Building Insurers' Guarantee Corporation v The Owners - Strata Plan No 57504 - [2010] NSWCA 23

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…

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: [2010] NSWCA 23
Decision Date: 15 March 2010

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

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:	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