Phoenix Palm Development Pty Ltd v The Secretary of the Department of Customer Service

[2024] NSWLEC 1812

Land and Environment Court

New South Wales

• Amendment notes

Medium Neutral Citation:

Phoenix Palm Development Pty Ltd v The Secretary of the Department of Customer Service [2024] NSWLEC 1812

Hearing dates:

Conciliation Conference 3 December 2024

Date of orders:

17 December 2024

Decision date:

17 December 2024

Jurisdiction:

Class 2

Before:

Targett C

Decision:

The Court orders that:

(1) The appeal is upheld.

(2) The Building Work Rectification Order dated 8 September 2023 is substituted for the Order set out at Annexure A.

(3) Liberty to apply to the Court is granted on giving 3 days’ notice.

Catchwords:

BUILDING WORK RECTIFICATION ORDER – conciliation conference – agreement between the parties – orders

Legislation Cited:

Land and Environment Court Act 1979, ss 18, 34, 39

Residential Apartment Buildings (Compliance and Enforcement Powers) Act 2020, ss 33, 49

Cases Cited:

Eunomia Developments Pty Ltd v Secretary of the Department of Customer Service [2021] NSWLEC 1279

Phillips v Walsh (1990) 20 NSWLR 206

Category:

Principal judgment

Parties:

Phoenix Palm Development Pty Ltd (Applicant)
Department of Customer Service (Respondent)

Representation:

Counsel:
F Corsaro SC (Applicant)
A Smith (Respondent)

Solicitors:
Memcorp Lawyers Pty Ltd (Applicant)
Department of Customer Service (Respondent)

File Number(s):

2023/315772

Publication restriction:

Nil

Judgment

1. COMMISSIONER: These proceedings concern an appeal pursuant to s 49(1) of the Residential Apartment Buildings (Compliance and Enforcement Powers) Act 2020 (RAB Act) against the Building Works Rectification Order issued to the applicant by the respondent on 8 September 2023 under s 33 of the RAB Act (BWRO), requiring the applicants to carry out rectification works primarily relating to waterproofing, fire safety, structural systems and building enclosure elements at a residential apartment building at 351 Hume Highway Bankstown (constituted in Strata Plan 95613) (Premises).

2. The Court has power to dispose of these proceedings under its Class 2 jurisdiction pursuant to s 18(l) of the Land and Environment Court Act 1979 (LEC Act).

Background

3. On 5 July 2023, the respondent issued the applicant with a notice of intention to issue the BWRO (Notice). Representations in response to the Notice were received from the Owners Corporation on 10 July 2023 and JD Law Group on 26 July 2023.

4. Notwithstanding these representations, the BWRO was issued by the respondent on 8 September 2023 pursuant to s 33 of the RAB Act.

5. On 5 October 2023, the applicant commenced these proceedings, being within the time period specified in s 49(2) of the RAB Act.

6. Following the termination of a conciliation conference arranged by the Court under s 34(1) of the Land and Environment Court Act 1979 (LEC Act) on 16 July 2024, the matter was listed for hearing on 3 and 4 December 2024.

7. Prior to the commencement of the hearing, the parties reached agreement as to the terms of a decision in the proceedings that would be acceptable to the parties and requested that the matter be listed for a further s 34 conference. The Court granted this request, and the matter was listed for a s 34 conference on 3 December 2024, following which the hearing was vacated. I presided over the conciliation conference.

8. The decision agreed upon involves the substitution of the BWRO with a substituted building works rectification order that primarily provides additional time for works to be carried out and removes the requirement to rectify Defects 4 and 5 (Substituted Order).

9. The parties provided a signed s 34 agreement and supporting jurisdictional statement on 3 December 2024.

Jurisdictional considerations

10. To make orders in accordance with the parties’ agreement, I must be satisfied that the decision to make orders substituting the BWRO is a decision that the Court can make in the proper exercise of its functions (being the test applied by s 34(3) of the LEC Act). In making the orders to give effect to the agreement between the parties, I was not required to, and have not, made any merit assessment of the issues that were originally in dispute between the parties.

11. Section 39 of the LEC Act relevantly provides the Court with all the functions and discretions of the respondent when determining an appeal of the respondent’s decision. In addition, s 49(3) of the RAB Act gives the Court broad powers on an appeal against a building work rectification order, as follows:

(3) On hearing an appeal, the Court may—

(a)  revoke the building work rectification order, or

(b)  modify the building work rectification order, or

(c)  substitute for the building work rectification order any other order that the Secretary could have given, or

(d)  find that the building work rectification order is sufficiently complied with, or

(e)  make any order with respect to compliance with the building work rectification order as the Court thinks fit, or

(f)  make any other order with respect to the building work rectification order as the Court thinks fit.

12. It is clear that the Court has power to substitute a building work rectification order (s 49(3)(c) of the RAB Act).

13. I am satisfied that it is appropriate to substitute the BWRO with the Substituted Order in the manner proposed by the parties on the basis that:

1. The applicant is the “developer” for the purposes of s 33(1) of the RAB Act and was able to be issued with the original BWRO and can similarly be issued with the Substituted BWRO.

2. The original BWRO and Substituted Order relate to “building work” for the purposes of s 33(1) of the RAB Act, and the parties agree that the “building work” identified in the original BWRO (with the exception of Defects 4 and 5 which have subsequently been rectified) and the Substituted Order constitute “serious defects” in a residential apartment building. The Substituted Order primarily requires the applicant to carry out the works the subject of the original BWRO relating to identified actual or potential serious defects (with the exception of Defects 4 and 5) but provides additional time for these works to be carried out. The Substituted Order is therefore in accordance with s 33 of the RAB Act.

3. The parties agree that Defects 4 and 5 relating to water ingress issues at basement ceilings at various locations should be deleted from the Substituted Order as those defects have now been rectified. It is therefore appropriate that Defects 4 and 5 are deleted from the Substituted Order.

4. The parties agree that the applicant’s compliance with the Substituted Order will “eliminate, minimise or remediate the applicable serious defects” for the purposes of s 33(2) of the RAB Act.

5. The grant of liberty to apply is appropriate in circumstances where the applicant is not in control or occupation of the Premises, and compliance with the Substituted Order could be hindered by the applicant obtaining access to carry out the works the subject of the Substituted Order. To this end, I note the comments of Gray C in Eunomia Developments Pty Ltd v Secretary of the Department of Customer Service [2021] NSWLEC 1279 at [7] with reference to the decision of McLelland J in Phillips v Walsh (1990) 20 NSWLR 206 at 210.

Conclusion

14. As the parties’ decision is a decision that the Court could have made in the proper exercise of its functions, I am required under s 34(3) of the LEC Act to dispose of the proceedings in accordance with the parties’ decision.

Orders

15. The Court orders that:

1. The appeal is upheld.

2. The Building Work Rectification Order dated 8 September 2023 is substituted for the Order set out at Annexure A.

3. Liberty to apply to the Court is granted on giving 3 days’ notice.

……………………….

N Targett

Commissioner of the Court

Annexure A

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Amendments

18 December 2024 - Amendment made to Representation.

Decision last updated: 18 December 2024