Proprietors Units Plan v Jiniess Pty Ltd - [2000] NTSC 89

Proprietors Units Plan & Ors v Jiniess Pty Ltd & Ors [2000] NTSC 89
PARTIES:PROPRIETORS UNITS PLAN NO 95/98
AND
HETHERINGTON & SIMMONS DEVELOPMENTS PTY LTD
AND
DROSOS & DESPINA KLIDARAS
AND
ALLAN GRAHAM ANDERSON
AND
THOMAS CHRISTOPHER SAWYER
AND
BOULEVARD INVESTMENTS (NT) PTY LTD
AND
RELKDAR PTY LTD
AND
MARIA JOSEPHINE STEPHENS & ALAN ROBERT STEPHENS
AND
MARISTEW PTY LTD
AND
MARILYNNE PAMELA PASPALEY
v
JINIESS PTY LTD
AND
SINCLAIR KNIGHT MERZ PTY LTD
AND
SLEEMAN DUNKLEY TREACY PTY LTD
AND
JOHN GLYNATSIS

TITLE OF COURT:  SUPREME COURT OF THE NORTHERN TERRITORY
JURISDICTION:  SUPREME COURT OF THE NORTHERN TERRITORY EXERCISING TERRITORY JURISDICTION
FILE NO:245 of 1998 (9827956)
DELIVERED:  31 October 2000
HEARING DATES:  10-14 & 17-21 January 2000, 13-17 March 2000, 26-28 April 2000, 1 May 2000, 12 July 2000, 28-30 August 2000
JUDGMENT OF:  RILEY J
CATCHWORDS:

Negligence – duty of care – proximity – economic loss – defective design and construction of residential and commercial units – liability of builder and engineer to subsequent purchaser – damages – diminution in value of units.
Building Act 1993 (NT), s 40, s 65, s 70, s 72, s 153(2), s 155, s 156
Voli v Inglewood Shire Council & Anor (1962 – 1963) 110 CLR 74; Bryan v Maloney (1994 – 1995) 182 CLR 609, followed.
Fangrove Pty Ltd v Tod Group Holdings Pty Ltd (1999) 2 QR 236; Zumpano Montagnese (1997) 2 VR 525; Woolahra Municipal Council v Sved (1996) 40 NSWLR 101; Perre v Apand Pty Ltd (1999) 198 CLR 180; National Mutual Life Association of Australasia Limited v Coffey & Partners Pty Ltd (1992) 2 Qd R 401, considered.
Trade Practices – misleading and deceptive conduct.
Trade Practices Act 1974 (Cth); Consumer Affairs and Fair Trading Act 1990 (NT)
REPRESENTATION:
Counsel:
Plaintiffs:R Ross-Smith
1^st & 4^th Defendants:                   J Glynatsis (In Person)
2^nd & 3^rd Defendants:                  R Perry
Solicitors:
Plaintiffs:Purcell Lancione Cureton
1^st & 4^th Defendants:                   J Glynatsis (In Person)
2^nd & 3^rd Defendants:                  Hunt & Hunt
Judgment category classification:        B
Judgment ID Number:  ril0017
Number of pages:  76

ril0017
IN THE SUPREME COURT
OF THE NORTHERN TERRITORY
OF AUSTRALIA
AT DARWIN
Proprietors Units Plan & Ors v Jiniess Pty Ltd & Ors [2000] NTSC 89
No. 245 of 1998 (9827956)

BETWEEN:
PROPRIETORS UNITS PLAN NO 95/98
First Plaintiff

AND
HETHERINGTON & SIMMONS DEVELOPMENTS PTY LTD
Second Plaintiff

AND
DROSOS & DESPINA KLIDARAS
Third Plaintiff

AND
ALLAN GRAHAM ANDERSON
Fourth Plaintiff

AND
THOMAS CHRISTOPHER SAWYER
Fifth Plaintiff

AND
BOULEVARD INVESTMENTS (NT) PTY LTD
Sixth Plaintiff

AND
RELKDAR PTY LTD
Seventh Plaintiff

AND
MARIA JOSEPHINE STEPHENS & ALAN ROBERT STEPHENS
Eighth Plaintiff

AND
MARISTEW PTY LTD
Ninth Plaintiff

AND
MARILYNNE PAMELA PASPALEY
Tenth Plaintiff

AND:
JINIESS PTY LTD
First Defendant

AND
SINCLAIR KNIGHT MERZ PTY LTD
Second Defendant

AND
SLEEMAN DUNKLEY TREACY PTY LTD
Third Defendant

AND
JOHN GLYNATSIS
Fourth Defendant

CORAM: RILEY J
REASONS FOR JUDGMENT
(Delivered 31 October 2000)

These proceedings arise…

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: [2000] NTSC 89
Decision Date: 31 October 2000

CaseChat Overview and Summary

The case of Proprietors Units Plan v Jiniess Pty Ltd involved a dispute concerning the defective design and construction of residential and commercial units. The plaintiffs, who were subsequent purchasers of units in the building, sought damages for economic loss due to the diminution in value of the units. The defendants included the builder, the engineer, and an individual involved in the construction process. The primary focus of the litigation was the establishment of liability for the defects in the building's design and construction. The court had to determine whether the builder and engineer owed a duty of care to the subsequent purchasers and whether that duty was breached, leading to actionable negligence and misleading and deceptive conduct under the Trade Practices Act and the Consumer and Fair Trading Act.

The central legal issue was whether the builder and engineer could be held liable for the economic losses suffered by the subsequent purchasers due to the defective design and construction of the units. The court examined whether a duty of care existed between the defendants and the plaintiffs, considering factors such as proximity and foreseeability. Additionally, the court assessed whether the defendants' actions constituted misleading and deceptive conduct under the relevant statutes. The plaintiffs argued that the defects were not merely sub-standard but were dangerous, which could potentially expand the scope of liability.

The court found that the builder and engineer owed a duty of care to the subsequent purchasers. The court held that the defects in the building, which were not merely sub-standard but potentially dangerous, constituted a breach of this duty. The reliance placed by the subsequent purchasers on the expertise of the engineer and the certification scheme was recognised as a significant factor in establishing the duty of care. The court concluded that the engineer was liable for negligence and misleading and deceptive conduct in relation to the original design and certification of the building, while the builder was liable for negligence and misleading and deceptive conduct related to the original design, certification, and construction. The court dismissed claims against the defendants for the remedial works conducted in 1997.

The court ordered that the engineer was liable to the sixth, seventh, and ninth plaintiffs for negligence and misleading and deceptive conduct in the original design and certification of the building. The builder was held liable to the first, sixth, seventh, and ninth plaintiffs for negligence and misleading and deceptive conduct in the original design, certification, and construction of the building. Mr. Glynatsis was found liable for the misleading and deceptive conduct of the builder. The matter proceeded to the assessment of damages for the successful claims.

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

In a further submission the plaintiffs said that the defects in the carpark occasioned by the engineers “deficient and negligent design” were dangerous and not merely shoddy or sub-standard design or workmanship. It was submitted that by this additional reason the plaintiffs can recover their losses. There can be little doubt that the defects in the building resulting from the design and construction failures made the building “potentially dangerous” and did not merely reflect shoddy or sub-standard workmanship. The building notice of 4 February 1997 is eloquent evidence of that. However in my view the fact that a defect may or may not be or become dangerous does not affect the existence or non-existence of a duty of care. I adopt, with respect, the observations on this issue that fell from de Jersey CJ in Fangrove Pty Ltd v Tod Group Holdings Pty Ltd (supra).The Evidence of Reliance(a) The Sixth Plaintiff Unit 5 is owned by the sixth plaintiff and evidence was given in relation to the purchase of that unit by Joanne Pretlove a director of the sixth plaintiff. Ms Pretlove advised that the unit was purchased on 30 May 1995 as an investment property. The conveyance was carried out by Guy Riley of Clayton Utz. He advised that there was a permit to occupy in existence in relation to the building prior to settlement and Ms Pretlove indicated that the directors relied upon that. She was aware of the scheme that prevailed by virtue of the Building Act because she was employed with the relevant department being the Department of Lands, Planning and Environment. She gave evidence that she expected the building to have been “constructed satisfactorily” based upon the issue of the permit. She said that she relied upon the expertise of the engineer who carried out the structural design. The submission of the engineers in relation to this plaintiff was that there was no reliance upon any aspect of structural integrity or compliance with relevant building standards. Rather the purchase was a purely commercial venture with the likely financial return due to the location of the building being paramount. Whilst that may be so the evidence of Ms Pretlove was clear that reliance was placed upon the engineers and upon the certification scheme for the sixth plaintiff to be satisfied that it should proceed with the purchase. I accept that evidence.(b) The Seventh Plaintiff The seventh plaintiff purchased residential Unit 6 from Mr and Mrs Barnes. Evidence was given on its behalf by Michael John Burns a director of the company. Mr Burns gave evidence that he resided in the unit for approximately six months before he purchased it. He moved into the premises in about August 1996 and the agreement to purchase was entered into on 13 February 1997. The unit was purchased as an investment and continues to be occupied by Mr Burns. The conveyancing work carried out in relation to the purchase was conducted by Karen Mellor, a conveyancing clerk with the legal firm Withnall Maley. Mr Burns indicated that he did not remember seeing a permit to occupy but relied upon the conveyancing clerk to ensure the appropriate permit was in place. He relied upon his solicitors to ensure that the building was constructed in compliance with relevant building codes and regulations. Ms Mellor gave evidence that the obtaining of a permit to occupy is one of the matters that she attends to in complying with a checklist which she “stringently” follows. I accept that she obtained or sighted a permit to occupy on this occasion.

Decision

Reasons for decision

In the event that the necessary loss and damage is demonstrated in the next stage of these proceedings, then the fourth defendant is personally liable therefore pursuant to the provisions of the Trade Practices Act and the CAFTA.Conclusions For the reasons I have expressed above I make the following findings in relation to the claims of the plaintiffs:(a)Against the Engineers:(1)The remaining claims of the tenth plaintiff are dismissed.(2)The engineers are liable to the sixth, seventh and ninth plaintiffs in tort for negligence in both the original structural design and original certification of the building but not for the remedial works of 1997.(3)The engineers are liable to the sixth, seventh and ninth plaintiffs for misleading and deceptive conduct contrary to the Trade Practices Act and the Consumer and Fair Trading Act constituted by the original certification of the structural adequacy of the building but not in relation to the certification of the remedial works of 1997.(b) Against the Builder:(1)The claims of the tenth plaintiff are dismissed.(2)The builder is liable in tort to the first, sixth, seventh and ninth plaintiffs for negligence in the original design, certification and construction of the building but not for the remedial works of 1997.(3)The builder is liable to the first plaintiff for misleading and deceptive conduct constituted by certifying compliance of the original construction with the Building Regulations and Code, but not to any plaintiff for certifying compliance of the remedial works of 1997.(c) Against Mr Glynatsis:(1)Mr Glynatsis is liable to the first plaintiff for the misleading and deceptive conduct of the builder. The matters will now proceed for assessment of damages in relation to the successful claims. I will hear the parties as to the form of orders and as to costs.

Ratio Decidendi

Legal Principle Established

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