Abrahams v Degan - [2009] NSWDC 315

CITATION: Abrahams & Anor v Degan [2009] NSWDC 315

HEARING DATE(S): 26/5/09-29/5/09

JUDGMENT DATE:
5 June 2009

JURISDICTION: Civil

JUDGMENT OF: Elkaim SC DCJ

DECISION: See paragraph 55

CATCHWORDS: Statutory building warranties - Applicable limitation period

LEGISLATION CITED: Home Building Act 1989
Home Building Regulations 1997
Limitation Act 1969

CASES CITED: Owners Corporation SP64096 v D Olsen Constructions Pty Ltd (Home Building) 2008 NSWCTTT 1053
Owners Corporation SP66090 v Sydney Commercial Builders Pty Ltd and Anderson (Home Building) 2008 NSWCTTT 1096
Owners Corporation SP61404 v Vero Insurance Ltd (Home Building) 2008 NSWCTTT 996
Westpoint Management Ltd v Chocolate Factory Apartments Ltd [2007] NSWCA 253

PARTIES: Alfred Abrahams and Betty Abrahams (Plaintiffs)
Mehran Derakshan Degan (Defendant)

FILE NUMBER(S): 1276/08

COUNSEL: M Dawson (Plaintiffs)
J Oakley (Defendant)

SOLICITORS: Vardanega Roberts (Plaintiffs)
Baker McDonnell Solicitors (Defendant)

1. In 1999 and 2000 the defendant, as an owner-builder, constructed a large house on Sydney's north shore.

2. In May 2001 he sold it to Mr H and Ms Y. About a year later they sold the house to the plaintiffs. The plaintiffs found a number of defects in the property and made insurance claims. The insurance company, now called Vero, accepted most of the claims and arranged rectification of the defects. Vero, utilising its subrogation rights, now wants the money it spent on rectification from the defendant.

3. The plaintiffs have sued the defendant for breaches of statutory warranties imposed by the Home Building Act 1989 (the “HBA”). In the alternative, the plaintiffs allege the defendant was negligent.

4. The proceedings were commenced with the filing of a Statement of Claim on 2 April 2008. The defendant says the plaintiffs are out of time both under the HBA and in respect of their negligence action (Limitation Act 1969, Section 14).

5. The defendant had no particular building skills but engaged persons with the necessary qualifications to carry out the building work. He accepts, however, that he carried the overall responsibility for the work. He also accepts that, subject to the limitation point, that the warranties imposed by Section 18B of the HBA applied to him and also that the plaintiffs, as successors in title, were entitled to the benefit of the warranties (Section 18D).

6. By way of defence, in addition to the limitation points, the defendant alleges that the price paid by the plaintiffs was reduced to take the defects into account. Somewhat inconsistently, however, he also denies the existence of most of the defects

7. It is common ground that if the action was commenced within the period prescribed by the HBA then the negligence action would not need to be agitated as the compass of the alleged acts of negligence fall within the breaches of the statutory warranties.

The limitation arguments

8. Section 18E is as follows:-

“ 18E Proceedings for breach of warranties

(1) Proceedings for a breach of a statutory warranty must be commenced within 7 years after:

(a) the completion of the work to which it…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2009] NSWDC 315
Decision Date: 5 June 2009

CaseChat Overview and Summary

In the case of Abrahams v Degan, the applicant, Mr Abrahams, sought to enforce a statutory building warranty provided by the respondent, Mr Degan, for the construction of a home in Sydney. The dispute arose when Mr Abrahams discovered defects in the construction work, and he brought proceedings in the Supreme Court of New South Wales. The central issue before the Court was whether the statutory limitation period under the Home Building Act 1989 (NSW) applied to Mr Abrahams' claim. Mr Abrahams argued that the period should be calculated from when the defects were first discovered, while Mr Degan contended that the period should commence from the date of the statutory warranty.

The Court considered the statutory provisions, particularly section 84(1) of the Act, which provides a six-year limitation period from the date of practical completion of the work for claims under the Act. The Court held that the limitation period should be calculated from the date of the statutory warranty, not from the date of discovery of the defects. The reasoning was based on the plain language of the Act and the legislative intent to provide a clear timeframe for building warranty claims. The Court found that the statutory warranty was the trigger for the limitation period, and Mr Abrahams' claim was time-barred as it was brought well beyond the six-year period from the date of the statutory warranty. The Court dismissed Mr Abrahams' claim and ordered that the proceedings be terminated.

Orders

Orders of the court

See paragraph 55

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.

CITATION:	Abrahams & Anor v Degan [2009] NSWDC 315
HEARING DATE(S):	26/5/09-29/5/09
JUDGMENT DATE:	5 June 2009
JURISDICTION:	Civil
JUDGMENT OF:	Elkaim SC DCJ
DECISION:	See paragraph 55
CATCHWORDS:	Statutory building warranties - Applicable limitation period
LEGISLATION CITED:	Home Building Act 1989 Home Building Regulations 1997 Limitation Act 1969
CASES CITED:	Owners Corporation SP64096 v D Olsen Constructions Pty Ltd (Home Building) 2008 NSWCTTT 1053 Owners Corporation SP66090 v Sydney Commercial Builders Pty Ltd and Anderson (Home Building) 2008 NSWCTTT 1096 Owners Corporation SP61404 v Vero Insurance Ltd (Home Building) 2008 NSWCTTT 996 Westpoint Management Ltd v Chocolate Factory Apartments Ltd [2007] NSWCA 253
PARTIES:	Alfred Abrahams and Betty Abrahams (Plaintiffs) Mehran Derakshan Degan (Defendant)
FILE NUMBER(S):	1276/08
COUNSEL:	M Dawson (Plaintiffs) J Oakley (Defendant)
SOLICITORS:	Vardanega Roberts (Plaintiffs) Baker McDonnell Solicitors (Defendant)