In a recent decision of Owners Corp – SP 14846 v Wesfarmers General Insurance Ltd t/as Lumley General [2015] NSWCATAP 204, the Appeal Panel considered the vexed question of home warranty insurance coverage for subsequent work by a builder to rectify defects in the builder's original work.
The unusual facts included that the builder had not obtained home warranty insurance for the original work, in contravention of the Home Building Act
The original work failed and the builder agreed to 'rip it up and start again'. No formal contract was entered into for the subsequent work. A marked up version of the contract for the original work was submitted in support of the application for home warranty insurance.
The builder was later deregistered. The subsequent work failed. A claim was made on the home warranty insurance policy.
The Tribunal below held that the claim was excluded under cl 3.4(bb)(i) of the policy on the basis of defects existing prior to the subsequent work.
The Appeal Panel considered that the Tribunal below had adopted a meaning of cl 3.4(bb)(i) that was too broad, but nevertheless dismissed the Owners Corporation's appeal, finding:
The relevant insured event is a breach of the statutory warranties by the Contractor. That person is the person named in the Certificate of Insurance ... who "enters in to a Contract with the Owner to do the Work ...": see definition of Contractor.
In our opinion, this requirement was not satisfied in the present circumstances where the Builder seeks to rectify in order to achieve the performance that it promised to achieve under the original contract for the building work.
Cases
Owners Corporation SP 78422 v Ware Building Pty Ltd
[2015] NSWSC 1384
PRACTICE AND
PROCEDURE – dispute between owners corporation and builder
– where defendant builder seeks to commence separate
proceedings against the developer to rectify the contract pursuant
to which the building was constructed – related application
to amend list response in present proceedings to incorporate that
defence – where it has been open to the defendant to agitate
the question of rectification for three years – where
substantial effort and expense has gone into the preparation of the
case as currently pleaded – where a variation argument is in
any event already provided for – consequence that it is not
in the interests of justice to allow defendant the leave it
seeks.More...
McPherson v Mace [2015] NSWCATAP 203
CIVIL AND
ADMINISTRATIVE TRIBUNAL – Claim for defective building
work-adequacy of reasons for decision – failure to
constructively exercise jurisdiction – error of law.More...
Barton v Calliden Insurance Limited [2015] NSWCATAP
202
Appeal – no precise identification of questions of
law – construction of building contract and insurance
contract under Home Building Act – objective principle of
contract construction – transportable dwelling to be built in
Victoria and installed in New South Wales – building contract
terminated before completion in Victoria – insurance contract
in name of individual and not building company – no building
contract with individual – insurance did not come into
operation – claim under insurance failed – inconclusive
preliminary hearing on separate issues before appealed decision
– appeal dismissed – no special circumstances.
More...
Omid Tofighi t/as Sovereign Buildings v Anahita Adami
and Mansoor Adami [2015] NSWCATAP 189
APPEAL – Civil and Administrative Tribunal –
application for leave to appeal – leave not granted –
appeal dismissed. More...
S & G Homes Pty Ltd t/as Pavilion Homes v Owen
[2015] NSWCATAP 190
PRACTICE AND PROCEDURE – consent orders made by
Tribunal in terms of agreed settlement – meaning of s
59(1)(b) of Civil and Administrative Tribunal Act 2013 (NSW)
– exercise of discretion to make consent orders
–Tribunal must take into account whether it had power to make
the consent orders and must make those orders reasonably - A
builder, S & G Homes Pty Ltd, has appealed from a consent order
that it pay a homeowner, Mr Owen, $85,000 for defective and
incomplete work. More...
Rose v Graham & Wyn [2015] NSWCATCD 92
Sufficient fence; licensed contractor; dividing fence as
an exempt and complying development. More...
Poytress v Director General, NSW Fair Trading [2015]
NSWCATOD 100
ADMINISTRATIVE LAW - administrative review of decision to
refuse the applicant's application for renewal of his licence
– applicant a director of an externally-administered company
- whether applicant took all reasonable steps to avoid external
administration – whether the applicant is a fit and proper
person to be issued with a licence.More...
Appeal – home warranty insurance – original defective work uninsured – rectification work by builder at no cost to owner also defective - whether insurance subsequently obtained covered or excluded loss – construction of insurance policy – jurisdiction of Tribunal to deal with alleged insurance settlement. More...
Lovich v Commissioner for Fair Trading [2015] NSWCATAP
208
ADMINISTRATIVE LAW – review of decision to grant
contractor licence – meaning of phrase "a wide range of
building construction work". More...
Legislation
NSW
Home Building Amendment (Insurance Exemption) Regulation
2015
The object of this Regulation is to provide certain
exemptions from the requirements of Part 6 of the Home Building Act
1989, which requires residential building work done under a
contract to be insured under the Home Building Compensation Fund.
This Regulation exempts from Part 6 a holder of a contractor
licence who does, or enters into a contract to do, residential
building work funded by the NSW Community Care Supports Program or
by the Commonwealth Home and Community Care Program (in relation to
home modification work commenced before 1 January 2016). 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.