The Owners - Strata Plan No 66375 v King

The Owners - Strata Plan No 66375 (the appellant) brought proceedings against David and Gwendoline King (the respondents), alleging they were "developers" within the meaning of the *Home Building Act 1989* (NSW) and therefore liable under that Act. The central dispute concerned whether the Kings were parties to a building contract, which would establish their status as developers.

The Court of Appeal was required to determine whether the primary judge erred in failing to draw the inference that the respondents were parties to the building contract. Further, the court had to consider the statutory construction of sections 18B and 18C of the *Home Building Act 1989* (NSW) to ascertain the scope of the notional contract created by section 18C and whether the Kings had breached a statutory warranty under section 18B(c) concerning "design defects".

The Court of Appeal found that the primary judge had erred in not inferring that the Kings were parties to the building contract, thereby establishing them as developers. The court reasoned that the evidence, when viewed holistically, supported the conclusion that the Kings had entered into the contract. Consequently, the court held that the Kings were liable for breaches of statutory warranties, including those relating to design defects, as contemplated by the *Home Building Act 1989* (NSW).

The appeal was allowed, the orders of the primary judge were set aside, and judgment was entered in favour of the Owners Corporation against the Kings for the sum of $5,093,168.08, together with costs. The respondents were also granted a certificate under the *Suitors’ Fund Act 1951* (NSW), if applicable.