Overview and objective

1. The realm of consumer and commercial law is generally regarded as complicated and draining for most people particularly when disputes escalate to the New South Wales Civil & Administrative Tribunal (NCAT) for determination. This article seeks to simplify the most common questions which are often asked by building experts, homeowners and legal practitioners before instituting or defending matters before the NCAT in respect of residential buildings. This guide addresses defective works claims, incomplete works claims and non-payment for completed residential building works.

2. The New South Wales Civil & Administrative Tribunal (NCAT) is a statutory administrative law tribunal established on 1st January 2014 under the Civil and Administrative Tribunal Act 2013 (NSW) (NCAT Act). The 2013 Act establishes the tribunal as an independent body and provides for its jurisdiction, scope and procedures. The NCAT Act also set out the tribunal's objectives under section 3 (a) and (g) which includes ensuring public confidence in its conduct and decisions. To achieve these objectives, the tribunal is tasked with ensuring just, accessible and speedy dispute resolution to citizens across NSW.

Home Building Act

3. The Home Building Act 1989 (NSW) (HBA) is a fundamental statute in home building claims. Section 48L of the HBA enumerates that the NCAT is primarily responsible for resolving building disputes. Section 3B of the HBA is of fundamental value in this discussion as it determines the date of completion in residential building works. The provision explains that the completion of residential building work takes place when the work is either complete per the contract or where the work is practically complete in cases where there are no contracts. Attendance to remedy any omissions and defects where they do not affect the reasonable use of a building for the intended purpose is not a completion date.

4. Section 48K of the HBA confers jurisdiction on NCAT to hear and determine all residential building claims that do not exceed $500,000. The jurisdiction also extends to claims emanating from building disputes which arose before the establishment of the Consumer and Commercial Division other than where statutory exempted. See, Dao v Rawson Homes Pty Ltd [2021] NSWCATAP 273.

5. Generally, section 48K (3) then elaborates that the Tribunal shall not have jurisdiction to entertain matters relating to building services and goods supplied after the lapse of three (3) years of the date of supply. Where supplied in instalments, the Tribunal has no jurisdiction after the lapse of three (3) years of the date the last supply was made. Essentially, section 48K (3) of the HBA covers claims other than those of breach statutory warranty. Such claims include a breach of contract for building materials and services supplied to or for the claimant. The time frame provided under section 48K of the HBA are crucial as the Tribunal has no jurisdiction to extend time once lapsed – see S & G Homes Pty t/as Pavilion Homes v Owen [2015] NSWCATAP 190 [150].

6. Section 18E of the HBA specifies that you cannot lodge a claim for a breach of statutory warranty resulting in major defects in residential building services after six (6) years. The warranty period starts running after the completion of the subject work. If the breach in question only becomes apparent in the last six (6) months of the six (6) years warranty period, proceedings before the Tribunal may commence within a further six (6) months from the warranty period.

7. For all other defects, known as minor defects, the statutory warranty period is 2 years only.

8. NCAT does not have jurisdiction to hear claims under the Design and Building Practitioners Act 2020 (NSW) despite its expansive jurisdiction. Further, the Tribunal is not conferred with jurisdiction to determine claims falling under the Building and Construction Industry Security of Payment Act 1999 (NSW).

Before commencing proceedings – what you should do

9. Before commencing a claim before the NCAT, refer the matter to the NSW Fair trading for review. The Department of Fair Trading investigates claims presented to it. It also encourages individuals with a legitimate claim against traders and service providers including professional builders to attempt to settle the problem directly with the respondent before complaining to the NCAT.

10. Investigations by the Department of Fair Trading usually takes weeks. A further four (4) weeks are spent attempting to summon parties to attend the site, inspect the issues and subsequently make the appropriate orders.

11. The requirement to first seek redress before the Department of Fair Trading may be foregone under section 48J (b) of the HBA in special circumstances. For instance, the exception may be allowed if the claimant will risk not meeting the statutory time frame for filing such a claim.

Preparing an application to the Consumer & Commercial Division

Points of Claim

12. A claimant can lodge their application before the NCAT for determination once they are ready to proceed with their claim. An applicant should first obtain all requisite relevant documents including expert reports applicable in the case.

13. The application lodged before the Tribunal must be in the prescribed form and must also attach a short typed numbered and paragraphed summary of points of the claim. The summary must also indicate orders that the claimant seeks from the Tribunal. The application must also accurately identify the respondent(s) and also state their accurate addresses.

Witness Statements

14. NCAT determines matters based on the evidence adduced before it. Therefore, to prove your case and respond to allegations by the other party you need to present evidence that may vary from verbal to written evidence. Written evidence includes written witness statements that are used to support a party's case. The statement may be made by the applicant, respondent or independent witnesses. A statement can only be signed by the maker though it does not have to be sworn.

15. Generally, there is no set way on how a witness statement should appear. However, it should be made in a precise and logical manner. It has to introduce the maker for instance, by stating their name, their address, occupation and so forth. The statement should then narrate and describes what the witness saw and heard. Documents referred to need to be attached.

Expert Evidence

16. Expert evidence adduced before NCAT is governed by the Expert’s Code of Conduct which is contained under the NCAT Procedural Direction 3. Clauses 14 and 15 of the Code of Conduct elaborate that an expert witness has the paramount duty to impartially assist the Tribunal on issues relevant to their area of expertise.

17. Clause 16 of the Code of Conduct, experts are not advocates for a party to proceedings. They should, therefore, never assume the role of an advocate. The rule is crucial, particularly in giving effect to clause 13 of the Code of Conduct which clarifies that an expert witness is prohibited to act as an advocate when preparing an expert's report in proceedings.

Scott Schedules

18. A Scott Schedule refers to a document that lay out issues raised by parties on building defective works and incomplete works subject to a dispute. The document also covers the estimated costs for each issue itemised therein. The document is usually prepared by an expert instructed by a party capturing all essential details. Notably, a Scott Schedule plays a fundamental role in the evidence produced in building work claims.

Preparing a defence

19. A respondent may choose to defend a claim once named as such in an application. Where they choose to do so, they must prepare their defence to their interest which includes organising all relevant documents to the claim. Respondents need to also attend the hearing before the Tribunal and present their side of the story accordingly. At this juncture, a respondent may get in touch with the applicant and attempt and settled the matter amicably.

20. Sometimes a respondent in a claim may wish to seek orders against the applicant. If so, the respondent must also lodge a separate application which is known as a cross-application. A cross-application must be filed not later than the first date on which the claim is coming up before the Tribunal. A cross-application is usually heard and be decided together save where circumstances may preclude such a move.

21. All documents relied upon must be served on parties involved in the claim.

22. If a respondent chooses not to attend the hearing, the application will be heard and determined in their absence. Orders may thereafter, be enforced against them depending on the merits of the case.

The Hearing

23. The majority of NCAT matters before the Consumer and Commercial Division are usually listed for the first directions hearing in a group of matters. If the parties appear they are encouraged to amicably settle their issues through conciliation. If the process is successful, a consent order is made.

24. The hearing is fixed at a specific date for a specific period where parties are heard on issues raised in their claim and defence for determination. Special hearings may be fixed for several days based on the complexity of the issues raised.

25. Notably, at the end of the hearing, the Tribunal Member hearing the matter will make a decision and explain why the orders are made. In such a case, written orders are then given to parties at the end of the hearing. Generally, there is no mandatory requirement for legal representation in disputed before NCAT. Parties may however have legal representation where the Tribunal grants leave allowing such representation. Usually, leave will be granted where a claim exceeds $30,000; where the opposing party is represented; where issues raised are complex; and, in other circumstances warranting legal representation.

NCAT’s preferred orders

26. NCAT is empowered to make various orders in determining building claims where it considers appropriate. Section 79U of the Fair Trading Act 1987 provides that all orders made by the Tribunal must be fair and equitable. Per 48O of the HBA Act, the Tribunal can make an order against a party directing they pay an amount of money to the party specified in the order as to damages, restitution, a debt or a refund of money. The provision further allows NCAT to make an order to the contrary stating that a person is not liable to pay a sum of money or refund any money to another person party to the proceedings. The Tribunal may also order a party to a claim for specific performance for a specified service or any contractual obligation or statutory obligations. It may also order a party to refrain from doing a specified act or thing.

27. Under section 48MA of the HBA Act, the statute provides that making an order for rectification of defective building work is the preferred outcome in proceedings claiming defective works.

Adjournments

28. A party may request for an adjournment where a matter is listed for a hearing or any other listing. You must, however, inform the other party of the intention to change the current hearing date and ask if they agree or are opposed to the adjournment. The response should be made in writing. Thereafter, a formal request is sent to NCAT in writing either by post or by email. It must include the reasons for seeking an adjournment and be supported by supporting documents like medical certificates where the party cites such grounds. Otherwise, NCAT may refuse to change the hearing date if the circumstances cited are not fair even where both parties are amicable to another date.

29. An adjournment request may also seek alternatives, including video link hearings or telephone hearings. Parties may also request NCAT to accept submission and evidence produced in written form only and so forth. Nevertheless, alternatives remain at the discretion of the Tribunal and thus not guaranteed.

Appeals

30. An appeal from the Tribunal may be made internally at the NCAT Appeal Panel (See, section 80 (2) NCAT Act). According to section 32 of the Civil and Administrative Tribunal Act of 2013, not all decisions are appealed before the Appeal Panel. (Also see, Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69). Appeals before the NCAT Appeal Panel are made on questions of law and the merit of the decision. Leave to appeal must be granted by the Appeal Panel.

31. Parties further dissatisfied with the decision of the Appeals Panel may seek recourse before the Supreme Court. However, the court does not entertain appeals without leave of court.

Legal costs

32. Generally, parties to a claim before the NCAT are expected to cater for their costs save where special circumstances arise warranting an award. Section 60 (3) of the NCAT Act lists circumstances that the Tribunal may consider. They include; the complexity of the case, the conduct of parties, and the strengths of the allegations by each party. Succeeding in a claim does not amount to a special circumstance. (See, Citadin Pty Ltd (No.2) v Eddie Azzi Australia Pty Ltd & General Pants Co Pty Ltd [2001] NSWADTAP 31.

33. However, according to Rule 38 of the Civil and Administrative Tribunal Rules, 2014 costs relating to the Consumer and Commercial Division may be awarded at the discretion of NCAT despite the absence of special circumstances allowing such an award, where costs exceed $30,000.