Australia: Residential focus - 1 March 2017

Last Updated: 5 March 2017
Article by Christine Jones
Most Read Contributor in Australia, July 2017

Walsh v Sandeberg & Anor [2017] NSWCATAP 38

The NCAT Appeal Panel (the Panel) recently considered an appeal by a builder that the Tribunal below failed to correctly apply the relevant principles in the calculation of damages awarded for the breach of a building contract. The builder claimed that the Tribunal below erred by failing to consider the issue of reasonableness with respect to the amount awarded for rectification costs.

It was not in dispute that the builder had failed to provide a rebate in the slab under a concrete block wall. The purpose of the rebate was to contain moisture that may seep through the wall from entering habitable spaces. Consequently, the Tribunal below held that "uncertainty about future waterproofing caused by lack of the rebate will always be an item of concern to the owners and is considered a latent defect."

It fell for consideration whether the rectification works were necessary to produce conformity with the contract and whether the rectification works and the costs associated with such works were a reasonable course to adopt.

As per Bellgrove v Eldridge (1954) 90 CLR 613, the normal measure of damages that an owner is entitled to receive is the cost of the rectification of the defective building work. This right, however, is subject to a qualification that all rectification works undertaken must be both "necessary" and "reasonable".

The Tribunal also referred to the 'test of unreasonableness' raised by the High Court in Tabcorp Holdings Pty Limited v Bowen Investments Pty Limited [2009] HCA 8 and found that there was "nothing exceptional in an owner of a new residence requiring a builder to construct the retaining wall in compliance with contractual terms and in accordance with an Australian Standard."

Following this reasoning, the Tribunal held and the Panel agreed that the demolition and rebuilding of the retaining wall in order to incorporate the rebate and achieve conformity with the contract was not an act of futility or betterment and was reasonable in the circumstances. In doing so, the Court rejected the builder's position that the rectification work was unreasonable because there was no evidence of leaking resulting from the absent rebate.

In the Media

NSW: Builders Insurance 'Black Hole'

The NSW Home Building Act requires that a licenced builder provides an insurance certificate to their clients prior to commencement of residential building works when the labour and materials associated with the work exceeds $20,000 in value (24 February 2017). More...

Storm-affected consumers advised to be on the lookout for dodgy traders

NSW Fair Trading Commissioner, Rod Stowe, is warning Sydney residents with storm damage to be aware of scammers going door-to-door, claiming to be contracted by the State Emergency Service (SES) (21 February 2017). More...

Parramatta light rail to connect communities

A new light rail line across Greater Parramatta will ensure commuters are able to travel easily to their homes, jobs, hospitals, universities, entertainment hubs, sport stadiums and leisure areas (17 February 2017). More...

Sydney housing completions hit record high

More homes are being delivered in Greater Sydney with the number of dwellings reaching a 44-year record high and more than 33,000 homes built in the 12 months to November 2016 (15 February 2017) More...


Walsh v Sandeberg & Anor [2017] NSWCATAP 38

Assessment of damages – reasonableness of rectification costs, procedural fairness - contract for the provision of residential building work, construction of a duplex in Ballina. More...

Kursun v Paul Garreffa Paul's Home Maintenance [2017] NSWCATCD 4

RESIDENTIAL BUILDING WORK – identity of contracting parties – defective work – competing expert opinions – quantum of loss. More...

Huxley Homes Pty Ltd (In liquidation) v Guenther [2017] NSWCATCD 1

COSTS - Calderbank offers. More...

Admark Property Group Pty Ltd (in liq) v GJ Building and Contracting Pty Ltd [2017] NSWSC 118

PRODEDURE – Contempt, attachment and sequestration – Contempt of Court – Sentence – where Respondent caused company to breach an undertaking to the Court thereby knowingly impeding the administration of justice – where contemnor purged contempt after conviction – whether custodial sentence is appropriate. More...

Johnson T/As One Tree Constructions & Ors v Lukeman & Anor [2017] NSWCATAP 45

CIVIL AND ADMINISTATIVE TRIBUNAL (NSW) costs – discretion to award costs – general rule is each party is to pay their own costs – where party has been unsuccessful on some issues – where those issues have not significantly added to costs – characterisation as a mixed result. 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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