01 August 2018
11 min read
#Property, Planning & Development
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Champion Homes Sales Pty Ltd v Commissioner for Fair Trading [2018] NSWCATOD 114
The New South Wales Civil and Administrative Tribunal (Tribunal) recently considered in Champion Homes Sales Pty Ltd v Commissioner for Fair Trading [2018] NSWCATOD 114 whether the standard of liability for a breach of statutory warranties under the Home Building Act 1989 (NSW) (Act) should be different when the warranty is considered in light of a contractual provision or a disciplinary provision in the Act.
The case also considered whether a builder holding a contractor licence should be held to the same standard of liability under the Act when it subcontracts work to a licenced subcontractor as it is when it performs the work itself.
Facts
The builder carried out works at a property in Eastlakes and a property at Kyeemagh. It was alleged that the builder had breached its statutory warranties under section 18B(1)(a) of the Act (contractual provision) by failing to complete the works with due care and skill, and in accordance with the plans and specifications set out in the contract.
With respect to the Eastlakes property, it was alleged that there was water ingress caused by a failure of the waterproofing membrane under the sliding door, resulting in water damage. The builder had engaged a licenced waterproofer to complete these works.
With respect to the property at Kyeemagh it was alleged that there were leaks to the laundry ceiling and in the garage, as well as occurrences of water ingress. No subcontractor had been engaged to complete these works. Instead, a NSW Fair Trading officer found that the builder did not install the flashings to the roof correctly, and that the builder should have installed a metal cap over the parapet wall in the garage.
Based on the evidence provided by the NSW Fair Trading officer after inspections at both properties, the Commissioner for Fair Trading (the Commissioner) found that the builder had twice breached its statutory warranty to complete work with due care and skill under section 18B(1)(a) of the Act.
The Commissioner subsequently relied on sections 51(1)(c) and 56(c) of the Act (disciplinary provisions) in imposing a penalty of $3,000 against the builder. Section 51(1)(c) provides that a holder of a contractor licence authorised by that licence to do residential building work is guilty of improper conduct if it breaches a statutory warranty. Section 56(c) provides that the Commissioner may take disciplinary action under section 62 against the licence holder on the ground that the holder is guilty of improper conduct.
Administrative review
The builder commenced proceedings in the Tribunal for a review of the Commissioner’s decision. Ultimately, the Tribunal upheld the decision.
The builder submitted that the breaches of statutory warranties should have varying standards of strict liabilities when considered either for the purposes of contractual provisions (for example, under section 18 of the Act) or as disciplinary provisions (for example, under section 51 of the Act). Specifically, the builder argued that it should not be held responsible failures in work done by subcontractors and the Act should not be interpreted so as to impose strict liability upon a builder for the work of others, when applying the disciplinary provisions.
The Tribunal found that no distinction between statutory warranties for the purposes of contractual provisions or disciplinary provisions should be drawn, and that the entire Act should be construed in a manner so as to give the same meaning to words which occur in different parts throughout the Act, unless there is good reason to do otherwise. The Tribunal therefore found it would be inappropriate to read down the words “breaches a statutory warranty” or give a different meaning to the word “breach” in different sections of the Act.
The Tribunal rejected the builder’s arguments, finding that:
The Tribunal ultimately held that the $3,000 fine imposed under section 62(3) of the Act for two breaches of statutory warranties was the correct and preferable decision.
What does this mean?
This decision clarifies that the same standard of liability exists for breaches of statutory warranties, notwithstanding the differentiation between the warranties being considered for the purpose of contractual provisions or disciplinary provisions. The Tribunal emphasised that it will construe the Act “as far as possible to give the same meaning to words which occur in different parts of the statute, unless there is good reason to do so otherwise.”
Editorial: Christine Jones, Christopher Yong & Eleanor Grounds
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prefabAUS Conference 2018
11th - 12th September, 2018 Brisbane Convention & Exhibition Centre. More...
Current Consultations
Non-conforming building products
Status: Submissions Closed Date Referred: 11 October 2016 Next Hearing: 02 August 2018 Reporting Date: 16 August 2018
Beveridge v Style Tiles and Bathrooms Pty Ltd [2018] NSWCATAP 183
CONTRACT LAW – formation of contract – “refundable” deposit – uncertainty.
HOME BUILDING ACT – Unenforceable contract – claim by homeowner – requirements of s 7AAA of Home Building Act 1989 (NSW).
COSTS – special circumstances – original orders set aside due to non-appearance of respondent – subsequent rehearing – party partially successful.
Woodward v D J & T L Mellross Pty Ltd [2018] NSWCATAP 179
BUILDING AND CONSTRUCTION – Home Building – Construction of contracts – precedence of documents – assessment of damages – whether rectification a reasonable course to adopt.
TTM Investment Corporation Pty Ltd v Hua Chang Pty Ltd [2018] NSWSC 1078
Security for costs order and freezing order to be granted.
CIVIL PROCEDURE – security for costs – discretionary considerations – where party resisting order not acting purely defensively in main proceedings – relevance of the strength of a party’s claim.
CIVIL PROCEDURE – security for costs order – quantum of security – ascertaining quantum where neither party is acting purely defensively in main proceedings – difficulty in ascertaining quantum where claims and cross-claims are interconnected.
CIVIL PROCEDURE – interlocutory application – freezing order – risk of removing assets out of jurisdiction – where party has little to no connection with jurisdiction – where party has commercial incentive to remove assets from jurisdiction.
Home Building Act 1989 (NSW), s 92(1).
Champion Homes Sales Pty Ltd v Commissioner for Fair Trading [2018] NSWCATOD 114
ADMINISTRATIVE REVIEW – Home Building – Disciplinary action – Where respondent imposed fine on applicant in respect of breaches of statutory warranty to exercise due care and skill – Whether different standards of liability should apply in proceedings for breach of warranty and in disciplinary proceedings.
Sproule v D P James Carpet Laying Pty Ltd [2018] NSWCATAP 177
Leave to appeal on a ground other than a question of law is refused.
APPEALS – admission of fresh evidence – rules of evidence – weight of evidence – no question of principle.
El Howot v Moss [2018] NSWCATAP 173
(1) The extension of time to lodge the appeal under sec 41 Civil and Administrative Tribunal Act 2013 is refused.
(2) The Appeal is dismissed.
APPEAL – extension of time – inadequate explanation of delay – weak prospects and lack of substantive merit – additional considerations taken into account in applications for leave to appeal from decisions of the Consumer and Commercial Division.
COSTS – special circumstances.
Civil and Administrative Tribunal Act 2013 (NSW); Civil and Administrative Tribunal Regulation 2013; Civil and Administrative Tribunal Rules 2014; Corporations Act 2001 (Cth); Home Building Act 1989 (NSW).
Lane Cove Council v The Owners – Strata Plan No 88649 [2018] NSWCATAP 171
HOME BUILDING CLAIM – defects and statutory warranties – no evidence or no reasonable basis for conclusion – failure to provide proper reasons – whether rectification work was a necessary and reasonable course to adopt – failure to provide procedural fairness – Civil and Administrative Tribunal Act 2013 (NSW); Home Building Act 1989 (NSW).
Andy and Patrick Floor Covering Pty Ltd t/as Silver Trading Timber Floor v Li [2018] NSWCATAP 172
By consent, pursuant to s 80(3) of the Civil and Administrative Tribunal Act 2013 (NSW) the appeal is to be dealt with by way of a new hearing.
PRACTICE AND PROCEDURE – Section 80(3) of the Civil and Administrative Tribunal Act 2013 (NSW) – determination of appeal by way of rehearing.
CONSUMER LAW – whether Expert Report – whether sufficient to prove claim.
Australian Consumer Law (NSW); Civil and Administrative Tribunal Act 2013 (NSW).
Owners Corporation 1 PS523454S v L.U Simon Builders Pty Ltd (Building and Property) [2018] VCAT 987
Domestic building – s75 Victorian Civil and Administrative Tribunal Act 1998 – standing of owners corporation to bring proceeding on behalf of private lot owners – s9 Domestic Building Contracts Act 1995 – s12 Owners Corporations Act 2006 – whether architect owes duty of care to the owners corporations.
By 2 August 2018 the applicants must file and serve substituted Points of Claim having regard to these Reasons.
The Owners – Strata Plan No. 80751 v AV Jennings (Cammeray) [2018] NSWSC 1080
CIVIL PROCEDURE – application for leave to rely on expert reports and affidavits served out of time – whether in interests of justice to grant leave – where hearing date is upcoming – impractical for defendant to deal with some of the reports in that time – whether hearing date should be vacated – where plaintiff had advance notice of necessity of expert evidence – no satisfactory explanation for delay given – vacation of hearing would create wasted court time – leave partially granted and partially refused.
Kang v Bishop (No 2) [2018] NSWSC 1073
ADMINISTRATIVE LAW – judicial review – appeal from Local Court– application to quash orders made by Magistrate – jurisdiction of Local Court – whether prosecution in Local Court authorised – whether delegate authorised under Fair Trading Act 1987(NSW) required to bring prosecution under s 192E and s 192 G of the Crimes Act 1900 (NSW) – proper construction of s 14 and s 173 of the Criminal Procedure Act 1986 (NSW) – consideration of the interaction between Criminal Procedure Act, Crimes Act and Fair Trading Act – application dismissed.
Regulations and other miscellaneous instruments
Community Housing Providers (Adoption of National Law) Regulation 2018 (2018-385) — published LW 20 July 2018.
Contacts:
Christine Jones, Partner - Construction & Infrastructure (Dispute Resolution)
T: +61 2 8083 0477
E: christine.jones@holdingredlich.com
Stefanie Dunnicliff, Senior Associate
T: +61 2 8083 0464
E: Stefanie.Dunnicliff@holdingredlich.com
Divya Chaddha, Associate
T: +61 2 8083 0457
E: Divya.Chaddha@holdingredlich.com
Disclaimer
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