Owners Corporation - Strata Plan 73019 v Brodyn Pty Ltd, Titanium Group Pty Ltd, Auscore Constructions Pty Ltd

Case •

[2015] NSWCATCD 43

•

31 March 2015

No judgment structure available for this case.

Civil and Administrative Tribunal


New South Wales

Medium Neutral Citation: Owners Corporation – Strata Plan 73019 v Brodyn Pty Ltd, Titanium Group Pty Ltd, Auscore Constructions Pty Ltd [2015] NSWCATCD 43
Hearing dates:14, 15, 16 and 17 April 2014
Decision date: 31 March 2015
Jurisdiction:Consumer and Commercial Division
Before: D. Goldstein, Senior Member
Decision:

1. Brodyn Pty Ltd must pay Owners Corporation – Strata Plan 73019 the sum of $316,212.99 within 21 days of the date of this order.

2. Auscore Constructions Pty Ltd must pay Owners Corporation – Strata Plan 73019 the amount claimed in the sum of $496,008.00 within 21 days of the date of this order.

3. Brodyn Pty Ltd’s claim against Auscore Constructions Pty Ltd in HB 11/06382 is dismissed.

4. Either party is at liberty to make a costs application in these proceedings.

5. Any costs application pursuant to section 53 of the Consumer, Trader and Tenancy Tribunal Act 2001 or regulation 20 of the Consumer, Trader and Tenancy Tribunal Regulation 2009 must be lodged in the Tribunal and served on the costs respondent within 21 days of the date of this order either attaching or referring to the documents relied upon in support of the application.

6. The costs respondent will have 21 days after the date of receipt of the costs application referred to above, to lodge in the Tribunal and serve on the costs applicant the submissions, if any, in response to the costs application, such submissions either attaching or referring to the documents relied upon.

7. The cost applicant will have 14 days after the date of receipt of the cost respondent’s submissions to lodge in the Tribunal and serve on the costs respondent the submissions, if any, in reply, such submissions either attaching or referring to the documents relied upon.

8. The Tribunal will determine any costs application on the basis of the papers lodged in the Tribunal.
Catchwords: Defective work, interpretation of section 18D(2) of the Home Building Act 1989, apportionable claims under section 34 of the Civil Liability Act
Legislation Cited: Civil and Administrative Tribunal Act 2013,
Civil Liability Act 2002,
Consumer, Trader and Tenancy Tribunal Act 2001,
Consumer, Trader and Tenancy Tribunal Regulation 2009,
Home Building Act 1989
Strata Schemes (Freehold Development) Act 1973
Cases Cited: Allianz v Waterbrook [2009] NSWCA 224,
Barrak Corporation Pty Ltd v The Kara Group of Companies Pty Ltd [2014] NSWCA] 395,
Bruno Pisano v Georgia Dandris [2014] NSWSC 1070,
Cordon Investments Pty v Lesdor Properties Pty Ltd [2012] NSWCA,
Nguyen vCosmopolitan Homes [2008] NSWCA 246,
Owners Corporation SP 72357 v Dasco Constructions Pty Limited & Ors [2010] NSWSC 819,
Owners Corporation Strata Plan 64757 v MJA Group Pty Ltd [2011] NSWCA 236, Owners Strata Plan 62930 v Kell & Rigby [2010] NSWSC 612
Pavey & Matthews Pty Ltd v Paul (1987) 162 CLR 221,
Perpetual Trustee Company Ltd v CTC Group Pty Ltd (No 2) [2013] NSWCA 58,
The Owners – Strata Plan No 68372 v Allianz Australia Insurance Limited [2014] NSWSC 1807,
Westpoint Management Ltd v Chocolate Factory Apartments Ltd [2007] NSWCA 253
Category:Principal judgment
Parties:

Applicant: Owners Corporation – Strata Plan 73019
First Respondent:Brodyn Pty Ltd
Second Respondent: Titanium Group Pty Ltd
Third Respondent: Auscore Constructions Pty Ltd

Applicant: Brodyn Pty Ltd
Respondent: Auscore Constructions Pty Ltd
Representation: Counsel: Mr P. Bambagotti for the Applicant
Mr T. Bland for the First Respondent
Solicitors: Grace Lawyers for the applicant
Johninfo for the first respondent
File Number(s):HB 08/57503 and HB 11/06382
Publication restriction:Unrestricted

reasons for decision

Background

  1. These proceedings arise in connection with defective work to premises situate at *********Street Stanmore. The premises are part residential and part commercial. The greater part is residential. There are 16 residential lots and 1 commercial lot. All told there are 17 lots in the strata scheme.

  2. The applicant is the registered proprietor of the common property, which is the subject of Strata Plan 73019.

  3. The premises were constructed pursuant to a building contract entered between the first respondent and the Titanium Group Pty Ltd, which company went into administration, in or about June 2003. In these reasons I will refer to the Titanium Group Pty Ltd as the developer.

  4. The applicant submits and there is no dispute about it, that upon registration of the strata plan it became the registered proprietor of the common property the subject of Strata Plan 73019 and became subject to absolute obligations to repair defects in the common property.

  5. It further submits that it is entitled to the Statutory Warranties that were implied into the building contract referred to above, by Part 2C of the Home Building Act 1989 (the ‘Act’) and in particular section 18D of the Act. I take the reference to section 18D of the Act to be to 18 D (1).

  6. In these reasons I will refer to the applicant as the owner and to the first respondent as the builder.

  7. The amount claimed in these proceedings is $491,492.00.

Jurisdiction

  1. The Consumer Trader and Tenancy Tribunal was abolished as of 1 January 2014 and the Consumer, Trader and Tenancy Tribunal Act 2001 and the Consumer, Trader and Tenancy Tribunal Regulation 2009 were repealed. As the application was not fully determined at that time, the proceedings were ‘pending’ as defined in clause 6 of Schedule 1 of the Civil and Administrative Tribunal Act 2013.

  2. Transitional provisions in relation to pending proceedings are set out in clause 7 of Schedule 1 of the Civil and Administrative Tribunal Act 2013. Pursuant to section 7(3) of Schedule 1 to that Act, the current Tribunal has and may exercise all the functions that the Consumer, Trader and Tenancy Tribunal had immediately before its abolition, and the provisions of the Consumer, Trader and Tenancy Tribunal Act and Consumer, Trader and Tenancy Tribunal Regulation continue to apply to unheard proceedings which expression includes pending proceedings.

  3. There is no dispute between the parties that the owner’s claim is a building claim for the purposes of section 48A of the Act and that the Tribunal has the jurisdiction to hear and determine the claim under section 48I of the Act.

  4. The owner and builder have filed and served detailed written submissions and have had the opportunity to address the Tribunal on the submissions in lieu of providing submissions in reply. I have had regard to the parties’ submissions in the preparation of these Reasons for Decision. I have not dealt with each and every submission made by the parties.

  5. The parties prepared a five volume bundle of documents for use at the hearing and also provided a bundle of additional documents.

The pleadings

  1. The parties have filed pleadings which consist of, inter alia, the owner’s amended points of claim dated 6 April 2010 and the builder’s undated Defence to Application filed in the Tribunal on 25 January 2011.

The contract

  1. It is desirable in my view that I make some brief findings of fact concerning the contract.

  2. The contract between the builder and developer was executed by the parties on 23 June 2003. The builder submits that practical completion was achieved in July 2004.

  3. The contract referred to drawings and specifications which are stated to be contract documents and which are identified in special condition 32.

The section 18D (2) defence

  1. The builder raises a defence based on section 18D of the Act in paragraphs 7, 22 and 23 of its Defence to Application. The builder also deals with this issue in its written submissions. The builder relies upon paragraphs 1 -17 of the affidavit of Mr B. Matterson dated 15 November 2010 in support of this defence.

  2. Section 18D(2) of the Act states:

‘This section does not give a successor in title or non-contracting owner of land any right to enforce a statutory warranty in proceedings in relation to a deficiency in work or materials if the warranty has already been enforced in relation to that particular deficiency, except as provided by the regulations.’

  1. The effect of this defence is set out in the particulars of paragraph 23 of the Defence to Application such that if the defence is successful, the owner will not be entitled to enforce the statutory warranties in these proceedings.

  2. The factual background to this defence is that on 11 November 2005 a Deed of Release was entered into between the builder and the developer. The deed settled the builder’s claims for money under the building contract. It is said that the developer’s claims for defective work made under section 18B of the Act were also settled. The builder contends that the result of this settlement prevents the owner’s action for defective work in these proceedings.

  3. The deed provided that the developer would pay the builder $1, and that the parties would releases and settle the claims that they had against one another. It is alleged that the release given by the developer to the builder included claims by the developer against the builder for defects as described in a tax invoice issued by the developer to the builder.

  4. In clause 5 of the Deed the parties mutually released each other from all claims and causes of action which they had including those ‘arising under the provisions of any statute’ which either or both of them then had or might have.

  5. The parties also agreed in clause 6 that the only obligation with regards to defects in the work would be as defined under the Act and that they would maintain their own obligations under the Act, as amended.

  6. The builder has addressed this defence in its final written submissions and in its closing oral submissions. The owner has dealt with paragraphs 7, 22 and 23 of the Defence to Application in its final written submissions and has addressed the Tribunal on the matter in its closing oral submissions.

Chronology

  1. At this point of these reasons a short chronology would be helpful in the analysis of the parties’ positions in connection with this defence. I make the following findings.

  2. The building contract was signed in in or about June 2003.

  3. Practical completion under the building contract occurred in July 2004.

  4. Strata Plan 73019 was registered on 17 August 2004.

  5. Pursuant to section 18 of the Strata Schemes (Freehold Development) Act 1973, the common property vested in the owner on 17 August 2004.

  6. At 17 August 2004, pursuant to section 18 D (1) of the Act, the owner was entitled to the benefit of the same statutory warranties referred to in section 18B of the Act as was the developer.

  7. On 11 November 2005 a Deed of Release was entered into between the builder and the developer.

Part 2C of the Act - Overview

  1. Taking an overview of Part 2C of the Act, it is apparent that a builder faces the potential of owing, at the one point in time, obligations under the statutory warranties referred to in section 18B to:

  1. a developer under section 18B of the Act,

  2. an owners corporation in respect of common property under section 18D of the Act; and

  3. lot owners, also under section 18D of the Act.

Allianz v Waterbrook

  1. The owner in its submissions refers to Allianz v Waterbrook [2009] NSWCA 224 to assert that the statutory warranties conferred under section 18D(1) of the Act are not assignments of the warranties, but new warranties given to it as the successor in title.

  2. Paragraph 65 of the decision in Allianz v Waterbrook was referred to and relied upon by the owner’s counsel in closing submissions. The paragraph states:

‘Section 18D conferred on a successor in title to a person entitled to the benefit of statutory warranties only the rights that that person had “in respect of” the statutory warranties. That is, it enabled the successor in title to claim whatever remedies might be available to it based on a breach of the statutory warranties by the builder. Those remedies included recovery of any loss incurred by the successor arising from the breach of the statutory warranties (and, arguably, the right to enforce the statutory warranties). It is not suggested that s 18D conferred the right on a successor to claim the losses its predecessor incurred arising out of a breach of the statutory warranties. That does not appear to be the intent of the legislation. Thus, s 18D did not have the same effect as an equitable assignment of a chose in action.’

  1. The owner’s counsel submits that the above passage establishes that what is created by section 18D of the Act is that the owner has the rights that the developer had in the statutory warranties contained in section 18B of the Act as at, in my view, the date the common property vested in the owner, namely on 17 August 2004. Insofar as Ipp JA states that ‘Thus, s 18D did not have the same effect as an equitable assignment of a chose in action.’ the meaning to be taken from that sentence is that the owner did not obtain the developer’s rights under section 18B of the Act as it would have had there been an equitable assignment of a chose in action. It obtained equivalent rights.

  2. On the basis of what was said in Allianz v Waterbrook as quoted above, I find that section 18D of the Act operated to confer on the owner the right to the statutory warranties contained in section 18B of the Act that the developer had as at 17 August 2004 and that these rights were independent of and separate to the developer’s rights to the statutory warranties.

  3. Although it was not expressly decided in Allianz v Waterbrook, it follows from my finding in the preceding paragraph that even though section 18D operates to confer a successor in title with rights under section 18B of the Act, that in itself will not strip a developer of its rights against a builder pursuant to section 18B of the Act. However, there is an issue of whether a developer who no longer has the ownership of the land and the building constructed upon it may sue the builder for damages for breach of the implied warranties in circumstances where it has no access to the common property to carry out rectification work. The developer may be unable to carry out rectification work. That issue and the effect of that factor in the question of whether a developer may recover damages for defective work was discussed in Cordon Investments Pty v Lesdor Properties Pty Ltd [2012] NSWCA and in Westpoint Management Ltd v Chocolate Factory Apartments Ltd [2007] NSWCA 253. However that issue is not directly in point in this case and does not fall to be considered or decided.

  4. Given that a builder may have obligations under section 18B of the Act to different parties in connection with the one project, one can appreciate the necessity, from a builder’s perspective, for a provision such as section 18 D (2) of the Act so that it not liable to different parties for the same defect. That section states:

‘This section does not give a successor in title or non-contracting owner of land any right to enforce a statutory warranty in proceedings in relation to a deficiency in work or materials if the warranty has already been enforced in relation to that particular deficiency, except as provided by the regulations.’

  1. The interpretation of section 18D (2) in context of the facts in these proceedings is of prime importance to the builder’s defence based on the 11 November 2005 Deed of Release.

  2. I have found that section 18D of the Act conferred on the owner the right to the statutory warranties contained in section 18B of the Act that the developer had as at 17 August 2004 independent of and separate to the developer’s rights to the statutory warranties.

Issue to be resolved

  1. The issue to be resolved by the builder’s defence based on section 18 D (2) of the Act is whether the owner’s claims under statutory warranties given to it by section 18 D (1) of the Act in connection with the deficiencies in work or materials the subject of its expert evidence in these proceedings, have already been enforced, in this case by the developer.

  2. In resolving this issue I will have regard to the terms of the deed of release between the builder and the developer.

Deed of release

  1. Before the signature of the deed of release on 11 November 2005, the evidence is that there were disputes and differences between the builder and the developer. The deed refers to terms of settlement. However, Mr Matterson states in his affidavit of 15 December 2010 that such a document was never prepared. I will find that in or about November 2005 there were no proceedings between the builder or the developer in relation to the disputes and differences referred to.

  2. The deed of release refers to a claim for payment having been made by the builder in respect of the premises. The developer paid $1 to settle that claim, as recorded in clause 3 of the deed.

  3. Clause 5 of the deed was a mutual release of all causes of actions that the parties to the deed had against each other. The clause was drafted in wide terms to catch all conceivable claims, including claims ‘arising under the provision of any statute’.

  4. Clause 6 of the deed stated:

‘The Releasor & the Releasee each agree that the only obligation with regards to defects in the work shall be as defined under the Home Building Act and that the Releasee & Releasor shall maintain their own obligations under the Home Building Act 1989 and amendments’

  1. In my view this clause is relevant in circumstances where the builder is taking the position that the deed referred to had the effect that rights under statutory warranties in connection with certain deficiencies in work and materials had been enforced, such that section 18D (2) of the Act prevents the owner in these proceedings from maintaining a claim against it in connection with those same deficiencies in work and materials.

  2. In interpreting clause 6, I take it that the defects in work being referred to are defects in work carried out by the builder pursuant to the building contract between the developer and builder relating to the premises.

  3. I also interpret clause 6 as being an exception to clause 5 which is a mutual release clause of very wide application. In my view clause 6 can have no other meaning or application other than as an exception to clause 5.

  4. In addition I interpret clause 6 to be a recognition by the builder and developer that obligations regarding defects in work are as defined by the Act, and not disposed of by clause 5, and that they will retain their own obligations under the Act in connection with such defects.

  5. In my view the effect of clause 6 of the Deed is that the parties agreed that the issue of defects in the work would be exempted from the general releases contained in clause 5 of the Deed. In particular and of importance, clause 6 is a recognition that the builder and developer would continue to be exposed to the obligations imposed on them by the Act in connection with defective work.

  6. In its submissions the builder comments on clause 6. It states it is unclear what effect clause 6 has and that it may be referring to maintaining obligations in respect to defects not the subject of the architects notice. With respect, I disagree. There is no reason to cast such doubt on the meaning of clause 6. The clause is expressed in clear language. It relates to defects as understood in the way that I have referred to.

  7. Secondly, the builder claims that the Act does not define specific obligations as to defects. That may be correct. However, the issue is not whether the Act defines specific obligations regarding defects. The issue in my view is how is clause 6 to be interpreted when it states that the obligation with regards to defects in the work shall be as defined under the Act.

  8. The Act deals with a wide range of issues from licensing to Home Owner’s Warranty Insurance. So far as defects are concerned, the Act provides for rectification orders in section 48E, as submitted by the builder. It is also deals with, and is commonly understood to deal with defective work by the implication of a term such as that found in section 18B (a) which requires a builder to perform work in a proper and workmanlike manner and in accordance with the plans and specifications. The other warranties implied by section 18B of the Act also deal with the issue of defective work in other contexts. It is clear that a breach of the implied statutory warranties will result in an order for damages or a work order as referred to in section 48O of the Act.

  1. Clause 6 refers to two types of obligations. The first is the obligations with regard to defects under the Act. These words are not to be interpreted in a pedantic way, such as by reference only to those provisions of the Act that specifically refer to defects. The second type of obligation is that imposed by the Act on a builder and a developer.

  2. As pointed out above, a builder is subject to obligations to different categories of persons. The developer is also subject to obligations to successors in title.

  3. The builder’s defence, as I understand it, does not (and could not) rely on the proposition that the statutory warranties relating to the defective work alleged in these proceedings were enforced by the developer before 17 August 2004. The builder asserts that by the time the owner instituted these proceedings, the developer had enforced the statutory warranties in relation to the defects the subject of these proceedings against the builder via the Deed of Release dated 11 November 2005. The builder submits that the result is that the owner as the successor in title to the developer is unable to enforce the statutory warranties in connection with those same defects.

  4. The position outlined above reinforces what was said earlier in these reasons, namely that a builder will owe obligations under section 18B of the Act to different parties at the same time. Here as has been accepted, the owner became entitled to the statutory warranties via section 18D of the Act at 17 August 2004. The evidence indicates that around the same time there were differences between the developer and the builder about payments under the contract and the developer’s rights under section 18B of the Act to damages for breach of the statutory warranties.

  5. For the builder to be successful, it must establish that the developer had enforced the statutory warranties by virtue of the deed of release dated 11 November 2005.

  6. The fact that the owner obtained the statutory warranties on 17 August 2004 and at that time the developer had not enforced the statutory warranties in connection with the defects the subject of these proceedings does not in my view dispose of the builder’s section 18D(2) defence.

  7. Section 18D(2) of the Act is clearly enacted to protect a builder in the position referred to above from being liable on more than one occasion to different parties in relation to the same ‘deficiency in work or materials’.

  8. I interpret clauses 5 and 6 of the Deed of Release to operate as a release by the developer of its rights against the builder based, among other things as the scope of the release is wide, on a breach of the contract or a breach of the warranties contained in section 18B of the Act and a release by the builder of its rights against the developer for money allegedly owning for work carried out in the construction of the premises.

  9. However as regards other parties who may have rights against either the builder or developer, clause 6 of the deed is clear in that the builder and developer maintained their own obligations under the Act.

  10. In that regard I note that the builder faced obligations under section 18B to the successors in title who came within section 18D of the Act and the developer faced obligations under section 18B to the immediate successor in title under section 18C of the Act. Those obligations were not released, and in context of section 18D (2) of the Act, were not enforced since the builder and developer acknowledged that their obligations under those sections remained intact.

  11. The owner’s case in these proceedings is under section 18D of the Act. Its rights to enforce the statutory warranties in relation to the alleged defects which form the basis of its case were not by reason of clause 6 released and have not been enforced.

  12. For the reasons expressed above, I dismiss the builder’s defence based on section 18D (2) of the Act

Claims under the Civil Liability Act 1989

  1. It is common ground that the Civil Liability Act 1989 applies to these proceedings.

  2. The builder submits that the defences under Part 4 of the Civil Liability Act are available to it in these proceedings and that the decision of the Supreme Court in Owners Corporation SP 72357 v Dasco Constructions Pty Limited & Ors [2010] NSWSC 819 binds the Tribunal. In particular the builder contends that the owners claim against it in these proceedings is an ‘apportionable claim’ under section 34 of the Civil Liability Act.

  3. The builder also states that defences available under Part 4 of the Civil Liability Act relate to tiling defect claims and sliding aluminium door claims.

  4. The builder submits that the decision in Owners Corporation SP 72357 v Dasco Constructions Pty Limited & Ors is to be preferred to the decision of the Court of Appeal in Owners Corporation Strata Plan 64757 v MJA Group Pty Ltd [2011] NSWCA 236. The owner submits that the decision in Owners Corporation Strata Plan 64757 v MJA Group Pty Ltd should be taken into account.

  5. In Owners Corporation Strata Plan 64757 v MJA Group Pty Ltd Young JA considered the Civil Liability Act in paragraphs 49 – 52 of his decision, However as he stated at paragraph 49, the conclusion that he had reached on other issues meant that it was not necessary for him to ‘consider in depth the other submission made by the respondent, that the present claim is a "apportionable claim" within the meaning of s 34 of the Civil Liability Act 2002 (NSW).’

  6. At paragraphs 50, 51 and 52 of his decision, Young JA stated, without reference to Owners Corporation SP 72357 v Dasco Constructions Pty Limited & Ors:

'50.   The submission is that the only liability which should be placed on the developer's shoulders is that liability for which it was personally liable and not that vicariously liability (in the special sense used in this Act) for what the builder did.

It is ordinarily the duty of an intermediate appellate court to deal with all the issues that arise in the appeal, notwithstanding that the appeal can be decided on one of those issues. However, the present point is an extremely significant one and it is not in the public interest that, without full argument on it, a definitive decision should be given.

Accordingly, I will content myself by saying that there is much to be said for the view that a claim under s 18C of the Home Building Act is not an action for damages from a failure to take reasonable care within the meaning of s 34(1) of the Civil Liability Act 2002. One principal reason for taking this view is that to take any other view would completely negate the whole purpose of s 18C in the case where the builder has become insolvent.’

  1. Although the above paragraphs of Young JA’s decision were obiter dicta, I have had regard to them and in particular his Honour’s observation that ‘a claim under s 18C of the Home Building Act is not an action for damages from a failure to take reasonable care within the meaning of s 34(1) of the Civil Liability Act 2002’.

  2. In Owners Corporation SP 72357 v Dasco Constructions Pty Limited & Ors Einstein J accepted that the plaintiff’s claim which was made pursuant to section 18D of the Act and found that such claim was an action for damages in contract which arose from a failure to take reasonable care.

  3. The owners have referred to the decision of the Court of Appeal in Perpetual Trustee Company Ltd v CTC Group Pty Ltd (No 2) [2013] NSWCA 58. That case concerned the defendant’s contention that other parties were concurrent wrongdoers and that its liability should be apportioned under Part 4 of the Civil Liability Act.

  4. The document which gave rise to the defendant’s liability was a Mortgage Origination Deed. The decision turned on whether section 3 A(2) of the Act applied to the Mortgage Origination Deed. Macfarlan JA also considered whether the plaintiff’s action arose from a ‘failure to take reasonable care’. His honour stated at paragraphs 22 and 23:

‘For a successful action for damages to have arisen from a failure to take reasonable care, it is in my view necessary that the absence of reasonable care was an element of the, or a, cause of action upon which the plaintiff succeeded. As observed by Professors McDonald and Carter in "The Lottery of Contractual Risk Allocation and Proportionate Liability" (2009) 26 Journal of Contract Law 1 at 18, the contrary view would produce the absurd result that a party to a contract who failed to perform a strict contractual obligation would benefit from being found to have acted negligently rather than "innocently". If claims could be apportioned where negligence is not an element of the successful cause of action, but merely arises from the facts, a plaintiff could lose his or her contractual right to full damages from a party whose breach of a contractual provision of strict liability happened to stem from a failure to take reasonable care.

My view accords with that which I reached in relation to the similarly worded, and in my view relevantly indistinguishable, provision in s 5A of the Act which renders Part 1A applicable only to a "claim for damages for harm resulting from negligence (Perpetual Trustee v Milanex at [87]; see also Monaghan Surveyors Pty Ltd v Stratford Glen-Avon Pty Ltd [2012] NSWCA 94 at [76] and [77]). It appears to differ from that expressed by Barrett J (as his Honour then was) in Reinhold v New South Wales Lotteries Corporation (No 2) [2008] NSWSC 187 at [20] - [30] and in other first instance decisions to which his Honour referred. Unless his Honour was simply saying that it is necessary to examine the court's findings to identify the cause, or causes, of action upon which the plaintiff succeeded, I cannot, with respect, agree with his Honour that the "nature of the claim, for the purposes of Pt 4, is to be judged in the light of the findings made and is not determined by the words in which it is framed" (at [30]). In my view the application of Part 4 turns not on the facts that happen to be found but on the essential character of the plaintiff's successful cause of action. Subject to cases that are conducted without regard to the pleadings, if negligence is an essential element of that cause of action, it will have been pleaded in the Statement of Claim. If it is not, it will not have been pleaded. It would be curious indeed if, to attract Part 4 of the Act, the defendant pleaded and proved his or her own negligence when that was not alleged by the plaintiff. The text of s 34(1) does not, in my view, contemplate that occurring. The natural meaning of the words used indicates that a failure to take reasonable care must be part of, and therefore an element of, the plaintiff's successful cause of action.’

  1. The owner’s counsel referred me to the case of The Owners – Strata Plan No 68372 v Allianz Australia Insurance Limited [2014] NSWSC 1807 in closing submissions. In that case Ball J. considered the authorities referred to above. The facts of that case were different to the facts in this case. The plaintiff was suing the developer since the builder had been placed in liquidation. It relied upon section 18C of the Act to obtain the benefit of the statutory warranties in section 18B of the Act against the developer. In connection with the question of whether the developer had been negligent, Ball J. upheld a referee’s findings that it had not since a claim against the developer was a statutory claim that did not depend on or involve any fault on the part of the developer.

  2. Since the owner’s claim against the builder in these proceedings is pursuant to section 18D of the Act, the case does not assist. It should however be noted that the court appointed referee in The Owners – Strata Plan No 68372 v Allianz Australia Insurance Limited preferred the dicta of Young JA in Owners Corporation Strata Plan 64757 v MJA Group Pty Ltd to the decision of Einstein J. in Owners Corporation SP 72357 v Dasco Constructions Pty Limited & Ors on the basis that the court in Owners Corporation Strata Plan 64757 v MJA Group Pty Ltd had higher authority than the court in Owners Corporation SP 72357 v Dasco Constructions Pty Limited & Ors. Ball J. did not correct or overturn this aspect of the referee’s decision.

  3. The referee also took the view that the cases were distinguishable on the basis that they considered different sections of the Act, namely Dasco dealt with section 18D of the Act, as do these proceedings, and MJA Group Pty Ltd was concerned with a claim under section 18C of the Act.

  4. Having regard to the passage cited above, I find that the owner’s claim does not arise from a failure on the part of the builder to take reasonable care.

  5. The reasons for reaching this conclusion are that the owner’s claim against the builder as pleaded in its Amended Points of Claim is framed entirely as a breach of contract relying on the statutory warranties implied by section 18B of the Act. As Macfarlan JA stated in Perpetual Trustee Company Ltd v CTC Group Pty Ltd (No 2)

‘‘For a successful action for damages to have arisen from a failure to take reasonable care, it is in my view necessary that the absence of reasonable care was an element of the, or a, cause of action upon which the plaintiff succeeded’ and later ‘The text of s 34(1) does not, in my view, contemplate that occurring. The natural meaning of the words used indicates that a failure to take reasonable care must be part of, and therefore an element of, the plaintiff's successful cause of action.’

  1. In these proceedings there is no part or element of the owner’s case that there was a failure on the part of the builder to take reasonable care. It is on that basis and adopting the approach taken by Macfarlan JA that I find that the owner’s case being entirely in contract and as pleaded not relying upon the failure of the builder to take care, is not an ‘apportionable’ claim under section 34 of the Civil Liability Act.

The owner’s claims

  1. I will now proceed to deal with the substance of the owners claims which are set out in the ‘Joint Report on Alleged Building Defects at 175 – 183 Trafalgar Street, Stanmore’ filed in the Tribunal on 9 September 2013, which will be referred to as either the ‘Scott Schedule’ or the ‘joint report’. The experts for the parties have provided reports that deal with the defects that the owners have alleged to have arisen due to the builder’s breach of the statutory warranties as contained in section 18B of the Act.

  2. Those warranties are:

‘(a)  a warranty that the work will be performed in a proper and workmanlike manner and in accordance with the plans and specifications set out in the contract,

(b)  a warranty that all materials supplied by the holder or person will be good and suitable for the purpose for which they are used and that, unless otherwise stated in the contract, those materials will be new,

(c)  a warranty that the work will be done in accordance with, and will comply with, this or any other law,

(d)  a warranty that the work will be done with due diligence and within the time stipulated in the contract, or if no time is stipulated, within a reasonable time,

(e)  a warranty that, if the work consists of the construction of a dwelling, the making of alterations or additions to a dwelling or the repairing, renovation, decoration or protective treatment of a dwelling, the work will result, to the extent of the work conducted, in a dwelling that is reasonably fit for occupation as a dwelling,

(f)  a warranty that the work and any materials used in doing the work will be reasonably fit for the specified purpose or result, if the person for whom the work is done expressly makes known to the holder of the contractor licence or person required to hold a contractor licence, or another person with express or apparent authority to enter into or vary contractual arrangements on behalf of the holder or person, the particular purpose for which the work is required or the result that the owner desires the work to achieve, so as to show that the owner relies on the holder’s or person’s skill and judgment.’

  1. The builder has made submissions regarding the burden of proof.

  2. The relevant principles in relation to discharging the burden of proof in civil cases were recently summarised by the New South Wales Court of Appeal in Nguyen v Cosmopolitan Homes [2008] NSWCA 246 at [55] as follows:

‘(1) A finding that a fact exists (or existed) requires that the evidence induce, in the mind of the fact-finder, an actual persuasion that the fact does (or at the relevant time did) exist;

(2) where on the whole of the evidence such a feeling of actual persuasion is induced, so that the fact-finder finds that the probabilities of the fact’s

existence are greater than the possibilities of its non-existence, the burden of proof on the balance of probabilities may be satisfied;

(3) where circumstantial evidence is relied upon, it is not in general necessary that all reasonable hypotheses consistent with the non-existence of a fact, or inconsistent with its existence, be excluded before the fact can be found; and

(4) a rational choice between competing hypotheses, informed by a sense of actual persuasion in favour of the choice made, will support a finding, on the balance of probabilities, as to the existence of the fact in issue.’

  1. The builder’s final submissions under the heading Burden of Proof, raises the issue of the passage of time that has elapsed since practical completion. It is to be recalled that practical completion under the building contract occurred in July 2004.

  2. The issue of maintenance was raised and a paragraph in the decision of Owners Strata Plan 62930 v Kell & Rigby [2010] NSWSC 612 was referred to and quoted by the builder (without a reference to the paragraph cited, which in a judgement of 449 paragraphs is not particularly helpful). I regard the quoted paragraph such that it is to be understood in the context of the evidence in those proceedings.

  3. The issue of the inter-relationship between of the existence of a defect and the carrying out of building maintenance is not one which I am able to determine without expert evidence. However I will have regard to the experts’ evidence, to the extent that this subject is raised. In other words I am of the view that it is impermissible for me to make findings based on my own views alone in connection with the lack of maintenance submission.

The experts

  1. Mr Roberts of Cornerstone gave evidence on behalf of the owners. He provided a number of reports, prepared a Scott Schedule and contributed to the joint reports of August and September 2013. Mr Jakovljevic signed a letter from remedial Building Services dated 7 February 2013 which was attached to Mr Roberts 30 July 2013 report. This letter provided rates for remedial work.

  2. Mr Taylor gave evidence on behalf of the builder. He also provided a number of reports, completed the Scott Schedule on behalf of the builder and contributed to the joint reports of August and 9 September 2013.

  3. There was also an experts’ conclave on 7 March 2013.

  4. I accept that each of Mr Roberts and Mr Taylor is entitled to give expert opinion evidence in these proceedings. There was no challenge to their status as experts.

  5. These proceedings were instituted in 2008. The first expert’s report in these proceedings was prepared in June 2010. The parties to these proceedings have had a significant amount of time to instruct their experts to prepare reports, consider their evidence, conduct investigations as to the cause of defects, assess costs of rectification and to confer with each other in order to reduce the scope of disputed items.

  6. In these circumstances I expect the expert evidence to be supported by an adequate reasoning process, relying on all necessary regulatory and other relevant references.

  7. Defects were dealt with in categories. That is to say that there were many items in the Scott Schedule which are in dispute, helpfully referred to in groups of similar items in the owner’s final submissions at paragraph 16(a). At the hearing the defects were dealt with in categories of like or identical items. I will deal with each category of defect in turn.

  1. The parties have made submissions about which of the experts ought to be preferred. I will not prefer the evidence of one expert over the other as part of a ‘blanket’ approach to the experts’ evidence. I will deal with each defect on the basis of the evidence before the Tribunal. However, my general impression of the experts is that the owner’s expert’s evidence suffers from a lack of specificity in some instances. In its generality, it sometimes fails to establish the specific matter that must be established, through a lack of concentrated analysis. The builder’s expert’s evidence tends toward advocacy in that it points out alleged deficiencies in the owner’s expert’s evidence rather than simply addressing the technical issues before the Tribunal. However, I think that it is fair to say that a number of the builder’s expert’s comments of this nature arise by reason of the generality of the owner’s expert’s evidence.

  2. In these circumstances producing adequate evidence to discharge the onus of proof as referred to above, will of course be of vital importance. The evidence must address the alleged defect in a meaningful way and in so doing establish the breach of contract relied upon.

Defects

  1. The first category of defects is cavity and sill flashing in relation to balcony doors. The defect items in the Scott Schedule are 2, 46, 49, 61, 67, 68, 74 and 75. The Scott Schedule refers to cavity flashings and moisture ingress in the description of these items. The owner’s final written submissions clarify that it is the balcony doors that are the substance of the owner’s complaint.

  2. The amount in issue in connection with these items is $134,050.00.

  3. The alleged defect is described as a lack of visible flashings in the walls of the premises at wall/floor junctions and at window and door openings.

  4. The owner in final submissions states in connection with this category of defects that there has been a breach of the implied warranties set out in sections 18B (a) and (c) of the Act, namely a failure to carry out work in a proper and workmanlike manner and in accordance with the specifications and in accordance with the law.

  5. Mr Roberts the expert for the owner states that there has been a failure to comply with the Building Code of Australia (‘BCA) and Australian Standard 3700 -2001 section 4.7.3. The reference to the BCA is to a general provision regarding a building being constructed to provide resistance to moisture penetration from outside.

  6. This category of defect is not agreed by Mr Taylor, the expert for the builder.

  7. Mr Roberts deals with these items in his first report of 18 June 2010 and in his later report of 16 November 2012 which is a report in reply. Mr Roberts’ evidence is that he observed a lack of visible flashings in the walls of the premises at wall/floor junctions and at window and door openings. Further he carried out destructive testing at the door sill/ wall junctions in areas he identified in units 4, 10 14, 15 and 16. His 18 June 2010 report sets out the results of these tests together with appropriate photographs.

  8. Mr Roberts found that there was no visible sill flashing upturn on the internal face of the door sill or at the edge of the door opening. He found that the only barrier to moisture ingress was a sealant joint between the aluminium door frame or angle and the wall. Mr Roberts has set out the relevant sections of the Australian Standard that he states is relevant, AS 3700 -2001 section 4.7.3 which relates to the provision of flashings in masonry to prevent moisture ingress.

  9. Mr Taylor responds to this evidence commencing at paragraph 78 of his 8 September 2011 report. He states that he is instructed that the door units incorporate self-draining sills and in that regard attaches an email from a supplier. He does not take any steps to ascertain for himself whether the basis of his instruction is correct.

  10. Mr Taylor takes a different view about the applicability of AS 3700 -2001. He states that it does not apply because the external walls are not masonry walls. Mr Taylor explains his basis for stating this, namely that the wording of AS 3700 -2001 applies only to masonry which it describes.

  11. Mr Taylor does state that he has observed the presence of moisture in the form of moisture staining to the carpet, underlay, smooth edge and wall finishes adjacent to the internal corners of the door framing. However he speculates about the causes for the presence of such moisture, giving 4 possible causes for the presence of such moisture.

  12. Mr Taylor’s evidence is not particularly helpful. He does acknowledge as referred to above that there is moisture in the units. I note that Mr Roberts does not specifically reply to Mr Taylor’s evidence.

  13. In its final submissions the owner refers to exhibit J which is the Ritek Installation Manual. Ritek is the walling system which Mr Taylor states was used in the construction of the external walls of the premises. Section 17 of the manual attaches ‘the standard details associated with the RITEK’ system. Drawings XF4 and XF7 which contain ‘STANDARD DETAIL’ show a range of flashings in connection with windows, panels laid on slabs, panel/slab edge flashing and panel/panel flashing. However there is no detail shown where a sliding door is to be installed within an opening in Ritek panels.

  14. In his 16 November 2012 report at paragraph 7.4.3 Mr Roberts refers to Mr Matterson’s affidavit of 24 June 2011 and specifically to the specification at annexure BM17. That specification is a window specification and requires the builder to install flashings and other items so ‘that water is prevented from penetrating the building between the window frame and the building structure’.

  15. That specification does not address the situation where a sliding door is to be installed within an opening in Ritek panels.

  16. Mr Matterson has annexed to his affidavit the email from Wideline Pty Ltd as referred to by Mr Taylor. That email responds to his email which seeks details of the sliding doors which were installed in the construction of the contract works. The email states that the sliding door sill is designed to be self-draining. The email sets out the design details in connection with the self-draining aspects of the sill.

  17. In connection with cavity and sill flashing in relation to balcony doors, the owner has on the evidence before the Tribunal failed to establish on the civil standard that there has been a failure to carry out the work relating to the sliding door units in accordance with the specifications.

  18. The evidence before the Tribunal does not include the specifications relating to balcony doors. There are, as pointed out above, specifications in evidence regarding windows, and details regarding panels laid on slabs, panel/slab edge flashing and panel/panel flashing. Further, I can see no occasion for stating that window specifications or details regarding panels laid on slabs, panel/slab edge flashing and panel/panel flashing should apply to sliding doors being installed within an opening in Ritek panels. In any event Mr Roberts does not rely on those specifications.

  19. There remains the owner’s claim that the builder has failed to carry out this work in a proper and workmanlike manner. Mr Roberts does not go so far as to state that in his opinion a builder in proceeding in a proper and workmanlike manner would install cavity flashings in the openings in which the sliding doors were installed.

  20. The basis for Mr Roberts’ ‘proper and workmanlike’ opinion appears to be based on AS 3700 -2001, as referred to above. I have stated that Mr Taylor does not agree that AS 3700 -2001 is applicable because the external walls are constructed by the use of Ritek panels, not masonry walls. Mr Taylor explains his basis for stating this, namely the wording of AS 3700 -2001 in that it applies only to masonry which it describes.

  21. The description of masonry in AS 3700 – 2001 does not in my view apply to Ritek panels.

  22. In my view the builder had no obligation to comply with AS 3700 – 2001 in the installation of balcony doors in the units referred to. That standard had no application to openings in Ritek panels.

  23. If the owner alleges that there has been a failure to comply with section 18B(c) of the Act based on a failure to comply with AS 3700 – 2001 in the installation of balcony doors in the units referred to, there is no basis for a finding in the owner’s favour, since as I have found, AS 3700 – 2001 does not in my view apply to Ritek panels.

  24. The only other basis advanced by the owner in connection with this defect item is that the builder breached the BCA, specifically as referred to in the Scott Schedule, as BCA FF1.2 and FP 1.4.

  25. The relevant provisions of the BCA are set out in Mr Taylor’s report at paragraph 88. Mr Taylor’s evidence is that he admits that there is moisture ingress in connection with six door units. He states that in connection with the remaining 24 sliding door units in the premises that he inspected those and they were preforming satisfactorily in that there was no ‘significant and ongoing water ingress’.

  26. The owner has failed to adduce evidence to establish that there has been a breach of breach of the implied warranties set out in section 18B (a) of the Act, namely a failure to carry out work in a proper and workmanlike manner and in accordance with the specifications.

  27. Insofar as the owner alleges that the builder is in breach of section 18B(c) of the Act based on a breach of the BCA, Mr Roberts concedes that there is moisture ingress in connection with six door units. Although he states that the reason for the water ingress is a failure of maintenance, I do not accept that as the sole cause of the failure.

  28. Mr Roberts has referred to the costs associated with the rectification of the doors in question in paragraph 111 of his report.

  29. I will find for the owners in that amount, namely the sum of $ 2,777.00.

  30. In closing oral submissions the builder submitted that the decision of the Court of Appeal in Barrak Corporation Pty Ltd v The Kara Group of Companies Pty Ltd [2014] NSWCA] 395 is relevant to this issue. I am unable to ascertain the relevance of that decision.

Cracked and drummy render above the door frame, northern elevation

  1. The next defect is cracked and drummy render above the door frame, northern elevation, item 5, amount in issue $675.00.

  2. This defect relates to cracked and drummy render over a door head adjacent to the garage roller shutter. The owner’s expert has stated what, in his opinion, is the cause of the cracked and drummy render in paragraph 9.5.3 of his 18 June 2010 report.

  3. The builder’s expert states that the door in question is not shown on the contractual plans and that he is instructed that the door was not installed by the builder.

  4. The builder’s final written submissions do not refer to any evidence from either Mr Brett Matterson or Mr Rodney Matterson to support the assertion made by the builder’s expert that the work the subject to this item was not carried out by the builder. Otherwise the builder’s expert states that the cause of the drummy render is not apparent to him. He states that if proved, the appropriate quantum is $270.00.

  5. I accept Mr Roberts’ evidence as to the cause of the cracked and drummy render. I also prefer the owner’s written submissions on this item.

  6. The builder’s expert has broken down the amount of $270.00 being primarily four hour’s work by a painter with materials. The owner’s expert’s estimate allows for eight hours labour with materials at $155.00.

  7. The photograph at paragraph 9.5.1 of Mr Roberts report provides a clear impression of the defect. I do not accept Mr Taylor’s evidence that the area of the defect is 150mm x 150mm. However, I am of the view that eight hours work would be excessive for the rectification of this defect. I prefer the builder’s expert’s estimate of four hours labour.

  8. I will allow the sum of $270.00 for the rectification of this defect.

Corrosion to corner angles, items 6 and 10 Amount in issue - $5,070.00

  1. The next category of defect is corrosion to corner angles, items 6 and 10.

  2. This item relates to corner angles used in external render application. The owner’s expert states that the angles should have been those fabricated in stainless steel as recommended by the manufacturer, rather than the angles used which were galvanised. The builder’s expert states that the angles used were zinc coated galvanised, as required at the time and that any deterioration that has occurred is consistent with ‘fair wear and tear’.

  3. The owner in final submissions states that there has been a breach of section 18B of the Act because the materials are unsuitable. I assume a breach of clause 18B (b) of the Act is being referred to.

  4. The contractual specification for external render is in evidence as DZ12 to Mr Taylor’s report. That document which is dated November 2002 shows that for plastering and rendering, under paragraph 4.4 ‘TRIM’ for edge trim ‘Purpose –made zinc coated steel sections’ was specified.

  5. Further, Mr Taylor attaches a Rondo external angle publication which had been revised in 2008. I note that document refers to a Rondo stainless bead for exterior render applications, as well as Rondo ‘E-Beads’ for exterior use. These beads are galvanised.

  6. Exhibit K is a document titled ‘Rondo Exangle’ which was first printed in April 2000 (Refer to P. 558 of Documents Bundle Volume 1 of 1). That document at page 17 (P.574 of Documents Bundle Volume 1 of 1) under the heading “Rondo ‘E-Bead’ Products for External Render Applications’’ also refers to ‘E-Beads’ which are stainless steel. This page states under the heading ‘Note’, ‘It is only these sections that are recommended for outdoor use.’

  7. While Exhibit K states on P. 577 of Documents Bundle Volume 1 of 1 that it was first printed in April 2000, I am unable to ascertain whether the document states the positon as regards Rondo external angles before, or at the time when the contract was entered into, or at some later date. It is possible that Exhibit K contains information which is current at a date later than when the contract was signed, despite the fact that it was first printed in April 2000.

  8. Exhibit 7 is a Rondo publication titled ‘Exangle’ Revised November 2003. At page 16 under the heading ‘Rondo ‘E – Bead’ Products for External Render Applications’ it is stated that all Rondo ‘E- Beads’ are made from Australian galvanised steel with a high zinc coating and then painted in a primer to provide superior corrosion resistance.

  9. The issue here is, was the builder being contractually bound to provide zinc galvanised corner beads, obliged to provide a higher grade stainless corner bead. In complying with the specification the builder has complied with section 18 B (a) of the Act to the extent that the work has been performed in accordance with the contractual specification.

  10. In my view the warranties contained in section 18B of the Act are to be read as mutually consistent, unless the contrary can be established. For example if materials or products are specified, it should follow that if a builder establishes that it has complied with the specification, the materials or products will be good and suitable. However, if an owner is able to establish, for example, that a material and product was clearly not good and suitable and known not to be good and suitable, then compliance with the specification will not serve as an answer to a claim for breach of section 18B (b) of the Act.

  11. By approaching the issue in this way the application of the warranties in sections 18B(a) and (b) of the Act will be consistent, subject to the proviso that I have mentioned which would protect an owner from work being specified to a level which is known or established to be inadequate at the time of contract.

  12. In connection with the items in dispute, the evidence has established that galvanised corner angles were used and also that galvanised corner angles were specified. Despite suggestions in submissions by the owner there is no evidence that the angles used were not galvanised.

  13. The evidence is unclear about when the manufacturer of the product used was stating that only non –corrosive stainless steel E Beads were recommended for outdoor use. There are two Rondo publications in evidence. One, Exhibit 7, is a Rondo publication titled ‘Exangle’ Revised November 2003. The other, Exhibit K, is ‘Rondo Exangle’ which was first printed in April 2000. The contractual specification is dated November 2002.

  14. I am not persuaded that Exhibit K stated the position as regards the use of Rondo corner angles for exterior use as at November 2002 or at June 2003 when the contract was signed. In my view it was more probable that the specification and the Rondo publication titled ‘Exangle’ Revised November 2003, exhibit 7, stated the current position at or about the time the contract was signed regarding the use of Rondo corner angles. I note that exhibit 7 calls for maintenance of rendered and painted finishes.

  15. It follows that I find that the owner has not established, that at the time of contract the galvanised Rondo corner angle was clearly not good and suitable and known not to be good and suitable for use as an external angle.

  16. For the reasons stated, I am of the view that the builder is not in breach of section 18B (a) or (b) in connection with this item of claim.

  17. This item of the owner’s claim is dismissed.

Cracking to the external wall, front block northern elevation. Amount in issue $5,500.00

  1. The next defect is cracking to the external wall Front Block Northern Elevation, defect item 7. The issue is a lack of movement joints between the external walls and balustrade walls.

  2. The owner’s expert states that work which was required by section 4.3 of the specification to be carried out, namely that the builder provide movement joints in the finish which coincide with movement joint in the substrate, was not in fact carried out, with the result that the defect complained of is present. The owner’s expert also relies upon AS 3700-2001 which relates to masonry walling.

  3. The owner’s final submissions state that the builder has breached section 18B(a) of the Act that is to carry out work in a proper and workmanlike manner and in accordance with the specifications.

  4. The builder’s expert states that as the Ritek structural walling system was used, AS 3700-2001 has no application.

  5. Further in relation to the specification references, the builder’s expert makes the point that the specification requires the identification of movement joints in the substrate for the correct positioning of the movement joint in the render finish. He points out that Mr Roberts has not identified that there is a requirement for a movement joints in the substrate in the locations that he has identified.

  6. The parties’ submissions make it clear that there is only one crack in the render which has been identified and which is said to be material. The crack is 900 mm long and is said by Mr Taylor to be a fine crack.

  7. On the evidence which there is in relation to this item and having regard to the parties final written submissions, it is clear that one crack in the external wall exists.

  8. Mr Taylor refers to a Ritek Manual which refers to structural movement joints installed at locations nominated by a structural engineer, Be that as it may, the contractual specification is the relevant specification for the purposes of section 18B(a) of the Act.

  9. The fact that concrete is cracked does not lead to an inevitable conclusion that here has been a breach of contract. I have previously found that AS 3700-2001 does not apply to construction using Ritek panels.

  10. However the specification is clear that movement joints in the finish which coincide with the movement joints in the substrate are required. Mr Taylor states that a movement joint is not specified in the substrate at the location in issue. In my view Mr Taylor’s interpretation of the specification is incorrect. The specification requires the builder to provide movement joints in the finish at the locations stated, namely to coincide with the movement joints in the substrate.

Scott Schedule defect item

Defect description

Amount agreed or determined

2, 46, 49, 61, 67, 68, 74 & 75

Cavity and sill flashing

$2,770.00

5

Cracked and drummy render above door frame

$270.00

6 and 10

Corrosion to corner angles

Nil

7

Cracking to the external wall front block northern elevation

$1,197.00

8

Failure to seal Ritek wall cladding

Nil

17

Cracking to the external wall southern elevation

$1,780.00

20

Courtyard tiling

Included in item 24

22, 31, 37 39, 40 & 41

Failure of waterproof membrane to planter boxes

$66,540.00

24

Water penetration through the slab in the car park

$145,080.00

25

Cracking to corner setting angle in staircase front block

Nil

26 and 50

Failure of water proof membrane on balcony Unit 10

Nil

27

Water penetration through window – front block

Agreed at $2,030.00

29

Water leak into unit 1

Nil

35

Delamination of skirting tiles in courtyard unit 4

Included in defect 24

52

Drummy floor tiles unit 11

$15,950.00

65

Drummy floor tiles unit 11, balcony

Nil

Sub-Total

$235,617.00

Overhead and margin

8%

$18,849.36

Sub –Total

$254,466.36

Supervision

$33,000.00

Total

$287,466.36

GST 10%

$28,746.63

Grand Total

$316,212.99

  1. It follows from the table which summarises these findings that an order will be made against the builder in the owner’s favour in the sum of $316,212.99.

Auscore Constructions Pty Ltd

  1. Auscore Constructions Pty Ltd is the third respondent in these proceedings. It took no part in the hearing.

  2. On the basis of the owner’s written submissions, I will find in the owner’s favour against Auscore Constructions Pty Ltd for the full amount claimed, namely the sum of $496,008.00 as stated in the Joint Report dated 5 September 2013, filed in the Tribunal on 9 September 2013.

Brodyn Pty Ltd v Auscore Constructions Pty Ltd

  1. The builder claimed the sum of $184,463.00 from Auscore in Tribunal proceedings HB 11/06382. Its claim was based on breaches of contract and also sought contribution from Auscore based on Part 4 of the Civil Liability Act.

  2. As stated Auscore took no part in the hearing. In final submissions the builder has not sought an order against Auscore. In order to dispose of HB 11/06382, I will make an order dismissing the builder’s case against Auscore on the basis that the builder has presented no evidence which goes to the breaches of contract on the part of Auscore as alleged. The claim against Auscore is also dismissed on the basis that the builder has failed in its defence that the owner’s claim was an ‘apportionable’ claim under section 34 of the Civil Liability Act.

Costs

  1. Either party is at liberty to make a costs application in these proceedings.

  2. Any costs application pursuant to section 53 of the Consumer, Trader and Tenancy Tribunal Act 2001 or regulation 20 of the Consumer, Trader and Tenancy Tribunal Regulation 2009 must be lodged in the Tribunal and served on the costs respondent within 21 days of the date of this order either attaching or referring to the documents relied upon in support of the application.

  3. The costs respondent will have 21 days after the date of receipt of the costs application referred to above, to lodge in the Tribunal and serve on the costs applicant the submissions, if any, in response to the costs application, such submissions either attaching or referring to the documents relied upon.

  4. The cost applicant will have 14 days after the date of receipt of the cost respondent’s submissions to lodge in the Tribunal and serve on the costs respondent the submissions, if any, in reply, such submissions either attaching or referring to the documents relied upon.

  5. The Tribunal will determine any costs application on the basis of the papers lodged in the Tribunal.

D Goldstein

Senior Member

Civil and Administrative Tribunal of New South Wales

31 March 2015

**********

I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales.


Registrar

Decision last updated: 11 June 2015

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