The Owners - Strata Plan 91959 v JD Projects (NSW) Pty Ltd

[2025] NSWCATCD 41

Civil and Administrative Tribunal

New South Wales

Medium Neutral Citation:

The Owners – Strata Plan 91959 v JD Projects (NSW) Pty Ltd [2025] NSWCATCD 41

Hearing dates:

16 December 2025

Date of orders:

11 June 2025

Decision date:

11 June 2025

Jurisdiction:

Consumer and Commercial Division

Before:

R Collins, Senior Member

Decision:

(1)      Whole Sun Property Developments Pty Ltd is liable to cause the following works to be carried out by 5 January 2026:

(a)      the scope of the works set out in the Expert Building Defect Report by Endeavour Engineering dated 27 June 2024 in the applicant’s tender bundle at tab 7 for the following items:

(i)    Cantilevered Glass Balustrades – section 6.2;

(ii)   Insufficient balcony drainage – section 6.3 and item UG06.2 of the Scott Schedule;

(iii)   Corroding door jams – section 6.4;

(iv)   Waterproofing of podium slab – section 6.5 and item B.5 of the Scott Schedule; and

(v)   Items UG08.1, UG08.2, R.1 and B.2 of the Scott Schedule.

(b)      the scope of works set out in the Fire Safety Compliance Assessment Report by Fahrenheit Global dated 27 June 2024 in the applicant’s tender bundle at tab 8 for Items no 1, 3, 4, 8, 9, 11, 12, 13, 18, and 19 of the Scott Schedule;

(c)      where the items in (a) and (b) require a regulated design, causing a suitably qualified design practitioner under the Design and Building Practitioners Act 2020 to approve the design;

(d)      Payment of relevant fees for any local council or other statutory authority approval that is required for the scope of works in (a) and (b),

   together, “the Rectification Works”.

(2) The application for work orders under section 48O of the HB Act is otherwise dismissed.

(3)      The proceedings against the first and second respondent are dismissed because they are withdrawn.

(4) The developer is to pay the owners corporation’s costs as agreed or assessed on the basis set out in the legal costs legislation (as set out in s 3A of the Legal Profession Uniform Law Application Act 2014 (NSW)) within 28 days of the date of these orders.

Catchwords:

BUILDING AND CONSTRUCTION — Home Building Act 1989 (NSW) — Statutory warranty — Due care and skill

BUILDING AND CONSTRUCTION — Home Building Act 1989 (NSW) — Major defect – Major element

Legislation Cited:

Civil and Administrative Tribunal Act 2013

Home Building Act 1989 (NSW)

Legal Profession Uniform Law Application Act 2014 (NSW)

Cases Cited:

Ghazal v Masterton Homes Pty Ltd [2018] NSWCATAP 227

Rodny v Stricke [2020] NSWCATAP 20

Ericon Buildings Pty Limited v The Owners Strata Plan No 96597 [2020] NSWCATAP 265

Deacon v National Strategic Constructions Pty Ltd; National Strategic Constructions Pty Ltd v Deacon [2017] NSWCATAP 185

Haines v Bendall [1991] HCA 15

Bellgrove v Eldridge [1954] HCA 36

Ashby v Slipper [2014] FCAFC 15

The Owners – Strata Plan No 66375 v King [2018] NSWCA 170

The Owners – Strata Plan No 93227 v InStyle Developments Pty Ltd [2023] NSWCATCD 154

Ashton v Stevenson; Stevenson v Ashton [2020] NSWCATAP 233

Stevenson v Ashton [2019] NSWSC 1689

Megerditchian v Kumond Homes Pty Ltd [2014] NSWCATAP 120

Texts Cited:

Nil.

Category:

Principal judgment

Parties:

The Owners – Strata Plan 91959 (applicant)
J D Projects (NSW) Pty Ltd (first respondent)
J D Projects Group Pty Ltd (second respondent)
Whole Sun Property Developments Pty Ltd (third respondent)

Representation:

T Bacon, Strata Title Lawyers – applicant’s solicitor

K Wu – respondent’s director

File Number(s):

2024/55706

Publication restriction:

Nil.

REASONS FOR DECISION

1. This is a claim by an owners corporation against the strata scheme’s developer for defective works at a 37 lot strata scheme property in Epping.

2. The proceedings were filed on 7 February 2024 against three respondents, being JD Projects (NSW) Pty Ltd, JD Projects Group Pty Ltd and Whole Sun Property Development Pty Ltd. The matter was listed for directions on 3 March 2024 where directions were made for the exchange of evidence.

3. On 11 October 2024 the matter was listed for further direction and was set down for a one day contested hearing.

4. At the hearing on 16 December 2024, the applicants confirmed that it had withdrawn the proceedings against the first two respondents, one of which was under liquidation. Its sole claim remains against the third respondent, Whole Sun Developments Pty Ltd.

5. In this decision, “owners corporation” will refer to the applicant and “developer” will refer to the third respondent.

6. The applicant was represented by its solicitor. The third respondent was represented at the hearing by its director, Mr Wu.

7. Mr Wu sought an adjournment on the basis that the developer had not yet received legal advice in the matter, and it has not had time to obtain legal advice. The developer had relied on the case falling on the first and second respondents. The developer had not filed any documents or points of defence in the proceedings.

8. The adjournment was opposed by the owners corporation on the basis that the application was filed and served on the developer in February 2024, the developer has not filed any evidence, has had the opportunity over 10 months to obtain advice and be active in the proceedings but has elected not to do so until today. The owners corporation also confirmed it had contacted the developer’s representative to explain the process.

9. The Tribunal was satisfied on the evidence before it that the developer had at least seven weeks of notification and repeated correspondence in relation to the matter. Its failure to take any steps to participate in the proceedings, including any appearance prior to the contested hearing and failing to file any documents in opposition, was solely explained by Mr Wu that he did not think he needed to, since in his view the other respondents were responsible for the defects.

10. In circumstances where every step of the way, the developer has chosen not to participate in the proceedings weighs heavily against the granting of an adjournment (Ghazal v Masterton Homes Pty Ltd [2018] NSWCATAP 227).

11. The Tribunal is satisfied that the prejudice suffered by the owners corporation if the matter did not proceed today included the risk the developer would become deregistered or under administration, like the second respondent, and the risk of the defective works compounding the safety to the building. These cannot be overcome by costs.

12. The prejudice to the developer if the matter proceeded were that the developer may not have the opportunity to best present its case.

13. The Tribunal was further satisfied that the third respondent has had a reasonable opportunity to present its case as required by s 38 of the Civil and Administrative Tribunal Act 2013 (NSW) (the NCAT Act).

14. The Tribunal determined, when considering the factors in Rodny v Stricke [2020] NSWCATAP 20, that the adjournment application be refused, in consideration of all the evidence before the Tribunal, because the potential prejudice to the applicant could not be overcome by final orders. Further oral reasons were given.

The owners corporation’s case

15. The owners corporation seeks an order under s 48O of the Home Building Act 1989 (NSW) (“the HB Act”) that the developer perform work to rectify defective works on the strata scheme building including related orders such as works supervision, and an order that the developer pay the owners corporation’s costs. The defective works were grouped as:

1. structurally inadequate cantilevered class balustrades;

2. no drainage overflow installation to balconies;

3. Corrosion to bathroom door jams;

4. Waterproof failing of podium slab at basement 1 to basement 2 ramp and fire stairs;

5. Other various defects; and

6. Fire safety defects.

16. The owners corporation relevantly relied documents filed on 28 June 2025, presented in a tender bundle, in addition to an affidavit of service of Amanda Stojanovska dated 13 December 2024. Relevant documents relied on included the design and construct contract, Affidavit of Li Xu, sworn 27 June 2024, expert report of John Riad of Endeavour Engineering dated 27 June 2024 and Fire Safety Compliance report of Fahrenheit Global dated 27 June 2024.

17. At the hearing, Mr Riad of Endeavour Engineering and Mr Levy of Fahrenheit Global both gave oral evidence and was asked questions by both parties.

The developer’s case

18. The developer’s case, in summary, is that it was not the developer’s responsibility, the items are not all defective and in the alternative, the methods of defect rectification were excessive and a less costly method would be effective.

19. The developer did not file any documents in the Tribunal but made oral submissions explaining its case at the contested hearing.

Jurisdiction

20. This is a dispute about the defective construction of an apartment block, by the immediate successor in title to the common property, being the owners corporation.

21. Section 48K of the Home Building Act 1989 (NSW) (“the HB Act”) gives the Tribunal jurisdiction to hear and determine any building claim in which the amount claimed does not exceed $500,000 and otherwise complies with that Part of the HB Act.

22. In this case, the Tribunal is satisfied that the works carried out, being the construction of a class 2 and class 7a building (apartment block) are residential building works within the definition set out in clause 1 of schedule 2 to the HB Act.

23. The Tribunal is further satisfied that the application is a building claim within the meaning of s48K of the HB Act because it is a claim for the rectification of building works including alleged defective building services and materials, arising from the warranties within the HB Act which apply to the construction work performed on behalf of the developer.

24. Section 3A of the HB Act also regulates the application of the HB Act to developers. The Tribunal finds that the third respondent is a developer within the meaning of s 3A of the HB Act. I find that the owners corporation is the immediate successor in title to the common property of the building pursuant to s 18C of the HB Act. Accordingly, pursuant to 18D of the HB Act, the developer may be liable to the owners corporation, for breach of the statutory warranties set out in s 18B of the HB Act.

25. It is common ground that the occupation certificate was issued on 8 February 2018. The application was submitted within the 6 year limitation period for major defects as set out in s 18E of the HB Act for major defects, and the orders sought are for the performance of work, which is therefore not subject to the $500,000 jurisdictional limit for monetary claims (see Ericon Buildings Pty Limited v The Owners Strata Plan No 96597 [2020] NSWCATAP 265).

26. The Tribunal is therefore satisfied that it has jurisdiction under s 48K of the HB Act to hear and determine the application.

Legal principles

27. Section 18B of the HB Act relevantly states:

“8B Warranties as to residential building work

1. The following warranties by the holder of a contractor licence, or a person required to hold a contractor licence before entering into a contract, are implied in every contract to do residential building work—

1. a warranty that the work will be done with due care and skill and in accordance with the plans and specifications set out in the contract,

2. 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,

3. a warranty that the work will be done in accordance with, and will comply with, this or any other law,

4. 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,

5. 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,

6. 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.

2. The statutory warranties implied by this section are not limited to a contract to do residential building work for an owner of land and are also implied in a contract under which a person (the principal contractor) who has contracted to do residential building work contracts with another person (a subcontractor to the principal contractor) for the subcontractor to do the work (or any part of the work) for the principal contractor.”

28. Section 18E of the HB Act limits claims on the implied warranties on major defects to claims made within 6 years of completion of the works, and other defects to claims made within 2 years of completion of the works. Major defects are then defined as:

“major defect means—

1. a defect in a major element of a building that is attributable to defective design, defective or faulty workmanship, defective materials, or a failure to comply with the structural performance requirements of the National Construction Code (or any combination of these), and that causes, or is likely to cause—

1. the inability to inhabit or use the building (or part of the building) for its intended purpose, or

2. the destruction of the building or any part of the building, or

3. a threat of collapse of the building or any part of the building, or

2. a defect of a kind that is prescribed by the regulations as a major defect, or

3. the use of a building product (within the meaning of the Building Products (Safety) Act 2017) in contravention of that Act.

major element of a building means—

4. an internal or external load-bearing component of a building that is essential to the stability of the building, or any part of it (including but not limited to foundations and footings, floors, walls, roofs, columns and beams), or

5. a fire safety system, or

6. waterproofing, or

7. any other element that is prescribed by the regulations as a major element of a building.”

29. Deacon v National Strategic Constructions Pty Ltd; National Strategic Constructions Pty Ltd v Deacon [2017] NSWCATAP 185 (‘Deacon’) sets out the test for determining whether the statutory warranties have been breached. Deacon states at paragraph 46:

“Although objective standards such as Australian Standards, the Building Code of Australia and the Guide are of significant relevance in establishing whether work has been performed in a proper and workmanlike manner (Wheeler v Ecroplot Pty Ltd [2010] NSWCA 61 at [10]), the absence of such evidence does not automatically mean a homeowner has failed to establish breach of statutory warranty. In our view, the relevant principle was succinctly stated by Senior Member Goldstein in G MacFayden and Anor v G Tadrosse [2014] NSWCATCD 194 at [46] as follows:

…[E]vidence that work does not comply with the Building Code of Australia would establish a basis for a finding that sub section 18B(c) of the Act has been breached. Evidence of the details in which work does not comply with the contractual plans and specifications would form the basis for a finding that sub section 18B(a) of the Act has been breached. Evidence of work not being carried out in a proper and workmanlike manner would in my view involve identification of the work in question, a statement of how the expert would expect it to be carried out in in a proper and workmanlike manner and then identification of the factors which establish that the way in which the work has been carried out falls short of it being carried out in a proper and workmanlike manner. Evidence of this nature, if accepted, would form the basis for a finding that sub section 18B(a) of the Act has been breached.”

30. Deacon also states that a Tribunal must consider:

1. whether the homeowner has established on the balance of probabilities that the works have not been performed in accordance with s 18B of the HB Act; and

2. then, where a defect is established, what is the appropriate method to rectify that defect and the cost of rectification.

31. To determine if a defect is a ‘major defect’, the Tribunal must establish that the item is:

1. “a defect in a major element of a building” attributable to one of the specified matters,

2. “that causes or is likely to cause”:

32. the inability to inhabit or use the building (or part of the building) for its intended purpose, or

33. the destruction of the building or any part of the building, or

34. a threat of collapse of the building or any part of the building.

(see Ashton v Stevenson; Stevenson v Ashton [2020] NSWCATAP 233 at [63] (“Stevenson”)).

35. Section 48MA of the HB Act also states that the Tribunal must consider an order that the contractor rectify the work is the “preferred outcome”.

36. If assessing damages, it is well established that damages should be used to put the party affected by the breach into the position they would have been in if the breach had not occurred: Haines v Bendall [1991] HCA 15.

37. However, Bellgrove v Eldridge [1954] HCA 36 (Bellgrove) determines that the rectification method must be both necessary and reasonable, and the rectification cost must be reasonable.

Background

38. The property is a six story residential building with additional basement parking. There are 37 residential units in the strata scheme.

39. The developer entered into a design and construct contract with the first respondent on 10 June 2016. An interim occupation certificate was issued on 8 February 2018 and a final occupation certificate was issued on 21 February 2018.

40. The strata plan, Strata Plan 91959 was registered on 12 February 2018.

41. These proceedings commenced on 14 February 2024.

Findings

42. As state in Ashby v Slipper [2014] FCAFC 15 at [77] “evidence, which is not inherently incredible and which is unchallenged, ought to be accepted: Precision Plastics Pty Ltd v Demir (1975) 132 CLR 372 at 370-371 (per Gibbs J, Stephen J agreeing, Murphy J generally agreeing). The evidence may of course be rejected if it is contradicted by facts otherwise established by the evidence or the particular circumstances point to its rejection.”

43. In this case, the respondent has not provided any of its own evidence, however the respondent’s representative has questioned the applicant’s witnesses.

44. The Tribunal makes the following findings based on all the evidence before it. Whilst this decision will not address each piece of evidence separately, the decision has considered all evidence.

45. The first respondent and the developer entered into a contract for the design and construction of the premises on 10 June 2016. The Tribunal finds that the statutory warranties set out in s 18B of the HB Act are implied into this contract.

46. On 8 February 2018, the Interim Occupation Certificate was issued for the premises.

47. On 12 February 2018, Strata Plan 91959 was registered and the owners corporation was duly constituted under s 8 of the Strata Schemes Management Act 2015 (NSW).

48. This decision will consider each alleged defect separately.

49. The applicant relies on the report of Mr John Riad of Endeavour Engineering (“the Riad Report”), dated 27 June 2024. I have reviewed the report, including the qualifications and experience of Mr Riad. I am satisfied that Mr Riad, a civil engineer, is an appropriate expert to give evidence in these proceedings, and note he has acknowledged the expert witness code of conduct and is aware of his obligations to the Tribunal in contested proceedings.

Cantilevered glass balustrades

50. The applicant submits that the cantilevered glass balustrades are defective in that they do not comply with AS 1288 and AS 1170.1 standards. They are structurally inadequate, and do not provide the necessary safety barrier for residents and visitors and is unsafe.

51. Mr Riad was questioned by the respondent’s representative at the hearing, who challenged Mr Riad on the basis for his finding that the balustrades deflect greater than 30mm.

52. No evidence was before the Tribunal in opposition to Mr Riad’s positions that the balustrades were in breach of AS 1288 and AS1170.1.

53. I find that the cantilevered balustrades in units listed in the table in section 6.2.9 of the Riad Report undergo deflection of greater than 30mm when a lateral force is applied, in breach of AS 1288. I further find the glazing used on the balustrades in these units in in breach of AS 1170.1 and is too thin for this application.

54. These proceedings may only make orders in respect of major defects, as the application was made out of time as stated in s 18E of the HB Act for claims in respect of defects that are not major.

55. I am satisfied that this is a ‘major defects’ within the meaning of s 18E(4)(a)(i) as balcony balustrades are a major element of the building, being a load bearing component of the building that is essential to the stability of the balcony, and the defect is one of the design, workmanship of faulty materials, which has resulted in the inability to use the balconies for their intended purpose as the defective balustrades are a safety hazard.

56. Mr Riad was questioned by the developer at the hearing in relation to the proposed scope of repairs. In consideration of all the evidence before the Tribunal, I accept the rectification method set out in the Riad Report and find that it is reasonable and necessary.

Balcony drainage

57. The applicant claims that the balcony drainage is defective on the basis that the balconies with rendered walls have inadequate drainage due to no overflow drainage systems in place.

58. The applicant relies on the Riad Report in respect of this, which states at 6.32 that “in the event that the balcony waste drainage becomes blocked due to a build up of dirt and debris, I am of the view that surface water is unable to effectively drain away due to the enclosed design of the balcony, and lack of secondary overflow provisions. This deficiency may inevitably lead to a breach of NCC Part F1 requirements for Damp and Weatherproofing (FP1.1, FPR 1.2 and FP1.3.)”

59. The Riad Report notes that there were water leaks “manifesting in the following units” due to the defective drainage, being units G07, G08, G09, 106,109, 209, 308, 402, 403 and 405. UG 06.2 as listed in the Scott Schedule also has deficient drainage. All other units have a drainage overflow system in place.

60. I find the lack of a drainage overflow to be a defect in the units listed in paragraph 51, based on the unchallenged evidence in the Riad Report which I find to not be inherently incredible. I find it is a breach of the warranties set out in s 18B(1)(a) of the HB Act that the work will be performed with due care and skill.

61. I am satisfied that the overflow drainage forms a part of the waterproofing system for the building. I find that the lack of drainage overflow is a defect in the waterproofing system (see Stevenson).

62. I find that the defective balcony drainage, if not rectified, could lead to the destruction of the impacted apartment flooring due to water ingress caused by flooding. Accordingly I find it is a major defect within the meaning of s 18E(4).

63. The Riad Report at page 30 sets out a rectification scope for both balcony balustrades and balcony drainage issues to be addressed together. The scope of repair for UG06.2 is set out in the Riad Report Scott Schedule at that item. An alternative scope is not before the Tribunal, however the respondent’s representatives made suggestions to Mr Riad and submissions that the scope was excessive.

64. On the basis that Mr Riad has inspected the property, and his experience in building works, I find that the scope of repairs for this item in the Riad Report is reasonable and limited to the necessary work to rectify the balcony balustrade and balcony drainage defects.

Bathroom Door Jam corrosion

65. The applicant claims there is defective waterproofing at the bathroom door jams, based on observing the bathroom door jams corroding.

66. I accept the evidence of Mr Riad, set out in section 6.4 of the Riad Report, that the cause of the bathroom door jam corrosion is embedment of the door jam into the tiling screed within the vertical termination of the waterproofing in breach of AS 3740-2010- Waterproofing of Domestic Wet Areas. I accept the evidence that this issue is observed in Units G06, 1101, 103, 207, 208, 303, 305, 307, 308, 402 and 407.

67. I find that the defect is a defect in waterproofing, and such is a major element of the building. I find it is a breach of the warranty set out in s 18B(1)(a) that the work will be done with due care and skill.

68. The Riad Report states at section 6.4.7 that “the defect is time dependent and the remaining non-corroding door jams will eventually corrode.” There are photographs demonstrating some door frames and many door jams are experiencing significant corrosion.

69. I find this corrosion is a defect that is likely to cause the destruction of a party of the building, being the bathroom door frames and jams. I therefore find this is a major defect for the purposes of s 18E(4) of the HB Act.

70. I have reviewed the proposed scope of repairs set out on page 35 of the Riad Report. I find the scope of repairs to be reasonable and necessary, and adopt this scope of repair.

Waterproofing failure of podium slab at basement 1 to basement 2 ramp and basement 2 fire stairs

71. The applicant claims there is a waterproofing failure of the podium slab at the basement 1 to basement 2 ramp and basement 2 fire.

72. The applicant relies on the Riad Report, section 6.5 and item B.5 of the Riad Report Scott Schedule. The Tribunal accepts the opinion set out in the Riad report, that there is a waterproofing failure on the soffit of the podium slab above the basement 1 to basement 2 ramp and the basement 2 fire stairs. There is water leaking and efflorescence build up. I accept the oral evidence of Mr Riad that the water is leaking from the two courtyards above the slab.

73. I accept that the waterproofing membrane on the podium slab is inadequate. I find that this is a breach of AS 4654.2 and the National Constriction Code NCC FP1.1, FP 1.3 and BP1.1. I find the work was in breach of the statutory warranties set out in s 18B(1)(a) that the work would be done with due care and skill.

74. I find that this is a defect in a major element of the building since the podium slab is a load-bearing component of a building that is essential to the stability of a part of the building.

75. I accept that the consequence of this defect could be that the reinforcement within the concrete corrodes and concrete spalling. I find these consequences defect could lead to inability to use the basement 1 to basement 2 ramp and fire stairs for its intended purpose, due to the podium corroding.

76. I therefore find this is a major defect.

77. I find the scope of repair set out in 6.5.11 and item B.5 of the Riad Report to be reasonable and necessary, and I adopt those scopes of repair.

Items in the Riad Report Scott Schedule

78. The below section addresses each item in the Riad Report Scott Schedule, except where those items fall within the four common defects listed above.

UG 01.1

79. The applicants claim defects in UG01.1 in that the balcony sliding door waterproofing is defective. I am satisfied that there is water ingress into unit G01 in the living room. I accept the Riad Report’s findings that this is caused by inadequate waterproofing/flashing at the sliding door.

80. The Riad Report states that it is “primarily affecting the area near the base of the sliding door sills”, which is supported by the photographs in the report. The result of the defect is “water damaged finishes, blistering of finishes and mould formation.”

81. On the evidence before the Tribunal, I do not find that this is likely to result in the inability to inhabit the lounge room, nor destruction of a part of the building. I do not find that this is a major defect.

UG06.2

82. This defect is addressed in lack of overflow drainage above.

UG08.1

83. This item relates is water ingress along the sliding door frame because “the sliding door frame has failed to act as a barrier”. I accept that this is in breach of NCC FP 1.2, FP 1.3 and FP 1.4 as described in the Riad Report. I find this is a defect in waterproofing, and is therefore a major element, and is a breach of the warranty set out in s 18B(1)(a) to undertake the work with due care and skill. The Riad Report states that result of the defect includes “corrosion to the steel support nails”. I accept this evidence as inherently credible, and find that the water ingress is likely to cause the destruction of part of the building, being the support for the UG.08 walls. I therefore find it is a major defect.

84. I find the scope of repair set out in Item UG08.1 of the Riad Report to be reasonable and necessary, and I adopt that scope of repair.

UG08.2

85. This item relates to water ingress near the window, adjacent to the same balcony as in paragraph 79 above. The Riad Report states that water penetration adjacent to the window is due to “poor installation and insufficient attention to the window installation” and is in breach of NCC FP1.1, FP1.2, FP1.3 and FP 1.4. I accept this evidence. I find that the window is defective in its waterproofing as it is a major element. I find the window waterproofing is in breach of the warranty in s18B(1)(a) to perform the work with due care and skill. I find, based on the significant mould below the carpet, that this is likely to result in the inability to use the bedroom for its intended purpose. Consequently I find it is a major defect.

86. I find the scope of repair set out in Item UG08.2 of the Riad Report to be reasonable and necessary, and I adopt that scope of repair.

U107.2, U207.2

87. These two items relate to a recessed window within the enclosed shower recesses. The Riad Report states it creates a pathway for wind driven rain or excess shower overspray to enter or exit through the window. The Riad Report states that the location of the window “is a design flaw” and “will inevitable lead to potential moisture penetration int the internal walling system.”

88. I find that the location of a window in an external wall is a major element of a building, as it is a load bearing component of the building. However I do not find that a defect which could result in “potential moisture penetration” into the wall is a defect that “is likely to cause” the inability to use a part of the building or the destruction of a part of the building. I therefore do not find that these are a major defect.

IC1

89. This item relates to water ingress in the internal commons area. The Riad Report finds that the cavity flashing is improperly buried within the screed, and there is mould and corroded steel nails behind the wall skirting tile.

90. The Riad Report states that the water ingress is due to “inadequately detailed the waterproofing provisions for the internal common area entrance and has failed to ensure sufficient waterproofing…” in breach of the National Construction Code FP1.1, FP 1.2 and FP 1.4. I accept the Riad Report’s evidence. I find that this is a defect in breach of the warranty set out in s 18B(1)(a) that the work will be performed with due care and skill.

91. In considering whether this is a major defect, I find that it is a defect in a major element, being waterproofing. I find that it is attributable to defective workmanship.

92. Unlike other items, there is no evidence that the corroded nails are structural in nature, nor that the mould is extensive or difficult to clean. I therefore do not find, based on the evidence provided, that it is likely to cause destruction of part of the building or inability to use the building for its intended purpose, or that it otherwise meets the requirement of a major defect.

EC1

93. This item relates to an external planter box waterproofing membrane. The Riad Report states that “the waterproofing membrande had deteriorated and no longer possesses waterproofing properties”. It stats “over time, it could crack and create a pathway for water to penetrate into the basement level.”

94. There is insufficient evidence before the Tribunal to establish that the waterproofing membrane, which has deteriorated, is due to defective work. The defect is not established.

R.1

95. This item relates to cracking along the roof, particularly along the perimeter rendered wall. The Riad Report states there is cracking, ands states “waterproofing lacks expansion joint provisions, which has led to early signs of failure. These signs include cracks and efflorescence leaching.” The Riad Report states that this is in breach of the National Construction Code F1.4, FP1.1, FP1.2, FP1.3 and FP1.4. I accept this evidence, which is unopposed.

96. I am satisfied that this is a defect in a major element of the building, being the waterproofing. I am also satisfied that it is as a result of defective workmanship, in breach of s 18B(1)(a), a warranty that the work will be done with due care and skill.

97. The Riad Report states that “if left untreated for an extended period, this shall result in corrosion to the reinforcement and spalling.” I accept this evidence and find that the defect is likely to cause the destruction of the roof. I therefore find it is a major defect.

98. I adopt the scope of repair set out in the Riad Report for this item. I find the methodology is reasonable and necessary.

B.1

99. This item relates to uncontrolled surface water at the base of the perimeter wall around the mechanical riser room. The Riad Report states the water is “emanating through the perimeter wall” and is a breach of the National Construction Code FP1.1, FP1.2, and FP1.3. I accept this evidence. I am satisfied this is a breach of the warranty set out in s 18B(1)(a) that the work will be performed with due care and skill. I am satisfied that this is a defect in a major element of a building, being a waterproofing defect. The Riad Report also states that the “builder has not provided any drainage to accommodate the drainage of the surface water.” However there is insufficient evidence before the Tribunal to establish that this defect, being a defect in workmanship, is likely to cause the inability to use a part of the building for its intended purpose, the destruction of any part of the building or the threat of collapse of any part of the building. Therefore the Tribunal finds that the defect is not a major defect.

B.2

100. This item relates to cracking in the concrete slab above car spaces 302. I accept the evidence in the Riad Report that these cracks are 0.55mm wide, and permit water penetration into the slab “potentially affecting its structural integrity.” I accept that this is a breach of the NCC BP1.1 as set out in the Riad Report. I find that this is a breach of the warranty set out in s 18B(1)(a) that the work will be performed with due care and skill.

101. I find that this is a defect in a load bearing component of a building that is essential to the building, given it is the concrete slab above a car space. I therefore find it is a defect in a major element of a building. I find it is a defect attributable to a failure to comply with the structural performance requirements of the National Construction Code and is likely to cause the inability to use the car space for its intended purpose. I therefore find it is a major defect.

102. I adopt the scope of repair set out in the Riad Report for item B2. I find the scope of repair to be reasonable and necessary.

B.4

103. This item relates to uncontrolled water pooling around car spaces 308 and 406 respectively. I accept the evidence of the Riad Report which states the water leaks form the fire stair well, and the drainage is “insufficient to catch all the water pilling out of the stair well… result[ing] in ponding and pooling at the base of the wall between carpark spot 308 and the fire stair.” I accept the opinion within the Riad Report that this is in breach of the National Construction Code FP1.1 and FP 1.2. I find that this is a defect in the drainage, which is a part of the waterproofing system, and is therefore a defect in a major element of the building.

104. I am not satisfied, on the evidence before the Tribunal, that this defect is likely to cause an inability to use a part of the building or destruction of part of the building. I therefore do not find it to be a major defect.

Fire safety

105. The applicants claim the fire safety system is defective, and rely on the report of Mr Levy of Fahrenheit Global (“the Levy Report”). I have considered Mr Levy’s qualifications and consider he is able to give evidence in relation to the content of his report in these proceedings.

106. Mr Levy attended the hearing and was asked questions by both parties.

107. The evidence in the Levy Report is unopposed. I accept the observations set out in section 3 of the Levy Report, and unless stated otherwise below, I find each item identified as a defect in the Levy Report to be a defect.

108. The consideration is whether these are major defects within the meaning of s 18E(4) of the HB Act. There is no dispute that each is a defect in a fire safety system, satisfying the requirement to be a major element of the building. However, this decision will consider whether each defect is one which causes or is likely to cause the inability to inhabit or use the building for its intended purpose, or destruction of the building, or a threat of collapse of the building. It is not necessary to determine if the defect has actually resulted in these consequences for a major defect to be determined, it is sufficient that the consequence is likely to arise.

109. Item 1 in the Scott Schedule relates to an oversized common gap between the door leaf and floor covering. I find that this could result in the destruction of part of the building, were a fire to occur, due to the fire spreading through the oversized gap. I therefore find this is a major defect.

110. I adopt the rectification methodology set out in the Levy Report for Defect 1. I find the methodology is reasonable and necessary.

111. Items 2, 14, 15, 16 and 17 in the Scott Schedule relate to fire door leaf and frame tags being painted over. I do not find that these defect are likely to cause any of the consequences set out in the definition of major defect, and are therefore not major defects for the purpose of s 18E(4).

112. Item 3 in the Scott Schedule is that unit G07 is not fitted with smoke or fire seals around the perimeter of the fire door frame. I find that this is a major defect, for the same reasoning set out in paragraph 104 above.

113. I adopt the rectification methodology set out in the Levy Report for Item 3. I find the methodology is reasonable and necessary.

114. Item 4 in the Scott Schedule alleges that the brown coloured aluminium composite panels used as external cladding of the building (“the cladding”) is defective, as it is combustible. The Levy Report relies on testing undertaken by Credwell Consulting dated 16 August 2019 (“the Credwell Report”). This testing is not challenged, and I accept its evidence. The Credwell Report finds that the building cladding contains 27% organic polymer. It is therefore a Category B product, and is not required to be removed under the Building Product (Safety) Act 2017 (NSW).

115. The Tribunal notes that the cladding material was not expressly banned at the time of practical completion. However I find that the material is flammable, and accept the evidence in the Levy Report, supported by Mr Levy’s oral evidence under questioning from the developer that the cladding, being flammable is in breach of C1.14 of the National Construction Code. I accept the oral evidence of Mr Levy that this is “high risk cladding.” I find that the cladding is also not reasonably fit for purpose as external cladding, as it is flammable.

105. Accordingly I find Item 4 is a defect, and is a breach of the warranties set out in s18B(1) of the HB Act that the work will be done with due care and skill, and that the materials will be reasonably fit for the specified purpose. I also find, based on the oral evidence of Mr Levy that it is a defect that is likely to cause the destruction of the building, since a fire would rapidly spread by way of the cladding burning. Accordingly I find this is a major defect.

106. I adopt the rectification methodology set out in the Levy Report for Item 4. I find the methodology is reasonable and necessary.

107. I find Item 5, that the electrical riser cupboard smoke seal has been painted, is not a major defect. There is insufficient evidence before the Tribunal to establish that the smoke seal being painted is likely to cause the destruction of a part of the building.

108. Alleged Items 6 and 7 in the Scott Scheule relate to the fire stairs. I do not find that these defects are likely to cause any of the consequences set out in the definition of “major defect”. There is insufficient evidence before the Tribunal to establish that these defects are likely to cause the inability to use the fire stairs for its intended purpose.

109. Items 8 and 9 in the Scott Schedule relate to the fire suppression pipework. I find that these defects are each likely to cause the destruction of part of the building, as each may cause the fire pumps and outlets to fail in the event of a fire. I therefore find defects 8 and 9 to be major defects.

110. I find the rectification methods set out in the Levy Report for Items 8 and 9 to be reasonable and necessary, and adopt these rectification methods.

111. Item 10 in the Scott Schedule relates to a lack of smoke detection in the storeroom and external WC on the southern elevation. There is insufficient evidence to determine that this is a defect arising from the work performed on behalf of the respondent, and so the claim for rectification of this item is dismissed.

112. Item 11 in the Scott Schedule relates to the fire fan control panel and mechanical main switchboard activating fans incorrectly. I find this is a major defect, as the exhaust fans should be correctly activated by the fire fan control panel. I find the failure to activate fire exhaust fans are likely to cause the destruction of a part of the building in the event of a fire, and therefore this is a major defect.

113. I find the rectification method set out in the Levy Report for Item 11 to be reasonable and necessary, and adopt this rectification method.

114. Item 12 in the Scott Schedule relates to the fire door on the level 4 fire stairs not closing due to catching on the floor. I find this is a major defect, as it is likely to cause the destruction of part of the building in the event of a fire, as the fire would spread through the open fire door.

115. I find the rectification method set out in the Levy Report for Item 12 to be reasonable and necessary, and adopt this rectification method.

116. Item 13 in the Scott Schedule relates to areas in the fire stairs where the Dincel SIP formwork have large openings. This defect is likely to cause the inability to use the fire stairs for their intended purpose, being a fire resistant path of egress from the building. I find this defect is likely to permit fire and smoke to enter the fire stairs. I therefore find this is a major defect.

117. I find the rectification method set out in the Levy Report for Item 13 to be reasonable and necessary, and adopt this rectification method.

118. Item 18 in the Scott Scheule relates to galvanised steel being used as a fire hydrant pipework support. I find that this defect is likely to cause the collapse of the relevant areas of fire suppression pipework in the event of a fire, and consequently is a major defect.

119. I find the rectification method set out in the Levy Report for Item 18 to be reasonable and necessary, and adopt this rectification method.

120. Item 19 in the Scott Schedule relates to the copper pipework penetrating the slab without being suitably fire sealed. I am satisfied that this defect is likely to cause the destruction of part of the building, as it will permit a fire to spread through the slab.

121. I find the rectification method set out in the Levy Report for Item 19 to be reasonable and necessary, and adopt this rectification method.

122. The Levy Report also sets out a series of ‘Maintenance Non Compliances’ in section 3.2. I do not find, based on the evidence before the Tribunal, that these are items are defective work.

Should there be a work order or money order?

134. The applicant seeks a work order. The respondent did not make any submissions which would displace the presumption set out in s 48K of the HB Act that rectification is the preferred option.

135. The respondent is a developer, however the Tribunal may make work orders requiring a developer to cause work to be performed (see The Owners – Strata Plan No 66375 v King [2018] NSWCA 170 and The Owners – Strata Plan No 93227 v InStyle Developments Pty Ltd [2023] NSWCATCD 154). The Tribunal is not satisfied there are any circumstances that would warrant a departure from the presumption that rectification is the preferred option.

Scope of the Work Order

136. The owners corporation proposes scope of work as set out in “Annexure A - Updated Work Order” attached to the owner’s corporation’s tender bundle. This proposed scope of works states that the developer will also pay the superintendent’s cost and design practitioner’s costs where required for works requiring a Regulated Design under the Design and Building Practitioners Act 2020. I find this the engagement of a design practitioner where required at for regulated designs to be an essential component of the works to the balcony and am satisfied this should form a part of the work order.

137. I am not satisfied on the evidence before the Tribunal that the engagement of an independent superintendent is necessary for the rectification of the defects.

138. Where fees are payable to the local council or other statutory authority for the rectification works contained in the work order, I find that such fees are necessary for the rectification of the works. I also find arranging such approvals and paying such amounts to be a reasonable element of the scope of rectification works and therefore should be included in the work order.

139. The applicant proposes that the work be completed within three months from the date of these order. There is evidence before the Tribunal that the works will take eight weeks to finalise the design, and then nine months to perform the works. This is for the full scope of works set out in the two reports. The Tribunal accepts this evidence. Applying a reduction on the basis that not all defects were found to be major defects, and not ordered to be rectified, the Tribunal considers a period of up to seven months to be sufficient time to comply with these orders.

140. The owner corporation also sets out terms that it proposes will apply to the works. These terms include rights of inspection, pass through of warranties, approvals, insurance and other terms. The Tribunal has considered these terms and is not satisfied that they are necessary or reasonable. The Tribunal has therefore formulated a work under s 480 O of the HB Act that it considers appropriate.

Costs

141. The applicant seeks an order for costs. In this case, there is no quantum in dispute, but instead the owners corporation seeks a work order. Therefore the owners corporation is required to satisfy the Tribunal that ‘special circumstances’ under s 60 of the NCAT Act, and that the Tribunal’s discretion should be exercised in favour of making an award of costs.

142. Oral submissions were made at the hearing in relation to costs.

143. It is well-established that the term “special circumstances” refers to circumstances that are out of the ordinary but do not need to be extraordinary or exceptional: Megerditchian v Kumond Homes Pty Ltd [2014] NSWCATAP 120, adopting what was said in Cripps v G & M Mawson [2006] NSWCA 84 at [60].

144. The Tribunal notes that an award of costs is not to punish the unsuccessful party, but to compensate the successful party.

145. I find that the developer’s complete lack of engagement in the proceedings until the day of the hearing is a special circumstance for the purpose of s 60 of the NCAT Act.

146. I find that the Tribunal should exercise its discretion in favour of awarding costs on an ordinary basis to the owners corporation, because the owners corporation has been denied the opportunity to resolve this dispute without the cost of preparing for and participating in a final hearing.

Orders

The Tribunal makes the following orders:

1. Whole Sun Property Developments Pty Ltd is liable to cause the following works to be carried out by 5 January 2026:

1. the scope of the works set out in the Expert Building Defect Report by Endeavour Engineering dated 27 June 2024 in the applicant’s tender bundle at tab 7 for the following items:

1. Cantilevered glass balustrades – section 6.2;

2. Insufficient balcony drainage – section 6.3 and item UG06.2 of the Scott Schedule;

3. Corroding door jams – section 6.4;

4. Waterproofing of podium slab – section 6.5 and item B.5 of the Scott Schedule; and

5. Items UG08.1, UG08.2, R.1 and B.2 of the Scott Schedule.

2. the scope of works set out in the Fire Safety Compliance Assessment Report by Fahrenheit Global dated 27 June 2024 in the applicant’s tender bundle at tab 8 for Items no 1, 3, 4, 8, 9, 11, 12, 13, 18, and 19 of the Scott Schedule;

3. where the items in (a) and (b) require a regulated design, causing a suitably qualified design practitioner under the Design and Building Practitioners Act 2020 to approve the design;

4. Payment of relevant fees for any local council or other statutory authority approval that is required for the scope of works in (a) and (b),

together, “the Rectification Works”.

2. The application for work orders under section 48O of the HB Act is otherwise dismissed.

3. The proceedings against the first and second respondent are dismissed because they are withdrawn.

4. The developer is to pay the owners corporation’s costs as agreed or assessed on the basis set out in the legal costs legislation (as set out in s 3A of the Legal Profession Uniform Law Application Act 2014 (NSW)) within 28 days of the date of these orders.

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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: 08 August 2025