Koundouris v The Owners - Units Plan No 1917

The dispute in *Koundouris v The Owners - Units Plan No 1917* concerned alleged breaches of statutory warranties by a builder in relation to residential building works. The Owners Corporation, as a subsequent owner, brought a claim against the builder for failure to construct the building to an adequate standard. The matter was heard by the Court of Appeal of the Supreme Court of New South Wales.

The central legal issues before the Court of Appeal were the extent to which subsequent owners can succeed to rights for breaches of statutory warranties, and whether the builder was required to be a party to the contract of sale between the original owner and the subsequent owner for the owners to succeed in their claim. The Court also considered the application of limitation periods to such claims and the interpretation of relevant statutory provisions.

The Court's reasoning focused on the purpose and object of the relevant legislation, particularly the *Home Building Act 1989* (NSW). It held that the statutory warranties were intended to protect subsequent purchasers of residential building work, and that an interpretation which limited these rights would frustrate the legislative purpose. The Court determined that the builder did not need to be a party to the contract of sale for subsequent owners to succeed to the statutory warranties. The Court emphasised that the purpose and object of the statutory provisions, read in the context of the legislation as a whole, take precedence over any inconsistent interpretation suggested by an Explanatory Statement, and that unreasonable consequences arising from a particular interpretation in the specific factual matrix are not an appropriate guide to statutory interpretation.

The Court of Appeal allowed the appeal, setting aside the orders of the primary judge and remitting the matter to the primary judge for further hearing and determination.