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Residential Focus

14 December 2022

19 min read

#Property, Planning & Development, #Construction, Infrastructure & Projects

Published by:

Lauren Boswell, Daniel Fane, Lucas Yang

Residential Focus

Design and Building Practitioners Act 2020 (NSW) – case digest update

The Design and Building Practitioners Act 2020 (NSW) (DBPA) has now been in force, in various forms, for 18 months. Its density, complexity and impact on day-to-day industry practice, particularly in the class 2 space, has seen industry participants struggling to come to terms with its introduction. Unsurprisingly, there remains uncertainty regarding its interpretation.

There is a growing body of decisions which provide insight into the application of the DBPA. In seminars and previous editions of our Residential Focus, we have reflected on some of those cases and their potential implications.

In this edition, we consider five of the most recent decisions regarding the DBPA and what impact they may have.

The Owners – Strata Plan No. 61285 v Taylor (No. 2) [2022] NSWCATCD 117

The primary issue for determination in this September 2022 decision of NCAT was whether a penalty under section 247A of the Strata Schemes Management Act 2015 (NSW) should be imposed on the respondent for failing to comply with a work order made by NCAT.

The respondent tendered a report prepared by an engineer that included comments on the suitability of the roof works the subject of the work order. The applicant objected to the admissibility of the engineer’s report on grounds which included that the engineer was not registered under the DBPA and so could not lawfully prepare the report by virtue of section 32 of the DBPA.

Section 32 of the DBPA prevents a person from carrying out “professional engineering work in a prescribed area of engineering” unless the person is registered under the DBPA or is supervised by a person that is registered under the DBPA.

NCAT reviewed the definition of “professional engineering work” in section 31 and the exclusions to the definition of professional engineering work in regulation 14 of the Design and Building Practitioners Regulation 2021 (NSW) (DBPR).

Regulation 14 of the DBPR provides that engineering work that is not professional engineering work under the DBPA “…unless the work is carried out directly in relation to the design or construction of a building…”

NCAT found that the report was prepared “in connection with civil penalty proceedings” and was not work carried out directly in relation to the design or construction of a building. As the report fell within the professional engineering work exclusion in regulation 14 of the DBPR, section 32 of the DBPA did not apply.

NCAT further found that it was unlikely that the admissibility of the report would be affected by any prohibition on the engineer issuing the report under the DBPA. NCAT noted that further consideration would need to be given to the admissibility of such a report if (unlike here) NCAT were being asked to make work orders based on a scope in the report.

The Owners – Strata Plan No 90018 v Parkview Constructions Pty Ltd [2022] NSWSC 1123

The plaintiff owners corporation sought leave to add new defects to its claim for breach of the statutory warranties in section 18B of the Home Building Act 1989 (NSW) (Warranties), and to bring a new claim against the builder under section 37 of the DBPA, which imposes a duty of care on a person carrying out construction work to each subsequent owner of the land.

The Court held that the limitation for making a claim under the DBPA had not lapsed. It then considered whether allowing the owners to add the new claim would prejudice the builder.

In reaching its decision to permit the claim to be added as there would be limited prejudice to the builder, the Court noted that section 41(3) of the DBPA provides that a claim under section 37 is subject to the proportional liability regime under the Civil Liability Act 2002 (NSW). Accordingly, section 37 imposes the same duty of care on the builder as on its subcontractors. This means a builder can say that its subcontractors were responsible for any breach of section 37, without having to bring a claim against those subcontractors.

The Court also granted the owners leave to add the new defects into its claim for breach of the Warranties as the new defects did not represent new claims, which meant that the claims were not outside the limitation period.

Kaltoum v Commissioner for Fair Trading [2022] NSWCATOD 138

This November 2022 decision involved an administrative review brought under section 63 of the DBPA. The applicant applied to NSW Fair Trading (NSWFT) to become a registered practitioner under the DBPA, under the category of ‘building practitioner - body corporate nominee.’ His application was unsuccessful. The applicant applied for an internal review of the decision, which upheld the original decision. The applicant then applied to NCAT for an administrative review of the review decision.

The respondent contended that the plaintiff had not provided sufficient evidence of his experience, knowledge and skills to support the registration. Specifically, there were apparent inconsistencies in the dates given by the applicant as to when he had worked on the nominated projects, and his two reference letters were unsigned.

NCAT concluded that the applicant had failed to provide compelling evidence to support an opinion that he had the requisite level of experience, knowledge and skill under section 45(3) of the DBPA, and that the two unsigned reference letters should be given little weight.

Alzaaim v Commissioner for Fair Trading [2022] NSWCATOD 139

This November 2022 decision involved the review of a decision by NSWFT to cancel the deemed registration of the applicant of four classes of licensed activities under the DBPA and the DBPR.

The respondent had issued a notice of intent to cancel the applicant’s deemed registration under section 52(1)(a) DBPA on the basis that the applicant had not provided sufficient proof that he had the appropriate qualifications for those licence classes.

NCAT held that the applicant had not provided sufficient evidence of his qualifications and competency to be granted registration for three licence classes.

In respect of the fire systems class, NCAT found that the applicant had completed tertiary courses equivalent to the prerequisite units of competency required under the DBPA and so set aside the decision to cancel the deemed registration of the applicant.

Conclusion

These decisions indicate that, particularly as regards the regulatory and compliance aspects of the DBPA, the courts and NCAT are taking a vigorous approach to uphold the intention of the DBPA, to improve the quality of construction.

Authors: Christine Jones, Marie-Louise Scarf, Lauren Boswell, Daniel Fane & Lucas Yang.

In the media

Sydney developer at centre of cracking tower allegations has building licence revoked
A controversial property developer has been suspending from holding a building licence in NSW for 10 years, while the building of its company has been permanently revoked following an investigation by the NSW Department of Fair Trading which found more than 40 defects in residential developments (8 December 2022).  More...

Designer home builder Elderton Homes goes into administration
Another major building company has announced it has gone into administration. The company has stated that it has faced ongoing struggles, citing natural disasters and the nation’s economic conditions following the pandemic (13 December 2022).  More....

In practice and courts

CEO update – Gary Rake
The CEO of the Australian Building Codes Board provides some updates on the Liveable Housing Project and the work of the Australian Building Codes Board (30 November 2022). Read more here.

Engineers Australia welcomes introduction of ACT engineer registration scheme
Engineers Australia has welcomed the ACT Government’s decision to establish a mandatory registration scheme for professional engineers (1 December 2022). Read more here.

Water efficiency labelling requirements for builders
The Water Efficiency Labelling and Standards scheme (WELS) was established in 2005 as a national instrument to encourage more efficient household water use and reduce demand for portable water. Builders and developers have obligations under this scheme that are enforceable by law (29 November 2022). Read more here.

Decision reserved – Court of Appeal
The Court of Appeal maintains a list of matters before the Court for which is judgment is reserved. The list is updated weekly (9 December 2022). Read more here.

Published

Building Approvals, Australia – October 2022
The Australian Bureau of Statistics has published the key statistics for building approvals in October 2022 (30 November 2022). Read more here.

Policy and Advocacy Update – NSW Chapter November 2022 and Yearly Wrap
The Australian Institute of Architects has published an update on the Draft Building Bill 2022, clarity on the Design and Building Practitioners Act and Regulation and an outline for the year (6 December 2022). Read more here.

Cases

James v Jandson Pty Ltd [2022] NSWSC 1686
BUILDING AND CONSTRUCTION – NCAT – appeal of NCAT Appeal Panel decision – application to extend time for this appeal refused – summons dismissed – statutory warranties as to residential building work – breach of statutory warranty – whether new contract entered into or original contract varied – offer and acceptance – consideration – forbearance to sue – completion date of building works – leave to appeal finding of facts – interpretation of s 3B Home Building Act 1989 (NSW).
Civil and Administrative Tribunal Act 2013 (NSW); Environmental Planning and Assessment Act 1979 (NSW); Home Building Act 1989 (NSW); Home Building Amendment Act 2011 (NSW); Uniform Civil Procedure Rules 2005 (NSW).

Millis v Walsh [2022] NSWCA 255
CONSUMER LAW – misleading or deceptive conduct – contract for residential renovation works – representation by silence that construction company was licensed to undertake works – whether primary judge erred in finding future form of pleaded representation made out – “No transaction” case – requirement of plaintiff to prove its loss – price paid minus value of benefits received – source of value in construction contract – where partially renovated property subsequently demolished and rebuilt – effect of circumstance that builder was unlicensed
Competition and Consumer Act 2010 (NSW); Civil Procedure Act 2000 (NSW); Evidence Act 1995 (NSW); Home Building Act 1989 (NSW); Trade Practices Act 1974 (Cth).

Divola v Natural Solar Power Pty Ltd [2022] NSWCATAP 379
APPEALS – leave to appeal – decision not fair and equitable – decision against the weight of the evidence – no question of principle.
Australian Consumer Law; Civil and Administrative Tribunal Act 2013 (NSW); Competition and Consumer Act 2010 (Cth); Fair Trading Act 1987 (NSW); Home Building Act 1989 (NSW).

Issa v Commissioner for Fair Trading [2022] NSWCATOD 159
ADMINISTRATIVE LAW – Home building – application for contractor licence – a “wide range of building construction work” – application of Instrument – experience which is considered relevant – whether applicant satisfied criterion – whether applicant is capable of doing or supervising work for which a contractor licence is required.
Administrative Decisions Review Act 1997; Civil and Administrative Tribunal Act 2013; Home Building Act 1989 (NSW); Licensing and Registration (Uniform Procedures) Act 2002 (NSW).

Actol Pty Ltd v Rise Products; Rise Products v Benth Holdings Pty Ltd t/as Gledswood Projects [2022] NSWCATCD 150
BUILDING AND CONSTRUCTION – Home Building Act 1989 (NSW), s 18B – statutory warranties – respondent undertaking supervision of residential building work but not pursuant to contract – not subject to implied warranties.
CONTRACTS – formation of contract – contract not wholly in writing – consideration of surrounding circumstances – whether contract required supply only or supply and installation.
CONSUMER LAW – Australian Consumer Law (NSW), s 3 – “consumer” – whether goods acquired as a consumer – whether pre-fabricated formwork panels for residential building are “goods … of a kind ordinarily acquired for personal, domestic or household use or consumption” – whether products acquired for the purpose of being incorporated into houses being constructed for sale at a profit are “acquired … for the purpose of using them up or transforming them … in the course of a process of production or manufacture”.
CONSUMER LAW – Misleading and deceptive conduct – representations as to future matters – reasonable grounds.
RESTITUTION – ineffective transactions – restitution of money paid – where purchase price was paid in full but only half of the goods the subject of the contract were delivered – purchaser asserted goods were defective and balance of goods not delivered – contract rescinded by purchaser or abandoned by parties – purchaser entitled to restitution of the price paid for the goods not delivered.
CONSUMER LAW – Fair Trading Act 1987 (NSW), s 79S – jurisdiction of the Civil and Administrative Tribunal with respect to consumer claims – whether the increase by regulation of the Tribunal’s jurisdiction in respect of consumer claims applies in proceedings commenced before the increase became effective – increased jurisdiction was applicable to proceedings already on foot at the time of the amendment.
STATUTORY INTERPRETATION – principle of legality – retrospectivity – Interpretation Act 1987 (NSW), s 30 – increase of jurisdiction of Tribunal with respect to consumer claims in existing proceedings does not affect any right, privilege, obligation or liability acquired, accrued or incurred under the pre-existing legislation.
WORDS AND PHRASES – “consumer”, “goods of a kind ordinarily acquired for the purpose of personal, domestic or household use or consumptions”, “using [goods] up or transforming them … in the course of a process of production or manufacture”.
Australian Consumer Law (NSW); Acts Interpretation Act 1958 (Vic); Building and Construction Industry Security of Payment Act 1999 (NSW); Civil and Administrative Tribunal Act 2013 (NSW); Civil and Administrative Tribunal Rules 2014 (NSW); Competition and Consumer Act 2010 (Cth); Corporations Act 2001 (Cth); Design and Building Practitioners Act 2020 (NSW); Fair Trading Act 1987 (NSW); Fair Trading Amendment (Monetary Limit on Orders) Regulation 2022 (NSW); Fair Trading Regulation 2019 (NSW); Home Building Act 1989 (NSW); Interpretation Act 1987 (NSW); Trade Practices Act 1974 (Cth).

Monisse v Kontelj [2022] NSWCATAP 373
PRACTICE AND PROCEDURE – application for a stay – need for evidence to substantiate allegation stay warranted – factors to be weighed in consideration of granting ex parte stay whilst the application is listed for determination at hearing.
Civil and Administrative Tribunal Act 2013 (NSW); Civil and Administrative Tribunal Rules 2014 (NSW); Home Building Act 1989 (NSW); Residential Tenancies Act 2010 (NSW).

Sunaust Properties Pty Ltd v The Owners – Strata Plan No 64807 [2022] NSWSC 1643
COURTS AND TRIBUNALS – power to transfer to NSW Civil and Administrative Tribunal (NCAT) – Civil and Administrative Tribunal Act 2013 (NSW), sch 4 cl 6(2) – proceedings commenced in Court – application then filed in NCAT – Court has jurisdiction for common issues and NCAT does not, by sch 4 cl 5(7) – whether Court can transfer to NCAT under sch 4 cl 6(2) – statutory construction of sch 4 cl 6(2) at [13]-[26] – Court may transfer where parties agree or it is appropriate to do so.
Civil and Administrative Tribunal Act 2013 (NSW); Consumer, Trader and Tenancy Tribunal Act 2001 (NSW); Limitation Act 1969 (NSW); Strata Schemes Management Act 1996 (NSW); Strata Schemes Management Act 2015 (NSW).

Silberstein v Strata Choice Pty Ltd & Hecker Australia Pty Ltd [2022] NSWCATAP 375
LAND LAW – strata title scheme dispute – claims by lot owner in negligence against strata managing agent and the building manager – whether the Tribunal has jurisdiction and power to order damages in such a dispute –interpretation of s 232 of the Strata Schemes Management Act 2015 (NSW).
APPEALS – leave to appeal – important question concerning jurisdiction and power of the Tribunal – error of law.
Civil and Administrative Tribunal Act 2013 (NSW); Civil and Administrative Tribunal Rules 2014 (NSW); Strata Schemes Management Act 2015 (NSW); Strata Schemes Management Act 1996 (NSW).

McDonnell v The Owners – Strata Plan No 64191 [2022] NSWSC 1631
APPEAL – NCAT – extension of time sought to appeal decision of NCAT – delay of over two years – appeal on question of law – leave required – plaintiffs accepted in NCAT that s 132 Strata Schemes Development Act 2015 (NSW) provided power to make orders sought – opposite position now taken for the first time – power of NCAT to make orders under s 132 Strata Schemes Development Act 2015 (NSW) – "damage" to common property under s 132 – power of NCAT to make orders conditional on approval granted under the Environmental Planning and Assessment Act 1979 – special resolution passed to permit construction/alterations on common property – concurrent proceedings in Equity Division of Supreme Court – extension of time refused.
Civil and Administrative Tribunal Act 2013 (NSW); Environmental Planning and Assessment Act 1979 (NSW); Strata Scheme Amendment Act 2004 (NSW); Strata Schemes Development Act 2015 (NSW); Strata Schemes Management Act 1996 (NSW); Strata Schemes Management Act 2015 (NSW); Supreme Court Act 1970 (NSW); Uniform Civil Procedure Rules 2005 (NSW).

Peng v Chief Commissioner of State Revenue [2022] NSWCATAP 378
APPEALS – Revenue Law – eligibility for First Home Owner grant.
Administrative Decisions Review Act 1997 (NSW); Civil and Administrative Tribunal Act 2013 (NSW); First Home Owner Grant (New Homes) Act 2000 (NSW); First Home Owner Grant and Shared Equity Act 2000 (NSW); Taxation Administration Act 1996 (NSW).

Green v Brown [2022] NSWCATAP 380
APPEAL – residential tenancy – failure to repair and consequent mould – appeal filed out of time – no legal error – no substantial miscarriage of justice – extension of time refused.
Civil and Administrative Tribunal Act 2013; Civil and Administrative Tribunal Rules 2014; Residential Tenancies Act 2010; Residential Tenancies Regulation 2010.

Patel v Southern Cross Joinery Pty Ltd [2022] NSWCATCD 162
BUILDING AND CONSTRUCTION – Home Building Act 1989 (NSW) – defective work.
Home Building Act 1989 (NSW).

Effective Building & Construction Pty Ltd v Commissioner for Fair Trading [2022] NSWCATAD 377
BUILDING AND CONSTRUCTION Home Building Act 1989 (NSW) – Disqualification – fit and proper person
Administrative Decisions Review Act 1997 (NSW); Home Building Act 1989 (NSW); Work Health and Safety Act 2011 (NSW).

Legislation

NSW Legislation

Regulations and other miscellaneous instruments

Electricity Infrastructure Investment Amendment (Access Schemes) Regulation 2022 – published LW 9 December 2022
Environmental Planning and Assessment Amendment (Cumberland Plain Biodiversity Certification) Regulation 2022 – published LW 9 December 2022
Environmental Planning and Assessment Amendment (Narrabri Lateral Pipeline Project) Order 2022 – published LW 9 December 2022
Environmental Planning and Assessment Amendment (Stage 1 Bays West Precinct) Regulation 2022 – published LW 9 December 2022
Home Building Amendment (Miscellaneous) Regulation 2022 – published LW 9 December 2022

Environmental Planning Instruments

Central Coast Local Environmental Plan (Planning Systems) (Map Amendment No 1) – published LW 8 December 2022
Central Coast Local Environmental Plan 2022 (Amendment No 2) – published LW 9 December 2022
Central Coast Local Environmental Plan 2022 (Map Amendment No 3) – published LW 9 December 2022
Central Coast Local Environmental Plan 2022 (Map Amendment No 5) – published LW 9 December 2022
Newcastle Local Environmental Plan 2012 (Amendment No 52) – published LW 9 December 2022
Parramatta Local Environmental Plan 2011 (Amendment No 64) – published LW 9 December 2022
State Environmental Planning Policy (Biodiversity and Conservation) Amendment (Cumberland Plain Biodiversity Certification) 2022 – published LW 9 December 2022
State Environmental Planning Policy Amendment (Exempt and Complying Development) 2022 – published LW 9 December 2022
State Environmental Planning Policy Amendment (Stage 1 Bays West Precinct) 2022 – published LW 9 December 2022
Sydney Local Environmental Plan (Green Square Town Centre – Stage 2) 2013 (Map Amendment No 1) – published LW 9 December 2022
Sydney Local Environmental Plan Amendment (Night Time Economy) 2022 – published LW 9 December 2022
The Hills Local Environmental Plan 2019 (Amendment No 26) – published LW 9 December 2022
Bayside Local Environmental Plan 2021 (Amendment No 1) – published LW 2 December 2022
Canada Bay Local Environmental Plan 2013 (Amendment No 24) – published LW 2 December 2022
Canada Bay Local Environmental Plan 2013 (Map Amendment No 2) – published LW 2 December 2022
Lake Macquarie Local Environmental Plan 2014 (Map Amendment No 7) – published LW 2 December 2022
Parramatta Local Environmental Plan 2011 (Map Amendment No 3) – published LW 2 December 2022
Shoalhaven Local Environmental Plan 2014 (Amendment No 49) – published LW 2 December 2022
Standard Instrument (Local Environmental Plans) Amendment (Land Use Zones) Order 2022 – published LW 30 November 2022
State Environmental Planning Policy (Exempt and Complying Development Codes) Amendment (Wilton Growth Area) 2022 – published LW 2 December 2022
State Environmental Planning Policy (Transport and Infrastructure) Amendment (Land Use Zones) 2022 – published LW 30 November 2022
State Environmental Planning Policy Amendment (Miscellaneous) (No 2) 2022 – published LW 2 December 2022
Sydney Local Environmental Plan 2012 (Amendment No 77) – published LW 2 December 2022
Sydney Local Environmental Plan Amendment (Moore Park) 2022 – published LW 2 December 2022
The Hills Local Environmental Plan 2019 (Amendment No 30) – published LW 2 December 2022

Cth legislation

Building and Construction Industry (Improving Productivity) Act 2016 9/12/2022 – Act No. 87 of 2016 as amended

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.

Published by:

Lauren Boswell, Daniel Fane, Lucas Yang

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