Australia: Residential Focus - 24 February 2016

Last Updated: 1 March 2016
Article by Christine Jones and Hilary Yeoh
Most Read Contributor in Australia, September 2017

Lee v Ace NSW Pty Ltd [2016] NSWCATAP 29

The Respondent was a head contractor (the Head Contractor). The sole director of the Head Contractor and his wife were constructing a residential dwelling. Although it was not the registered proprietor of the property, the Head Contractor brought proceedings on its own behalf and in its own name in alleging that defective works were performed by its subcontractor, the Appellant (the Subcontractor).  The Head Contractor alleged that the Subcontractor had breached the statutory warranty under s 18B(f) of the Home Building Act 1989 (NSW) (Act).

The issue was whether the Head Contractor could sue the Subcontractor for breach of statutory warranties under s 18B(f) of the Act.  The Tribunal below concluded that it was permissible for the Head Contractor to bring proceedings against the Subcontractor. The Subcontractor appealed.

Section 18B of the Act outlines the warranties that are implied in every contract to do residential building work by the holder of a contractor licence or a person required to hold a contractor licence. In particular s 18B(f) provides for a warranty that the work and any materials used in doing the work will be reasonably fit for purpose.

Section 18B was amended by the Home Building Amendment Act 2014 (NSW) (Amendment Act) by inserting a new subsection (2). Section 18B(2) provides that the statutory warranties are not limited to a contract to do residential building work for an owner and are implied in a contract in which a principal contractor, who has contracted to do residential building work, contracts with another person (a subcontractor to the principal contractor) for the subcontractor to do work for the principal contractor. However, this amendment did not take effect until March 2015.

The Subcontractor argued that the subsequent insertion of s 18B(2) demonstrated that without such a provision, a head contractor could not sue a subcontractor under the previous s 18B(f). After considering the explanatory memorandum and second reading speech for the Amendment Act, the Tribunal concluded that the insertion of the new section clarified the rights and obligations of licence holders and consumers, in that subcontractors are also responsible for statutory warranties. The Tribunal was of the view that the warranties did, in any event, enable head contractors to bring proceedings against subcontractors.

The Subcontractor also asserted that the benefit of the warranties in s 18B was limited to "owners," being defined in s 3 of the Act as a person who is entitled to the land for an estate of freehold in possession.

The Tribunal's reasoning in dismissing the Subcontractor's appeal was as follows:   

  1. section 18B imposed warranties by an express statutory implication upon the "holder of a contractor licence or a person required to hold such a licence", however, it does not expressly say to whom such warranties are taken to be given. It indicates that the warranties are implied in "every contract to do residential building work".  The legislation is beneficial and should not be given a restrictive operation; 
  2. section 18B(f) applied to work and materials used in doing the work reasonably fit for the specified purpose or result;
  3. the relevant warranty is conditional upon the person for whom the work is done, expressly making known to the holder of the contractor licence the particular purpose for which the work is required, where the language does not exclude the prospect of the warranty being enforced by a head contractor; and
  4. section 18D(1) of the Act provides that a person who is a successor in title to a person entitled to the benefit of a statutory warranty under the Act is entitled to the same rights as the person's predecessor in respect of the statutory warranty, again where the language does not exclude the prospect of the warranty being enforced by a head contractor.

In the media

Timber Buildings to Rise Higher Following NCC Amendments 2
Approved changes to the National Construction Code (NCC) will see timber buildings in Australia rise to far greater heights starting from May 1, 2016. The changes to the NCC will permit the construction of Class 2, Class 3 and Class 5 timber buildings to effective heights of as high as 25 metres, which is roughly equivalent to eight storey (04 February 2016).   More...

Final update on the Government's response to the Royal Commission into the Home Insulation Program
Today the Government announces its final update about its response to the Report of the Royal Commission into the Home Insulation Program (05 February 2016). More...

Builders Back Return Of ABCC
Master Builders Australia welcomes the Government's commitment to re-establish the powers of the Australian Building and Construction Commission (ABCC) by reintroducing the ABCC Bill in the Parliament today (02 February 2016).   More...

Guildford Builder Prosecuted
An unlicensed builder from Guildford has been ordered by Parramatta Local Court to pay $75,775 in fines and costs as well as $14,700 consumer compensation. Paul Logan, trading as Paul Logan Creations, was convicted of various Consumer Law and Home Building Act 1989 violations (10 February 2016).   More... 

Unlicensed Hunter Builders Prosecuted
Jason Tilse and Brent Tilse left a trail of defective roofing repairs and sub-standard incomplete renovations in their wake after charging their customers deposits well in excess of the 10 per cent permitted under the Home Building Act 1989 (10 February 2016) Unlicensed Hunter Builders Prosecuted

NSW building approvals at historic high
A record number of new homes were given the green light in NSW in 2015, official ABS figures have revealed. Today's data showed 66,705 homes were approved in the 12 months to December (03 February 2016) 03 February 2016: NSW building approvals at historic high


Australian Bureau of Statistics
Building Approvals, Australia, Dec 2015 (cat no. 8731.0) – 03 February 2016

Practice and courts

Building and Construction Industry (Improving Productivity) Bill Reintroduced
‎The bill has been reintroduced into the House of Representative on 2 February 2016 without any amendments. The bill will, like its predecessor, re-establish the ABCC, described as a genuinely strong watchdog that will maintain the rule of law to protect workers and constructors and improve productivity on building sites (03 February 2016).  More...

NCC 2016 now online on the new ABCB website
The National Construction Code 2016 can now be accessed online on the new Australian Building Codes Board (ABCB) website (08 February 2016).   More... 

Download the NCC 2016.

ABCB NCC Seminars 2016
The national seminars, running in February and March 2016 are presented by the ABCB and Standards Australia. These seminars will be held in each Australian capital city and will provide valuable information to building and plumbing practitioners on the changes included in the NCC 2016, which comes into effect on 1 May 2016. From 2016 onwards, the NCC will only be updated once every three years. To register for a seminar or to find out more visit the ABCB website.

ABCB: Condensation Survey
Stakeholders are invited to complete an online survey on condensation in residential buildings. The survey closes on 14 February 2016.  More...


D&R Constructions (Aust) Pty Ltd v Wesiak [2016] NSWCATAP 38
Building contract- Held letter that respondents were seeking alternative quotations to complete building works and to then terminate the contract constituted repudiation entitling the appellant builder to terminate the contract - Consequential orders made.   More...

Lee v Ace NSW Pty Ltd [2016] NSWCATAP 29
CIVIL AND ADMINISTRATIVE TRIBUNAL – Home Building Act 1989 s 18B –a head contractor did get the benefit of warranties under former s 18B(f).   More...

Li v Ward Building Construction Pty Ltd [2016] NSWCATAP 33
ADMINISTRATIVE LAW- Civil and Administrative Tribunal (NSW)- whether appeal as of right established- whether leave to appeal under section 80(2)(b) Civil and Administrative Tribunal Act 2013 (NSW) required- whether leave pursuant to clause 12 of Schedule 4 of the Civil and Administrative Tribunal Act 2013 (NSW) ought be granted - interpretation of standard form contract issued by the Master Builders Association NSW for Residential Small Renovations & Additions - whether contract incorporates references in the BASIX certificate – where the respondent did what it quoted for and built in accordance with the drawings and the quote - there has been an error and the Tribunal was clearly mistaken in the calculation of the refund in relation to the shower screens - leave to appeal established.   More...

Antonio v Ian Cubitt's Classic Home Improvements Pty Ltd [2016] NSWCATAP 37
PRACTICE AND PROCEDURE – Civil and Administrative Tribunal (NSW) –"part heard proceedings" – transitional provisions – application of Sch 1 cl 7 of the Civil and Administrative Tribunal Act 2013 (NSW)   COSTS – whether costs decision is interlocutory or ancillary decision – costs decision ancillary under s 4(1) of the Civil and Administrative Tribunal Act 2013 (NSW) – no error in exercise of discretion.   More...

Kapetanellis v Hatem [2016] NSWCATAP 41
Home Building Act 1989 – dispute as to method and cost of rectification of work carried out by owner-builder – damages to be assessed on a once and for all basis – whether leave to appeal should be granted – alleged threat to the stability of part of the work – obligation of Tribunal to give adequate reasons for decision – amendment of grounds of appeal.   More...

Da Wei Plastering (NSW) Pty Ltd v Salanitro-Chafei [2016] NSWCATAP 39
Home Building Act 1989 – defective and incomplete work - assessment of damages.   More...

Tzaneros Investments Pty Limited v Walker Group Constructions Pty Limited [2016] NSWSC 50
BUILDING AND CONSTRUCTION CONTRACTS – warranties – assignment of warranties – effect of subsequent assignment of the subject-matter of the contract TORTS – negligence – existence of a duty of care – breach – whether claim apportionable under the Civil Liability Act 2002 (NSW) CONTRACT – ascertaining the parties to the contract EQUITY – estoppel – estoppel by convention DAMAGES – calculating loss – whether to discount award for betterment.   More...

Long & Fitzpatrick v Wollongong Homes Pty Ltd [2015] NSWCATCD 141
Home Building Act 1989 - defects, breach of statutory warranty, agreements at conclave.   More...

Warren v K Kavangh t/as Local Fencing [2015] NSWCATCD 140
Home Building Act 1989 – defective work, breach of statutory warranties.   More...

Martin v Giro Construction Group Pty Limited [2015] NSWCATCD 133
Home Building Act 1989 - scope of works, successor in title, defects, breach of statutory warranty.   More...

Baak v Concrete Services Group Pty Ltd [2016] NSWCATAP 42
Appeal - procedural fairness, nominal damages.   More...

Roberts v Duffy [2015] NSWCATCD 149
CONTRACT – assessment of damages – mitigation of damages - the ultimate burden of proving its loss lies upon the plaintiff, but the defendant bears the burden of calling evidence establishing that the plaintiff acted unreasonablyCIVIL AND ADMINISTRATIVE TRIBUNAL – costs – Calderbank offer.   More...

Mulhearn v Merit Homes Pty Ltd [2015] NSWCATCD 139
Admissibility of time lapse images obtained from surveillance device, improperly obtained evidence, probity of evidence.   More...

Keith v Florida Kitchen Centre Pty Ltd [2015] NSWCATCD 131
Practice and Procedure – written reasons for orders.   More...

Phan Building Services Pty Ltd v Dang [2016] NSWCATAP 51
Appeal - Question of law; leave to appeal; quantum meruit assessment; discretion in respect of costs.   More...

Markunsky v Zammit t/a Zammit Quality Constructions [2016] NSWCATAP 49
Appeal – reasons for decision, regard for evidence, fairness and equity of decision.   More...

Hertslet v Doherty; Doherty v Hertslet [2016] NSWCATAP 46
APPEAL – costs application when proceedings settled – relevant principles are different from the principles that apply following a contested hearing – procedural fairness – whether it is a breach of procedural fairness for Member to fail to ask parties whether they object to that Member determining an application for costs when proceedings settled
New hearing – consideration of material before Tribunal below – application of correct principles to costs application.   More...


Building and Construction Industry (Consequential and Transitional Provisions) Bill 2013
Introduced HR 02/02/2016 - A Bill for an Act to deal with consequential and transitional matters arising from the enactment of the Building and Construction Industry (Improving Productivity) Act 2013, and for related purposes.  More...

Building and Construction Industry (Improving Productivity) Bill 2013
Introduced HR 02/02/2016 - A Bill for an Act to re-establish the Australian Building and Construction Commissioner, and for related purposes. 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.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Christine Jones
Hilary Yeoh
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.