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Residential Focus

24 October 2018

11 min read

#Property, Planning & Development

Published by:

Lauren Stables

Residential Focus

David Cameron Jones t/as Oz Style Homes v Panchal [2018] 

In David Cameron Jones t/as Oz Style Homes v Panchal [2018] NSWCATAP 238, the NSW Civil and Administrative Tribunal Appeal Panel (the Panel) considered whether time limits on jurisdiction in s 48K of the Home Building Act 1989 (NSW) (HBA) apply separately to each claim brought in an application or whether each application constitutes one building claim. 

Facts

The Tribunal below had ordered the Appellant (the Builder) to pay damages to the Respondents (the Homeowners) for breach of the statutory warranties under s 18B of the HBA and for liquidated damages for delay in completion.

The Tribunal below held that the proceedings were commenced outside the warranty period in respect of any breaches of statutory warranty other than those which resulted in a major defect (finding that there were two major defects). The Tribunal below also determined that the claim to liquidated damages was brought within the three year time limit imposed by s 48K(3) of the HBA.

The Builder sought leave to appeal on five grounds, including that the Tribunal below erred in finding that NCAT had jurisdiction under s 48K of the HBA by finding that each cause of action pleaded by the Applicant was a separate, or individual, building claim such that NCAT was required to consider its jurisdiction separately for each cause of action. 

Relevant Sections of the HBA

Section 48A of the HBA defines a building claim as a claim for:

  • the payment of a specified sum of money
  • the supply of specified services, or
  • relief from payment of a specified sum of money
  • the delivery, return or replacement of specified goods or goods of a specified description, or
  • 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.

Section 48A(2) extends that definition to include:

  • an appeal against a decision of an insurer under a building cover contract required to be entered into under this Act
  • a claim for compensation for loss arising from a breach of statutory warranty implied under Part 2C. 

Under section 48K(3) of the HBA, NCAT does not have jurisdiction in respect of a building claim relating to building goods or services that have been supplied to or for the claimant if the date on which the claim was lodged is more than three years after the date on which the supply was made.

Under section 48K(7) of the HBA, NCAT does not have jurisdiction in respect of a building claim arising from a breach of a statutory warranty implied under Part 2C if the date on which the claim is lodged is after the end of the period within which proceedings for a breach of the statutory warranty must be commenced (as provided by section 18E).

Builder’s argument on appeal 

The Builder argued that pursuant to s 48A(e) of the HBA, multiple building claims within one application are deemed to be a singular building claim. Therefore, in determining whether the claim was within the jurisdiction of NCAT it was necessary to consider all subsections of s 48K. Accordingly, if NCAT’s jurisdiction is precluded in respect of one component of a building claim, NCAT has no jurisdiction in respect of the whole of the building claim. Support was said to be derived from s 48K(1) which provides that the jurisdiction limit of $500,000 is for the total of all claims made in the application.

A similar conclusion was said to be reached in Marsh v Linmore Pty Ltd [2006] NSW CTTT 672 in which the Tribunal found that the  three year limitation under s 48K(3) included claims for breach of statutory warranty. This decision has not been followed and was rejected in Marks v Stafflair [2012] NSW CTTT 199.

Decision 

It was held that s 48A(1)(e) does not provide that a claim comprised of separate components (including, for example, breach of contract and breach off statutory warranty) constitutes one building claim. The Panel emphasised that different remedies may be sought in respect of breach of contract or breach of statutory warranty. Section 48A(1)(e) provides that a claim for more than one remedy in respect of a breach is one building claim, it does not provide that all claims in respect of alleged breaches of contract or statutory warranty brought in one application constitute one building claim. 

It was further held that under subsections 48K (3)–(8), different limitations periods are allocated to the different categories of building claims. Subsections 48K (3)–(8) apply distributively in respect of each separate claim for alleged breaches of contract or statutory warranty, notwithstanding that the claims may be made in a single application to NCAT. NCAT’S jurisdiction to determine each building claim must be determined separately.

Accordingly, whilst the proceedings were commenced outside the warranty period for breaches of statutory warranty for non-major defects, NCAT still had jurisdiction with respect to claims for damages for delay and breach of statutory warranties which resulted in major defects (being claims which were brought within time).

The Panel noted that the arguments advanced by the Builder would severely limit the jurisdiction of the Tribunal for no obvious purpose reducing the period in most cases to two years. 

Editorial: Christine Jones & Lauren Stables

  • We will soon run a seminar on the topic of 'Home Building Act  basics - What you need to know'. Click here for more information and to RSVP.

In the media

House price falls to continue as new loans dry up
New home lending has fallen to an almost eight-year low pointing to ongoing weakness in property prices (12 October 2018).  More... 

COAG Economic Reform Council should target housing affordability
The Property Council of Australia has welcomed Shadow Treasurer Chris Bowen’s proposal for the creation of a new independent COAG Economic Reform Council to drive long-term reform priorities, and called for its first focus to be on housing affordability (11 October 2018).
More...

Tradies to get relief with 13 home building licence renewal fees greatly reduced
Tradies will save $52.3 million over 10 years by not having to renew their licences every three years, as part of the NSW government’s Better Business reforms (10 October 2018).  More...

There's an enormous number of homes under construction in NSW and Victoria at a time when prices are already falling
Created using data released by the Australian Bureau of Statistics (ABS), it shows the total number of homes that were under construction in New South Wales and Victoria as at the end of June this year. According to the ABS, there were a record 87,882 homes under construction in New South Wales at the end of June, the highest level on record (10 October 2018).  More...

Published - articles, papers, reports

ABCC Industry update September - October 2018
Industry update is ABCC's bi-monthly online newsletter. It provides updates on the latest activities of the ABCC, industry trends, and emerging issues (09 October 2018).  

ACI Construction Briefs
A fortnightly communication highlighting key updates related to Australia's construction industry (15 October 2018).  More...

Australian Bureau of Statistics
12/10/2018 Housing Finance, Australia, August 2018 (cat no. 5609.0)
10/10/2018 Building Activity, Australia, Jun 2018 (cat no. 8752.0)

In practice and courts

ABEC: GBCA: Future Homes Project
GBCA have launched their Future Homes Project and accompanying Thought Leadership paper. The Future Homes Project aims to develop a framework for quality housing and test ways to verify the construction and performance of homes. In order to deliver affordable, sustainable, quality homes to for all Australians (17 October 2018).  More... 

ABCB Accessible Housing Options Paper: consultation
The ABCB’s Accessible Housing Options Paper has been released for public consultation. The Options Paper provides a preliminary menu of options and costings on the possible inclusion of a minimum accessibility standard for housing in the NCC. Feedback on the Options Paper is invited until Friday 30 November 2018.

MBA NSW Reminder: HBCF Premium changes from 2 October 2018
The biggest changes are to C01 – New Dwelling Construction and C09 – New Duplex, Dual Occupancy, Triplex and/or Terrace (attached) construction which will have base rate premium increases of 44% and 46% respectively.  More...

BPB: Options to improve and strengthen certifier independence
Public consultation on the Options Paper – ‘Improving Certifier Independence’ is open until 30 October 2018.
The options paper is seeking feedback on three methods for appointing certifiers that will increase certifier independence. NSW consumers can check the register of accredited certifiers through the BPB website.  More...

New dates for Environmental Planning & Assessment Act Updates
Councils, certifiers and other industry practitioners have more time to implement some of the recent EP&A Act updates. Changes affect new provisions for building and subdivision certification, Local Strategic Planning Statements for councils in the Greater Sydney Region and Community Participation Plans. While most of the changes will commence on 1 March 2018, there will be a number of other changes that will involve further design and consultation from mid to late 2018 outlined here.

Cases

Petropoulos v CPD Holdings Pty Ltd t/as The Bathroom Exchange (No 2) [2018] NSWCATAP 233
HOME BUILDING – Where statutory warranty breached in relation to size of showers – whether damages or rectification appropriate remedy - Civil and Administrative Tribunal Act 2013 (NSW), s 36(1), s 50, s 80(3).
Civil and Administrative Tribunal Rules 2014 (NSW), r 38; Fair Trading Act 1987 (NSW), ss 79R, 79T, 29U, 79V; Home Building Act 1989 (NSW), ss 18B(1), 48O, 48MA. 

David Cameron Jones t/as Oz Style Homes v Panchal [2018] NSWCATAP 238
BUILDING AND CONSTRUCTION – Home Building jurisdiction of the Tribunal – whether time limits on jurisdiction in s 48K of the Home Building Act apply separately to each claim brought in an application or whether each application constitutes one “building claim” – whether in considering whether to make a work order requiring rectification by the builder it is a relevant consideration that there are defects for which the builder has not been found liable which the home owner will need to employ other builders to rectify.
WORDS AND PHRASES – “building claim”.
Appeal dismissed.
Civil and Administrative Tribunal Act 2013 (NSW); Civil and Administrative Tribunal Rules 2014 (NSW); Home Building Act 1989 (NSW) s 48A, s 48K, s 48MA; Home Building Amendment Act 2011 (NSW); Home Building Amendment Act 2014 (NSW); Interpretation Act 1987 (NSW).

P & N NSW Pty Ltd t/as Euro Solar v Park (No 2) [2018] NSWCATAP 242
CONSUMER CLAIM – Order for compensation.
PRACTICE AND PROCEDURE - New hearing pursuant to s 80(3) of the Civil and Administrative Tribunal Act 2013 (NSW) 

The Owners-Strata Plan 89023 v AT Building Pty Limited and Mowbray Road Pty Limited as trustee for Mowbray Unit Trust; Jayanthi and Shikaram v AT Building Pty Limited and Mowbray Road Pty Limited as trustee for... [2018] NSWCATCD 33
HOME BUILDING - Individual components of a fire safety system a major defect - completion of residential building work on issue of interim occupation certificate - limitation period for bringing claim for breach of statutory warranty in respect of other defects - preferred outcome.  

Hartley v McRae [2018] NSWCATCD 31
Section 48MA of the Home Building Act 1989 - Work orders - Prime cost items - undocumented variations. 

Maher v The Pines Resort Management Pty Ltd T/as Gateway Lifestyle The Pines; Marsh v The Pines Resort Management Pty Ltd T/as Gateway Lifestyle The Pines [2018] NSWCATCD 35
RESIDENTIAL (LAND LEASE) COMMUNITIES – Site fee increase – Whether notice of site fee increase valid – Whether site fee increase excessive.

Legislation

Bills

National Housing Finance and Investment Corporation Amendment Bill 2018
18/10/2018 - The National Housing Finance and Investment Corporation Amendment Bill 2018 (the Bill) amends the National Housing Finance and Investment Corporation Act 2018 (the NHFIC Act) to establish a $1 billion special account to support the National Housing Finance and Investment Corporation (NHFIC).

New South Wales

Bills introduced Government – 19 October 2018
Building and Development Certifiers Bill 2018
Fair Trading Legislation Amendment (Reform) Bill 2018

Proclamations commencing Acts
Fair Trading Legislation Amendment (Consumer Guarantee Directions) Act 2018 No 43 (2018-578) — published LW 11 October 2018

Contacts:
Christine Jones, Partner - Construction & Infrastructure (Dispute Resolution) 
T: +61 2 8083 0477 
E: christine.jones@holdingredlich.com

Divya Chaddha, Associate 
T: +61 2 8083 0457
E: Divya.Chaddha@holdingredlich.com

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 Stables

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