Lee v Ace NSW Pty Ltd [2016] 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
2
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
Prosecuted
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
high
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
Published
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...
Cases
D&R Constructions (Aust) Pty Ltd v Wesiak [2016]
NSWCATAP 38
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 [2016] 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 [2016] NSWCATAP
33
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 [2016] 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 [2016] 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
[2016] NSWCATAP 39
Home Building Act 1989 – defective and incomplete
work - assessment of damages.
More...
Tzaneros Investments Pty Limited v Walker Group
Constructions Pty Limited [2016] 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 [2015]
NSWCATCD 141
Home Building Act 1989 - defects, breach of statutory
warranty, agreements at conclave.
More...
Warren v K Kavangh t/as Local Fencing [2015] NSWCATCD
140
Home Building Act 1989 – defective work, breach of
statutory warranties.
More...
Martin v Giro Construction Group Pty Limited [2015]
NSWCATCD 133
Home Building Act 1989 - scope of works, successor in
title, defects, breach of statutory warranty.
More...
Baak v Concrete Services Group Pty Ltd [2016] NSWCATAP
42
Appeal - procedural fairness, nominal damages.
More...
Roberts v Duffy [2015] 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 [2015] 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 [2015] NSWCATCD
131
Practice and Procedure – written reasons for orders.
More...
Phan Building Services Pty Ltd v Dang [2016] NSWCATAP
51
Appeal - Question of law; leave to appeal; quantum meruit
assessment; discretion in respect of costs.
More...
Markunsky v Zammit t/a Zammit Quality Constructions
[2016] NSWCATAP 49
Appeal – reasons for decision, regard for evidence,
fairness and equity of decision.
More...
Hertslet v Doherty; Doherty v Hertslet [2016] NSWCATAP
46
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...
Legislation
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...
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.
