On 1 August the limit on claims to the Disputes Tribunal doubled to $15,000 and, by agreement, to $20,000.
However, the way claims are decided hasn’t changed. Justice Minister Simon Power has said he “would not rule out further changes to the threshold, as long as the character of the tribunal can be maintained”.
Many builders who find themselves being drawn into the Disputes Tribunal by disgruntled owners would disagree.
The system is arguably biased against them. While they must comply with every regulation that applies to their work, the corresponding legislation that protects them or places responsibility on the consumer can be ignored by the Referee. The system can most certainly be improved.
Consumer NZ has welcomed the change, and continues to advocate for an upper limit of $50,000. The New Zealand Law Society, while not opposing the raising of the limit, has made submissions to the effect that consistency, transparency, adherence to law and greater appeal rights should be included in any further reform.
Referees are not required to be legally trained, and are not required to apply the law (only to “have regard to it”). Appeal rights are limited. It is meant to be fair and just, but I doubt most builders would agree.
Many have related instances where Referees have admitted they have not read the papers submitted by the builder, and have said that didn’t matter because they are not required to adhere to the law.
If the limit is to be raised any further these issues need addressing. Referees need to be legally qualified, with limited authority to depart from the law. The decisions need to be published so the public can see how issues are dealt with and have some certainty how theirs will be handled. Appeal rights need to be strengthened.
The secrecy around Tribunal decisions has been criticised in the past, with the Law Commission recommending in 2007 that public access to Tribunal hearings and reports of proceedings should be permitted.
Proceedings and decisions of the Tenancy Tribunal and the Motor Vehicle Disputes Tribunal are not private. Decisions of the Ombudsmen are published quarterly. If the privacy of the participants is important their identities can be suppressed as happens in the Family Court.
Referees make decisions based on the substantial merits and justice of the case, having regard to the law. Anecdotal evidence is that these decisions are ad hoc and inconsistent, and that consumer rights are championed but consumer responsibilities are ignored.
Decisions are often circulated around to Referees. They have the advantage of reading each others’ decisions, while members of the public do not. The public cannot see where Referees may be consistently choosing not to apply a rule of law.
Referees should be permitted to depart from statute and case law only where it would be clearly unjust to apply it.
At the moment an appeal against a Referee’s decision is only allowed if the proceedings were conducted in a manner that was unfair and/or prejudicial to the appellant.
The Tenancy Tribunal has wider grounds for appeal, and the Motor Vehicle Disputes Tribunal has a two-appeal system. For claims under $12,500 an appeal is allowed only on the grounds of procedural unfairness, but over that amount an appeal can be made on the grounds that the decision is wrong in law.
Awards may now be made against a builder up to $15,000, an amount that would have an impact on anybody’s bottom line.
Any further raise in that amount will require a corresponding raise in the Dispute Tribunal’s accountabilities. Having a potential award of more than $15,000 (possibly even up to $50,000) with no one in the dispute being required to adhere to the law is untenable. The RMBF will be watching developments with interest.