Australia: Residential Focus – 29 March 2017

Last Updated: 31 March 2017
Article by Christine Jones and Georgia Appleby
Most Read Contributor in Australia, July 2017

Galdona v Peacock [2017] NSWCATAP 64

The NCAT Appeal Panel recently considered an appeal by a builder that the Tribunal below had erred in failing to consider section 48MA of the Home Building Act 1989 (NSW) (the Act), that rectification of defective works by the responsible party is to be the preferred outcome.

This case arose out a contract for concreting works. In finding for the owner, the Tribunal ordered that the builder pay $17,257.90 to the owner, representing the cost of full replacement of the defective works.

The builder appealed this order as the cost of rectification was significantly below the cost of replacement. The owner argued that the Tribunal had made an error of law when it failed to consider and apply section 48MA of the Act, which stated:

A court or tribunal determining a building claim involving an allegation of defective residential building work or specialist work by a party to the proceedings (the responsible party) is to have regard to the principle that rectification of the defective work by the responsible party is the preferred outcome.

The Appeal Panel found that the words "is to have regard to" make section 48MA a mandatory consideration for the Tribunal. The oral reasons of the Tribunal below disclosed that rectification of the defective work by the responsible party was considered not to be appropriate, however, the requirements of section 48MA were not referred to. The Appeal Panel found that this failure amounted to an error of law.

However, despite this finding, the Appeal Panel confirmed the Tribunal below's decision. The Appeal Panel found that even if section 48MA had been applied by the Tribunal below, its decision would have been no different.

We reach this conclusion having regard to the fact that the Tribunal Member made the following findings. First, the relationship between the parties had broken down. Secondly, the appellants did not acknowledge the poor standard of the work they had carried out. Thirdly, the Tribunal Member had severe reservations as to the appellant's ability to rectify the work with due care and skill. These findings were in our view sufficient to justify a decision that the preferred outcome of rectification by the appellants should not be ordered.

In doing so, the Appeal Panel observed that section 48MA only required the Tribunal to have regard to the principle of rectification by the responsible party being the preferred outcome, it did not make the preferred outcome the mandatory outcome.

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Galdona v Peacock [2017] NSWCATAP 64

Adequacy of reasons, work orders under the Home Building Act, rectification as the preferred outcome under s.48MA of the Home Building Act 1989, failure to take into account relevant considerations. More...


Administrative Arrangements (Administration of Acts—Amendment No 1) Order 2017

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