O'Toole v M Johnson Building Pty Ltd - [2023] ACTSC 116

SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY

Case Title:	O’Toole & Anor v M Johnson Building Pty Ltd
Citation:	[2023] ACTSC 116
Hearing Date:	27 April 2023 – 5 May 2023
Decision Date:	19 May 2023
Before:	Balla AJ
See [231]
Decision:
Catchwords:	CIVIL LAW – BUILDING AND CONSTRUCTION – Breach of Contract – defects in construction of residential building – failure to carry out works in accordance with plans – failure to carry out works with proper care and skill – failure to comply with requirements under the Building Act – Rectification of defects
granted
Legislation Cited:	Building Act 2004 (ACT) ss 20, 36, 42, 88, 140 Building (General) Regulation 2008 (ACT)
Cases Cited:	Bellgrove v Eldridge [1954] HCA 36; (1954) 90 CLR 613 Brewarrina Shire Council v Beckhaus Civil Pty Ltd & Anor [2006] NSWCA 361
Jones v Dunkel (1959) 101 CLR 298 Kirkby v Coote [2006] QCA 61 Stone v Chappel [2017] SASCFC 72; 128 SASR 165 at 172
Tabcorp Holdings Ltd v Bowen Investments Pty Ltd [2009] HCA
8; 236 CLR 272 The Owners Units Plan 1917 v Koundouris [2016] ACTSC 96;
307 FLR 372
Documents Cited:	ACT Government, Minimum Documentation Requirements for
Building Applications Lodgement Class 1 and 10 - Residential
Construction (2 August 2016)
Parties:	Kate Mary O’Toole (First Plaintiff)
Farooq Ahmed (Second Plaintiff)
M Johnson Building Propriety Ltd (First Defendant) Capital Certifiers Pty Ltd (Second Defendant)
Representation:	Counsel
M Robens (Plaintiffs)
J Masters (First Defendant)
Solicitors
Harrington Hall Lawyers (Plaintiffs)
O’Connor Harris & Co (First Defendant)
File Number:	SC 386 of 2021
BALLA AJ:
Introduction
1․	In 2018 Ms Kate Mary O'Toole and Mr Farooq Ahmed bought a block of vacant land at Latham in the ACT and decided that they wanted to build a house on it.
2․	They retained the first defendant, M. Johnson Building Pty Ltd (the builder), and the building work commenced in February 2019. The plaintiffs moved in on 7 June 2019.
3․	The plaintiffs say that there have been a number of breaches of the contract by the builder and claim damages.
4․	The builder disputes the plaintiffs’ claims.

Causes of Action

5․

On 6 November 2018 the plaintiffs entered into a written contract with the builder for
the construction of a single-story residential dwelling.

6․

The plaintiffs rely on the clauses in the contract which say the builder was required to:

(a)	Carry out the works on the approved plans, in the specifications and in the contract

in a proper and skilful manner;[1]
[1] clause 1(a)

(b) Complete the works to the standards of construction required by the Building Act
2004 (ACT) (the Act) and, if inconsistent with the contract, to the higher standard;[2]
[2] clause 1(b)
(c) Provide a warranty as to the accuracy and correctness of the construction plans;[3]
[3] clause 4(a)
(d) Obtain all planning and building approvals;[4]
[4] clause 7(a)
(e) Notify them of any variations in writing;[5] and
[5] clause 17(c)

(f) Rectify any…

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: [2023] ACTSC 116
Decision Date

CaseChat Overview and Summary

In O'Toole v M Johnson Building Pty Ltd, the Supreme Court of the Australian Capital Territory (ACT) ruled in favour of the plaintiffs, Kate Mary O'Toole and Farooq Ahmed, against the builder, M Johnson Building Proprietary Ltd (the builder). The plaintiffs claimed that the builder breached the contract in multiple ways, including failing to carry out the works in accordance with the approved plans and specifications, not carrying out the works with proper care and skill, and not complying with the requirements under the Building Act 2004 (ACT). The builder disputed the plaintiffs' claims. After considering the evidence and expert opinions, the court found that the builder breached the contract in several aspects and awarded the plaintiffs damages for the rectification of the defects, the cost of obtaining a new development approval and a certificate of occupancy, and loss of amenity.

The court held that the builder breached the contract by not having the site classification reassessed during excavation and not following the geotechnical engineer's recommendation to use piers to weathered rock. The court found that the builder's design did not comply with the Australian Standards (AS) and the National Construction Code of Australia (NCC) because the engineers did not attend and view the excavated footings and there is no evidence of an engineered design or the application of engineering principles that would satisfy the requirements. The court also found that the builder breached the contract by spacing the ferrules/dowels too far apart in at least one area and using dowels which were too long, by not reinstating the cut reinforcing, by not complying with the Australian Standards (AS) for tiling over a large area, by not building the garage floor with a 100mm set-down as specified in the architectural drawings, by not setting down the internal wet areas and not installing the required falls, by not excavating the site in accordance with the plans, by not installing any drainage to take water away from the edge of the slab, by not constructing the driveway in accordance with the plans, by not changing the access to the porch from the driveway as set out in the plans, by not properly installing the garage door, by not installing expansion joints in the floor tiling, by not installing a termite management system, by not backfilling the stormwater lines to the required depth, by not tiling and sealing the walls adjoining the laundry tub and the ensuite vanity, by not sealing the linen cabinet in the laundry, by not sealing the internal doors at the top and bottom, by not applying the clear seal to the doors as required by the door manufacturer's conditions of sale, by not correctly painting and removing the packing materials around the ensuite and main bathroom vanity mirrors, and by not installing lift-off hinges on the bathroom door.

The court ordered the builder to pay the plaintiffs damages for the rectification of the defects, the cost of obtaining a new development approval and a certificate of occupancy, and loss of amenity. The court also ordered the builder to pay the plaintiffs' costs. The court held that the damages awarded should be reasonable and not out of proportion to the benefit to be obtained. The court considered the likely consequences which flow from the contractual breach and the expert evidence in determining the amount of damages. The court allowed the plaintiffs' claims except for one minor defect and made no award for loss of amenity. The court also apportioned the damages between the builder and the certifier, Capital Certifiers Pty Ltd, based on their respective responsibility for the loss or damage.

Orders