James Otley Land v Adaptive Constructions
[2014] NSWSC 638
•21 May 2014
Supreme Court
New South Wales
Medium Neutral Citation: James Otley Land v Adaptive Constructions [2014] NSWSC 638 Hearing dates: 21/05/2014 Decision date: 21 May 2014 Jurisdiction: Equity Division - Technology and Construction List Before: McDougall J Decision: Judgment for plaintiff against the first defendant in the sum of $616,492.00. Judgment for the plaintiff against the second defendants in the sum of $344,434.00. Judgment for the plaintiff against the third defendant in the sum of $313,302.00. Defendants to pay plaintiff's costs.
Catchwords: BUILDING AND CONSTRUCTION - statutory warranties in relation to building construction - whether defective building work - whether costs of rectification disproportionate - whether sufficient evidence for court to allow claims for defective building work
PROCEDURE - undefended hearing - application of Uniform Civil Procedure Rules 2005 (NSW) r 29.7Legislation Cited: Home Building Act 1989 (NSW)
Uniform Civil Procedure Rules 2005 (NSW)Cases Cited: Voli v Inglewood Shire Council (1963) 110 CLR 74 Category: Principal judgment Parties: James Otley Land (Plaintiff)
Adaptive Constructions Pty Ltd (First Defendant)
Andrew Gerakis (Second Defendant)
Michael Gerakis (Third Defendant)
R Balas Engineering Pty Ltd (Fourth Defendant)
Stephen Pinn (Fifth Defendants)Representation: Counsel:
S Goldstein (Plaintiff)
Solicitors:
Adrian Batterby Lawyer
File Number(s): 2013/175911
Judgment (ex tempore - revised 21 May 2014)
HIS HONOUR: The plaintiff, Mr Land, is the proprietor of a residence at Curl Curl. He bought it in April 2010 from Mr and Mrs Zervos.
Before the sale, Mr and Mrs Zervos had carried out a very substantial renovation. The engineering design was undertaken by the fourth defendant (the engineer). The first defendant (the builder) was the builder. The second and third defendants (the waterproofers) carried out water-proofing work. The fifth defendant (the certifier) was the principal certifying authority.
Mr Land says, and the evidence satisfies me, that much of the work done by the builder was defective; that much of the waterproofing work carried out by the waterproofers was defective; that aspects of the engineering design were performed negligently; and that the certifier was negligent in the performance of his duties of certification.
There is no doubt that Mr Land is entitled to the benefit of the implied statutory warranties, pursuant to the Home Building Act 1989 (NSW), as against the builder and the waterproofers, for their respective works.
Equally, I am satisfied that the engineer owed a duty of care, on the principles explained (in relation to an architect) in Voli v Inglewood Shire Council (1963) 110 CLR 74.
Mr Land claims damages from each of the defendants. He has settled his case against the certifier, and accordingly the certifier can be disregarded in what follows.
Perhaps fortunately, none of the defendants raised a "proportionate liability" defence.
None of the active defendants (the builder, the waterproofers and the engineer) has appeared today. I am satisfied, in respect of each of them, that he or it has had knowledge of the proceedings, by being served with the summons and list statement and amended list statement. I am satisfied, further, that each of them has been served with the evidence on which Mr Land relied for the purposes of today's hearing, and that each of them was notified that the matter would proceed to hearing today.
The engineer has indicated that it did not wish to be heard, and that it would submit to the Court's judgment on the basis that the matter would proceed in its absence. The builder and the waterproofers have not given any indication of their attitude. Nonetheless, as I have said, I am satisfied that each knows that the matter was to proceed to hearing today, and each knows of the evidence to be adduced.
In the circumstances, I am satisfied, for the purposes of UCPR Rule 29.7, that it is appropriate to proceed with the hearing, in the absence of the active defendants.
There is a very substantial volume of evidence proving the defects and, in most cases, the cost of rectification. Mr Goldstein of counsel, who appeared for Mr Land, very helpfully furnished a defects schedule which set out individually the defects in respect of which Mr Land sought damages, the references to where in the evidence those defects were demonstrated, the claimed cost of rectification and the evidentiary justification for that cost of rectification (save for two matters, to which I will turn in due course).
In the course of the hearing, Mr Goldstein worked his way through the defects schedule and took the Court to the evidence in respect of each defect. I do not propose, in these reasons, to go to the detail of the evidence. In very broad summary, the evidence shows that the building and waterproofing work carried out by the builder and the waterproofers respectively was defective in the various respects particularised in the defects schedule (which, I should have said, will be marked for identification 1 and kept with the papers). It shows, too, that the engineering design was defective in the respects particularised.
In many cases, the rectification costs have been paid. Where that is so, the evidentiary references given in the defects schedule show as much. In other cases, the rectification costs have not been paid, but the evidence proves the amount estimated by the builder who was called upon to repair the defective work.
Having regard to the substantial nature of the residence, and what was clearly intended to be a very high standard of detailing and finishes, I am satisfied that it could not be argued, on the material before the Court, that the cost of rectification of defects was disproportionate, to the extent that it ought not be awarded as damages. To put it another way, I am satisfied, on the evidence before the Court, that the rectification costs paid and claimed are necessary to bring the work into conformity with the intended standards of finish and the statutory warranties (and the common law duty of care) owed in respect of them.
As I have said, there are two aspects of the work where I am not satisfied as to the claimed cost of repair. One is item 5.1, relating to the repair of drummy and cracked render on some of the external walls. The estimated cost of that, I think including GST, was $3,657.50. The amount claimed was many times that: $190,764. It may be expected that from time to time, in the course of building work (particularly, the repair of defective building work) that costs will increase, in some cases substantially, beyond those originally estimated. But in circumstances where the cost claimed is of the order of fifty times the cost estimated, I do not think it proper to allow the amount claimed in the absence of any explanation. Mr Goldstein has indicated that his client does not wish to seek to adduce further evidence on that point. Accordingly, in respect of this class of defects, I propose to allow only the amount quoted.
The other matter is item 5.3, which apparently relates to a buried sewerage inspection port. Only $3,000 was claimed. There is no evidence that this amount has been paid. Nor is there any other evidence that would justify the Court in allowing it. In those circumstances, Mr Goldstein indicated that this claim would not be pressed.
The outcome is that I am satisfied that Mr Land has made good his claim against the builder, the waterproofers and the engineer in the respective amounts stated in a schedule which I will mark for identification 2. Those amounts are inclusive of GST. Since Mr Land is not a GST paying entity, and thus cannot claim any input tax credit for the GST amounts, it is appropriate that the damages claimed by him, to the extent allowed, should be inclusive of GST.
Interest is not claimed in respect of the amounts that have been paid.
The result is that there should be verdicts and judgments as follows:
(1) For the plaintiff against the first defendant, in the sum of $616,942;
(2) For the plaintiff against the second and third defendants, in the sum of $344,434; and
(3) For the plaintiff against the fourth defendant, in the sum of $313,302.
There is no reason why costs should not follow the event and accordingly I order each of the first to fourth defendants to pay the plaintiff's costs.
I direct that the exhibits be handed out.
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Decision last updated: 23 May 2014
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