18 July 2023
12 min read
#Property, Planning & Development
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In the Strata Plan 92450 v JKN Para 1 Pty Ltd & Anor [2022] decision, although the Supreme Court found that the ACP cladding did not comply with the deemed-to-satisfy provisions of the Building Code of Australia (BCA), it did not award damages, finding that there was no breach of the Home Building Act (HBA) statutory warranties. See our case summary here.
On appeal, the NSW Court of Appeal overturned the primary decision, finding that the primary judge erred in:
Although the primary judge ultimately found no breach of section 18B(1)(c) of the HBA, upon the Court’s ‘strict’ view of the section and facts, the builder was in breach. The Court also noted that during an oral argument, the builder had accepted that it was in breach of the statutory warranty (that the work will be done in accordance with, and will comply with, this or any other law) under section 18B(1)(c) of the HBA.
In the most significant part of the decision, the Court found that the primary judge erred in finding that the Owners Corporation had the onus of establishing that an alternative solution could not have been prepared at the relevant time or at the time of the proceedings. The Court found that the Owners Corporation had established that the builder and developer had not complied with the BCA, and that the evidentiary onus on the Owners Corporation did not extend to proving that there was no possible way for the builder and developer to comply with the BCA.
In relation to damages, the Court identified that the correct assessment of damages for building contracts is the reinstatement of an aggrieved party rather than the diminution in value of a defective building, taking into account that the reinstatement damages must be based on rectification work that is reasonable. The Court noted that the test of unreasonableness is satisfied by exceptional circumstances. On the facts, the builder and developer argued that any breach of the statutory warranties was purely formal. However, the Court found that the Owners Corporation was entitled to a building that complied with any deemed to satisfy provisions of the BCA as it was at the relevant time.
The decision will likely stand as authority on what is necessary to prove in a cladding claim and the extent of the evidentiary onus.
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Authors: Christine Jones & Lauren Boswell
Residents to cop brunt of NSW development sting
A new tax on developments will help the NSW government to maintain a social licence to increase density in infill areas. But it is owners and renters who will wear the cost (6 July 2023). Read more here.
Commencements of detached houses continue to decline into 2023
“Australia commenced 26,265 new houses in the first quarter of 2023, down by 16.4 per cent on the same quarter last year and 39.1 per cent fewer houses commenced than during the peak in the June Quarter 2021,” stated HIA Senior Economist, Tom Devitt (12 July 2023). Read more here.
New digital tool to help home buyers access government support
Whether it is a growing family buying a cosy abode in Parkes or a young professional looking to purchase their first home in Campbelltown, house hunters are set to save time and money with the launch of the new online Home Buyer Assistance Finder (15 July 2023). Read more here.
New Rental Commissioner to give renters a voice
NSW renters will soon have a strong voice to government with the announcement today that sector leader Trina Jones will be the first NSW Rental Commissioner (11 July 2023). Read more here.
Turning to data-driven decision-making in the construction industry
Technology is constantly evolving and integrating into different industries. These innovations bring new hardware and software, allowing organisations to complete their operations more efficiently. One industry where technology has found solid footing is the construction sector (16 July 2023). Read more here.
Turning the housing crisis around: how a circular economy can give us affordable, sustainable homes
Households across Australia are struggling with soaring energy and housing costs and a lack of housing options. Mixed with a climate crisis, economic volatility and social inequality, it’s a potent set of policy problems. Australia needs a circuit-breaker – a bold national project to tackle the climate crisis and support households by shifting to a more sustainable housing industry (12 July 2023). Read more here.
NSW government introduces Connecting with Country Framework
The New South Wales government has finalized its Connecting with Country Framework, which provides guidance for designers, planners and governments on how to respond to Country and empower Aboriginal voices in the design process (6 July 2023). Read more here.
Australian Bureau of Statistics: Building Activity Australia
ABS has released its statistics on estimates of value of building work and the number of dwellings commenced, completed, under construction and in the pipeline for the quarter ending March 2023 (12 July 2023). Read more here.
Decisions reserved as at 14 July 2023
The Court of Appeal maintains a list of matters before the Court for which judgement is reserved (14 July 2023). Read more here.
Housing Industry Association: Variations to the Scope of Works
Variations end up being one of the most common causes of disputes between owners and builders. The building legislation has strict rules for variations to domestic building contracts. The golden rule is that all variations and changes to the contract need to be in writing and agreed between the parties. This includes those changes requested by the client (26 June 2023). Read more here.
Beechwood Homes (NSW) Pty Ltd v Hassos [2023] NSWCATAP 184
APPEALS – Building and construction – Home Building Act 1989 (NSW) – contract – damages – loss of ability to rent dwelling – loss of profit – Principles applicable to assessment of damages.
Civil and Administrative Tribunal Act 2013 (NSW); Civil and Administrative Tribunal Rules 2014 (NSW); Home Building Act 1989 (NSW).
Ur Rehman v Commissioner for Fair Trading [2023] NSWCATOD 102
ADMINISTRATIVE LAW – OCCUPATIONS – Home Building – Contractor licence – supervisor certificate – real Estate – Class 1 Licence – Assistant Agent certificate – improper conduct – fit and proper person – disciplinary action – imposition of penalties – cancellation – disqualification.
Administrative Decisions Review Act 1997; Civil and Administrative Tribunal Act 2013; Crimes Act 1900; Home Building Act 1989; Home Building Regulation 2014; Licensing and Registration (Uniform Procedures) Act 2002; Property and Stock Agents Act 2002.
Makkar v Solar Power Nation Pty Ltd [2023] NSWCATAP 187
APPEALS – new evidence not allowed as reasonably available at time of hearing – expert evidence – tradesman’s report containing bare assertion to be given no weight – leave to appeal refused.
Civil and Administrative Tribunal Act 2013 (NSW); Home Building Act 1987 (NSW).
Nassif v Commissioner of Fair Trading; Toplace Pty Ltd v Commissioner of Fair Trading (No 2) [2023] NSWCATOD 98
ADMINISTRATIVE LAW – review of decision by external decision-maker – decision to cancel contractor licence and disqualify a licence holder pursuant to the Home Building Act 1989 (NSW).
PRACTICE AND PROCEDURE – interlocutory order – revoking stay order.
Administrative Appeals Tribunal Act 1975 (Cth); Administrative Decisions Review Act 1997 (NSW); Crimes Act 1900 (NSW); Home Building Act 1989 (NSW); Licensing and Registration (Uniform Procedures) Act 2002 (NSW).
Sunshine East Pty Ltd v CBEM Holdings Pty Ltd [2023] NSWSC 744
APPEALS – procedure – leave to appeal against summary judgment of District Court Registrar – plaintiff/judgment debtor ordered to pay unanswered progress claim for building works undertaken by defendant/judgment creditor pursuant to s 15 of the Building and Construction Industry Security of Payment Act 1999 (NSW) – where summary judgment entered against plaintiff/judgment debtor due to absence of triable defence.
CONTRACTS – parties – agency – whether second plaintiff entered into contract with defendant for building works – where corporate agent empowered to enter into trade contracts on behalf of second plaintiff with prior approval – where no evidence that second plaintiff did not give prior approval in circumstances from which approval could be inferred – corporate agent acted with express actual authority to bind second plaintiff – no triable issue that second plaintiff was not a party to the contract.
BUILDING AND CONSTRUCTION – Home Building Act 1989 (NSW) – where defendant/judgment creditor was uninsured – statutory prevention to recover costs of work for failing to insure under s 94(1) not applicable to parts of the work that are not “residential building work” under the Act – where defendant/judgment creditor was unlicensed – where statutory consequences of being unlicensed do not include loss of entitlement to progress payments under s 15 of the Security of Payment Act – no triable issues arise due to the defendant/judgment creditor being uninsured or unlicensed.
Building and Construction Industry Security of Payment Act 1999 (NSW); District Court Act 1973 (NSW); Home Building Act 1973 (NSW) and Supreme Court Act 1970 (NSW).
Drummond v Gordian Runoff Ltd (No 2) [2023] NSWSC 731
PRECEDENT – whether NCAT decisions binding on tribunal – whether District Court judgements binding on NCAT – principles at [21] – neither binding but legally persuasive.
COSTS – plaintiffs sue insurer for $215,000 in NCAT – case turns on legal issue already determined by NCAT and District Court in insurer’s favour – insurer makes Calderbank offer when serving defence – $10,000 inclusive – insurer does not refer to NCAT and District Court decisions – no evidence plaintiffs aware of these decisions – rejection of offer not unreasonable in circumstances.
COSTS – offer of compromise – ‘walk away’ – proceedings on foot for a year – legal issues fully ventilated – application of Regency Media considered at [28]-[31].
Uniform Civil Procedures Rules rr 20.26, 42.14
NSW Legislation
Regulations and other miscellaneous instruments
Water Management (Application of Act to Bega River Area Coastal Floodplain Alluvial Groundwater Source) Proclamation 2023 – published LW 4 July 2023.
Water Management (Application of Act to Greater Metropolitan Region Groundwater Sources) Proclamation 2023 – published LW 4 July 2023.
Water Management (Application of Act to Towamba River Coastal Floodplain Alluvial Groundwater Source) Proclamation 2023 – published LW 4 July 2023.
Water Management (Application of Act to Tweed River Area Coastal Floodplain Alluvial Groundwater Source) Proclamation 2023 – published LW 4 July 2023.
Justice Legislation Amendment (Fees) Regulation 2023 – published LW 7 July 2023.
Environmental Planning Instruments
Camden Local Environmental Plan 2010 (Amendment No 52) – published LW 7 July 2023.
Canterbury-Bankstown Local Environmental Plan 2023 (Map Amendment No 1) – published LW 7 July 2023.
Hawkesbury Local Environmental Plan 2012 (Map Amendment No 4) – published LW 7 July 2023.
Lismore Local Environmental Plan 2012 (Map Amendment No 6) – published LW 7 July 2023.
Maitland Local Environmental Plan 2011 (Amendment No 35) – published LW 7 July 2023.
Orange Local Environmental Plan 2011 (Amendment No 35) – published LW 7 July 2023.
Orange Local Environmental Plan 2011 (Map Amendment No 6) – published LW 7 July 2023.
Penrith Local Environmental Plan 2010 (Map Amendment No 3) – published LW 7 July 2023.
Wingecarribee Local Environmental Plan 2010 (Map Amendment No 7) – published LW 7 July 2023
Wollondilly Local Environmental Plan 2011 (Amendment No 44) – published LW 7 July 2023.
Woollahra Local Environmental Plan 2014 (Amendment No 31) – published LW 7 July 2023.
Byron Local Environmental Plan 2014 (Amendment No 38) – published LW 14 July 2023.
North Sydney Local Environmental Plan 2013 (Map Amendment No 2) – published LW 14 July 2023.
Sydney Local Environmental Plan 2012 (Amendment No 92) – published LW 14 July 2023.
Woollahra Local Environmental Plan 2014 (Amendment No 33) – published LW 14 July 2023.
Bills assented to
Parliamentary Remuneration Amendment Act 2023 No 6 – Assented to 3 July 2023.
Statute Law (Miscellaneous Provisions) Act 2023 No 7 – Assented to 3 July 2023.
Statutory and Other Offices Remuneration Amendment Act 2023 No 8 – Assented to 3 July 2023.
Residential Tenancies Amendment (Rental Fairness) Act 2023 No 9 – Assented to 3 July 2023.
Environmental Planning and Assessment Amendment (Housing and Productivity Contributions) Act 2023 No 10 – Assented to 13 July 2023.
Crimes Legislation Amendment (Assaults on Retail Workers) Act 2023 No 11 – Assented to 13 July 2023.
Criminal Legislation Amendment (Knife Crimes) Act 2023 No 12 – Assented to 13 July 2023.
Law Enforcement (Powers and Responsibilities) Amendment (Digital Evidence Access Orders) Act 2023 No 13 – Assented to 13 July 2023.
Commonwealth
Act Compilation
National Housing Finance and Investment Corporation Act 2018 No 65 – Registered 13 July 2023.
Disclaimer
The information in this publication is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, we do not guarantee that the information in this newsletter is accurate at the date it is received or that it will continue to be accurate in the future.
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