A licence and insurance makes a builder
The Supreme Court recently handed down the decision of BH Australia Constructions Pty Ltd v Kapeller  NSWSC 1086, a dispute concerning the identity of the builder. It was concluded that irrespective of conflicting company details in the building contract, the contracting party was the building entity that had both a licence and insurance for the work.
In or around September 2015, the owners entered into a written contract for the building of their home with either:
The contract confusingly referred to both companies, as well as “Blissful Properties”.
In early 2017, disputes arose as to completion of work and outstanding payment.
In late 2017, the owners commenced proceedings against Developments, asserting that it was the contracting party and that it was in breach of the contract for failing to hold a licence or home warranty insurance. The owners asserted, in reliance upon s 10 of the Home Building Act 1989, that Developments could not enforce the contract and the owners were thus relieved from the obligation to pay any monies owing. Constructions was joined to the application and brought a cross application against the owners, claiming that it was the correct contract counter party and that it was owed $123,634.50.
After liquidators were appointed to Developments the current or former administration manager of each company gave a statement contrary to this position.
The decisions of the Tribunal and Appeal Panel
During the hearing at first instance, Constructions sought to ‘undo’ an earlier order joining it as a respondent and to withdraw the cross application.
The Tribunal at first instance held that the contracting party was Developments for reasons including that it was named in the contract, each party treated it as such up until the initial stages of the dispute, that there was a proposed novation and that Developments had been receiving the payments under the contract. The Tribunal accordingly dismissed Constructions’ cross application.
The owners appealed.
The Appeal Panel considered whether it could have regard to post-contractual conduct, in determining who the counter party to the contract was. Among its reasoning that it could was the statement that “Except to the extent that subsequent conduct of the parties constitute admissions by one or other party they are largely equivocal”. This led the Appeal Panel to disregard much of the post-contractual conduct.
The Appeal Panel concluded that the contract itself suggested that the contracting party was Constructions, particularly given that Constructions was licensed and had obtained home warranty insurance for the works and the parties would have intended for the contract to be lawful.
Constructions sought leave to appeal the decision of the Appeal Panel, arguing that the Appeal Panel had made an error of law in determining that post-contractual conduct is largely equivocal on the question of the contracting parties, unless it constitutes an admission by a party.
The Supreme Court agreed that there was an error of law in elevating “a proposition descriptive of the particular evidence in the case to a general proposition of law”. Leave to appeal was allowed.
The Court was against the proposition that the post-contractual conduct could be had regard to in order to identify the parties to a wholly written contract, noting there was no support for this in the authorities to which it had been directed.
The Court concluded that the parties must have intended that Constructions was to be the builder given it held the licence and had obtained the insurance and had intended not to break the law. There was an obvious mistake in the contract to the extent it named Developments.
Lessons for contracting parties
Due diligence is not just for large projects. Owners should ensure their contractors are licensed, insured and that the contracting entity is identical to the licensed and insured entity. Likewise, contractors with multiple entities within their corporate structure should take care to ensure that the contracting entity is correctly identified.
Authors: Christine Jones & Divya Chaddah
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Murrant v Building Professionals Board  NSWCATOD 130
The decision of the Board to reprimand Mr Glenn Murrant and to impose a fine in the amount of $10,000.00 is affirmed. ADMINISTRATIVE REVIEW – accredited certifier – findings of unsatisfactory professional conduct – disciplinary orders. Administrative Decisions Review Act 1997; Building Professionals Act 2005; Environmental Planning and Assessment Act 1976; Environmental Planning and Assessment Regulation 2000
Hanson v Metricon Homes Pty Ltd (No 2)  NSWCATAP 214
The appellants are to pay the respondent’s costs of the appeal as agreed or assessed.
COSTS – appeal dismissed – whether order for costs should be made
Civil and Administrative Tribunal Act 2013; Civil and Administrative Tribunal Rules 2014; Home Building Act 1989
Paraiso v CBS Build Pty Ltd  NSWCATAP 211
APPEAL – Home Building – claim for variations on contractual basis – further claims for adjustment of provisional sum –alternative claims by builder on quantum meruit basis – no error of law – leave to appeal declined
BH Australia Constructions Pty Ltd v Kapeller  NSWSC 1086
CONTRACT – wholly written contract – dispute as to identity of builder to perform residential building – whether regard may be had to post-contractual conduct – where contract identified one company as builder but gave another company’s licence and insurance details – parties taken to have agreed to a contract which was lawful and enforceable
Harris for and on behalf of the estate of Harris and Harris v Rapisarda  NSWSC 1088
ESTOPPEL – Anshun estoppel – where proprietors commenced earlier proceedings against builder alleging defective workmanship – where defendant architects prepared the building contract and supervised builder’s work but were not joined in earlier proceedings – where earlier proceedings referred out and referee’s report adopted – where proprietors do not in these proceedings seek findings inconsistent with those of referee in earlier proceedings – whether unreasonable for proprietors not to have joined architects in the earlier proceedings so that they are now estopped from bringing these proceedings
CIVIL PROCEDURE – pleadings – striking out – abuse of process
Edwards v Commissioner for Fair Trading, Department of Finance, Services and Innovation  NSWCATAP 208
Leave to appeal on a ground other than a question of law is granted.
APPEAL – licensing and regulation – leave to appeal on a ground other than a question of law – whether Tribunal’s decision unjust – whether significant new evidence had arisen since the hearing below
ADMINISTRATIVE LAW – Practice and procedure – Agency's duty to produce documents under s 58 Administrative Decisions Review Act 1997; Civil and Administrative Tribunal Act 2013 (NSW); Home Building Act 1989 (NSW)
Margaret Ritchie v Advanced Plumbing and Drains Pty Ltd  NSWSC 1028
CIVIL PROCEDURE – Leave to proceed against insurer – defendant in liquidation – third party claims against insurers – arguable case that policy responds to liability – construction of insurance contracts – whether insurer has validly disclaimed liability – held arguable case against defendant – held arguable case that insurance policy responds to liability – held insurer has not discharged onus disclaiming liability – held leave to proceed against insurer granted.
CONTRACT LAW – Interpretation of insurance contracts – exclusion and limitation clauses – construing ambiguous words – whether general expression “spark producing equipment” should be read down – held general expressions to be read in context – held expression confined to include only specified equipment – held general expression to be read down.
Regulations and other miscellaneous instruments
Contaminated Land Management (Adjustable Amounts) Notice 2019 (2019-404) — published LW 23 August 2019
Dust Diseases Tribunal Regulation 2019 (2019-405) — published LW 23 August 2019
Protection of the Environment Operations (Underground Petroleum Storage Systems) Regulation 2019 (2019-411) — published LW 23 August 2019
Civil Liability Regulation 2019 (2019-384) — published LW 16 August 2019
Proportionate liability under the Environmental Planning and Assessment Act 1979
Environmental Planning and Assessment Amendment (Newcastle Gas Terminal Project) Order 2019 (2019-387) — published LW 16 August 2019
Environmental Planning Instruments
State Environmental Planning Policy (Housing for Seniors or People with a Disability) Amendment (Heritage Conservation Areas Exemption) 2019 (2019-394) — published LW 16 August 2019
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 Christine Jones, Divya Chaddha