Koundouris v The Owners-Unit Plan No 1917 - [2018] HCATrans 23

[2018] HCATrans 023

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
Canberra No C19 of 2017

B e t w e e n -
MICHAEL KOUNDOURIS
Applicant
and
THE OWNERS‑UNIT PLAN NO 1917
Respondent
Application for special leave to appeal

NETTLE J
GORDON J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON FRIDAY, 16 FEBRUARY 2018, AT 9.28 AM

MR D.F. JACKSON, QC: If the Court pleases, I appear with my learned friend, MR B.F. KATEKAR, for the applicant. (instructed by Clayton Utz)

MR N.C. HUTLEY, SC: May it please the Court, I appear with my learned friend, MR F.P. HICKS, SC, for the respondent. (instructed by MinterEllison Lawyers)

NETTLE J: Mr Jackson.

MR JACKSON: Your Honours, may I go to two paragraphs in our application first, where we set out the essential complaint which, in our submission, founds the application. The first of those is page 195, paragraph 8 and the second is paragraph 22 on page 197. I have to say I think in paragraph 32, the reference to paragraph 19 should actually be to paragraph 18.

NETTLE J: Thank you.

MR JACKSON: To put it shortly, your Honours, this was, in our submission, simple legislation, on the one hand to benefit those acquiring residential premises and, on the other hand, making clear to builders of such premises the ambit and duration of their obligations. Instead, in our submission, the judgment of the Court of Appeal has brought about a situation where multiple sets of obligations are created and repair work to comply with the statutory obligations is treated as giving rise to a new and additional set of obligations and, to put it shortly, legislation designed to produce clarity has produced, we would submit with respect, obscurity.

Your Honours, may we say immediately, true it is that the legislation is not in similar terms in other Australian jurisdictions ‑ ‑ ‑

GORDON J: So it is peculiar to the ACT.

MR JACKSON: Yes, it is, your Honour. I was going to say it will not infrequently be the case where important legislation of one State or a Territory is in question and, in our submission ‑ ‑ ‑

GORDON J: It has been substantially amended on a number of occasions, though, has it not?

MR JACKSON: Well, amended substantially so far as the present matters are concerned once only, I think, your Honour, and that was the conversion from the earlier Act to the 2004 version. The provisions with which the Court is concerned are ones that have been in effectively similar form since 1972. Your Honours, it is an important case for the Territory.

Your Honours, the relevant provisions of the two enactments can be seen at pages 201 and following. If I could go perhaps to the later version commencing at page 203 of the 2004 Act, your Honours will see that as applies from section 88(1), which is on page 204, it applies…

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: [2018] HCATrans 23
Decision Date

CaseChat Overview and Summary

The applicant, the builder, sought special leave to appeal to the High Court of Australia from a decision of the Court of Appeal of the Australian Capital Territory. The dispute concerned the interpretation of statutory warranties under the *Building Act 2004* (ACT) and its predecessor, the *Building Act 1972* (ACT), particularly in relation to the duration of these warranties and the rights of successive owners. The applicant argued that the Court of Appeal's interpretation created obscurity and multiple sets of obligations where the legislation was intended to provide clarity for builders and purchasers of residential premises.

The legal issues before the High Court included whether the statutory warranties, which commenced from the completion date of the work and expired six years later, gave rise to new and additional obligations each time a builder undertook repair work on a defect. Furthermore, the Court was asked to consider whether the Court of Appeal erred in finding that the first limb of section 88(1) of the *Building Act 2004* applied to subsequent sales of units, thereby potentially creating multiple sets of rights for successive owners, even if those owners acquired their rights after the initial warranty period had expired.

The applicant contended that a breach of warranty should be considered to occur at the time of the first sale and settlement of a unit, as this is when the owner becomes entitled to sue. The Court of Appeal, however, had found that the builder remained in breach throughout the prescribed period due to systemic problems with the building, and that defective repair work undertaken by the builder could itself give rise to new warranties. The applicant argued that this approach created an erroneous situation where repair work generated new obligations, contrary to the legislative intent. The respondent argued that the legislation was consumer protection-oriented and that the Court of Appeal's construction, which ensured each purchaser within the warranty period received a new promise from the builder, made perfect sense and provided complete protection to consumers, preventing claims from being inhibited by the actions or knowledge of antecedent purchasers.

The High Court granted special leave to appeal, indicating that the case raised important questions regarding the interpretation of statutory warranties and their application to successive owners and repair work within the Australian Capital Territory. The ultimate outcome of the appeal was not determined in the provided transcript.

Orders