Only some Home Building Claims do not need to be referred to Fair Trading before commencing in the Tribunal – Exceptions to the Rule requiring Mediation before commencing proceedings


With few exceptions, the Consumer and Commercial Division of the NSW Civil and Administrative Tribunal (NCAT) has jurisdiction to hear and determine any building claim brought before it under part 3A of the Home Building Act 1989 (HB Act) where the amount claimed does not exceed $500,000.

However, often such claims need to be first referred to Fair Trading for investigation under Division 2 of the HB Act 1989 prior to being lodged as building claims in NCAT.

We are currently acting for homeowners that have a Home Building Claim who wish to commence proceeding in NCAT, however the limitation period is due to expire shortly.

There has been no Mediation or referral to the Department of Fair Trading which is the usual requirement before being allowed to commence proceedings in NCAT.

Section 48J(b) of the HB Act provides as follows:

Certain applications to be rejected

The Principal Registrar of the Tribunal must reject any application to the Tribunal for the determination of a building claim unless:

(a)      the Principal Registrar is satisfied that the subject-matter of the building claim has been investigated under Division 2, or

(b)      the President of the Tribunal directs that the building claim be accepted without such an investigation having been made.

Section 26 of the Civil and Administrative Tribunal Act 2013 (NSW) (NCAT Act) provides as follows:

Procedural directions

(1)      The President may give directions (procedural directions) relating to the practice and procedures to be followed in, and to the actual conduct of, proceedings in the Tribunal.

(2)      The procedural directions must be:

(a)      publicly available, and

(b)      consistent with this Act, enabling legislation and the procedural rules.

(3)      Without limiting subsection (2)(a), it is sufficient compliance with that paragraph if procedural directions are published on the website of the Tribunal.

(4)      Each member, and the parties to proceedings and their representatives, must comply with any applicable procedural directions.

On 1 August 2017, the President of NCAT, issued NCAT a Procedural Direction pursuant to section 26 of NCAT Act, which has the consequence that the following types of building claims can be lodged directly with NCAT without first undergoing investigation through Fair Trading:

(a)         Claims that are appeals against a decision of an insurer under a contract of insurance required to be entered into under the Act;

(b)         Claims for recovery of a debt by a contractor;

(c)         Cross-claims;

(d)         Claims where the time for lodging a claim is due to expire within 3 months;

(e)         Claims involving unlicensed contractors;

(f)          Claims by a trader against a subcontractor regarding defective work;

(g)         Claims against owner-builders regarding defective work;

(h)         Claims involving companies that have been de-registered;

(i)          Claims against companies or individuals who have gone into administration, liquidation or bankruptcy.

Accordingly as our client’s claim is due to expire within 3 months, our clients’ claim can be commenced in NCAT directly.  Accordingly we have lodged the proceedings at NCAT even though there has been no investigation or mediation before the Department of Fair Trading.  It is important to be aware of the time limits, and that after there are exceptions to the general rule.

Watson & Watson Lawyers are highly experienced in Building & Construction and Strata Law and have conducted many matters in NCAT with successful outcomes. If you are an Owner or Builder and have any concerns or queries in relation to commencing proceedings in NCAT regarding your building matter, seek our advice in relation to a proposed building claim.  Please contact Richard Watson Accredited Specialist Building & Construction or his Personal Assistant Shereen Da Gloria to discuss your matter and seek appropriate advice.

This is only a preliminary view and is not to be taken as legal advice without first contacting Watson & Watson Solicitors on 9221 6011.

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