Tribunal throws case out - why? - The Builders Lawyer
The costs of proving building claims can often exceed the value of the work contracted to be done. The Consumer Trader and Tenancy Tribunal (NSW) offer the
possibility, not always realized, of swift and cheap resolution of building disputes because of its informal procedures. However it is not always easy to
determine if the Tribunal has jurisdiction in a matter owing to the poor wording of the relevant legislation.
The Court of Appeal in 2005 widened the Tribunal's jurisdiction by holding that the Tribunal had jurisdiction to consider a collateral contract relating
to building works. Nevertheless last month Senior Tribunal Member Le Compte refused to hear a building claim where the seller of the land was not also the
builder of the house erected there. [Chowdhurry v. Sangari & Jezzar 16 May 2006]. The basis for the decision appears to have been that a building
claim can only be brought against the builder.
But no land, no building; land sold with building to be built: what agreement could be more collateral? The vendor could join his builder if he chose.
The Tribunal relied upon the doctrine of merger yet that is merely a rule here relating to the contract of sale for land.
The doctrine could not be conclusive on jurisdiction: the applicant may have had other causes of action.
The Tribunal denied jurisdiction despite the fact that section 48K(5) specifically empowers the Tribunal to hear building claims arising out a
contract which also involves the sale of land. It is also doubtful that Sect. 48K(5) should be taken to limit the extension of the meaning of collateral
contract under the Home Building Act.
This case seems to me precisely the spot where the definition of collateral contract should have been given its ordinary meaning since there is no requirement
of "same parties" to make the contract in dispute "collateral". By joining the builder, the costs thrown away be the parties could have been
avoided. Jurisdiction is a right of the applicant, not an indulgence granted by the forum.
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