Australia: Residential Focus - 18 January 2017

Last Updated: 22 January 2017
Article by Lauren Stables and Christine Jones
Most Read Contributor in Australia, September 2018

Xu v Jinhong Design & Constructions Pty Ltd [2011] NSWCA 277


The respondent, Jinhong Design & Constructions Pty Ltd (the Builder) and Ausino Art Ceramic Development Pty Ltd (the Owner) entered into a contract, to construct 18 townhouses, shops and offices at Sylvania Waters for $2.385 million (the First Building Contract). On behalf of the Owner, two of its directors signed a Deed of Guarantee and Indemnity contained within the First Building Contract. In the following weeks, one of those directors was removed and a replacement contract was executed (the Second Building Contract). The Deed of Guarantee was not signed. The Builder alleged that the then directors of the Owner (the Directors) promised to sign the form of guarantee at a later date.

During the construction work, numerous variations were agreed between the parties, however only one variation was agreed in writing. The Builder claimed the variations and an amount outstanding under the Second Building Contract.

The Court found in favour of the Builder. The Directors appealed to the New South Wales Court of Appeal.

Issues for determination

The issues for the Court of Appeal to determine included whether:

  1. the Directors promised for consideration to sign the guarantee in the Second Building Contract;
  2. the Directors represented that they would sign the guarantee in the Second Building Contract and whether those representations constituted misleading and deceptive conduct and knowingly false representations of fact; and
  3. if the Directors had signed the form of guarantee, they would have been liable to indemnify the Builder, inter alia, in respect of amounts owing pursuant to variations to the building work that were agreed between the Owner and the Builder, whether agreed orally or in writing.


The Court of Appeal found that the fact one of the Directors signed a guarantee in respect of the First Building Contract, did not conclude that he would have signed a guarantee in the Second Building Contract. Furthermore, the failure to fill in the names of the Directors as the guarantors suggested against the likelihood that the Builder 'insisted on personal guarantees being given as part of the replacement contract.'

The findings of the primary judge that the appellants made the alleged representations were vitiated for the same reasons as described above. The Court of Appeal held that the Directors did not have the requisite states of mind at the time they made the alleged statements to constitute misleading and deceptive conduct and therefore the claim failed.

The Court of Appeal held that the oral variations were not enforceable having regard to section 6(1)(b) of the Home Building Act 1989 (NSW), which provides that the requirement of writing imposed by section 7 also applies to variations.

The guarantee was limited to the payment of 'all monies agreed to be paid by the owner under this contract.' As clause 17.1 of the Second Building Contract required variations to be in writing, any monies recoverable by the Builder by reason of the oral variations could not be characterised as 'moneys agreed to be paid by the owner under the contract.' Accordingly, the Court of Appeal held that the guarantees, if given, would not permit recovery of the variations against the Directors.

The Court of Appeal has remitted the Builder's contract claim to the Supreme Court.

In the media

What Builders Need to Know About the ABCC at a Practical Level

Predictably, reactions to the passing of the legislation to reinstate the Australian Building and Construction Commission (ABCC) in December were mixed (11 January 2017). More...

A third of apartment cranes in banks' 'blacklisted' areas

More than one-third of the cranes hovering over apartment building sites in Australian cities are in neighbourhoods banks have "blacklisted" as lending problem spots. A new analysis reveals 38.2 per cent are within postcodes National Australia Bank and AMP have targeted for reduced or restricted lending, The Australian Financial Review reports (05 January 2017). More...

Building Ministers agree to comprehensive package of fire safety measures

At its meeting of 14 December 2016 the Building Ministers' Forum (BMF) agreed to a comprehensive package of measures to improve fire safety in high rise buildings (20 December 2016). More...

Apartments Give Dwelling Approvals A Pulse In December

The fall in dwelling approvals in NSW and Victoria is a growing concern. In trend terms, dwelling approvals in NSW and Victoria fell by 4.3 per cent and 2.5 per cent respectively. Nationally, apartments led the trend, growing 18.5 per cent over the month in seasonally adjusted terms (10 January 2017). More...


Australian Bureau of Statistics

09/01/2017 Building Approvals, Australia, Nov 2016 (cat no. 8731.0)

Practice and courts

ABCB's 2017 NCC Information Seminars Registrations Now Open

Registrations are now open for the Australian Building Codes Board's (ABCB) 2017 NCC Information Seminars. The series will include presentations from the ABCB, Standards Australia and local Building Control Administrations. More...

Senate Inquiry Update

Non-conforming building products
Status: Accepting Submissions; Date Referred: 11 October 2016; Submissions Close: 01 December 2016; Reporting Date: 25 May 2017

Submission to NSW Government on building certification

Engineers Australia response to the NSW Government's consultation on a draft accreditation framework for building certifiers, in response to the Lambert review (20 December 2016). More...

NSW: [Draft regulation] Fire safety proposed reforms to buildings (multi-unit residential, commercial, retail, industrial, health care and public-assembly structures)

The proposals, which cover a broad range of buildings, and various stages of the building lifecycle, form part of the Government's response to a recent Statutory Review of the Building Professionals Act 2005. The draft reforms follow consultation with key industry and community stakeholders. Feedback closes 31 January 2017. More...

BPB: Read BPB's December 2016 e-news

BPB's e-news is a regular digest of work by the Board, legislative updates, events, training and consultation opportunities (23 December 2016). More...

BPB: New disciplinary case studies

Two new disciplinary case studies have been published. Each is based on a complaint considered by the Board and offers important lessons for certifiers (23 December 2016). More...

BPB: Have your say on improving fire safety in NSW

The NSW Government is seeking to improve fire safety in new and existing buildings and is asking for your feedback on changes to relevant legislation and certification. Public consultation on the proposed reforms to the Environmental Planning and Assessment Regulation 2000 closes 31 January 2017 (19 December 2016). More...


Steven Mace v Christopher John McPherson t/as CMC Building Works [2017] NSWCATAP 8

Having regard to the considerable costs which have clearly been expended in relation to the Item 2 claim, we consider that the parties should have the opportunity to make submissions as to orders which ought be made as to costs.

Commissioner for Fair Trading v Younan [2016] NSWCATAP 270

APPEAL – Civil and Administrative Tribunal – administrative review – disciplinary action under Home Building Act – operation of transitional provisions concerning statutory amendments – sufficiency of rectification order – statutory construction – question of law.

Johnson v Lukeman [2016] NSWCATAP 272

APPEAL – Civil and Administrative Tribunal (NSW) – procedural fairness - refusal to adjourn proceedings –adequacy of preparation time – adequacy of reasons APPEAL – Civil and Administrative Tribunal (NSW) – expert evidence – adequacy of reasons – whether report provided no evidence or unreasonable to rely upon APPEAL – Civil and Administrative Tribunal (NSW) – s 48MA of the Home Building Act – relevant consideration.

Access Housing Pty Ltd ACN 065902936 v Rayfield [2017] NSWCATAP 4

CIVIL AND ADMINISTRATIVE TRIBUNAL – Appeal Panel – home building – consumer claim – breach of statutory warranty – defective work – compensation based on demolition of building works – denial of procedural fairness – misapplication of Belgrove v Eldridge – refusing to receive evidence of director of the appellant as expert evidence – no error of law.

Leisure Brothers Pty Ltd v Smith [2017] NSWCATAP 11

Procedure- Failure to comply with directions, refusal to adjourn hearing. Evidence- Sufficiency of evidence where no competing evidence, lump sum quotation prepared by reference to detailed scope of work. Leave to appeal- new evidence not reasonably available at the time of the hearing.

Economos v P & T Athos Constructions Pty Ltd [2016] NSWCATCD 89

Defective work.

In the matter of Datlas-Rahme Construction Pty Ltd [2016] NSWSC 1833

CORPORATIONS — Winding up — Application to set aside creditor's statutory demand under s 459H of the Corporations Act 2001 (Cth) – where plaintiff contracted with defendant for the defendant to perform painting works on a third party's property – where plaintiff contended defendant caused damage to third party's property – where plaintiff contended that costs of remedying defects caused by defendant constituted offsetting claim – whether there was contract between plaintiff and third party under which plaintiff may be contractually liable to rectify damage caused by defendant – whether offsetting claim under s 459H of the Corporations Act 2001 (Cth) established.

Krahe v Manfate Pty Ltd [2016] NSWCA 363

BUILDING AND CONSTRUCTION – contracts – oral contract – whether statement of a price was an estimate or a fixed quote – evidence of past dealings between parties suggestive of informal, trusting and flexible contractual relationships. APPEAL – whether primary judge erred in admitting evidence of prior dealings between the parties – whether primary judge erred in his assessment of the credibility of the appellants' evidence and the interpretation of their affidavit evidence – whether primary judge erred in his assessment of the evidence giving rise to the contract which led to a conclusion adverse to the appellants.

Karan v Champion Homes Sales Pty Ltd [2016] NSWCATCD 84

Home Building---Limitation of Actions---Statutory Warranties---Date of Practical Completion.

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.

Lauren Stables
Christine Jones
Similar Articles
Relevancy Powered by MondaqAI
Holding Redlich
Holding Redlich
Holding Redlich
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 Topics
Similar Articles
Relevancy Powered by MondaqAI
Holding Redlich
Holding Redlich
Holding Redlich
Related Articles
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
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

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 or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq 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 of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions