In our last edition, we wrote about the introduction of decennial liability insurance as an alternative to the strata building bond, via the rather innocuously titled Building and Other Fair Trading Legislation Amendment Bill 2022 (Bill).
There are a number of other significant changes introduced by the Bill.
The Bill amends the Design and Building Practitioners Act 2020 (NSW) (DBPA), whereby the Secretary of the Department of Customer Service (the Secretary) now must keep and publish a register of stop work orders in force under the DBPA on the Fair Trading website.
This amendment complements existing discretionary powers of the Secretary with regard to publishing disciplinary action and warning notices, and is intended to act as a reputational deterrent.
Additionally, the Secretary has been given the discretionary power to publish on the register written undertakings, or parts of the written undertakings, made under the DBPA. Given this is discretionary rather than mandatory, if in practice the discretion is not exercised, it may serve to encourage and promote the undertaking pathway.
The effectiveness of these measures will likely rely on public awareness of the register and its function.
The Bill also introduces a series of changes to the Residential Apartment Building (Compliance and Enforcement) Act 2020 (RAB Act).
The existing requirement to keep and publish a register of prohibition orders, building work rectification orders and stop work orders in force under the RAB Act has been redrafted to align with the new keep and publish requirement under the DBP Act. Likewise, there is a discretion to include written undertakings on the register, which again, depending on the use of the discretion, may serve to encourage and promote the undertaking pathway.
In terms of the other amendments, firstly, maximum penalties for failing to produce expected completion notices have tripled for corporations and quintupled for individuals. The maximum penalty for a corporation has increased from $110,000 to $330,000, and from $22,000 to $110,000 for individuals. The maximum penalties for continuing daily offences have increased in the same proportions.
These changes have been made in light of the number of serious defects which have been prevented since the introduction of the RAB Act, which is attributed to proactive auditing of buildings nearing completion, after the lodgement of expected completion notices. This has been achieved despite the high rates of non-compliance with the requirement to lodge an expected completion notice.
The penalty increase is intended to promote compliance with the requirement to lodge an expected completion notice (at least six months, but no more than 12 months, before an application is made for an occupation certificate) and thereby increase the capacity for detection of defects through audit.
Secondly, and again perhaps to further promote and encourage the undertaking pathway, developers will no longer require development consent or approval under the Environmental Planning and Assessment Act for work to eliminate, minimise or remediate a serious defect or a potential serious defect, if the work is carried out pursuant to an undertaking accepted by the Secretary.
Thirdly, there is a restatement of what a building work rectification order may require. It is on the one hand broader, as it may need the developer to take other actions as specified in the order; that is, it is no longer limited to doing or refraining from doing building work. In terms of other actions, that might include the commissioning of a report or testing. However, on the other hand, it is narrower in that it no longer extends to potential serious defects.
Fourthly, there is the introduction of a feedback loop on building work rectification orders, in circumstances where an order is drafted in terms of requiring work to be carried out to a particular standard. Such orders may now also require a developer to provide particulars of how the work will meet that standard or to engage a suitably qualified person to prepare a report on how the standard will be met.
Lastly, the Secretary has been provided with a greater capacity to share information with local councils for specific regulatory purposes, and with Australian universities and contractors or consultants engaged by or on behalf of the Secretary, for either research purposes or to assist the Secretary in exercising their functions.
The amendments introduced by the Bill generally affirm the trajectory of the NSW Government’s building industry reform. Developers in particular should take heed of the potential benefits introduced by the Bill associated with the undertaking pathway under each Act, and of the steep increase in penalties for failing to lodge an expected completion notice.
Authors: Christine Jones & Daniel Fane
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Regulatory and Compliance Priorities Statement 2022-2023
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Krolczyk v Winnert/as J Winner Buildiung Services (No 2)  NSWCA 241
JUDGMENTS AND ORDERS – orders to give effect to reasons in principal judgment.
Civil Procedure Act 2005 (NSW); Uniform Civil Procedure Rules 2005 (NSW).
Effective Building & Construction Pty Ltd v Commissioner for Fair Trading  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).
Allianz Australia Insurance Ltd v Probuild Constructions (Aust) Pty Ltd  NSWSC 1601
CONTRACT – performance bonds – deed of indemnity relating to issue of performance bonds – proper construction of provision concerning surplus bond moneys – whether funds paid by principal to builder pursuant to deed of settlement comprise surplus bond moneys – whether trust provision in deed of indemnity enlivened – whether trust provisions created a security interest for the purposes of the Personal Property Securities Act 2009 (Cth).
Building and Construction Industry Security of Payment Act 2002 (Vic); Personal Property Securities Act 2009 (Cth).
Liang v Jasta Constructions Pty Ltd  NSWCATAP 364
BUILDING AND CONSTRUCTION – Home Building Act 1989 (NSW) – building dispute – no alleged errors identified or apparent – no substance to the appeal – no question of principle.
Civil and Administrative Tribunal Act 2013 (NSW).
Williamson v Sydney Olympic Park Authority & Ors  NSWSC 1618
CIVIL PROCEDURE – representative proceedings – settlement or discontinuance – court approval – where parties agreed to settle the representative proceedings – where the litigation funder seeks to recover both a funders commission and “after the event” (“ATE”) insurance – whether the settlement is fair and reasonable as a whole and, in particular, whether the deductions for the funders commission and ATE insurance are fair and reasonable.
Civil Procedure Act 2005 (NSW); Design and Building Practitioners Act 2020 (NSW); Home Building Act 1989 (NSW); Legal Profession Uniform Law.
Monisse v Kontelji  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).
Rona v Opes Lifestyle Homes Pty Ltd  NSWCATAP 363
APPEALS – Home Building Act 1989 – decision against the weight of evidence – total failure of consideration.
Civil and Administrative Tribunal Act 2013; Civil and Administrative Tribunal Rules 2014; Home Building Act 1989.
Hanave Pty Ltd v Wine Nomad Pty Ltd; Wine Nomad Pty Ltd v Hanave Pty Ltd (No 2)  NSWCATAP 361
PRACTICE AND PROCEDURE – s 63 Civil and Administrative Tribunal Act 2013 – power to correct for accidental error or omission – whether appropriate where no submissions and/or factual finding made in substantive appeal concerning making an order for payment of money.
COSTS – operation of r 38 and r 38A of the Civil and Administrative Tribunal Rules 2014 – meaning of “proceedings” – meaning of “amount claimed or in dispute” – application of rule to proceedings where there are two applications, one in the nature of a cross-application – relevance of issues raised in cross-application to determine what, if any, amount is in dispute in the primary proceedings.
Agricultural Tenancies Act 1990 (NSW); Civil and Administrative Tribunal Act 2013 (NSW); Civil and Administrative Tribunal Rules 2014 (NSW); Civil Procedure Act 2005 (NSW); Consumer, Trader and Tenancy Tribunal Act 2001 (NSW) (repealed); Home Building Act 1989 (NSW); Residential Tenancies Act 2010 (NSW); Residential Tenancies Regulation 2019 (NSW); Retail Leases Act 1994 (NSW); Supreme Court Act 1970 (NSW).
Smith v Owners – Strata Plan No. 3004  NSWSC 1599
LAND LAW – strata title – owners corporation – maintenance and repair of common property – breach of obligation to maintain and repair common property – whether lost rental income was reasonably foreseeable consequence of breach – whether lot owners failed to mitigate loss by not renting out unit on lot.
Local Court Act 2007 (NSW); Strata Schemes Management Act 1996 (NSW); Strata Schemes Management Act 2015 (NSW); Strata Titles Act 1973 (NSW); Trade Practices Act 1974 (Cth).
Allsopp v The Owners – Strata Plan No 6006  NSWCATAP 365
LAND LAW – strata title – whether compulsory strata managing agent should be appointed – failure by owners corporation to comply with provisions of the Strata Schemes Management Act 2015 (NSW).
APPEAL – no error of law established – no appealable error of fact established.
Civil and Administrative Tribunal Act 2013 (NSW); Strata Schemes Management Act 2015 (NSW).
Britton v Evans  NSWCATCD 139
HOME BUILDING: where builder is not licensed to carry out the work – where there is no written contract and no homeowners warranty insurance – claim for repayment of monies paid – defective and incomplete work.
Home Building Act 1989 (NSW).
Warburton v County Construction (NSW) Pty Ltd (No 3)  NSWSC 1563
COSTS – party/party – exceptions to general rule that costs follow the event – where plaintiffs only succeeded in respect of a few issues and recovered a small proportion of the total amount claimed by them – where plaintiffs initially relied on a substantial amount of inadmissible evidence which was abandoned at the commencement of the hearing – where the defendants abandoned a defence at the commencement of the hearing.
Uniform Civil Procedure Rules 2005 (NSW).
Boughton v Masterton Homes Pty Ltd  NSWSC 1556
CIVIL PROCEDURE – cross-claims – application by builder to file cross-claim against engineer – principles at - – engineering problem identified from outset – defendant identified engineer as concurrent wrongdoer two years’ earlier – inadequate explanation for delay – granting leave would result in substantial delay – leave refused.
Home Building Act 1989 (NSW).
Gorczyski v W & FT Osmo Pty Ltd  NSWSC 1517
PROCEDURE – parties – joinder of parties – plaintiff filed notice of motion seeking to join concurrent wrongdoer in the proceedings – ss 34, 38 Civil Liability Act – application to Amend Statement of Claim – ss 64, 65 Civil Procedure Act – limitation issues – notice of motion dismissed.
Civil Liability Act 2002 (NSW); Civil Procedure Act 2005 (NSW); Limitation Act 1969 (NSW).
Regulations and other miscellaneous instruments
Environmental Planning and Assessment Amendment (Miscellaneous) Regulation (No 2) 2022 – published LW 25 November 2022
Environmental Planning Instruments
Armidale Dumaresq Local Environmental Plan 2012 (Amendment No 16) – published LW 25 November 2022
Georges River Local Environmental Plan 2021 (Amendment No 5) – published LW 25 November 2022
Guyra Local Environmental Plan 2012 (Map Amendment No 1) – published LW 25 November 2022
Inner West Local Environmental Plan 2022 (Amendment No 4) – published LW 25 November 2022
Lake Macquarie Local Environmental Plan 2014 (Map Amendment No 6) – published LW 25 November 2022
Lismore Local Environmental Plan 2012 (Map Amendment No 3) – published LW 25 November 2022
Queanbeyan – Palerang Regional Local Environmental Plan 2022 (Amendment No 1) – published LW 25 November 2022
Sydney Local Environmental Plan 2012 (Amendment No 84) – published LW 25 November 2022
Kempsey Local Environmental Plan 2013 (Map Amendment No 2) – published LW 18 November 2022
Muswellbrook Local Environmental Plan 2009 (Map Amendment No 1) – published LW 18 November 2022
Parramatta Local Environmental Plan 2011 (Map Amendment No 6) – published LW 18 November 2022
Tweed Local Environmental Plan 2014 (Amendment No 37) – published LW 18 November 2022
Willoughby Local Environmental Plan 2012 (Amendment No 31) – published LW 18 November 2022
Bills passed by both Houses of Parliament
Aboriginal Land Rights Amendment Bill 2022
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 article is accurate at the date it is received or that it will continue to be accurate in the future.