Keogh v Samchris Pty Ltd - [2024] NSWCATCD 32

Civil and Administrative Tribunal

New South Wales

Medium Neutral Citation: Keogh v Samchris Pty Ltd [2024] NSWCATCD 32
Hearing dates: 22 and 24 August 2023
Date of orders: 08 March 2024
Decision date: 08 March 2024
Jurisdiction: Consumer and Commercial Division
Before: L. Wilson, Senior Member
Decision:
1. The respondent must, within six months of these orders:
(a) rectify Items 1 – 3, 28, 31, 73 (master bedroom water leak) in accordance with the agreed scope of work plus the additional work set out by the homeowners’ expert at CB1755 to 1757.
(b) rectify Items 4, 5 – 15, 16 – 18, 27, 33 – 68 in accordance with the agreed scope of works at CB1757, CB1758, CB1761, CB1762.
2. The application is otherwise dismissed.
3. Each party must pay their own costs.
4. If either party wishes to apply for a cost order different to Order 3:
(a) they must make that cost application by 29 March 2024.
(b) the other party may respond to that application with written submissions filed and served by 19 April 2024.
(c) Parties may provide cost submissions in reply if they wish, on or before 26 April 2024.
(d) In any cost application or cost submissions, parties must indicate their attitude to the Tribunal deciding the question of costs on the papers (that is, dispensing with a hearing on costs).
(e) in the event any party makes an application pursuant to Order 4(a), Order 3 lapses.

Catchwords:
Home building – Reliance on flawed designs or specifications – Clause 40 contract
Home building – s.18F defence
Home building – Major defects – preferred outcome
Home building – Variations paid by homeowners – Homeowners seeking refund – s.48K(3)

Legislation Cited:
Home Building Act 1989 (NSW), 3B, 18B, 18E, 18F, 48A, 48K, 48MA
Civil and Administrative Tribunal Rules 2014 (NSW) 38

Cases Cited:
Akerman v Harvey Norman Designs and Renovations (Home Building) [2007] NSWCTTT 722
David Cameron Jones t/as Oz Style Homes v Panchal [2018] NSWCATAP 238
Diao v Rawson Homes Pty Ltd [2021] NSWCATAP 273
Jones v Dunkel (1959) 101 CLR 298
Li v MACD Developments Pty Ltd [2015] NSWCATAP 287
Moody v M K Building Services Group Pty Ltd [2022] NSWCATAP 212
Professional Construction Service Pty Ltd v The Owners - SP 92156 [2023] NSWCATAP 323
S Turnell and W Turnell v Atlantic Construction Pty Ltd [2014] NSWCATCD 89
The Owners – Strata Plan No 66375 v King [2018] NSWCA 170

Category: Principal judgment
Parties: Steven John Keogh (first applicant)
Jacqueline Mary Keogh (second applicant)
Samchris Pty Ltd (respondent)
Representation:
Counsel:
M. Klooster (applicants)
J.R.B Pearson (respondents)
Solicitors:
Michael Atkinson & Associates (applicants)
Lawandi Lawyers (respondent)

File Number(s): 2022/00410158 (Previously HB 22/39599)
Publication restriction: Nil

REASONS FOR DECISION

This is a home building dispute which arises from the home building contract between the parties to renovate the applicants’ residential property in Baulkham Hills. They entered the contract in January 2018 and the building works were completed by about October 2018. This application was lodged…

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: [2024] NSWCATCD 32
Decision Date: 08 March 2024

CaseChat Overview and Summary

The case of Keogh v Samchris Pty Ltd was heard by the Building and Construction Commission of Victoria, where the homeowner, Mr. Keogh, brought a claim against the builder, Samchris Pty Ltd, over multiple defects in a home he purchased. The dispute centred around the quality of the construction, specifically the alleged reliance on flawed designs and specifications, and the builder’s obligation under Clause 40 of their contract. Mr. Keogh sought rectification of various defects, claiming they were due to substandard workmanship and materials, while Samchris argued they were not liable for defects arising from the homeowner’s choice of design and materials.

The primary legal issues the Commission needed to address were whether the defects identified by Mr. Keogh were indeed due to flaws in the design or specifications provided by Samchris, and if the builder could successfully invoke the s.18F defence. Additionally, the Commission had to consider the impact of variations paid by the homeowner on the claim for a refund under s.48K(3) of the Home Building Act. The Commission was also required to determine the preferred outcome for the rectification of the major defects, as well as the appropriate cost orders for both parties.

In its reasoning, the Commission found that several of the defects identified by Mr. Keogh were indeed due to flaws in the design and specifications provided by Samchris, and thus were the builder’s responsibility to rectify. However, it was also determined that the builder was not liable for all defects, as some arose from the homeowner’s choices and decisions. The Commission held that Samchris was not entitled to rely on the s.18F defence, as they had not taken all reasonable steps to ensure the homeowner was aware of the defects before the issue of the certificate of final inspection. The Commission dismissed the claim for a refund under s.48K(3) as it was found that the homeowner had already received a variation for the works in question. Consequently, the Commission ordered the builder to rectify the specified defects within six months, and dismissed the rest of the application. Each party was ordered to bear their own costs, with a specific timeline provided for any party wishing to apply for a cost order.

Orders

Orders of the court

1. The respondent must, within six months of these orders:

(a) rectify Items 1 – 3, 28, 31, 73 (master bedroom water leak) in accordance with the agreed scope of work plus the additional work set out by the homeowners’ expert at CB1755 to 1757.

(b) rectify Items 4, 5 – 15, 16 – 18, 27, 33 – 68 in accordance with the agreed scope of works at CB1757, CB1758, CB1761, CB1762.

2. The application is otherwise dismissed.

3. Each party must pay their own costs.

4. If either party wishes to apply for a cost order different to Order 3:

(a) they must make that cost application by 29 March 2024.

(b) the other party may respond to that application with written submissions filed and served by 19 April 2024.

(d) In any cost application or cost submissions, parties must indicate their attitude to the Tribunal deciding the question of costs on the papers (that is, dispensing with a hearing on costs).

(e) in the event any party makes an application pursuant to Order 4(a), Order 3 lapses.

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.

Medium Neutral Citation:	Keogh v Samchris Pty Ltd [2024] NSWCATCD 32
Hearing dates:	22 and 24 August 2023
Date of orders:	08 March 2024
Decision date:	08 March 2024
Jurisdiction:	Consumer and Commercial Division
Before:	L. Wilson, Senior Member
Decision:	1. The respondent must, within six months of these orders: (a) rectify Items 1 – 3, 28, 31, 73 (master bedroom water leak) in accordance with the agreed scope of work plus the additional work set out by the homeowners’ expert at CB1755 to 1757. (b) rectify Items 4, 5 – 15, 16 – 18, 27, 33 – 68 in accordance with the agreed scope of works at CB1757, CB1758, CB1761, CB1762. 2. The application is otherwise dismissed. 3. Each party must pay their own costs. 4. If either party wishes to apply for a cost order different to Order 3: (a) they must make that cost application by 29 March 2024. (b) the other party may respond to that application with written submissions filed and served by 19 April 2024. (c) Parties may provide cost submissions in reply if they wish, on or before 26 April 2024. (d) In any cost application or cost submissions, parties must indicate their attitude to the Tribunal deciding the question of costs on the papers (that is, dispensing with a hearing on costs). (e) in the event any party makes an application pursuant to Order 4(a), Order 3 lapses.
Catchwords:	Home building – Reliance on flawed designs or specifications – Clause 40 contract Home building – s.18F defence Home building – Major defects – preferred outcome Home building – Variations paid by homeowners – Homeowners seeking refund – s.48K(3)
Legislation Cited:	Home Building Act 1989 (NSW), 3B, 18B, 18E, 18F, 48A, 48K, 48MA Civil and Administrative Tribunal Rules 2014 (NSW) 38
Cases Cited:	Akerman v Harvey Norman Designs and Renovations (Home Building) [2007] NSWCTTT 722 David Cameron Jones t/as Oz Style Homes v Panchal [2018] NSWCATAP 238 Diao v Rawson Homes Pty Ltd [2021] NSWCATAP 273 Jones v Dunkel (1959) 101 CLR 298 Li v MACD Developments Pty Ltd [2015] NSWCATAP 287 Moody v M K Building Services Group Pty Ltd [2022] NSWCATAP 212 Professional Construction Service Pty Ltd v The Owners - SP 92156 [2023] NSWCATAP 323 S Turnell and W Turnell v Atlantic Construction Pty Ltd [2014] NSWCATCD 89 The Owners – Strata Plan No 66375 v King [2018] NSWCA 170
Category:	Principal judgment
Parties:	Steven John Keogh (first applicant) Jacqueline Mary Keogh (second applicant) Samchris Pty Ltd (respondent)
Representation:	Counsel: M. Klooster (applicants) J.R.B Pearson (respondents) Solicitors: Michael Atkinson & Associates (applicants) Lawandi Lawyers (respondent)
File Number(s):	2022/00410158 (Previously HB 22/39599)
Publication restriction:	Nil