Owners - Strata Plan No 68372 v Allianz Australia Insurance Limited

The case before the court involved a complex dispute regarding the liability of various parties for defects in a residential building development. The plaintiff, the Owners Corporation, sought to hold GEO, the third defendant, accountable as a developer under the Home Building Act 1989 (NSW) and claim against Allianz and Vero, the first and second defendants, for breaches of statutory warranties. The Owners Corporation also sought to adopt the referee's report, subject to certain objections regarding the rectification of laundry waste defects and the allocation of liability for balcony waterproofing defects.

The central legal issues revolved around the interpretation and application of the Home Building Act 1989 (NSW), specifically whether GEO qualified as a "developer" under section 3A and was thus liable for breaches of implied warranties under section 18C. Additionally, the court had to determine if the claims made under section 18C were apportionable and whether the referee had erred in selecting a cheaper option for rectifying the laundry waste defects. The court also needed to assess if the Owners Corporation failed to mitigate its loss by not pursuing its claims diligently and whether GEO was entitled to indemnity from Allianz.

The court found that GEO was indeed a developer under the Home Building Act 1989 (NSW) and held liable for breaches of the implied warranties. However, the court disagreed with the referee's selection of a cheaper option for rectifying the laundry waste defects, stating that insisting on compliance with contractual specifications was not unreasonable. The court also ruled that the Owners Corporation did not fail to mitigate its loss and that GEO was not entitled to indemnity from Allianz. As for the balcony waterproofing defects, the court found that Allianz and Vero were liable for defects in their respective stages of the development.

The court's final orders were that GEO was liable for all defects in Stages 1 to 6, Allianz was liable for defects in Stages 1 to 4, and Vero was liable for defects in Stages 5 and 6. The court did not adopt the referee's report in full and made adjustments to the liability allocation and rectification costs as per its reasoning.