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