LMA Contractors Limited v Changizi [2017] NSWCATAP 75

The Builder and the Owners entered into a contract to construct a duplex. The contract provided for liquidated damages of $300 per day for each day the work proceeded beyond the date for completion.

The building work was completed 133 days late. At first instance the Owners were awarded $33,306.06 for delay, representing additional interest charges incurred, rather than the daily rate for liquidated damages, which the Tribunal Member considered high and in truth a penalty.

The basis for this decision was a finding that 'the builder must have known that one and probably both dwellings were a commercial operation and that delay would cause significant commercial loss to the applicants.' Accordingly the Owners' claim fell within the second and probably the first limb of Hadley v Baxendale.

That decision was appealed by the Builder to the Appeal Panel.

The Appeal Panel found that the Tribunal below’s decision may have been justified under the second limb of Hadley v Baxendale, if it were reasonably supposed to have been in the contemplation of both parties, at the time they made the contract. However there was no evidence tendered before the Tribunal below which provided a basis for the finding.  Accordingly there was an error of law.

As to whether the claim fell within the first limb of Hadley v Baxendale, that the damages may fairly and reasonably be considered as arising naturally, that is, according to the usual course of things, from the breach of contract itself, the Builder submitted that financing costs in a residential context must always be paid, continue after completion and did not naturally arise from late completion.  Further, the builder submitted that the appropriate measure of loss is the cost of alternate accommodation during the delay.

The Appeal Panel found it was clear that the development was of a two storey dual occupancy and the Owners were relying on a lender to pay progress claims. Therefore it was open on the facts for the Tribunal to have found that at least one of the residences was to be put to commercial use.  The Builder conceded that one of the duplexes was most likely to have been used for relatives or sold.

It was found that the evidence supported a finding that that the actual costs of late completion claimed by the Owners applied to one of the residences being constructed, namely the occupancy that was not to be the Owners' residence and that the additional interest costs flowed from the Builder’s breach.

The Appeal Panel accordingly reduced the award for delay by half.

In the media

Building boom surprisingly resilient, while retail sales disappoint
Australia's record-breaking building boom rolls on, with a further increase in construction approvals during February, however the retail sector continues to struggle (03 April 2017).  More...

HIA: Population Growth Underpins Strong Housing Demand
ABS building approvals data again showed building activity firmly anchored in Sydney and Melbourne (03 April 2017).  More...

Leaking buildings, mould and court battles: The dark side of the apartment boom
As apartments are built at a breakneck pace along Australia's east coast, experts fear a coming glut of problem buildings that cannot keep the rain out will trap many buyers in legal limbo (31 March 2017).  More...

SafeWork NSW fast-tracking asbestos assessments on flood damaged properties
SafeWork NSW is waiving the five-day asbestos removal work notification period to allow immediate clean-up of asbestos debris from storm-damaged properties in north east NSW (05 April 2017).  More...

Public Warning: Do not deal with Sam Robinson, also known as Bassam Marouche
NSW Fair Trading is warning consumers not to deal with Sam Robinson (Bassam Marouche), who enters into contracts for residential building work through his companies ATS Group (NSW) Pty Ltd and BMF Building Consultants Pty Ltd. Mr Robinson was convicted in 2016 of a number of offences under the Australian Consumer Law (NSW), the Home Building Act 1989, and the Crimes Act 1900 (05 April 2017).  More....

NSW Housing Approvals Still at All-Time Highs
Housing approvals in NSW have continued at near-record highs according to the latest Australian Bureau of Statistics data, in a further sign the NSW Government’s commitment to boost housing supply is delivering results (03 April 2017).  More...

BASIX energy targets to change
The NSW Government has announced that the BASIX energy targets will be increased across the State in July 2017 (31 March 2017).  More...

Sydney’s housing crisis needs strong actions to maximise supply
With indicators showing a slow-down in housing approvals in Sydney some strong actions are needed to boost supply and help with affordability, says the Urban Taskforce (28 March 2017).  More...

Published

ACI Construction Brief
27 March 2017 - Update: Last week the first HIA Renovations Roundup for 2017 was released. This is the most comprehensive quarterly update regarding renovations activity available in Australia.  More...  More...

Demand, deposits, debt: Housing affordability in Sydney
Briefing Paper No 1/2017 by Chris Angus: 03 April 2017
This paper presents the issue of housing affordability in Sydney in three parts.  More...

Practice and courts

ABCB: Consultation RIS released
The Consultation RIS Considers the application of the requirements for temperature control when replacing water heaters in private residences Responses to the questions contained within the RIS are invited until Friday 21 April 2017.  More...

Senate Inquiry Update
Non-conforming building products
Status: Accepting Submissions; Date Referred: 11 October 2016; Submissions Closed: 01 December 2016; Reporting Date: 25 May 2017/

NSW BPB: Read our March 2017 e-news
31 March 2017 - the latest 3-news is a regular digest of work by the Board, legislative updates, events, training and consultation opportunities.  More...

Cases

Hoque v ARZ Building & Constructions Pty Ltd [2017] NSWCATAP 71
Civil and Administrative Tribunal – Appeal Panel – questions of law – building contract – errors of law established – matter remitted for consideration according to law. 

Spasevski v Commissioner for Fair Trading [2017] NSWCATOD 53
HOME BUILDING – contractor licence – whether fit and proper person – criminal convictions – rehabilitation.

Skyworks v 32 Drummoyne Road [2017] NSWSC 343
PRACTICE AND PROCEDURE – freezing order – whether there is a good arguable case – whether there is a risk of removal or dissipation of assets - danger that a prospective judgment will be unsatisfied – whether evidence supports such a finding –Uniform Civil Procedure Rules 2005 (NSW), r 25.11, 31.27, 26.17. Building and Construction Industry Security of Payment Act 1999 (NSW); Home Building Act 1989 (NSW); Uniform Civil Procedure Rules 2005 (NSW). 

LMA Contractors Limited v Changizi [2017] NSWCATAP 75
Damages for late completion of building work.

Pandanas Qld Pty Ltd v Chief Commissioner of State Revenue; Harris v Chief Commissioner of State Revenue; O’Shea v Chief Commissioner of State Revenue; Brown v Chief Commissioner of State Revenue [2017] NSWCATAD 106
Duties Act 1997; New Home Grant Scheme; meaning of “home”, “residence”.

Gassman & Anor v Peck [2017] NSWCATAP 66
Costs- building case- settled without hearing- appeal against refusal to order costs.

Oppidan Homes Pty Ltd v Yang [2017] NSWCATAP 67
Civil and Administrative Tribunal (NSW) – Home Building - Costs – Appeal – Exercise of discretion – error of law.

Legislation

NSW

Regulations and other miscellaneous instruments
Uniform Civil Procedure (Amendment No 84) Rule 2017 (2017-130) — published LW 7 April 2017.
Environmental Planning and Assessment Amendment (The Northern Road Upgrade) Order 2017 (2017-115) — published LW 31 March 2017.

Bills introduced – Government – 07 April 2017
Gas and Electricity (Consumer Safety) Bill 2017

Editorial: Christine Jones

Contacts:

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

Cameron Sheather, Partner - Planning, Property & Environment
T: +61 2 8083 0461
E: cameron.sheather@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 publication is accurate at the date it is received or that it will continue to be accurate in the future. We are not responsible for the information of any source to which a link is provided or reference is made and exclude all liability in connection with use of these sources.

In the media

Building boom surprisingly resilient, while retail sales disappoint
Australia's record-breaking building boom rolls on, with a further increase in construction approvals during February, however the retail sector continues to struggle (03 April 2017).  More...

HIA: Population Growth Underpins Strong Housing Demand
ABS building approvals data again showed building activity firmly anchored in Sydney and Melbourne (03 April 2017).  More...

Leaking buildings, mould and court battles: The dark side of the apartment boom
As apartments are built at a breakneck pace along Australia's east coast, experts fear a coming glut of problem buildings that cannot keep the rain out will trap many buyers in legal limbo (31 March 2017).  More...

SafeWork NSW fast-tracking asbestos assessments on flood damaged properties
SafeWork NSW is waiving the five-day asbestos removal work notification period to allow immediate clean-up of asbestos debris from storm-damaged properties in north east NSW (05 April 2017).  More...

Public Warning: Do not deal with Sam Robinson, also known as Bassam Marouche
NSW Fair Trading is warning consumers not to deal with Sam Robinson (Bassam Marouche), who enters into contracts for residential building work through his companies ATS Group (NSW) Pty Ltd and BMF Building Consultants Pty Ltd. Mr Robinson was convicted in 2016 of a number of offences under the Australian Consumer Law (NSW), the Home Building Act 1989, and the Crimes Act 1900 (05 April 2017).  More....

NSW Housing Approvals Still at All-Time Highs
Housing approvals in NSW have continued at near-record highs according to the latest Australian Bureau of Statistics data, in a further sign the NSW Government’s commitment to boost housing supply is delivering results (03 April 2017).  More...

BASIX energy targets to change
The NSW Government has announced that the BASIX energy targets will be increased across the State in July 2017 (31 March 2017).  More...

Sydney’s housing crisis needs strong actions to maximise supply
With indicators showing a slow-down in housing approvals in Sydney some strong actions are needed to boost supply and help with affordability, says the Urban Taskforce (28 March 2017).  More...

Published

ACI Construction Brief
27 March 2017 - Update: Last week the first HIA Renovations Roundup for 2017 was released. This is the most comprehensive quarterly update regarding renovations activity available in Australia.  More...  More...

Demand, deposits, debt: Housing affordability in Sydney
Briefing Paper No 1/2017 by Chris Angus: 03 April 2017
This paper presents the issue of housing affordability in Sydney in three parts.  More...

Practice and courts

ABCB: Consultation RIS released
The Consultation RIS Considers the application of the requirements for temperature control when replacing water heaters in private residences Responses to the questions contained within the RIS are invited until Friday 21 April 2017.  More...

Senate Inquiry Update
Non-conforming building products
Status: Accepting Submissions; Date Referred: 11 October 2016; Submissions Closed: 01 December 2016; Reporting Date: 25 May 2017/

NSW BPB: Read our March 2017 e-news
31 March 2017 - the latest 3-news is a regular digest of work by the Board, legislative updates, events, training and consultation opportunities.  More...

Cases

Hoque v ARZ Building & Constructions Pty Ltd [2017] NSWCATAP 71
Civil and Administrative Tribunal – Appeal Panel – questions of law – building contract – errors of law established – matter remitted for consideration according to law. 

Spasevski v Commissioner for Fair Trading [2017] NSWCATOD 53
HOME BUILDING – contractor licence – whether fit and proper person – criminal convictions – rehabilitation.

Skyworks v 32 Drummoyne Road [2017] NSWSC 343
PRACTICE AND PROCEDURE – freezing order – whether there is a good arguable case – whether there is a risk of removal or dissipation of assets - danger that a prospective judgment will be unsatisfied – whether evidence supports such a finding –Uniform Civil Procedure Rules 2005 (NSW), r 25.11, 31.27, 26.17. Building and Construction Industry Security of Payment Act 1999 (NSW); Home Building Act 1989 (NSW); Uniform Civil Procedure Rules 2005 (NSW). 

LMA Contractors Limited v Changizi [2017] NSWCATAP 75
Damages for late completion of building work.

Pandanas Qld Pty Ltd v Chief Commissioner of State Revenue; Harris v Chief Commissioner of State Revenue; O’Shea v Chief Commissioner of State Revenue; Brown v Chief Commissioner of State Revenue [2017] NSWCATAD 106
Duties Act 1997; New Home Grant Scheme; meaning of “home”, “residence”.

Gassman & Anor v Peck [2017] NSWCATAP 66
Costs- building case- settled without hearing- appeal against refusal to order costs.

Oppidan Homes Pty Ltd v Yang [2017] NSWCATAP 67
Civil and Administrative Tribunal (NSW) – Home Building - Costs – Appeal – Exercise of discretion – error of law.

Legislation

NSW

Regulations and other miscellaneous instruments
Uniform Civil Procedure (Amendment No 84) Rule 2017 (2017-130) — published LW 7 April 2017.
Environmental Planning and Assessment Amendment (The Northern Road Upgrade) Order 2017 (2017-115) — published LW 31 March 2017.

Bills introduced – Government – 07 April 2017
Gas and Electricity (Consumer Safety) Bill 2017

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