Phelan like terminating your home building works contract?

Tribunal confirms jurisdiction to deal with claims arising out of alleged repudiation in Phelan v Thompson Sustainable Homes (WA) Pty Ltd [2025] WASAT 25

Key Takeaways:

1. The right to bring a home building works complaint under Section 5(2) of the Building Services (Complaints Resolution & Administration) Act 2011 (WA) (CRA Act) and Section 17 of the Home Building Contracts Act 1991 (WA) (HBC Act) persists even if the home building works contract has been terminated for repudiation.
2. The Tribunal can, within the framework of the CRA Act award damages for loss of bargain even though a home building works contract has been terminated.
3. Vogt Legal acted for the successful Owners in resisting the Builder’s application, resulting in a dismissal of the Builder’s jurisdictional challenge.

In Phelan v Thompsons Sustainable Homes WA Pty Ltd [2025] WASAT 25, the Tribunal had cause to consider whether it had jurisdiction to consider a claim made by Mr and Mrs Phelan (Owners) for loss and damage in relation to a home building works contract which had been terminated for the alleged repudiation by Thompsons Sustainable Homes WA Pty Ltd (Builder).

Facts:

In November 2021, the Owners engaged the Builder to construct a residence for them on their property in Jane Brook, Western Australia (Contract).

Prior to the commencement of the Works, the Owners purported to terminate the Contract for alleged repudiation on the part of the Builder. Information on termination for repudiation may be found here and here.

The Owners subsequently brought a claim against the Builder, seeking their loss and damage on a ‘loss of bargain’ basis, representing the difference between the cost to construct the Works with the Builder and the cost to construct the Works with an independent third-party builder.

At the final hearing of the Owners’ complaint, the Builder raised a series of jurisdictional arguments, contending that the Tribunal did not have jurisdiction to consider the Owners’ complaint.

Broadly speaking, the issues raised by the Builder were:

1. The Tribunal did not have jurisdiction to consider an application based on repudiation of the Contract.

2. The Tribunal did not have jurisdiction to award damages on a loss of bargain basis under Section 41(2)(d) of the CRA Act. 

3. The Owners sold the Site by the date of the final hearing and, therefore, the Owners could not perform their obligations under the Contract and therefore were not entitled to damages.

The Tribunal considered that matters (2) and (3) were a matter better left for determination following the final hearing, however, matter (1) was considered fulsomely by the Tribunal in the above decision.

Disposition:

Vogt Legal represented the Owners at the final hearing of the matter and made submissions in opposition to the Builder’s challenge to the Tribunal’s jurisdiction, resulting in the Tribunal dismissing the Builder’s contention that the Tribunal did not have jurisdiction to consider the Owners’ complaint.

Does the Tribunal have jurisdiction to consider a claim founded in repudiation of the Contract?

The Tribunal found that the Tribunal did have jurisdiction to consider the Owners’ complaint.

The Respondent contended that the proper interpretation of Section 17 of the HBC Act was such that, having regard to the structure of the HBC Act, it did not apply in circumstances where the relevant home building works contract had been terminated (see: [37]).

The Respondent contended further that, in circumstances where the Contract had been terminated, the Owners entitlements were governed by Section 20 of the HBC Act, which, in short, entitles the Owners to: “the return or repayment of the whole or part of any consideration, or the value of any consideration, given by the owner under or in relation to the contract” (see: [38]-[39]).

Vogt Legal, on behalf of the Owners, contended that the Builder’s position was incorrect and misconceived where the plain words of Section 17 of the HBC Act did not expressly limit or exclude a complaint which was made in relation to a contract that had been terminated.

Tribunal’s Conclusion

After considering the positions articulated by the Builder and the Owners, the Tribunal ultimately dismissed the Builder’s application.

In short, the position advanced by the Owners was entirely accepted, specifically, that Section 17 of the HBC Act permitted complaints to be made in relation to a contract that had been terminated (see: [56]-[57]).

The Tribunal relevantly found:

It is the [Builder’s] submission that having regard to the structure of the BSCRA Act, s 17 of the HBC Act is intended to apply where the owner elects to affirm the contract and seek damages for breach. We consider this submission to be flawed because on the [Builder’s] construction of s 17 of the HBC Act, additional words have been included, which invariably changes the meaning of the statutory language. This is because we have construed s 17 of the HBC Act to provide an avenue for either an owner or a builder under a home building works contract to make a complaint in circumstances where there is a claimed breach of contract. Having given careful consideration to the proper construction of s 17 of the HBC Act, in our view, there is nothing on a plain reading of it that excludes complaints being made about a breach of contract that has subsequently been terminated.

Vogt Legal’s comment

The Tribunal’s decision in Phelan is plainly a correct, proper and ‘commonsense’ conclusion having regard to the plain reading of the relevant provisions of Section 17 of the HBC Act and Section 5(2) of the CRA Act.

Ramifications

The Tribunal’s decision in Phelan stands as authority for the proposition that the Tribunal does have jurisdiction to consider complaints involving a breach of a home building works contract which has been terminated.

Referring back to the three jurisdictional challenges referred to above, although the Tribunal declined to deal with (2) and (3) above, the Tribunal ultimately decided that position on the basis that: “the respondent’s arguments around the applicant’s ‘loss of bargain’ and the impact of the sale of their Jane Brook property, are relevant to the Tribunal’s task of deciding whether a HBWC remedy order is justified when it comes time to deal with the applicant’s HBWC complaint”.

Although the Tribunal did not expressly rule on this issue, the decision to deal with issues (2) and (3) when deciding whether a HBWC remedy order is justified appears to suggest by implication that the Tribunal could make such an order, but, must decide whether such an order is justified after hearing the evidence and considering the Parties’ submissions.

The fact that the Tribunal has not ‘shut the door’ on a claim of loss of bargain damages appears to suggest that the Tribunal would and could be minded to make such an order and, is, therefore, within the Tribunal’s jurisdiction.

For a confidential and detailed discussion as to how you may be affected by Phelan, do not hesitate to reach out and contact Will Vogt and Stephen Mintz.