiffs further submit that the insurer was in breach of its duty to act in the utmost of good faith, where the insurer was aware of a right to deny liability under the contract, it fails to draw that right to the insured's attention and allows the insured to continue to believe that he or she is entitled to indemnity. [103] No allegation has been or could be advanced that at the time of the January 2009 telephone call, the Defendant was aware of the right to deny liability. Nor does the Plaintiff identify at what stage the Defendant became aware of any such right which it failed to draw to the Plaintiffs' attention. 6. To establish estoppel, Brennan J in Walton Stores stated:- "[34] … to establish an equitable estoppel, it is necessary for a plaintiff to prove that (1) the plaintiff assumed that a particular legal relationship then existed between the plaintiff and the defendant or expected that a particular legal relationship would exist between them and, in the latter case, that the defendant would not be free to withdraw from the expected legal relationship; (2) the defendant has induced the plaintiff to adopt that assumption or expectation; (3) the plaintiff acts or abstains from acting in reliance on the assumption or expectation; (4) the defendant knew or intended him to do so; (5) the plaintiff's action or inaction will occasion detriment if the assumption or expectation is not fulfilled; and (6) the defendant has failed to act to avoid that detriment whether by fulfilling the assumption or expectation or otherwise. For the purposes of the second element, a defendant who has not actively induced the plaintiff to adopt an assumption or expectation will nevertheless be held to have done so if the assumption or expectation can be fulfilled only by a transfer of the defendant's property, a diminution of his rights or an increase in his obligations and he, knowing that the plaintiff's reliance on the assumption or expectation may cause detriment to the plaintiff if it is not fulfilled, fails to deny to the plaintiff the correctness of the assumption or expectation on which the plaintiff is conducting his affairs." [104] 1. In this instance there was no evidence that the Defendant knew that the Plaintiff would rely on the assumption or expectation to its detriment or failed to deny the Plaintiff the correctness of the assumption or expectation upon which the Plaintiff was conducted his affairs. On the Plaintiffs' own case, the only detriment that could have arisen is on 19 May 2009, when the 2009 amendment came into effect. Insurance in this case, expired on the 14 May 2009 and the amendment was retrospective. Whilst it is arguable that a period of grace was open, the Plaintiff did not at that point seek to engage it. There was no relevant loss attributable to the Defendant, even if a duty were found. Whilst the Plaintiffs also argued that the Defendant was estopped from asserting that they had received all proper notification in terms of the policy, as notification was not required, at least until the builder had died, disappeared or became insolvent this does not constitute estoppel by convention. [105] Notification was not required under the terms of the policy but was required under the legislation. I do not accept that estoppel by representation can arise by the conducted relations between the parties, ignoring the legislative consequences that follow. s 54 of the Insurance Contracts Act 1984 (Cth) 1. The Plaintiffs next contend that even if the Plaintiffs did not provide valid notice to the Defendants during the period of insurance, the Defendant was prevented by s 54 of the Insurance Contracts Act 1984 (Cth) [106] from denying coverage on the basis of the Plaintiff's failure to provide notice. [107] 2. s 54 of the 1984 Act is in the following terms: 54 Insurer may not refuse to pay claims in certain circumstances (1) Subject to this section, where the effect of a contract of insurance would, but for this section, be that the insurer may refuse to pay a claim, either in whole or in part, by reason of some act of the insured or of some other person, being an act that occurred after the contract was entered into but not being an act in respect of which subsection (2) applies, the insurer may not refuse to pay the claim by reason only of that act but the insurer's liability in respect of the claim is reduced by the amount that fairly represents the extent to which the insurer's interests were prejudiced as a result of that act. (2) Subject to the succeeding provisions of this section, where the act could reasonably be regarded as being capable of causing or contributing to a loss in respect of which insurance cover is provided by the contract, the insurer may refuse to pay the claim. (3) Where the insured proves that no part of the loss that gave rise to the claim was caused by the act, the insurer may not refuse to pay the claim by reason only of the act. (4) Where the insured proves that some part of the loss that gave rise to the claim was not caused by the act, the insurer may not refuse to pay the claim, so far as it concerns that part of the loss, by reason only of the act. (5) Where: (a) the act was necessary to protect the safety of a person or to preserve property; or (b) it was not reasonably possible for the insured or other person not to do the act; the insurer may not refuse to pay the claim by reason only of the act. (6) A reference in this section to an act includes a reference to: (a) an omission; and (b) an act or omission that has the effect of altering the state or condition of the subject-matter of the contract or of allowing the state or condition of that subject-matter to alter. 1. The Plaintiffs contend that the effect of s 54(1) of the 1984 Act to operate on the effect of the contract, not on its terms. They contend that the effect cannot be examined simply by looking at the contractual provisions in isolation from the legislative framework in which it operates. In this respect, the Plaintiffs argue that the 1989 Act attempts to alter the effect of various contracts of insurance by statutory overlay of various provisions regarding notification. In this regard, the Plaintiffs contended that the Commonwealth Parliament has evinced an intention where the insured has failed to act in a manner, the effect of which would entitle the insurer to refuse to pay the claim, then the insurer could only reduce its liability by reason of the prejudice that it has been caused by that act. Accordingly, the Plaintiff contends that the effect of the policy on the claim would be to enable the insurer to refuse to pay the claim if there has been a late notification, and s 54(1) of the 1984 Act is enlivened to provide the Plaintiffs with the relief and any statutory provision that seeks to deprive the Plaintiffs of that relief, by purportedly entitling the insurer to refuse to pay the claim, must not be given effect to, insofar as they are inconsistent with the Commonwealth provisions. [108] 2. In supplementary submissions, the Plaintiffs argued that the 2011 amendments imposed a restriction or limitation inherent in the claim. This was said because the section operated to impose time limits for, in effect, the notification of circumstances that might give rise to a claim. It drew attention to the heading of s 103BB of the 1989 Act which stated: "Time limits for policies issued from 1 July 2002." It contended that the section was drafted to make "proper notification" a condition precedent to the making of "delayed claim" such that the restriction was inherent to the claim and not to the scope of cover. [109] 3. In support of its argument, the Plaintiffs drew attention to the test set out in Maxwell v Highway Hauliers Pty Ltd [110] wherein the plurality stated:- "[27] … it is sufficient to engage s 54(1) that the effect of the Policy is that the Insurers may refuse to pay those claims by reason only of acts which occurred after the contract was entered into. Precisely how the Policy produced that effect is not to the point …" 1. The Plaintiffs contended that the policy did not respond because of the omission of the Plaintiffs to notify the "loss" and the Defendant was refusing to pay by reason only of an omission that only occurred after the contract of insurance was entered into, such that s 54 of the 1984 Act was engaged. [111] 2. The Defendant for its part contended that the amendments brought about through the enactment of s 103BB of the 1989 Act redefined or recast the scope and extent of liability. The consequence was that the Plaintiffs' failure to notify falls within the same field as the insured's failure to notify in Gosford City Council v GIO General Limited. [112] The Defendant further argued that it was not an issue of the effect of the policy, as ss 103BA and 103BB of the 1989 Act sit outside the operation of s 54 of the 1984 Act by providing for the case of a delayed claim indemnity only offered in consequence of notification (rather than notification being a condition of the cover, in respect of which a failure to notify might be an act or omission to which s 54 of the 1984 Act could provide relief). 3. I accept that the character and features of the policy stand to be read by reference to the terms of the legislation. The indemnity offered by Part 6 policies is governed by its provisions, including ss 99, 103B, 103BA, 103BB and 103BC of the 1989 Act. These collectively provide the legislative scheme setting out the indemnity which is to be offered. Both parties accepted that it is inappropriate to attempt to construe the policy in the absence of the legislative framework. [113] 4. In Gosford City Council v GIO General Limited, Sheller JA stated:- "[36] Section 54 does not permit the reformulation of the claim. It operates to prevent an insurer relying on certain acts or omissions to refuse to pay that particular claim. The actual claim made by the insured is one of the premises from which consideration of the application of s54 must proceed. The section does not operate to relieve the insured of restrictions or limitations, such as the temporal limits within which the claim must be made upon the insured in a claims made policy, that are inherent in that claim." [114] 1. Subsequently in Prepaid Services Pty Ltd & Ors v Atradius Credit Insurance NV [115] , Meagher JA, after referring to the High Court's decision in FAI General Insurance Company Ltd v Australian Hospital Care Pty Ltd [116] stated:- "[130] The effect of the contract of insurance must be determined as a matter of construction, unconstrained by distinctions between provisions which define the scope of cover and conditions or exclusions which affect the entitlement of an insured to claim. It is not controversial that s 54 is concerned with the effect of the contract as a matter of substance: East End Real Estate Pty Ltd v CE Heath Casualty & General Insurance Ltd (1991) 25 NSWLR 400 at 403-404 (Gleeson CJ), cited with approval in Antico at 660, 668-669 and Australian Hospital Care at [35], [50]. It is necessary to consider the effect of the contract in the way in which it responds to the claim actually made by the insured. It is at this point that difficulties may arise in applying s 54(1) in circumstances where it is said by the insured that the act or omission is the reason why the insured's claim is not with respect to a risk or event covered by the policy." 1. His Honour then went on to elaborate:- "[133] The respects in which the insured's claim does not have the characteristics of the event of the kind insured are referred to by the plurality in Australian Hospital Care as "restrictions or limitations" inherent in that claim. Section 54 does not "relieve" the insured of those restrictions or limitations: [41]. The plurality (at [41], [42]) describe that event as "the event insured against" and as "an event of the type contemplated by the contract" and note that it will vary according to "the type of insurance in issue". [134] That event may be an accident which results in personal injury or property damage; or the happening of that injury or damage; or the making of a demand against the insured by a third party; or the happening of an occurrence or circumstance which may give rise to such a demand; or the insured's becoming aware of such an occurrence or circumstance. These descriptions of themselves are not sufficiently specific to define the event covered by a particular type of policy. The accident will have to be of a particular kind, or arise out of or in the course of a specified activity. The injury or damage will usually have to happen in the course of or in connection with a particular activity. The third party demand is usually described as arising out of or in connection with the conduct of a particular business or professional activity. The same may be said of an occurrence or circumstance which may give rise to a claim. [135] The way in which the provisions of the policy describe and define that event or risk will vary between different types of policy, and sometimes between policies which provide the same type of cover. It is here that matters of form are not to dictate the outcome when considering the effect of the contract: East End at 403-404. It nevertheless remains necessary, in addressing that effect, to have regard to the nature of the risk and subject matter insured as well as the commercial or other context in which the insurance is written, to the extent that evidence of that kind is admissible on that question of construction. [136] In Australian Hospital Care, the significant point of difference between the plurality and Gleeson CJ was in the characterisation of the effect of the contract and the identification of the event insured. Gleeson CJ considered that the effect of the contract was to indemnify against third party claims made, or potential claims notified, during the policy period: [11]. The plurality considered that the effect of the contract, particularly by reason of condition 3, was to indemnify against any claim, or occurrence likely to give rise to a claim, of which the insured became aware during the policy period, and irrespective of whether that occurrence was notified during that period: [23], [43]. Kirby J also considered that to be the effect of the contract: [59], [60]. The actual claim made by the insured was for an indemnity against liability for an occurrence of which the insured first became aware during the period of cover. If the effect of the contract was as Gleeson CJ considered it to be, the claim made by the insured did not involve an insured event because no third party claim had been made or potential claim notified during the policy period. The reason for refusal of the insured's claim would not have been an act or omission of the insured and s 54(1) would not have applied. The effect of the contract as characterised by the plurality led to the opposite conclusion: [46]." [117] 1. Following the decision in Prepaid, the High Court in the case of Maxwell v Highway Hauliers, [118] had cause to consider the approach taken in Prepaid alongside the different approach Queensland Court of Appeal in Johnson v Triple C Furniture and Electrical Pty Ltd. [119] In Maxwell, the plurality stated:- "[19] The Act is described in its long title as an Act to reform and modernise the law relating to certain contracts of insurance so that a fair balance is struck between the interests of insurers, insureds, and other members of the public and so that the provisions included in such contracts, and the practices of insurers in relation to such contracts, operate fairly. [20] The more specific objects of s 54 of the Act were explained in the report of the Australian Law Reform Commission which recommended its introduction. Those objects included striking a fair balance between the interests of an insurer and an insured with respect to a contractual term designed to protect the insurer from an increase in risk during the period of insurance cover. That balance was to be struck irrespective of the form of that contractual term. In particular, no difference was to be drawn between a term framed: as an obligation of the insured (eg "the insured is under an obligation to keep the motor vehicle in a roadworthy condition"); as a continuing warranty of the insured (eg "the insured warrants he will keep the motor vehicle in a roadworthy condition"); as a temporal exclusion from cover (eg "this cover will not apply while the motor vehicle is unroadworthy"); or as a limitation on the defined risk (eg "this contract provides cover for the motor vehicle while it is roadworthy"). [21] Antico v Heath Fielding Australia Pty Ltd established, conformably with those objects, that s 54 takes as its starting point nothing more than the existence of a claim and of a contract the effect of which is that the insurer may refuse to pay that claim by reason of some act which the insured (or someone else) has done or omitted to do after the contract was entered into; it does not postulate a liability of the insurer to pay the claim that has been made. In terms consistent with the reasoning of the majority[10], Brennan CJ there said that s 54(1)[11]: "focuses not on the legal character of a reason which entitles an insurer to refuse to pay a claim – falling outside a covered risk, coming within an exclusion or non-compliance with a condition – but on the actual conduct of the insured, that is, on some act which the insured does or omits to do. ... It is engaged when the doing of an act or the making of an omission would excuse the insurer from an obligation to pay a claim for a loss actually suffered by the insured." [22] The Antico construction of s 54(1) is inconsistent with the Insurers' proposition that the "claim" to which the section refers is limited to a claim for an insured risk. That construction is reinforced by the reasoning in FAI. The plurality there emphasised both that s 54(1) "directs attention to the effect of the contract of insurance on the claim on the insurer which the insured has in fact made"[12] and that "[n]o distinction can be made", for the purposes of the section, "between provisions of a contract which define the scope of cover, and those provisions which are conditions affecting an entitlement to claim". [23] The Insurers sought support for their argument from a statement of the plurality in FAI that the section "does not operate to relieve the insured of restrictions or limitations that are inherent in [the] claim". They misapply that statement in equating its reference to restrictions or limitations that are inherent in a claim with any restriction or limitation on the scope of the cover that is provided under the contract. A restriction or limitation that is inherent in the claim which an insured has in fact made, in the sense in which the plurality in FAI used that terminology, is a restriction or limitation which must necessarily be acknowledged in the making of a claim, having regard to the type of insurance contract under which that claim is made. [24] Thus, as explained in FAI, the making of a claim under a "claims made and notified" contract necessarily acknowledges that the indemnity sought can only be in relation to a demand made on the insured by a third party during the period of cover. The section does not operate to permit indemnity to be sought in relation to a demand which the third party omitted to make on the insured during the period of cover but made after that period expired. Similarly, the making of a claim under a "discovery" contract, of the type in issue in FAI itself, necessarily acknowledges that the indemnity sought can only be in relation to an occurrence of which the insured became aware during the period of cover. [25] The making of a claim under an "occurrence based" contract, the type of insurance contract in the present case, necessarily acknowledges that the indemnity sought can only be in relation to an event which occurred during the period of cover. That restriction or limitation is inherent in a claim which is made under such a policy. But it is of no moment in the present case." 1. The plurality declined to follow Johnson in its application of s 54(1) of the 1984 Act. [120] 2. Both parties agree that the effect of the 2011 Act required the policy to be read alongside the amendments it made. The effect of the 2011 amendments go to the cover provided by the policy and do so retrospectively in light of the provisions of Clause 106 of Schedule 4. The 2011 Act did not amend the policy terms. The effect of the 2011 amendment was to make the policy one characterised, as the Defendant submitted::- [13] "In the case of an ordinary claim, the insured event is the risk of being unable to recover compensation for a builder's breach of statutory warranties because of the builder's death, disappearance, or insolvency (see s 99(1)),or where claim or notification is made pursuant to sec 103BB by reference to the insurance periods in sec 103B." [121] 1. As there was no claim or notification as required by s 103BB, the circumstances contemplated in s 54(1) of the 1984 Act are not engaged. It follows that the Plaintiffs' argument must fail. s 109 inconsistency 1. The Plaintiff argues that it was the expressed intent in the enactment of s 54 of the 1984 Act that it was to apply to the present policy. It contends that the statutory regime ought not to be imposed by the State on contracts of insurance that oust the protection afforded by the 1984 Act. In respect of this particular contact of insurance by the imposition of an absolute notice requirement as to a precondition of making a claim. 2. It contended that it could be no more significant a detraction from the Commonwealth law than to absolutely deprive the Plaintiffs of an entitlement to make a claim because of the "late notification" of the circumstances that gave rise to a loss. The legislative intent in these circumstances in s 54 of the 1984 Act is this should only occur in circumstances where the "late notification" has given rise to the loss. [122] It was contended that this was the inconsistency envisaged in the High Court in Bell Group NV (in liq) v The State of Western Australia. [123] 3. In the Bell Group NV, the plurality of the High Court summarised the applicable principles as follows:- "[50] Where there is an alleged conflict between a Commonwealth law and a State law, "s 109 requires a comparison between any two laws which create rights, privileges or powers, and duties or obligations, and s 109 resolves conflict, if any exists, in favour of the Commonwealth". [51] A conflict may arise in a number of ways. The State law, if valid, might "alter, impair or detract from the operation of a law of the Commonwealth Parliament". If so, then to that extent it will be invalid because of what sometimes is described as "direct inconsistency". As the Court said in Jemena Asset Management (3) Pty Ltd v Coinvest Ltd: 'The crucial notions of 'altering', 'impairing' or 'detracting from' the operation of a law of the Commonwealth have in common the idea that a State law conflicts with a Commonwealth law if the State law undermines the Commonwealth law.' (emphasis added) The conflict may also arise from the laws' legal operation or from their practical effect. [52] [A]ny alteration or impairment of, or detraction from, a Commonwealth law must be significant and not trivial". The question of whether any alteration or impairment of, or detraction from, a Commonwealth law is significant is "always one of fact and degree". The starting point is an analysis of the laws in question and their true construction. The extent of the inconsistency "depends on the text and operation of the respective laws". As Dixon J explained in Wenn v Attorney-General (Vict): '[W]hile s 109 invalidates State legislation only so far as it is inconsistent, the question whether one provision of a State Act can have any operation apart from some other provision contained in the Act must depend upon the intention of the State legislation, ascertained by interpreting the statute. ... No doubt s 109 means a separation to be made of the inconsistent parts from the consistent parts of a State law. But it does not intend the separation to be made where division is only possible at the cost of producing provisions which the State Parliament never intended to enact.'" 1. The basis on which the High Court held that the Bell Group Companies (Finalisation of Matters and Distribution of Proceeds) Act 2015 (WA) was invalid was described as follows:- "[60] The Bell Act thus purports to create a scheme under which Commonwealth tax debts are stripped of the characteristics ascribed to them by the Tax Acts as to their existence, their quantification, their enforceability and their recovery. It purports to override the Commonwealth's accrued rights under a law of the Commonwealth as a creditor of each of the WA Bell Companies. With respect to the recovery of tax debts due to the Commonwealth, the Commonwealth (and the Commissioner) is reduced to the position of a mere supplicant for the exercise of a favourable discretion on the part of the Executive of the State of Western Australia. In particular, ss 9, 16, 22, 25, 35, 37, 38, 39, 42, 43, 44, 73 and 74 of the Bell Act have the effect of altering, impairing or detracting from s 177 of the 1936 Act (now Item 2 of the table in s 350-10(1) of Sched 1 to the TAA) and ss 208 and 209 of the 1936 Act (now s 255-5 of Sched 1 to the TAA)." 1. The plurality of the High Court at [61] then went onto state that the Bell Act purported to alter, impair or detract from the operation of each of those rights which arose and had accrued to the Commonwealth or to the Commissioner under a law of the Commonwealth prior to the enactment of the Bell Act; and that that alteration or impairment of, or detraction from the Tax Acts was significant so as to engage s 109 of the Constitution. 2. s 7 of the 1984 Act states as follows:- 7 Effect of Act on other laws It is the intention of the Parliament that this Act is not, except in so far as this Act, either expressly or by necessary intendment, otherwise provides, to affect the operation of any other law of the Commonwealth, the operation of law of a State or Territory or the operation of any principle or rule of the common law (including the law merchant) or of equity. 1. s 103BB of the 1989 Act relates to the terms of the offer of the indemnity, that is offered under the policy. The section does not attempt to restrict or impair s 54 of the 1984 Act. [124] s 54 operates "where the effect of the contract of insurance would, but for this section, be that the insurer may refuse to pay a claim." The section does not define or regulate the effect of the contract of insurance. It follows that there is no inconsistency of the kind referred to in Bell Group NV. s 54 of the 1984 Act does not alter or impair, or detract, in a manner so as to engage s 109 of the Constitution. It follows that the Plaintiffs' claim in this regard must also fail. CONCLUSION 1. For these reasons, the Plaintiffs have failed to succeed on each of their arguments. Accordingly the formal orders are: 1. Verdict for the Defendant; and 2. The Plaintiffs are to pay the Defendant's costs. Endnotes 1. See Judgment, unreported, 9 March 2016 2. T 30.36 – 32.2 3. T 37.6 – 39.16 4. T 40.24 – .26 (which was Marked for Identification #1) 5. T 60.30 – 61.29 6. Affidavit of Mr Michael Foy sworn 15 November 2013 at [2] 7. Affidavit of Mr Michael Foy sworn 15 November 2013 at [8] 8. Affidavit of Mr Michael Foy sworn 15 November 2013 at [3] 9. Affidavit of Mr Michael Foy sworn 15 November 2013 at [6] 10. Affidavit of Mr Michael Foy sworn 15 November 2013 at [15] 11. Affidavit of Mr Michael Foy sworn 15 November 2013 at [18] 12. Affidavit of Mr Michael Foy sworn 15 November 2013 at Annexure G 13. Affidavit of Mr Michael Foy sworn 15 November 2013 at [20] 14. Affidavit of Mr Michael Foy sworn 15 November 2013 at [21] 15. Affidavit of Mr Michael Foy sworn 15 November 2013 at [22] 16. Affidavit of Mr Michael Foy sworn 15 November 2013 at [9] – [10] 17. Affidavit of Mr Michael Foy sworn 15 November 2013 at [11] 18. Affidavit of Mr Michael Foy sworn 15 November 2013 at Annexure H 19. Affidavit of Mr Michael Foy sworn 15 November 2013 at Annexure I 20. Affidavit of Mr Michael Foy sworn 15 November 2013 at [13] 21. Affidavit of Mr Michael Foy sworn 15 November 2013 at [14] 22. Affidavit of Mr Michael Foy sworn 15 November 2013 at Annexure L 23. T 49.33 – .45 24. T 50.11 – .15; and T 50.30 – .42 25. T 50.44 – 51.6 26. T 51.13 – .14 27. T 51.22 – .25 28. T 53.1 – .16 29. T 55.19 – .21 30. T 55.23 – .24 31. T 55.46 – .47 32. T 56.6 – .9 33. T 57.12 – .15 34. T 60.3 – .12 35. Affidavit of Mr Martin Warren White sworn 7 February 2014, Annexure A 36. Affidavit of Mr Stephen Molcik sworn 11 August 2015 at [4] 37. Affidavit of Mr Stephen Molcik sworn 11 August 2015 at [5] 38. Affidavit of Mr Stephen Molcik sworn 11 August 2015 at [6] – [7] 39. Exhibit A, Product Disclosure Statement for Owner Builder Warranty Insurance, produced by Calliden Insurance Limited, dated 1 October 2007, p 12 40. Affidavit of Mr Michael Foy sworn 15 November 2013 at Annexure A 41. T 115.17 – .47 42. Hereinafter referred to as the "NSW CTTT" 43. Exhibit A, Points of Claim dated 11 April 2014 filed in the NSW CTTT at [6] 44. Amended Defence filed on 22 March 2016 at [6](a) 45. T 111.13 – .19 46. Exhibit A, Product Disclosure Statement for Owner Builder Warranty Insurance, produced by Calliden Insurance Limited, dated 1 October 2007, p 16 47. Affidavit of Mr Michael Foy sworn 15 November 2013 at Annexure D 48. Affidavit of Mr Michael Foy sworn 15 November 2013 at Annexure E 49. Hereinafter referred to as the "1989 Act"; and also: Amended Defence filed 22 March 2016 at [10] 50. Hereinafter referred to as the "2011 Act" 51. [2008] NSWSC 1022 (McDougall J) 52. New South Wales, Parliamentary Debates, Legislative Assembly, 6 May 2009 (Virginia Judge) 53. Home Building Amendment (Claims) Regulation 2008 (NSW) as made under the Home Building Act 1989 (NSW) 54. New South Wales, Parliamentary Debates, Legislative Assembly, 6 May 2009 (Virginia Judge) 55. Hereinafter referred to the "2009 Act" 56. New South Wales, Parliamentary Debates, Legislative Assembly, 6 May 2009 (Virginia Judge) 57. Kopriunjak v Vero Insurance Ltd (Home Building) [2008] NSWCTTT 1520 (Member Smith) 58. Puckeridge v Calliden Insurance Limited (Home Building) [2013] NSWCTTT 450 at [17] (Member Smith) 59. T 102.31 – .33 60. T 104.2 – .19 61. Plaintiff's Written Submissions in Reply filed 12 May 2016 at [3] – [4] 62. Plaintiff's Written Submissions in Reply filed 12 May 2016 at [8] 63. Defendant's Written Submissions dated 26 April 2016 at [9](h) 64. Plaintiff's Outline of Argument dated 8 March 2016 at [26] 65. Defendant's Written Submissions dated 26 April 2016 at [31] 66. Defendant's Written Submissions dated 26 April 2016 at [32] 67. T 106.10 – .18 68. T 107.9 – .21 69. T 114.45 – 115.36 70. Plaintiff's Written Submissions in Reply filed 12 May 2016 at [9] 71. Hereinafter referred to as the "2011 Act" 72. Plaintiff's Outline of Argument dated 8 March 2016 at [56] 73. Michell & Thomas v Calliden Insurance Limited (Home Building) [2011] NSWCTTT 300 at [30] (Senior Member Buckley) 74. T 121.39 – .44 75. Plaintiff's Outline of Argument dated 8 March 2016 at [47] 76. Michell & Thomas v Calliden Insurance Limited (Home Building) [2011] NSWCTTT 300 at [25] (Senior Member Buckley) 77. Michell & Thomas v Calliden Insurance Limited (Home Building) [2011] NSWCTTT 300 at [30] (Senior Member Buckley) 78. Morton v Hampson [1962] VR 364, 365 (Herring CJ, Sholl and Little JJ) 79. See also: Ward v Walton (1989) 10 MVR 537; and Susiatin v Minister for Immigration and Multicultural Affairs (1998) 83 FCR 574, 580 (Beaumont J) 80. Affidavit of Mr Michael Foy sworn 15 November 2013 at Annexure I 81. Plaintiff's Outline of Argument dated 8 March 2016 at [55] and T 94.32 – 95.3 82. Defendant's Written Submissions at dated 26 April 2016 at [42] 83. Hereinafter referred to as the "1974 Act" 84. Hereinafter referred to as the "2001 Act" 85. Exhibit A, Product Disclosure Statement for Owner Builder Warranty Insurance, produced by Calliden Insurance Limited, dated 1 October 2007, p 10 86. Second Further Amended Statement of Claim filed 16 March 2016 at [9](a) – (c) 87. Tobacco Institute of Australia Ltd v Australian Federation of Consumer Organisations Inc (1992) 38 FCR 1 88. T 57.17 – .19 89. Plaintiff's Outline of Argument dated 8 March 2016 at [63] – [64] 90. Plaintiff's Outline of Argument dated 8 March 2016 at [69] 91. Plaintiff's Outline of Argument dated 8 March 2016 at [71] 92. Edgar v Farrow Mortgage Services Pty Ltd (in liq) (1992) ASC 56-186 93. Exhibit A, Product Disclosure Statement for Owner Builder Warranty Insurance, produced by Calliden Insurance Limited, dated 1 October 2007, p 10 94. Affidavit of Michael Foy dated 15 November 2013 at Annexure C 95. Plaintiff's Outline of Argument dated 8 March 2016 at [77] 96. See: Australian Competition and Consumer Commission v Allphones Retail Pty Ltd (No 2) [2009] FCA 17 at [113](c) (Foster J) cited in Australian Competition and Consumer Commission v Dukemaster Pty Ltd [2009] FCA 682 at [17] (Gordon J) 97. Defendant's Written Submissions dated 26 April 2016 at [91] 98. Second Further Amended Statement of Claim filed 16 March 2016 at [23] 99. (1998) 164 CLR 387; [1988] HCA 7, 428 – 429 [34] (Brennan J) 100. (1933) 49 CLR 507, 547 (Dixon J) 101. (1937) 59 CLR 641, 674 – 675 (Dixon J) 102. (1990) 170 CLR 394; [1990] HCA 39 103. Nigel Watts Fashion Agencies Pty Ltd v GIO General Ltd [1994] NSWCA 365 104. (1998) 164 CLR 387; [1988] HCA 7, 428 – 429 [34] (Brennan J) 105. Con-Stan Industries of Australia Pty Ltd v Norwich Winterthur Insurance (Australia) Limited (1986) 160 CLR 226; [1986] HCA 14, 244 – 245 [22] (Gibbs CJ, Mason, Wilson, Brennan and Dawson JJ) 106. Hereinafter the "1984 Act" 107. Amended Reply filed 16 March 2016 at [5] 108. Plaintiff's Outline of Argument dated 8 March 2016 at [90] – [108] 109. Plaintiff's Written Submissions in Reply filed 12 May 2016 at [7] 110. (2014) 252 CLR 590; [2014] HCA 33, 599 [27] (Hayne, Crennan, Kiefel, Bell and Gageler JJ) 111. Plaintiff's Written Submissions in Reply dated 26 September 2016 at [10] 112. (2003) 56 NSWLR 542; [2003] NSWCA 34 113. Plaintiff's Outline of Argument dated 8 March 2016 at [94] and Defendant's Written Submissions in Reply dated 12 September 2016 at [9] 114. (2003) 56 NSWLR 542; [2003] NSWCA 34, 553 [36] (Sheller JA with Spigelman CJ and Meagher JA agreeing) 115. [2013] NSWCA 252 at [130] (Meagher JA with Macfarlan and Emmett JJA agreeing) 116. (2001) 204 CLR 641; [2001] HCA 38 117. [2013] NSWCA 252 at [133] – [136] (Meagher JA with Macfarlan and Emmett JJA agreeing) 118. (2014) 252 CLR 590; [2014] HCA 33, 597 – 598 [19] – [24] (Hayne, Crennan, Kiefel, Bell and Gageler JJ) 119. (2010) 243 FLR 336; [2010] QCA 282 120. (2014) 252 CLR 590; [2014] HCA 33, 599 [28] (Hayne, Crennan, Kiefel, Bell and Gageler JJ) 121. Defendant's Written Submissions dated 12 September 2016 at [13] 122. Plaintiff's Written Submissions dated 26 September 2016 at [20] – [22] 123. (2016) 90 ALJR 655; [2016] HCA 21, 665 – 666 [50] – [52] (French CJ, Kiefel, Bell, Keane, Nettle & Gordon JJ) 124. See: Home Building Regulation 2004 (NSW) r 53(2) then in force; and Interpretation Act 1987 (NSW) s 31 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: 11 May 2018