Australia: Residential Focus - 30 September 2015

Last Updated: 6 October 2015
Article by Christine Jones
Most Read Contributor in Australia, September 2017

In a recent decision of Owners Corp – SP 14846 v Wesfarmers General Insurance Ltd t/as Lumley General [2015] NSWCATAP 204, the Appeal Panel considered the vexed question of home warranty insurance coverage for subsequent work by a builder to rectify defects in the builder's original work.

The unusual facts included that the builder had not obtained home warranty insurance for the original work, in contravention of the Home Building Act

The original work failed and the builder agreed to 'rip it up and start again'.  No formal contract was entered into for the subsequent work.  A marked up version of the contract for the original work was submitted in support of the application for home warranty insurance.

The builder was later deregistered. The subsequent work failed.  A claim was made on the home warranty insurance policy.

The Tribunal below held that the claim was excluded under cl 3.4(bb)(i) of the policy on the basis of defects existing prior to the subsequent work.

The Appeal Panel considered that the Tribunal below had adopted a meaning of cl 3.4(bb)(i) that was too broad, but nevertheless dismissed the Owners Corporation's appeal, finding:

The relevant insured event is a breach of the statutory warranties by the Contractor. That person is the person named in the Certificate of Insurance ...  who "enters in to a Contract with the Owner to do the Work ...": see definition of Contractor.

In our opinion, this requirement was not satisfied in the present circumstances where the Builder seeks to rectify in order to achieve the performance that it promised to achieve under the original contract for the building work.


Owners Corporation SP 78422 v Ware Building Pty Ltd [2015] NSWSC 1384
PRACTICE AND PROCEDURE – dispute between owners corporation and builder – where defendant builder seeks to commence separate proceedings against the developer to rectify the contract pursuant to which the building was constructed – related application to amend list response in present proceedings to incorporate that defence – where it has been open to the defendant to agitate the question of rectification for three years – where substantial effort and expense has gone into the preparation of the case as currently pleaded – where a variation argument is in any event already provided for – consequence that it is not in the interests of justice to allow defendant the leave it seeks.More...

McPherson v Mace [2015] NSWCATAP 203
CIVIL AND ADMINISTRATIVE TRIBUNAL – Claim for defective building work-adequacy of reasons for decision – failure to constructively exercise jurisdiction – error of law.More...

Barton v Calliden Insurance Limited [2015] NSWCATAP 202
Appeal – no precise identification of questions of law – construction of building contract and insurance contract under Home Building Act – objective principle of contract construction – transportable dwelling to be built in Victoria and installed in New South Wales – building contract terminated before completion in Victoria – insurance contract in name of individual and not building company – no building contract with individual – insurance did not come into operation – claim under insurance failed – inconclusive preliminary hearing on separate issues before appealed decision – appeal dismissed – no special circumstances. More...

Omid Tofighi t/as Sovereign Buildings v Anahita Adami and Mansoor Adami [2015] NSWCATAP 189
APPEAL – Civil and Administrative Tribunal – application for leave to appeal – leave not granted – appeal dismissed. More...

S & G Homes Pty Ltd t/as Pavilion Homes v Owen [2015] NSWCATAP 190
PRACTICE AND PROCEDURE – consent orders made by Tribunal in terms of agreed settlement – meaning of s 59(1)(b) of Civil and Administrative Tribunal Act 2013 (NSW) – exercise of discretion to make consent orders –Tribunal must take into account whether it had power to make the consent orders and must make those orders reasonably  - A builder, S & G Homes Pty Ltd, has appealed from a consent order that it pay a homeowner, Mr Owen, $85,000 for defective and incomplete work. More...

Rose v Graham & Wyn [2015] NSWCATCD 92
Sufficient fence; licensed contractor; dividing fence as an exempt and complying development. More...

Poytress v Director General, NSW Fair Trading [2015] NSWCATOD 100
ADMINISTRATIVE LAW - administrative review of decision to refuse the applicant's application for renewal of his licence – applicant a director of an externally-administered company - whether applicant took all reasonable steps to avoid external administration – whether the applicant is a fit and proper person to be issued with a licence.More...

Owners Corp – SP 14846 v Wesfarmers General Insurance Ltd t/as Lumley General [2015] NSWCATAP 204

Appeal – home warranty insurance – original defective work uninsured – rectification work by builder at no cost to owner also defective - whether insurance subsequently obtained covered or excluded loss – construction of insurance policy – jurisdiction of Tribunal to deal with alleged insurance settlement. More...

Lovich v Commissioner for Fair Trading [2015] NSWCATAP 208
ADMINISTRATIVE LAW – review of decision to grant contractor licence – meaning of phrase "a wide range of building construction work". More...



Home Building Amendment (Insurance Exemption) Regulation 2015
The object of this Regulation is to provide certain exemptions from the requirements of Part 6 of the Home Building Act 1989, which requires residential building work done under a contract to be insured under the Home Building Compensation Fund. This Regulation exempts from Part 6 a holder of a contractor licence who does, or enters into a contract to do, residential building work funded by the NSW Community Care Supports Program or by the Commonwealth Home and Community Care Program (in relation to home modification work commenced before 1 January 2016). More...

This publication does not deal with every important topic or change in law and is not intended to be relied upon as a substitute for legal or other advice that may be relevant to the reader's specific circumstances. If you have found this publication of interest and would like to know more or wish to obtain legal advice relevant to your circumstances please contact one of the named individuals listed.

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Christine Jones
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