The Consumer Trader & Tenancy Tribunal (Tribunal) is empowered to determine any building claim brought before it in which the amount claimed does not exceed $500,000 (s48K of the Home Building Act 1989 (NSW)).

In proceedings commenced in the Tribunal, Da Silva & Da Silva Constructions Pty Limited (Da Silva), the corporate applicant, was ordered to provide security for costs for Bresond Pty Limited, a respondent.

Pursuant to s67 of the Consumer Trader & Tenancy Tribunal Act 2001, Da Silva appealed to the Supreme Court of NSW on a question of law, namely the Tribunal holding that it had jurisdiction to make an order for security for costs.

Smart AJ ultimately decided in favour of Da Silva, deciding that the Tribunal did not have jurisdiction to make an order for security for costs.

The overriding question to be answered was whether the Tribunal was a court for the purposes of s1335 of the Corporations Act 2001 (Cth), the empowering provision for a “court” to make an order for security for costs against a corporate applicant/plaintiff.

His Honour had regard to the definition of a court within the Corporations Act (s58A) and took some significant solace from the stance taken by the NSW Court of Appeal in Trust Company of Australia Limited v Skiwing Pty Limited (2006) before concluding that:

“having regard to the constitution of the Tribunal and the related matters as to tenure or lack of tenure, the Tribunal cannot be regarded as a court. The Tribunal therefore was not entitled to exercise the powers of a court under s1335 of the Corporations Act.”

His Honour was not unsympathetic of the plight of a respondent in Tribunal proceedings commenced by an apparently impecunious corporate applicant, noting that:

“the Tribunal should have power in proceedings involving more than $25,000 (or perhaps $50,000) to order security for costs where there is an impecunious corporate plaintiff. Building disputes are notoriously costly.”

Under the Home Building Act, the Tribunal has the jurisdiction within NSW to be “chiefly responsible for resolving building claims”. There is provision within that Act for building claims (less than $500,000) commenced in any Court to be transferred to the Tribunal for determination. Respondents to the proceedings should give careful consideration to these issues before making such an application.