The Owners - Units Plan No 4421 v Geocon Constructors (ACT) Pty Ltd (No 2)

[2025] ACTSC 206

SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY

Case Title:

The Owners - Units Plan No 4421 v Geocon Constructors (ACT) Pty Ltd (No 2)

Citation: 

[2025] ACTSC 206

Hearing Date: 

9 May 2025

Decision Date: 

19 May 2025

Before:

Mossop J

Decision: 

See [92]

Catchwords: 

PRACTICE AND PROCEDURE – PLEADINGS – Applications by different defendants to strike out parts of statement of claim – where some pleadings raise difficult questions of statutory interpretation – where some pleadings provide insufficient details about the case to be met – some pleadings struck out with leave to replead

PRACTICE AND PROCEDURE – COSTS – Interlocutory applications – where applicants successful on some grounds but unsuccessful on others – inappropriate to encourage expectation that, if strike out applications are only partly successful, costs will be awarded – parties encouraged to engage in pragmatic compromise – no order as to costs

STATUTES – INTERPRETATION – Drafting error – previous legislation copied and pasted – change in sub‑section numbering not accommodated – error not identified or corrected during 21 years of operation – necessary to read internal cross‑reference as if it were to the correct sub‑section

Legislation Cited: 

Building Act 1972 (ACT), s 58C

Building Act 2004 (ACT), ss 37(1)(a), 42, 49, 84, 88

Building and Construction Legislation Amendment Act 2016 (ACT)

Building and Construction Legislation Amendment Bill 2016 (ACT)

Competition and Consumer Act 2010 (Cth), Sch 2 – Australian Consumer Law ss 2, 18, 236

Court Procedures Rules 2006 (ACT), rr 425, 513, 1147, div 2.8.6

Legislation Act 2001 (ACT), s 84

Cases Cited: 

Alfred McAlpine Construction Ltd v Panatown Ltd [2001] 1 AC 518

Brookfield Multiplex Ltd v Owners Corporation Strata Plan 61288 [2014] HCA 36; 254 CLR 185

Central Coast Council v Norcross Pictorial Calendars Pty Ltd [2021] NSWCA 75; 391 ALR 157

Creer & Anor - The Estate of Peters [2007] NSWSC 1291

Dome Resources NL v Silver [2008] NSWCA 322; 72 NSWLR 693

Envy Trading v Queensland [1998] 1 Qd R 413

General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125

Koundouris v The Owners – Units Plan No 1917 [2017] ACTCA 36; 323 FLR 375

Linden Gardens Trust Ltd v Lenesta Sludge Disposals Ltd [1994] 1 AC 85

Lindner v Wright (1976) 14 ALR 105

Mirvac Queensland Pty Ltd v Horne & Ors [2009] QSC 269; Q ConvR 54‑722

Productivity Partners Pty Ltd v Australian Competition and Consumer Commission [2024] HCA 27; 98 ALJR 1021

Theseus Exploration NL v Foyster (1972) 126 CLR 507

Trident General Insurance Co Ltd v McNiece Bros Pty Ltd (1988) 165 CLR 107

Winterton Constructions Pty Ltd v Hambros Australia Ltd (1991) 101 ALR 363

Yorke v Lucas (1985) 158 CLR 661

Texts Cited:

Explanatory Statement, Building and Construction Legislation Amendment Bill 2016 (ACT)

Parties: 

The Owners - Units Plan No 4421 ( Plaintiff)

Geocon Constructors (ACT) Pty Ltd (First Defendant)

NG Landholdings No. 1 Pty Ltd (Second Defendant)

A.C.N 119 755 734 Pty Ltd (Third Defendant)

Vital Design Solutions Pty Ltd (Fourth Defendant)

Northrop Consulting Engineers Pty Ltd (Fifth Defendant)

O'Neill & Brown Fire Services Pty Ltd (Sixth Defendant)

O'Neill & Brown Plumbing Company Pty Ltd (Seventh Defendant)

Dysen Pty Ltd (Ninth Defendant)

Compendium Design Pty Ltd (Tenth Defendant)

Magnate Tiling Pty Ltd (Eleventh Defendant)

All Things in Concrete Pty Ltd t/a TLC Pumping Pty Ltd & Prestige Pools (Twelfth Defendant)

Nikolaos Georgalis (Thirteenth Defendant)

Darren Sault (Fourteenth Defendant)

Representation: 

Counsel

F Corsaro SC ( Plaintiff)

J Steele SC with WDB Buckland (First, Second and Thirteenth Defendants)

J Moffett (Fourteenth Defendant)

Solicitors

Chambers Russell Lawyers ( Plaintiff)

Clayton Utz (First, Second and Thirteenth Defendants)

DLA Piper (Fourteenth Defendant)

File Number:

SC 506 of 2023

MOSSOP J:  

Introduction

1․These proceedings involve a claim by an owners corporation for a units plan against 14 persons or entities involved in the construction of the development to which the units plan relates.

2․Before the court are two applications in proceeding to strike out parts of the plaintiff’s amended statement of claim (ASOC).

3․The first application, an amended application in proceeding filed 7 April 2025, is brought by the first defendant (Geocon Constructors (ACT) Pty Ltd), the second defendant (NG Landholdings No. 1 Pty Ltd) and the thirteenth defendant (Nikolaos Georgalis). I will refer to these collectively as the Geocon defendants. That application seeks the following orders:

1․Pursuant to rr 425(1)(a), 425(3)(a) and 1147 of the Court Procedures Rules 2006 (ACT), paragraphs [12]-[30] and parts of paragraphs [61]‑[62] of the amended statement of claim filed on 9 August 2024 (ASOC) be struck out, with judgment for the First, Second and Thirteenth Defendants in relation to the causes of action set out in those paragraphs.

2․Pursuant to rr 425(1)(b) and 425(3)(b) of the Court Procedures Rules 2005 [sic], paragraphs [40] and [42]‑[48] of the ASOC filed on 9 August 2024 be struck out with leave to replead.

3․That the Plaintiff pay the First, Second and Thirteenth Defendants’ costs of and incidental to this application.

4․The time frame for the First, Second and Thirteenth Defendants to file a defence and any counterclaim(s) be extended to a date to be fixed following the determination of this application.

5․Any other orders that the Court considers appropriate.

4․The second application, filed 15 November 2024, is brought by the fourteenth defendant (Mr Darren Sault). That application seeks the following orders:

1․Pursuant to rule 425 of the Court Procedure Rules 2006 (ACT), paragraphs 31 to 39 and 41A of the Plaintiff’s Amended Statement of Claim dated 7 August 2024 (ASOC) are struck out insofar as they relate to or make claims against the Fourteenth Defendant.

2․Pursuant to rule 425 of the Court Procedure Rules 2006 (ACT), the sections at pages 37 and 38 of Schedule A of the ASOC that relate to the Fourteenth Defendant are struck out.

3․The Plaintiff is to pay the Fourteenth Defendant's costs of the proceedings.

5․Alternative orders are sought by the fourteenth defendant requiring the provision of further particulars. Costs are also sought by the fourteenth defendant.

Grounds of the applications

6․The grounds of the application by the Geocon defendants are as follows:

1․The statutory warranties claims at [12]-[30] and [61]-[62], including the assigned claims of the owners, should be struck out without leave to replead and with judgment in favour of the First Defendant as those warranties do not apply to the building and some of the defects which are the subject of the present proceedings.

2․Part of the misleading and deceptive conduct claim at [40] should be struck out with leave to replead as the pleading of that claim does not disclose the basis upon which it is alleged that the First, Second and Thirteenth Defendants were persons involved in the alleged contraventions and will prejudice the First, Second and Thirteenth Defendants’ ability to know the case which they are meeting and plead to that case.

3․The subrogation claim at [42]-[48] should be struck out with leave to replead as the pleading of that claim does not disclose the basis upon which the right of subrogation could arise and will prejudice the First Defendant's ability to know the case which it is meeting and to plead to that case.

7․The grounds of the fourteenth defendant’s application are as follows:

1․Paragraphs 31 to 39, paragraph 41A and Schedule A of the Plaintiff’s Amended Statement of Claim dated 7 August 2024 do not disclose any reasonable cause of action against the Fourteenth Defendant. Namely, as against the Fourteenth Defendant, the Amended Statement of Claim does not disclose:

1.1.representations made by the Fourteenth Defendant which are alleged to have been false, misleading or deceptive;

1.2.the material fact(s) relied upon to support the assertion that, at the time representations were made by the Fourteenth Defendant, they were false, misleading or deceptive;

1.3.reliance on the alleged false, misleading or deceptive representation(s) made by the Fourteenth Defendant which induced error; or

1.4.the loss occasioned by any false, misleading or deceptive conduct.  

2․The Plaintiff has failed to remedy the deficiencies in the pleading despite the Fourteenth Defendant's requests for particulars.

8․I will deal first with the application by the Geocon defendants and then with the fourteenth defendant’s application.

Statutory Warranties

Introduction

9․In relation to warranties in the Building Act 2004 (ACT), the ASOC contains two relevant parts. They are:

(a)“Geocon—statutory warranties claim” (ASOC at [12]-[20]); and

(b)“Geocon—assigned claims of unit owners” (ASOC at [21]-[30]).

10․The Geocon defendants seek to have both of these sections struck out without leave to replead.

11․They also seek to have a claim relating to repair work undertaken following completion of the construction of the development, which is based upon Statutory Warranties as defined in the pleading (ASOC [61]-[62]), struck out. That claim refers back to the earlier pleaded claim (at [12]-[20]) based upon the warranties implied by operation of s 88 of the Building Act.

The Geocon defendants’ submissions

12․The Geocon defendants’ submissions were to the effect that the pleadings should be struck out without leave to replead because the statutory warranties alleged “do not apply to the building”. They also submitted that the warranties do not apply to “some of the defects” which are the subject of the proceedings.

13․The essential contention related to the change in the terms of the Building Act on a date that post-dated the building contract between the first defendant and another company, Infinity Towers Development Pty Ltd, which was entered into on 11 August 2016. Building approval was granted on 9 September 2016. A building commencement notice was issued on 11 April 2017. A further building commencement notice was issued on 6 October 2017 in relation to certain pool and spa works, naming a different builder in respect of those works. The certificates of occupancy and use were issued for the building works on 7 February 2018 and for the pool and spa works on 22 February 2018.

14․The Geocon defendants place particular reliance upon the fact that the works the subject of the building contract exceeded three stories and that the building contract was entered into on 11 August 2016.

15․These dates are significant because it was only on 19 August 2017 that the Building Act was changed so that, instead of only applying to buildings that were no more than three stories, it applied to buildings mainly intended for private residential use. Because at all times the building was intended to be more than three stories, the Geocon defendants submitted that no statutory warranties could be implied, because only the Building Act in its pre‑19 August 2017 form applied to the building work. The essential basis for that contention was that the application of the Act should be determined as at the date the April 2017 building commencement notice was granted.

16․The submissions made by the Geocon defendants included the following points.

17․The warranties in s 88 of the Building Act include, in s 88(2)(a), a warranty that the residential building work has or will be carried out in accordance with the Act, and that calls up other requirements of the Building Act for the carrying out of the work. Those requirements include the requirements in s 42 of the Building Act, which in turn call up the requirements of the Building Code. The Geocon defendants also point to the fact that it is an offence under s 49 for a builder to do work that does not comply with the Building Code. Section 49(6)(a) specifies that building work which complies with the Building Code in force at the time the approved plans for the building work were approved is taken to result in a building that complies with the Code.

18․They therefore submit that it is the version of the Building Code at the time of the approval of the plans which is the subject of the statutory warranties. The submissions then continue: “This is a textual indication that the time for assessing the implication of the warranties and their content is the time building approval is granted.” They submit that this date is either the same as or before the date a building commencement notice is issued, referring to the terms of s 37(1)(a), which makes a building approval a precondition to the commencement notice.

19․They therefore submit that, “[a]s the warranties did not apply to the works the subject of the Building Contract at the time that building approval was given for those works, the statutory warranties do not apply to any of those works carried out after 19 August 2017, irrespective of the amendment of section 84 of the Building Act”.

20․They then submit that, even if the warranties were implied into sale contracts to which unit holders were parties (as distinct from the contract between the first defendant and Infinity), this did not mean that the holders had claims against the first defendant. That was because s 88(3) provides that each new owner “succeeds to the rights of the owner in relation to the statutory warranties”. They then submit:

In circumstances where the First Defendant did not complete any residential building work (for the reasons set out above), there was no breach of any warranties which may have been implied under section 88 of the Building Act and there is nothing to “succeed to”.

Plaintiff’s submissions

21․The plaintiff contended that the warranties apply to residential building work performed after the new definition took effect, even under existing contracts or approvals. That was said to be because the warranties operate by force of statute without the need for amendment of the contract. Contrary to the submissions of the Geocon defendants, the plaintiff submitted that what triggers the operation of the warranties is not the issuing of the building commencement notice but is, instead, the carrying out of “residential building work” under the contract.

22․The legislation contains no carveout for buildings commenced before the amendment, and there is no saving clause that states the amended definition does not apply to contracts or works commenced prior to the amendment’s commencement that continue thereafter.

23․The plaintiff also contended that a judge has a discretion to refrain from deciding difficult legal issues on a summary basis, particularly when those issues require full consideration in the context of a properly developed factual and legal record: Theseus Exploration NL v Foyster (1972) 126 CLR 507 at 514-515, Mirvac Queensland Pty Ltd v Horne & Ors [2009] QSC 269; Q ConvR 54‑722 at [20]-[21].

Decision

24․The submissions made on behalf of the Geocon defendants were insufficient to convince me that the plaintiff’s claim was unarguable so as to make it appropriate to strike it out. That was, in part, because of the limited nature of the submissions made. In circumstances where a potentially‑difficult but significant question of statutory interpretation arises, a court is not obliged to finally determine that issue in order to resolve the strike out question. While it plainly is open to the court to resolve the legal issue, it has, in my view, consistent with the authorities referred to by the plaintiff in relation to summary judgment, a discretion as to whether to do so. Whether or not it is appropriate to do so will depend also upon the extent of assistance provided by the parties. Most obviously, the party which seeks to persuade the court that the claim is legally unarguable bears a persuasive burden of showing that to be the case. In those circumstances, “light touch” submissions are unlikely to be sufficient.

25․There are a number of points that can be made about the Geocon defendants’ submissions in the present case.

26․The “textual indication”: The statutory interpretation argument presented relied upon the proposition that the version of the Building Code to be applied was that which was in force at the time the approved plans were approved. That was said to be a “textual indication” that the time of building approval was the relevant date. Even on this submission, it is hard to see how a “textual indication” would be sufficient to render any contrary argument manifestly unarguable. When regard is had to the specific provisions relied upon, it cannot be said that, because the version of the Code is that at the time of the approval of plans, statutory warranties could only be statutorily imposed at that time. There is, in fact, no explicit or necessarily implied statutory link which would compel that to be the case. An obvious example would be where the plans are approved substantially prior to entry into any building contract. There is no reason why the statutory warranties would not operate, at the earliest, from the time when the contract was entered into by reference back to the standards at the time when the plans were approved. Similarly, a building contract may be entered into in advance of the approval of the plans, in which case the applicable version of the Building Code would postdate the contract and it is that postdated version of the Building Code which would govern the content of the warranties implied into the contract. As there is no necessary link between the timing of the building contract and the version of the Building Code upon which the statutory warranty will operate, it cannot be said with the requisite level of confidence that the warranties could only be statutorily implied at the point of the approval of plans or the issuing of a commencement notice, and not at any later time.

27․The quote from the Court of Appeal: The submissions of the Geocon defendants placed very significant weight upon the passage from the Court of Appeal’s decision in Koundouris v The Owners – Units Plan No 1917 [2017] ACTCA 36; 323 FLR 375. The submission was to the effect that, in circumstances where the Court of Appeal had conclusively determined the issue that arose in the present case, a single judge of the Supreme Court should strike out a claim which was inconsistent with that determination.

28․I do not accept the submission that this issue is determined by the decision of the Court of Appeal in Koundouris. The passage relied upon by the defendants was at [59], as follows:

We also do not accept that this means the content of the statutory warranties may vary over time. For one thing, the building work which is carried out will have been carried out and completed over a period of time. It is the form of the Act and building code as in force at that time which informs the content of the statutory warranties. The mere fact that the statutory warranties are inserted into contracts at different times depending on the contract date does not change the content of the warranties. For another thing, the alleged problem exists irrespective of the interpretation advanced for Mr Koundouris. This is because, as noted, even if the builder is the owner of the land, units within a residential building may not be sold immediately on completion or for months or years afterwards. In all cases the content of the statutory warranties will remain the same. 

29․The defendants relied upon this passage in support of the proposition that the existence or otherwise of the statutory warranties could not change over time and therefore, consistently with their submission about when those warranties arose, could not exist because they were not in place at the time of entry into the contract.

30․I do not accept that the quoted passage from the decision in Koundouris was addressing the same issue that arises in the present case. The reasons in Koundouris were responding to a submission that s 58C of the Building Act 1972 (ACT) meant that warranties only applied where the builder was a party to the contract. It was in the course of addressing the lengthy and detailed submissions on that point that the Court of Appeal said what it did at [59]. The court was responding to the submission (recorded at [28]) that, because sales to incoming unit owners may occur at different times, the breach of warranty may occur at different times and hence the “building standards may change between the first and subsequent sales and thus change the content of the warranty”. The court returned to this issue at [39], saying: “The content of the warranty does not alter. It is fixed in time by reference to the provisions as in force at the time the work is completed.” The court then returned to the issue at [59] as set out earlier.

31․The court was addressing the content of the warranties implied in subsequent contracts of sale. It was not addressing the point at which the warranties arise in relation to the contract between developer and builder.  To the extent that Koundouris makes reference to the point at which the warranties arise, it makes reference to the “provisions as in force at the time the work is completed” (at [39]). That is obviously inconsistent with the submissions made by the Geocon defendants in the present case. Whether or not that is correct in the circumstances of the present case does not need to be determined here. The only point is that, on any reading of Koundouris, [59] is not so clearly contrary to the claims made by the plaintiff that they should be struck out.

32․The undeveloped statutory interpretation arguments: The submissions made on behalf of the Geocon defendants only identified a very limited statutory basis for any implication that the only date upon which statutory warranties could be imposed was the date of the approval of the plans or the issuing of the commencement notice. Apart from that, the submissions largely involved the assertion that those were the appropriate dates. No reference was made to the extrinsic material relating to the enactment of the Building and Construction Legislation Amendment Act 2016 (ACT). Consideration of that material may be significant for the interpretive exercise. It is not appropriate, on an application to strike out which depends upon the court being satisfied that there is no reasonable argument available, to leave it to the judge to search through potentially significant material which was not referred to in the course of the application.

33․The significance of the Explanatory Statement to the Building and Construction Legislation Amendment Bill 2016 (ACT) may be illustrated by reference to two aspects of the Statement. The first relates to the purpose of the amending legislation. The Explanatory Statement makes it clear that the expansion of the warranty scheme to multi‑storey buildings over three stories was a response to the decision of the High Court in Brookfield Multiplex Ltd v Owners Corporation Strata Plan 61288 [2014] HCA 36; 254 CLR 185. Having referred to that decision and identified that it could “significantly affect the rights of subsequent owners of buildings to pursue damages for economic loss for latent defects”, the Explanatory Statement continued:

To ensure apartment owners and their successors in title have clearly stated warranty rights, this Bill extends the existing statutory warranties to apply to all private residential buildings and their supporting structures … This would provide equal cover for all apartment owners regardless of the size of the building.

34․It points out that the warranty does not change the builder’s obligations in relation to the standard of building because they already are required to build in accordance with the plans and specifications and to a reasonable standard of workmanship.

35․Plainly, this legislative purpose may be of significance to the interpretation of the legislation. As counsel for the plaintiff suggested, if the legislation was a response to the decision in Brookfield, that would, in his submission, support an interpretation which allowed the warranty to apply to building work carried out after 19 August 2017.

36․However, the Explanatory Statement also contains the following statement:

The amendments are to take effect on a date fixed by the Minister, and will apply to contracts entered into on or after the commencement.

37․In addition to the capacity of the Minister to set a commencement date, there was a fallback provision, s 2(3) of the Bill, which required that the amendments commence 12 months after their notification. That is the provision which brought the amendments into effect on 19 August 2017.

38․So far as the statement in the Explanatory Statement as to the amendments only applying to contracts entered into on or after their commencement is concerned, that statement does not appear to be reflected in any provision of the Act. It is notable, however, that the Geocon defendants did not refer to this statement or make any submissions that would explain its making or significance. No transitional provisions in the statute were referred to in the Geocon defendants’ submissions. There is a possibility that the Explanatory Statement was made based upon provisions of the Legislation Act 2001 (ACT) in accordance with the provisions of which Territory legislation is drafted. However, no such provisions were referred to in the submissions made by the Geocon defendants. Specifically, there was no reference to the applicability of s 84 of the Legislation Act, or how any one of the elements of s 84(1) of that Act may apply in the circumstances of this case so as to give rise to the statement made in the Explanatory Statement. It may be that the statement in the Explanatory Statement does not reflect the proper interpretation of the words of the statute. The Court of Appeal found that to be the case in relation to an aspect of the Explanatory Statement relating to statutory warranties for an amendment to the Building Act 1972 in 1988: see Koundouris at [54].

39․It is certainly not a case in which the court is in a position to finally determine the proper interpretation of the current Building Act and its application in the circumstances of this case so as to then be able to reach a conclusion that the pleaded case meets the very high test articulated in General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125 at 128-129.

The further issue about contracts for the sale of a residential building

40․There is an additional issue relating to contracts for the sale of a residential building. It arises because the statutory warranties in s 88(1) are statutorily implied into two different types of contracts. One is a “contract to carry out residential building work”. That was the focus of the Geocon defendants’ submissions and has been addressed earlier. However, the other category of contract is a “contract for the sale of a residential building”.

41․In Koundouris, the Court of Appeal recognised that these were two different pathways to the inclusion of the warranties: Koundouris at [55].

42․The plaintiffs have pleaded reliance upon the provisions implying warranties into contracts at [21]-[30], which are among the paragraphs sought to be struck out by the Geocon defendants. Specifically, the plaintiff has pleaded the warranties arising from “contracts for the sale of the Residential Building” at ASOC [23]-[24].

43․The very limited submission made on behalf of the Geocon defendants is referred to at [18] above. The way the argument is articulated makes the Geocon defendants’ submissions in relation to contracts with unit owners dependent upon the success of the argument in relation to contracts for building work. For the reasons given earlier, that would not render the plaintiff’s claim unarguable.

44․The terms of s 88 imply the statutory warranties into “every contract for the sale of a residential building”. As explained by the Court of Appeal, this implies warranties into contracts to which the builder is not a party. The first relevant contract would be the contract between the owner of the constructed building and the first purchaser. Into that contract is implied the warranties given by the builder. That is a contract that may well be entered into substantially after the building work is completed: Koundouris at [43], [59]. The warranties are then implied into each such contract during the warranty period. Where rights accrue within the warranty period, a new owner will succeed to the accrued rights of the previous owner which are then actionable for the six-year limitation period after the date of accrual: Koundouris at [58].

45․The submissions made on behalf of the Geocon defendants were inadequate to preclude the reasonable possibility that the warranties were imposed at the time that those contracts with purchasers were entered into. Unless the relevant contracts were purchases “off the plan”, then in the circumstances of this case, that would have necessarily meant that they were entered into after 19 August 2017 when the amended legislation took effect. It may be significant for this argument that, if the statement in the Explanatory Statement referred to earlier that the amendments apply to contracts entered into on or after the commencement was accurate, then it would be consistent with the warranties applying to contracts with incoming unit owners. There are arguments which could be deployed in favour of this interpretation which were not referred to by the parties in their submissions, and it is not appropriate to explore them further. It is very clear that the submissions made on behalf of the Geocon defendants did not establish, as a matter of statutory interpretation, that the warranties given in every contract for the sale of a residential building were necessarily tied to the existence of the same warranty in a prior contract for the carrying out of building works. That is a possible interpretation, but not one compelled by the language of the statute and certainly not so unarguably correct as to require the striking out of a pleading inconsistent with it.

46․In those circumstances, I will simply note the submission of the Geocon defendants based upon the terms of s 88(3), which is dependent upon there being an unavoidable statutory link between the warranties in the two types of contracts referred to in s 88(1).

47․It is unnecessary to explore the submission further, other than to note one curiosity as to the meaning of “owner” in s 88(3). “Owner” in subs (3) must pick up the definition in subs (5), notwithstanding that subs (5) says that it is providing a definition for subs (2) and not subs (3). In another interesting Territory drafting error, even though since its enactment in 2004 the reference in subs (5) has always been to subs (2), it is very unlikely that this is accurate. That is because there is only a very limited reference to the word “owner” in subs (2), and if the reference was in fact to subs (2), then there would be no definition of “owner” for the purposes of subs (3). The position is put beyond doubt when one goes back to the predecessor provision under the Building Act 1972 (ACT) immediately before its repeal (see Republication No 6). Section 58C(2) provided: “Each of the owner’s successors in title succeeds to the rights of the owner in respect of the statutory warranties”. Subsection (4) provided the definition of “owner” and referred back to subs (2). The drafter of the 2004 Act has largely copied and pasted the terms of s 58C, but has split what was s 58C(1) into two paragraphs, hence increasing the number of paragraphs and making the cross‑reference in what became subs (5) a reference to the wrong, earlier subsection. Notwithstanding the passage of 21 years since its enactment, no amendment has been made to fix this error. In the circumstances, it is appropriate to read the cross‑reference in subs (5) as if “(2)” was “(3)”: Lindner v Wright (1976) 14 ALR 105 at 109; Envy Trading v Queensland [1998] 1 Qd R 413 at 417; Creer & Anor - The Estate of Peters [2007] NSWSC 1291 at [5]; Dome Resources NL v Silver [2008] NSWCA 322; 72 NSWLR 693 at [32].

48․In the circumstances, the Geocon defendants’ argument that the whole of the statutory warranty claims relating to contracts for sale of a residential building should be struck out must be rejected.

The outdoor pool issue

49․The Geocon defendants also seek to strike out the ASOC insofar as it relates to defects in an outdoor pool. This issue arises because s 84 of the Building Act excludes from the definition of “building”, and hence from the concept of residential building work in s 88(1), an “outdoor swimming pool”.

Submissions

50․The Geocon defendants identified that the pool and spa works were not built by any of the defendants, but instead by a different named builder shown in the building commencement notice. As a result, the Geocon defendants say that no claim could be made against the first defendant in relation to any such defects.

51․Second, they point out that “building” does not include an “outdoor swimming pool” and hence could not be the subject of a statutory warranty.

52․The plaintiff submits that this submission is misconceived in the context of an application under r 425 of the Court Procedures Rules 2006 (ACT). That is because it raises factual issues as to who constructed the pool and whether the pool was part of the building contract, issues which must be determined by evidence. If the Geocon defendants contended that the claim lacked reasonable prospects of success, they should have proceeded under r 1147 which governs summary dismissal. I note in that regard that the application in proceeding made reference to r 1147, but the submissions appear to be premised on an application under r 425. The plaintiff also contends that the Geocon defendants were contractually responsible for the pool’s construction or coordination. They contend that the exclusion of outdoor pools from the definition of building under s 84 does not conclusively determine whether the pool work constitutes residential building work under s 88. The plaintiff contends that the claim raises an arguable question of law.

53․During the course of oral submissions, junior counsel for the Geocon defendants explained — consistently with the plans that were in evidence — that the pool is a part of the overall structure of the building. From the description given, and the plans, it can be inferred that, while it is an outdoor pool, it is integrated into a part of the building which is located between the two towers of the building. In those circumstances, in my view, the viability of the claim is entwined with factual issues which will or are likely to arise and have not yet been determined. In addition to the factual issue as to precisely what the relationship is between the builder named in the commencement notice and the first defendant:

(a)there is likely to be a legal issue as to whether or not the reference to an “outdoor pool” includes a pool which is integrated into a substantial development such as the present;

(b)further, if the pool is subject to a carveout, there may be questions of mixed fact and law as to precisely what is encompassed in that carveout, having regard to the pool being integrated into a much larger development and forming a part of the overall building as a matter of ordinary language; and

(c)consequent upon the previous issue, there may be issues as to which of the identified defects fall within or without the carveout.

54․It is certainly not possible at this stage to say that, simply because of the exclusion of “outdoor pool” from the definition of building, the claim made by the plaintiff is unarguably legally defective.

55․In those circumstances, the submissions made by the Geocon defendants as to the claim relating to the pool cannot be accepted.

The repair work claim

56․The submissions made by the Geocon defendants did not separately address the status of the claim for repair work which is included amongst the paragraphs which they sought to have struck out. These claims are at [61]-[62]. The Court of Appeal in Koundouris recognised that statutory warranties would arise in relation to repair work: Koundouris at [121]-[132]. In the circumstances, it is not appropriate to attempt to determine the legal validity of this claim prior to the determination of the facts or to strike out that aspect of the pleading.

Additional reasons why questions of law should not be determined at this stage

57․It should be apparent from what I have said earlier that the statutory interpretation issues and their application in the circumstances of this case are not so straightforward as to allow the plaintiff’s pleadings to be struck out. The decision in Koundouris illustrates the difficult legal and factual problems that arise in relation to claims relating to warranties under the Building Act. They are manifestly not issues which should be determined on a summary basis after limited argument and in the absence of findings of fact.

58․An attempt to determine the legal viability of the claims based upon the existence of statutory warranties would carry with it the potential to fragment and delay the proceedings. That is because the determination of those issues would not finally determine the whole proceedings. Having regard to the significance of the statutory interpretation issue arising in relation to the operation of s 88, whichever way the question is decided, there is the potential for an interlocutory appeal to the Court of Appeal. Necessarily, that would take place in a context in which the facts of the case had not been finally determined. Such an appeal is likely to take up to a year to resolve. It is unlikely that the balance of the case could proceed while such an appeal was outstanding. That provides a further reason as to why it is inappropriate to attempt to determine difficult questions of substantive law at this stage.

Involved in a contravention

59․The plaintiff has pleaded that the Geocon defendants are persons involved in the contraventions of s 18 of the Australian Consumer Law (ACL) pleaded elsewhere.

Submissions

60․The Geocon defendants claim that, having regard to the definition of “involved” in s 2 of the ACL and the requirements for knowledge articulated in Productivity Partners Pty Ltd v Australian Competition and Consumer Commission [2024] HCA 27; 98 ALJR 1021, the pleading is inadequate. In particular, they rely upon the conclusion in Productivity Partners that a person said to be involved must have knowledge of the facts necessary for them to intend to participate in the contravention: Productivity Partners at [266]. They submit that the pleadings are inadequate to identify the case that they are required to meet.

61․In response, the plaintiff says that it has served detailed further and better particulars setting out the role of each defendant and the factual basis for the allegation that each was knowingly involved in the impugned conduct. The plaintiff also indicates that, if those particulars were found to be inadequate, it would replead in accordance with a draft provided with its submissions. Further, it submits that, if repleading were necessary, that should be done after the plaintiff has obtained leave to issue subpoenas addressing the issue. However, the proposed amended pleading did not relevantly amend the claim that the Geocon defendants were “involved”.

Decision

62․In my view, the pleading is insufficient to identify the material facts relied upon. It is in one sense understandable that, amongst a long pleading involving multiple causes of action, some claims are addressed in more detail than others. However, the plaintiff is still required to plead the material facts in a way that sufficiently identifies the case that is to be run. It is inadequate to simply plead a material fact in the terms of a statute if doing so involves a wrapped up conclusion and does not articulate the facts which give rise to that conclusion. In the present case, at the most basic level, while the pleading does articulate a claim of involvement within the terms of the statute, it does not articulate the material facts in a way that allows the relevant defendant to know which of the limbs of the definition of “involved” in s 2 of the ACL is sought to be invoked or the factual basis for any such allegation, particularly as to knowledge, as required by Productivity Partners and Yorke v Lucas (1985) 158 CLR 661. Similarly, the ASOC refers in general terms to “the contraventions of section 18 of the ACL pleaded above”, and hence incorporates all of the multitude of representations alleged in relation to each of the other defendants without articulating which of the three Geocon defendants are alleged to have been involved in which of those multitude of representations by other defendants. Although the submissions of the plaintiff assert that it has provided further particulars identifying the factual basis upon which each defendant is alleged to have been knowingly involved in the impugned conduct, where that was done is not identified in the plaintiff’s submissions. Particulars were not provided in the particulars dated 24 May 2024, or the letter from the plaintiff’s solicitors dated 25 June 2024, or the draft further amended statement of claim circulated on 5 May 2025.

63․As a consequence, this pleading is inadequate to perform the basic function of pleadings. It will be struck out with leave to replead. Although the plaintiff foreshadowed an application for leave to issue subpoenas, there was no formal application for that to occur. This was also a question of controversy, the Geocon defendants asserting that the issue of subpoenas would amount to a fishing expedition in order to discover a case against the Geocon defendants. I do not consider that it is appropriate to determine that issue as part of this decision.

Subrogation/implied trust

64․The plaintiff makes claims at [42]-[48] of the ASOC under the heading “Geocon—claims by the plaintiff as subrogee of the developer’s rights under the building contract or as a person entitled to the benefit of Geocon’s promises under the building contract”.

Submissions

65․The Geocon defendants assert that the claim does not fully plead the facts upon which it relies. They assert that the states of mind pleaded in paragraph 43 and the matters giving rise to the rights of subrogation by reason of unjust enrichment are inadequately pleaded. They rely upon the point made about pleading unjust enrichment in Winterton Constructions Pty Ltd v Hambros Australia Ltd (1991) 101 ALR 363 at [59].

66․In relation to the capacity of a third party beneficiary of a contract to sue under that contract, the Geocon defendants point to the decision of the New South Wales Court of Appeal in Central Coast Council v Norcross Pictorial Calendars Pty Ltd [2021] NSWCA 75; 391 ALR 157 at [158], indicating the limited scope of the statements in Trident General Insurance Co Ltd v McNiece Bros Pty Ltd (1988) 165 CLR 107.

67․The plaintiff relies upon the principle in Trident as providing a foundation for an entitlement of a third-party beneficiary to sue. The plaintiff submits that the present case would be a paradigm example of circumstances in which contractual obligations were undertaken for the benefit of the future owners of the development and that to deny the owners corporation the ability to enforce the building contract would create a legal “black hole”. The submissions referred to English decisions in St. Martins Property Corporation Limited v Sir Robert McAlpine Limited [1994] 1 AC 85 (more properly cited as Linden Gardens Trust Ltd v Lenesta Sludge Disposals Ltd) and the discussion in Alfred McAlpine Construction Ltd v Panatown Ltd [2001] 1 AC 518. It submits that Australian courts have sought to mitigate the harshness of the privity rule through the doctrines of assignment, subrogation and trust.

68․The plaintiff also contends that there is an arguable basis for an implied trust and that courts will infer a trust where the circumstances show an intention that contractual rights be held for another. It submits that it is inappropriate to determine a complicated or novel legal issue on a strike out application and that the Geocon defendants’ submissions conflate questions of pleading sufficiency with substantive entitlement, the latter being a matter for trial.

69․The Geocon defendants did not contend that this claim was unarguable. Rather, they contended that the pleadings were inadequate to articulate the claims sought to be made. As a consequence, they accepted that there should be an entitlement to replead.

Decision

70․I consider that the claims are not adequately pleaded and that, as a consequence, they are embarrassing and should be struck out. These paragraphs involve a number of different claims intended to allow a party without privity of contract to recover damages against the contracting party. The difficulty with the paragraphs is that they are too rolled up and do not articulate the claims in a way which discloses sufficiently the material facts relied upon and thereby the nature of the cause(s) of action relied upon.

71․In light of the submissions made on behalf of the plaintiff, it appears that the intention is to plead a case based upon:

(a)the contractual theory identified in Linden and Panatown;

(b)an entitlement to subrogation to the rights of the second defendant under the building contract against Geocon, said to arise in order to prevent the unjust enrichment of Geocon; and

(c)a claim that the benefit of Geocon’s promises under the building contract were held on trust by the second defendant for the plaintiff and the unit owners.

72․If I have misunderstood the nature of the claims to be made and, notwithstanding the three sub‑paragraphs at [44] of the ASOC, only two foundations for the claims are intended (as suggested by the heading to the section of the pleadings), then that would indicate their embarrassing nature. If I have correctly identified the nature of the claims intended to be made, then the pleadings are inadequate to identify the material facts that are said to give rise to those causes of action. Without intending to provide a checklist, they include at least the following:

(a)Paragraph 43(a) refers to it being “a known object of the Building Contract” that it was to benefit the plaintiff and future owners. The pleading impliedly indicates that this was a known object of the contracting parties, but does not say so expressly. (Although not an issue going to the technical adequacy of the pleadings, at [42] of the ASOC the second defendant is identified as the other contracting party, but there was evidence before the court for the purpose of the application that another entity, Infinity Towers Developments Pty Ltd, a company which appears to be associated with the Geocon defendants, was the contracting party. If so, that would substantially affect what was required to be included in the pleadings.)

(b)The different causes of action pleaded at [44] do not clearly identify either the nature of the cause of action or the material facts required in order to establish that cause of action. The Geocon defendants pointed in particular to the reference to unjust enrichment in what I understood to be the subrogation claim. It can be understood that unjust enrichment is intended to be the basis for the remedy of subrogation. However, the Geocon defendants submitted, correctly, that material facts need to be pleaded in order to make clear how the unjust enrichment is alleged to arise.

(c)If [44(c)] is in fact intended to be a claim that the benefit of Geocon’s promises would be held on trust, then that needs to be made clear and any required material facts pleaded.

(d)Paragraphs 47 and 48 appear to be intended to make similar claims in relation to the claims assigned to the plaintiff by the unit owners. Assuming they are intended to repeat the nature of the claims made in relation to the losses suffered by the plaintiff, then the same matters identified earlier need to be addressed in relation to this claim.

73․Paragraphs 42-48 will be struck out with leave to replead.

Claims against the fourteenth defendant

74․The fourteenth defendant seeks to have [31]-[39] and [41A], as well as the parts of Schedule A to the ASOC relating to the fourteenth defendant, struck out with leave to replead. In the alternative, he seeks an order for the provision of further particulars.

Submissions

75․The submissions of the fourteenth defendant identify that the compliance representations are alleged to have been contained in three “Design Check Certificates of Structural Sufficiency” dated 23 January 2017, 13 December 2017 and 19 February 2018. Apart from saying that the compliance representations are contained in those certificates, the ASOC does not provide any other details of precisely what those representations were.

76․The fourteenth defendant then submits that the pleadings are defective because they do not identify:

(a)the representation said to have been false, misleading or deceptive;

(b)the material facts relied upon to support the assertion that the representation was false, misleading or deceptive;

(c)what reliance was placed upon the representation and what loss or damage is caused as a consequence of that representation; and

(d)what loss or damage was caused as a consequence of reliance.

77․Submissions are then made about the content of the three certificates.

78․The fourteenth defendant points to what he submitted was an unhelpful response in a letter dated 11 October 2024 to his requests for particulars of the claims against him, which simply referred to the future provision of expert evidence and submissions. He submitted that more recent correspondence which contemplated the issue of subpoenas to permit further particularisation of the case was inappropriate in circumstances where the plaintiff could have made an application for preliminary discovery under div 2.8.6 of the Rules.

79․The plaintiff submits that it has provided detailed further and better particulars setting out the representations relied upon to the fourteenth defendant which include the contents of the compliance representations, the identity of the persons involved in the representations, the date of the representations, and the specific respects in which the representations were false. The plaintiff also indicated that, if necessary, it would seek to file a further amended statement of claim, a draft of which was in evidence.

Decision

80․It is appropriate to address each of the complaints made by the fourteenth defendant in turn.

81․Particulars of the representations: The fourteenth defendant is correct to say that the ASOC does not adequately particularise the representations made in the three identified documents. However, the submissions fail to adequately address the fact that, well prior to the fourteenth defendant’s application, the plaintiff had provided on 24 May 2024, and filed in court on 28 May 2024, formal statements of particulars which identified the representations alleged to arise from each of those documents. These particulars are consistent with the structure of the pleadings in the ASOC. They adequately identify the representations alleged to be contained within each of the documents. They provide a basis upon which the fourteenth defendant may understand and plead to the claims in the ASOC.

82․Material facts indicating misleading or deceptive conduct: This issue is addressed in the pleadings, most particularly at [33]-[34]. The essential point is, because the building contained defects, the representation that it was built in accordance with the specified plans or standards was misleading or deceptive. Plainly enough, that claim requires the relevant facts to be tied to one or other of the plans or standards referred to in the representations. The relevant defects were identified in the ASOC in the same portion of Schedule A which identified from where the representations came. That was done by reference to an item number in the Preliminary Scott Schedule. That is no doubt a voluminous document, and it was not referred to for the purposes of the present application. I proceed on the basis that it identifies what the defect is and what standard, plan or other requirement it fails to meet. In the event that there was some difficulty in identifying precisely the connection between the description of the defect in an item in the Preliminary Scott Schedule and the standard, plan or other requirement referred to in the relevant representation, then that might be something that requires resolution. It is a matter which could be resolved in the event that such a difficulty existed. Finally, it must be noted that Schedule A refers to items in a “Preliminary Scott Schedule with further defects to be particularised in due course”. The plaintiff will be required to finalise the Scott Schedule and hence the scope of its claim. However, that is not a source of complaint at the moment.

83․Reliance: It is not necessary for the plaintiff to plead “reliance” per se. The causal connector in s 236 of the ACL is the word “because”. The pleadings alleging breach of the ACL clearly address the causal connection at [35]. Essentially, the building would not have been approved as fit for occupation if the representations had not been made, and hence, the building would have been fixed before the registration of the units plan so as to create the plaintiff and allow the sale of units to individual unit owners.

84․Loss and damage: The part of the ASOC addressing the ACL claims refers back to the defined term “Defects Loss”. That term is defined at [11]. It includes the “Plaintiff’s Rectification Liability” and associated costs losses and liabilities. The term “Plaintiff’s Rectification Liability” is defined at [10]. The ASOC indicates that further particulars of loss or damage will be set out in the Plaintiff’s Scott Schedule and evidence in these proceedings. As with the identification of defects, the scope of loss and damage will need to be finally stated at some point in the proceedings. It is not the case that dollar figures are required to be included in the ASOC. It certainly does not provide a basis for striking out the claim at this point.

85․For these reasons, it is not appropriate to strike out the relevant paragraphs of the ASOC. The fourteenth defendant did, in the alternative, seek an order relating to the provision of further particulars. While I accept that some further particularisation will be necessary in order to finally define the scope of the plaintiff’s claim, I do not consider that any further particularisation is necessary at this time in order for the fourteenth defendant to be able to plead to the allegations against him.

86․Separately, the plaintiff pleads at paragraph 41A that the fourteenth defendant was a person involved in the contraventions of Sellick Consultants Pty Ltd, and hence seeks damages against him in respect of the compliance representations made by Sellick Consultants. This claim accommodates the possibility that the representations in the various certificates were not made by the fourteenth defendant himself but instead were only made by the corporate entity with which he was associated. The brief pleading suffers a similar defect to that identified in relation to the Geocon defendants in that, most obviously, it fails to identify which of the elements of the definition of “involved” in s 2 of the ACL are relied upon. That is of fundamental importance to the claim. It is appropriate to strike out this paragraph but allow it to be repleaded.

Costs

87․At the hearing of these applications, I indicated that I would provide an indicative determination of the question of costs as between the plaintiff and the Geocon defendants and the plaintiff and the fourteenth defendant, but permit the parties to be further heard on that issue if they wished. The intention was to at least provide the opportunity for the question of costs to be resolved without the need for further submissions on that issue. As a consequence, any conclusions stated below are obviously ones reached without the benefit of submissions and hence are subject to revision if the parties do not accept them and wish to devote further time and resources to the question of costs.

88․In relation to the application by the Geocon defendants, aspects of the pleading will be struck out. On the other hand, some of the submissions made by the Geocon defendants have not been accepted, most particularly their arguments in relation to the statutory warranties claims.

89․As between the plaintiff and the fourteenth defendant, the application has failed except in relation to the “person involved” point.

90․Parties are often tempted to make a strike out application on multiple different bases in the expectation that, if successful on only one point, they will receive the whole of their costs. To encourage such a course is to encourage applications to which the requisite discipline required by the law has not been applied. That in turn requires the other party and the court to spend time and effort on applications which lack merit. The larger and more complex an application becomes, the more likely it is to substantially delay the orderly progress of the proceedings, and the less likely it is able to be resolved between the parties by modest and pragmatic compromise. Those considerations mean that, where a strike out application has been successful on some but not all of the bases upon which it is brought, consideration should be given to dissecting the outcome so as to address the question of costs, having regard to the issues upon which the applicant lost and won.

91․Having regard to the outcome of the applications, both plaintiff and defendants have caused each other to unnecessarily incur costs. In circumstances where costs thrown away by reason of the amendment of the pleadings will be the subject of the default rule in r 513, the appropriate order is that there should be no order as to costs of the respective applications. However, as indicated, if the parties wish to seek a different order, they will have that opportunity.

Orders

92․The orders of the Court are:

(1)Paragraphs 40–41A and 42–48 of the Amended Statement of Claim are struck out with leave to replead those causes of action.

(2)As between the plaintiff and the first, second and 13th defendants, there is no order as to costs of the amended application in proceeding dated 7 April 2025.

(3)As between the plaintiff and the 14th defendant, there is no order as to costs of the application in proceeding dated 12 November 2024.

(4)In the event that any of the plaintiff or the first, second, 13th or 14th defendants seek a different costs order, the relevant party must file and serve written submissions limited to no more than three pages and any evidence by 22 May 2025, and the relevant responding party must file and serve written submissions and any evidence in reply by 28 May 2025 and, unless the court otherwise orders, the question of costs shall be determined on the papers without an oral hearing.

(5)The proceedings are listed for directions at 4:15pm on Wednesday 21 May 2025.

(6)The parties have leave to provide any agreed or competing proposed directions to the Associate to Justice Mossop in advance of that listing.

I certify that the preceding ninety‑two [92] numbered paragraphs are a true copy of the Reasons for Judgment of his Honour Justice Mossop.

Associate:

Date: