Lee v Ace NSW Pty Ltd  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:
- 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;
- section 18B(f) applied to work and materials used in doing the work reasonably fit for the specified purpose or result;
- 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
- 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
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
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
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 
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  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  NSWCATAP
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  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  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
 NSWCATAP 39
Home Building Act 1989 – defective and incomplete work - assessment of damages. More...
Tzaneros Investments Pty Limited v Walker Group
Constructions Pty Limited  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 
Home Building Act 1989 - defects, breach of statutory warranty, agreements at conclave. More...
Warren v K Kavangh t/as Local Fencing  NSWCATCD
Home Building Act 1989 – defective work, breach of statutory warranties. More...
Martin v Giro Construction Group Pty Limited 
Home Building Act 1989 - scope of works, successor in title, defects, breach of statutory warranty. More...
Baak v Concrete Services Group Pty Ltd  NSWCATAP
Appeal - procedural fairness, nominal damages. More...
Roberts v Duffy  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  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  NSWCATCD
Practice and Procedure – written reasons for orders. More...
Phan Building Services Pty Ltd v Dang  NSWCATAP
Appeal - Question of law; leave to appeal; quantum meruit assessment; discretion in respect of costs. More...
Markunsky v Zammit t/a Zammit Quality Constructions
 NSWCATAP 49
Appeal – reasons for decision, regard for evidence, fairness and equity of decision. More...
Hertslet v Doherty; Doherty v Hertslet  NSWCATAP
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...
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