The Owners of Strata Plan 93357 v Bloc (ACT) Pty Ltd

[2024] NSWSC 239

Supreme Court

New South Wales

Medium Neutral Citation:

The Owners of Strata Plan 93357 v Bloc (ACT) Pty Ltd [2024] NSWSC 239

Hearing dates:

08 March 2024

Decision date:

08 March 2024

Jurisdiction:

Equity - Technology and Construction List

Before:

Stevenson J

Decision:

Parties to confer and agree on the orders to be made to give effect to the reasons; no order as to costs with the intent that each party bear their own costs

Catchwords:

LIMITATION OF ACTIONS – whether proceedings brought out of time – whether interim occupation certificate authorised occupation and use of the “whole of the building” for the purposes of the Home Building Act 1989 (NSW)

CIVIL PROCEDURE – pleadings – application to strike out – whether claims under the Home Building Act 1989 (NSW) and Design and Building Practitioners Act 2020 (NSW) adequately articulated – whether necessary to prepare a schedule setting out the risks and steps to manage those risks

Legislation Cited:

Design and Building Practitioners Act 2020 (NSW)

Home Building Act 1989 (NSW)

Cases Cited:

Dyldam Developments Pty Ltd v The Owners - Strata Plan 85305 [2020] NSWCA 327

The Owners - Strata Plan No 87060 v Loulach Developments Pty Ltd (No 2) [2021] NSWSC 1068

Wardley Australia Limited v Western Australia (1992) 175 CLR 514; [1992] HCA 55

Category:

Procedural rulings

Parties:

The Owners of Strata Plan 93357 (Plaintiff/Respondent)
Bloc (ACT) Pty Ltd (Defendant/Applicant)

Representation:

Counsel:
A D Justice (Plaintiff/Respondent)
D Weinberger (Defendant/Applicant)

Solicitors:
MRM Lawyers (Plaintiff/Respondent)
Mills Oakley (Defendant/Applicant)

File Number(s):

2023/8270

EX TEMPORE JUDGMENT (REVISED)

1. The plaintiff is the Owners Corporation of a residential development in Newcastle comprising 72 apartments. The defendant was the builder. The Owners Corporation alleges there are defects in the building. It brings claims against the builder under the Home Building Act 1989 (NSW) and the Design and Building Practitioners Act 2020 (NSW).

2. The defendant seeks to have the Home Building Act claims struck out or dismissed on the basis that they are out of time. It also seeks to have the Owners Corporation’s claims under the Design and Building Practitioners Act struck out, but on the basis that the Owners Corporation be given an opportunity to replead.

Strike-out of the Home Building Act Claim

3. The proceedings were commenced on 9 January 2023.

4. It is common ground, so far as the claim arises under the Home Building Act, that:

1. the Owners Corporation was required to bring proceedings concerning any “major defect” within six years from the date of the “completion of the work”: s 18E(1)(b)-(c) of the Home Building Act; and

2. “completion” of residential building work comprising the construction of a new building in a strata scheme occurs on the issue of an occupation certificate “that authorises the occupation and use of the whole of the building”: s 3C(2)(a) of the Home Building Act.

5. An interim occupation certificate in relation to this development was issued on 8 December 2016, a little over six years before the proceedings were commenced.

6. If the interim occupation certificate authorised occupation and use of the “whole of the building”, the proceedings are out of time.

7. On the face of the interim occupation certificate, taken alone, it appears that it did authorise occupation and use of the “whole of the building”. The interim occupation certificate described the “details of building” as, relevantly, “72 Residential Apartments”. It also provides under the heading “Certification” that “[the] building is suitable for occupation or use in accordance with its classification under the Building Code of Australia”.

8. However, the interim occupation certificate also stated, again under the heading “Certification”, that “[a] Fire Safety Certificate has been issued for the building”.

9. The Fire Safety Certificate was annexed to the interim occupation certificate. It described the building as a “9 storey residential apartment”. It made no reference to the number of apartments. It stated that “this certificate is for ... the whole of the building”.

10. However, there is more.

11. The Fire Safety Certificate attached “the current fire safety schedule for the building”.

12. There was thus annexed to the Fire Safety Certificate, and thus to the interim occupation certificate, a document called the Fire Safety Schedule. That document was dated 18 December 2015, around a year before the date of the Fire Safety Certificate.

13. The Fire Safety Schedule specified some 23 “required fire safety measures”. It stated that none of those required fire safety measures were “critical” but, for each of them, set out an “interval for supplementary fire safety statements” and a statement of the “minimum standard of performance”. It was thus in this document, the Fire Safety Schedule, that the particular fire safety measures that were required were specified. On the face of it, the Fire Safety Schedule appears to be part – indeed, a vital part – of the Fire Safety Certificate.

14. The Fire Safety Schedule described the “details of Building” as “71 Residential Apartments”. The interim occupation certificate referred to “72 Residential Apartments”. Evidently, the explanation for this is that, on 29 April 2016, a certifying authority issued a “Modified Construction Certificate” permitting an increase in the number of apartments from 71 to 72.

15. There was debate before me as to the status of the Fire Safety Schedule itself. The relevant development consent was given on 18 June 2015. One of the conditions of that development consent was:

“Fire Safety Certification

E11. Prior to the issue of the relevant Occupation Certificate, a Fire Safety Certificate shall be obtained for all the relevant Essential Fire or Other Safety Measures forming part of this consent. A copy of the Fire Safety Certificate must be submitted to the relevant authority and Council and be prominently displayed in the building.”

16. There was no reference, in terms, in that requirement to a “fire safety schedule”. Reference is instead made to a “fire safety certificate”. But the condition is directed to the requisite “essential fire or other safety measures” forming part of the development consent, these being the matters which are set out in the Fire Safety Schedule rather than in the Fire Safety Certificate itself.

17. In those circumstances, the question is whether the interim occupation certificate should be seen as authorising occupation of the "whole of the building”, that is, all of the 72 apartments which have now been erected, or only the 71 apartments referred to in the Fire Safety Schedule.

18. I do not see the answer to that question as being at all clear.

19. There is a tension between the statements in the interim occupation certificate itself, that the building was “suitable for occupation” and the reference to the “72 Residential Apartments”, and the statements to which I have referred in the Fire Safety Schedule, including the reference to “71 Residential Apartments”.

20. Much may depend on the context in which these documents were created, which may explain how it was that the Fire Safety Schedule, created in 2015 and referring to 71 apartments, came to be attached to the Fire Safety Certificate, issued a year later and 18 months after the issue of the modified construction certificate.

21. It appears to me that in these circumstances it is at least arguable, despite the statements in the interim occupation certificate itself that the building was “suitable for occupation” and the reference in the Fire Safety Certificate to its being in respect of “the whole of the building”, that the interim occupation certificate did not authorise occupation of all of the 72 apartments and thus the whole of the building.

22. I am mindful of the oft-repeated statement in Wardley Australia Limited vWestern Australia:^[1]

“We should, however, state in the plainest of terms that we regard it as undesirable that limitation questions of the kind under consideration should be decided in interlocutory proceedings in advance of the hearing of the action, except in the clearest of cases.”

1. (1992) 175 CLR 514 at 533 (Mason CJ and Dawson, Gaudron and McHugh JJ); [1992] HCA 55.

23. It is true that those observations were made in the context of consideration by the High Court as to when loss occurred but, as this case shows, the words have a wider context.

24. I do not see the question of whether the Owners Corporation's Home Building Act claim is statute barred to be in the category of the “clearest of cases” such as would warrant it being dealt with summarily.

25. This conclusion is sufficient to dispose of the defendant's application to strike out the Owners Corporation's Home Building Act claim as being out of time. It is not, in those circumstances, necessary for me to consider the Owners Corporation's alternative argument to the effect that the interim occupation certificate was not valid, the arguments in relation to that focussing on the observations of White JA in Dyldam Developments Pty Ltd v The Owners - Strata Plan85305. ^[2]

    2. [2020] NSWCA 327.

Major Defect

26. The Amended Technology and Construction List Statement recites some 32 alleged defects in the building, and then simply alleges, at par C14:

“Each of the Defects is a major defect as defined pursuant to s 18(4) of the [Home Building Act].”

27. This is an unhelpful way to plead this aspect of the case. The expression “major defect” is defined in s 18E(4) of the Home Building Act to include, amongst other things, a defect in a “major element of a building that is attributable to defective design”. The expression “major element” is itself defined to have a number of meanings, including “an internal or external load bearing component of a building that is essential to the stability of the building”.

28. In those circumstances, I see force in the submission of Mr Weinberger for the defendant that:

“It is necessary to plead why each of the defects is a ‘major defect’ in order for the Defendant to understand the case it is required to meet. This involves identifying, in relation to each defect, inter alia:

(a) a ‘major element’ of the Building;

(b) if the ‘major element’ falls within definition (a) of ‘major element’, whether it is an internal or external load-bearing component of the Building (and why) and why it is essential to the stability of the Building, or any part of it; and

(c) that the defect has caused or is likely to cause, for example, the inability to inhabit or use the building and why.” (Emphasis in original.)

29. A bald allegation of the kind that is found in par C14 of the List Statement inevitably invites a request for particularisation as to how the alleged defects could be characterised as being “major”. Such questions arise particularly in relation to defects C12.8 (“properly install the tiles on the balconies of the residential units”) and defect C12.12 (“to paint the inside face of the structural steel bracket connecting the precast balustrade to the blade walls”). On the face of it, it is difficult to see, without some particularisation, how these defects could be “major”.

30. The better course is for the pleader to identify in relation to each defect how it is said that the defects come within the defined elements as set out in the Home Building Act.

31. In this case, as I shall mention in a moment, I propose to direct the Owners Corporation to prepare a “Loulach Schedule”. The appropriate course is for particularisation of the alleged “major defects” to be incorporated into that schedule.

Design and Building Practitioners Act

32. The defendant also complained about the manner in which the Owners Corporation has pleaded this case under the Design and Building Practitioners Act.

33. It is not necessary to turn in detail to the manner in which those matters are currently pleaded because, as I understand it, it is common ground that the Owners Corporation should prepare a schedule of the kind to which I referred in The Owners - Strata Plan No 87060 v Loulach Developments Pty Ltd (No 2) [3] setting out the risks the defendant was allegedly required to manage, and the steps the defendant should have taken to manage those risks.

    3. [2021] NSWSC 1068 at [44].

Conclusion

34. The parties should bring in short minutes to give effect to these reasons.

35. Each party has had a measure of success today and should bear their own costs.

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Endnotes

Decision last updated: 12 March 2024