Todd v SD Portfolio Holdings Pty Ltd

[2025] NSWCATCD 54

Civil and Administrative Tribunal

New South Wales

Medium Neutral Citation:

Todd v SD Portfolio Holdings Pty Ltd [2025] NSWCATCD 54

Hearing dates:

3 March 2025

Date of orders:

23 June 2025

Decision date:

23 June 2025

Jurisdiction:

Consumer and Commercial Division

Before:

K Ross, Senior Member

Decision:

(1)   SD Portfolio Holdings Pty Ltd is to pay to David Todd and Taejin Lee the sum of $40,820.95 on or before 18 July 2025.

(2)   SD Portfolio Holdings Pty Ltd and BH Australia Constructions Pty Ltd are jointly and severally to pay to David Todd and Taejin Lee the sum of $2662.00 on or before 18 July 2025.

(3)   Any application for costs is to be filed and served by 4 July 2025.

(4)   Submissions in reply are to be filed and served by 18 July 2025.

(5)   Submissions must address whether a hearing of the cost application can be dispensed with.

Catchwords:

HOME BUILDING: definition of building claim ; special condition in contract requiring construction of a deck; whether the clause is a contract for the supply of building goods and services, flooring and stairway rectification; whether common property; owner has no standing to bring claim in respect of common property

Legislation Cited:

Home Building Act 1989

Category:

Principal judgment

Parties:

David Todd & Taejin Lee
SD Portfolio Holdings Pty Ltd
BH Australia Constructions Pty Ltd

Representation:

Counsel:
Davie, T (applicants)
Justice, AD (respondents)
Solicitors:
Quaife,M: Keystone Lawyers (applicants)
Hanna,C: Takchi & Associates (respondents)

File Number(s):

2024/00127036

Publication restriction:

unrestricted

REASONS FOR DECISION

The application

1. The applicants are the registered proprietors of Lot 8 in Strata Plan 101198, which they purchased from the developer and first respondent SD Holdings Pty Ltd (SD) pursuant to a contract dated 11 January 2023 (the Sale Contract). The second respondent BH Australia Constructions Pty Ltd was the builder.

2. The Sale Contract contained a special condition requiring SD to construct an external deck. The applicants complain that the deck is incomplete and defective. It is not disputed that the second respondent was not contracted to construct the deck.

3. The applicants seek a money order in the sum of $98,049.05 in relation to four issues (the fifth having been withdrawn at hearing):

1. the external deck structure

2. internal flooring

3. internal stairs

4. defective and incomplete electrical work.

4. The respondents oppose the order sought.

The deck

5. The parties agree that this issue concerns the first respondent SD only.

Findings of fact

6. I find as follows:

1. The Sale Contract contained Special Condition 64:

“64.1 Following completion the vendor agrees to build a timber deck within the statutory provisions for planning exemption for R2 land, veranda and pergolas, with a 1.4 m wall to 3 sides, timber decking to match the existing rear deck, exposed timber beams in black (to match the property) metal roofing, painted plywood ceiling, 2 x lights, 3 x retractable screens to veranda openings to create enclosure of the verandah, approximate dimensions are, 3.5 metres by 3.5 metres.

64.2 The vendor warrants the deck referred to in 64.1 above is to be completed before the end of February 2023 but not prior to settlement. Access for the deck shall be via the back garden and not through the property.

64.3 An amount of $10,000 of the vendor’s settlement funds is to be withheld in the purchaser’s conveyancers trust account in good faith until the rear deck is completed to the satisfaction of the purchaser.

64.3 The vendor will also arrange for the garage floor (internal) to be painted on completion of driveway (approx 6 months).

64.4 this clause will not merge on completion.”

2. The deck was not completed before the end of February 2023.

3. In early April 2023 SD engaged Sustainable Homes Australia R and D Pty Ltd (SHARD) to construct the deck.

4. Construction of the deck commenced in about April 2023.

5. During construction the applicants raised with SD and with SHARD their concerns that the deck was not being constructed in accordance with the requirements of the special condition, including that no allowance had been made for lighting the deck.

6. On or about 31 May 2023, the applicants were advised that the construction of the deck required strata approval, which had not been given.

7. On or about 20 June 2023, the applicants were advised that construction of the deck without proper approval may jeopardise the insurance of the property.

8. Construction of the deck ceased until these issues could be resolved.

9. On 30 November 2023, special by-law 1 dealing with rear decks was adopted by the strata scheme.

10. An extraordinary meeting held on 26 November 2024 resolved to impose a special levy of $20,000 on the applicants as owners of lot 8, to cover the removal costs for the “non-DA approved structure”, being the rear deck.

Jurisdiction

7. The respondent SD submits that the Tribunal does not have jurisdiction in respect of the deck, on the basis that the claim is not a building claim because the contract does not comply with the requirements of the Home Building Act 1989 (the HBA),the parties knew that SD was not a builder, and knew that SD proposed to employ a builder to construct the deck.

8. I do not accept these submissions. A failure to comply with the requirements of the HBA does not mean that the HBA does not apply. If it were otherwise there would be no incentive at all for compliance with the legislative scheme.

9. A building claim is defined in s 48 A of the HBA as follows:

“building claim” means a claim for--

(a) the payment of a specified sum of money, or

(b) the supply of specified services, or

(c) relief from payment of a specified sum of money, or

(d) the delivery, return or replacement of specified goods or goods of a specified description, or

(e) a combination of two or more of the remedies referred to in paragraphs (a)-(d),

that arises from a supply of building goods or services whether under a contract or not, or that arises under a contract that is collateral to a contract for the supply of building goods or services, but does not include a claim that the regulations declare not to be a building claim.

10. The special condition in the Sales Contract is an agreement for the supply of building goods and services. A claim which arises under that agreement is a building claim. The claim has been brought within the time required in s 48K. The Tribunal has jurisdiction to hear and determine the claim.

11. To the extent that the claim seeks to enforce the statutory warranties, I need also to consider the time limits in s 18E of the HBA:

(1) Proceedings for a breach of a statutory warranty must be commenced in accordance with the following provisions--

(a) proceedings must be commenced before the end of the warranty period for the breach,

(b) the warranty period is 6 years for a breach that results in a major defect in residential building work or 2 years in any other case,

(c) the warranty period starts on completion of the work to which it relates (but this does not prevent proceedings from being commenced before completion of the work),

(d) if the work is not completed, the warranty period starts on--

(i) the date the contract is terminated, or

(ii) if the contract is not terminated--the date on which work under the contract ceased, or

(iii) if the contract is not terminated and work under the contract was not commenced--the date of the contract,

(e) if the breach of warranty becomes apparent within the last 6 months of the warranty period, proceedings may be commenced within a further 6 months after the end of the warranty period,

(f) a breach of warranty

“becomes apparent” when any person entitled to the benefit of the warranty first becomes aware (or ought reasonably to have become aware) of the breach.

12. The deck is incomplete. The warranty period commenced either when work on the deck ceased (around the beginning of June 2023) or when the contract was terminated. There is no direct evidence of termination of the contract, but SD alleges that it was frustrated because of the delay in obtaining the special by-law, which was adopted on 30 November 2023.

13. In either case, this claim filed on 5 April 2024 is brought within 2 years and is accordingly brought in time. Issues with the deck do not require that the breach has resulted in a major defect.

The statutory warranties

14. Section 18B of the HBA provides:

(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--

(a) 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,

(b) 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,

(c) a warranty that the work will be done in accordance with, and will comply with, this or any other law,

(d) 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,

(e) 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,

(f) 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.

15. I am satisfied on the evidence that the work was not carried out “within the time stipulated in the contract”. I also have regard to the expert evidence (Aaron Kyle on behalf of the applicants, and Peter Shepherd on behalf of the respondent) and am satisfied that the partially constructed structure does not comply with the requirements in the special condition (there were no plans, but the special condition set out certain specifications).

16. The experts engaged in a conclave and produced a joint report. They both agree that the deck is incomplete and agree on certain of the defects but differ in respect of the scope of work for rectification. Mr Shepherd is satisfied that the deck can be completed whilst Mr Kyle says that it needs to be removed and rebuilt.

17. I prefer the evidence of Mr Kyle for a number of reasons:

1. The deck has not been built in accordance with the specifications. It varies in the following ways:

1. It required a 1.4m wall to 3 sides. The constructed wall is 1 m high and is incomplete,

2. The timber decking does not match the existing rear deck,

3. The exposed timber beams are not black to match the property,

4. The metal roofing is incomplete,

5. No plywood ceiling has been supplied,

6. No provision has been made for lights to be installed,

7. The 3 retractable screens have not been supplied,

8. The deck was to be 3.5m X 3.5M but is 3 m X 2.6 m.

2. The deck has been sitting in an incomplete stage of construction for 2 years. I accept that this will necessarily have caused damage.

3. The deck as constructed has not been approved by the Owners Corporation. The By-law requires consent to be sought before construction.

18. I accept Mr Kyle’s amended costings and allow the sum of $40,820.95.

Internal flooring and stairway

19. The respondent opposes the claims in respect of these items on the basis that they are common property issues, and the applicant as the owner of the lot has no standing to bring the claim.

20. I accept this submission in respect of the flooring and stairway. Lot property is defined in section 6 of the Strata Schemes Development Act 2015 (NSW) (SSDA) as:

(1) For the purposes of this Act, the boundaries of a lot shown on a floor plan are--

(a) except as provided by paragraph (b)--

(i) for a vertical boundary in which the base of a wall corresponds substantially with a base line--the inner surface of the wall, and

(ii) for a horizontal boundary in which a floor or ceiling joins a vertical boundary of the lot--the upper surface of the floor and the under surface of the ceiling, or

(b) the boundaries described on the floor plan relating to the lot, in the way prescribed by the regulations, by reference to a wall, floor or ceiling in a building to which the plan relates or to common infrastructure within the building.

(2) In this section--

“base line” --see paragraph (a) of the definition of

“floor plan” in section 4 (1).

21. Floor plan in s 4 is defined as

“floor plan” means a plan that--

(a) defines by lines (each a “base line” ) the base of the vertical boundaries of each cubic space forming the whole of a proposed lot, or the whole of a part of a proposed lot, to which the plan relates, and

(b) shows--

(i) the floor area of each proposed lot, and

(ii) if a proposed lot has more than one part--the floor area of each part together with the aggregate of the floor areas of the parts, and

(c) if a proposed lot or part of a proposed lot is superimposed on another proposed lot or part--shows the separate base lines of the proposed lots or parts, by reference to floors or levels, in the order in which the superimposition occurs.

22. The applicant says that the first floor of the dwelling is not a boundary shown on a floor plan, but I do not agree. The plan of the first floor meets the requirements of the definition of “floor plan”.

23. It follows that the flooring and internal stairs are common property. The applicants have no standing in respect of those issues.

Electrical wiring

24. The respondent opposes this order on the basis that cabling which services more than one lot is also common property. There is however no evidence that the cabling in question services more than one lot. I do not accept that the cabling is common property.

25. The experts agree that the cabling is defective and agree that the cost of rectification is $2420 exclusive of builder’s margin and GST.

26. There is no evidence that builder’s margin would apply to this item. I allow the sum of $2420 plus GST $ 2662.00.

The validity of the occupation certificate

27. Bearing in mind that I am not satisfied that the flooring or stairs are common property there is no need for me to consider the submissions in relation to the occupation certificate.

Work order or money order?

28. The Tribunal is required to consider that the preferred outcome in home building disputes is a work order. However, in this case I decline to make a work order because neither of the respondents holds a contractor license, and neither have proposed a licensed entity to carry out the work.

Orders

29. I make the following orders:

1. SD Portfolio Holdings Pty Ltd is to pay to David Todd and Taejin Lee the sum of $40,820.95 on or before 18 July 2025.

2. SD Portfolio Holdings Pty Ltd and BH Australia Constructions Pty Ltd are jointly and severally to pay to David Todd and Taejin Lee the sum of $2662.00 on or before 18 July 2025.

3. Any application for costs is to be filed and served by 4 July 2025.

4. Submissions in reply are to be filed and served by 18 July 2025.

5. Submissions must address whether a hearing of the cost application can be dispensed with.

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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: 14 August 2025