Building Insurers' Guarantee Corporation v The Owners - Strata Plan No 57504

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New South Wales


Court of Appeal


CITATION: Building Insurers’ Guarantee Corporation v The Owners – Strata Plan No. 57504 [2010] NSWCA 23
HEARING DATE(S): 23/11/09
 
JUDGMENT DATE: 

15 March 2010
JUDGMENT OF: Tobias JA at 1; Campbell JA at 2; Handley AJA at 3
EX TEMPORE JUDGMENT DATE: 2 March 2010
DECISION: Appeal dismissed with costs.
CATCHWORDS: BUILDING CONTRACT - breach by builder - work not in conformity with plans & specifications - waterproofing system - whether system installed as effective as that specified - query whether issue one of mitigation with onus on builder. - BUILDING CONTRACT - breach by builder - whether demolition and reinstatement to produce compliance with contract reasonable - whether damages recoverable on that basis. - HOME BUILDING INSURANCE - breach of statutory implied warranties by builder – insurance - successor in title entitled to benefit of warranties and insurance - measure of damages - successor entitled to same damages as predecessor.
LEGISLATION CITED: Home Building Act 1989, s 92
Home Building Amendment (Insurance) Act 2009
CATEGORY: Principal judgment
CASES CITED: Allianz Australia Insurance Ltd v Waterbrook at Yowie Bay Pty Ltd [2009] NSWCA 224
Bellgrove v Eldridge [1954] HCA 36, 90 CLR 613,
Christopoulos v Angelos (1996) 41 NSWLR 700
Kirkby v Coote [2006] QCA 61
Luxley Electronics & Construction Ltd v Forsyth [1996] AC 344
Production Spray Painting & Panel Beating Pty Ltd v Newnham (No 2) (1992) 27 NSWLR 659
Tabcorp Holdings Ltd v Bowen Investments Pty Ltd [2009] HCA 8, 236 CLR 272
PARTIES: A - Building Insurers’ Guarantee Corporation
R - The Owners – Strata Plan No. 57504
FILE NUMBER(S): CA 40444/08
COUNSEL: A - T Lynch and R Francois
R - HJA Neale
SOLICITORS: A - Mills Oakley Lawyers
R - Doyle Edwards Anderson
LOWER COURT JURISDICTION: Supreme Court - Equity Division
LOWER COURT FILE NUMBER(S): SC 55043/06
LOWER COURT JUDICIAL OFFICER: McDougall J
LOWER COURT DATE OF DECISION: 21/11/08
LOWER COURT MEDIUM NEUTRAL CITATION: [2008] NSWSC 1285




                          CA 40444/08

                          TOBIAS JA
                          CAMPBELL JA
                          HANDLEY AJA

                          15 March 2010
BUILDING INSURERS’ GUARANTEE CORPORATION v THE OWNERS - STRATA PLAN NO 57504

Catchwords



      BUILDING CONTRACT - breach by builder - work not in conformity with plans & specifications - waterproofing system - whether system installed as effective as that specified - query whether issue one of mitigation with onus on builder.

      BUILDING CONTRACT - breach by builder - whether demolition and reinstatement to produce compliance with contract reasonable - whether damages recoverable on that basis.

      HOME BUILDING INSURANCE - breach of statutory implied warranties by builder – insurance - successor in title entitled to benefit of warranties and insurance - measure of damages - successor entitled to same damages as predecessor.
Headnote


      The respondent was the successor in title of the developer which had engaged a builder to convert a six-storey warehouse into 111 residential units and a small number of commercial units. The developer had a home building insurance policy with HIH Casualty & General Insurance…

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Details
Case
[2010] NSWCA 23
Decision Date

CaseChat Overview and Summary

The Building Insurers' Guarantee Corporation (BIG Corp) appealed a decision concerning a dispute between BIG Corp and the Owners – Strata Plan No 57504. The core of the dispute involved alleged breaches of a building contract by the builder, specifically relating to work not conforming to the plans and specifications, particularly concerning a waterproofing system. The appeal was heard by Tobias and Campbell JJA, and Handley AJA.

The primary legal issue before the court was whether the waterproofing system installed by the builder was as effective as the system specified in the contract. A related question was whether the issue of the system's effectiveness was one of mitigation, and if so, where the onus lay to prove such mitigation.

The court considered the evidence presented regarding the waterproofing system. It was found that the installed system was not as effective as that specified. The court rejected the argument that the issue was one of mitigation, finding that the builder had failed to meet the contractual standard. The onus was on the builder to demonstrate compliance with the contract, which they had not done.

The appeal was dismissed, and BIG Corp was ordered to pay the costs of the appeal.

Orders

Orders of the court

Appeal dismissed with costs.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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