Owners Corporation Court of Appeal Building Defects Win!

Adding Further Building Defects to an Existing Claim

On 17 April 2023, the New South Wales Court of Appeal in the case of Parkview Constructions Pty Ltd v The Owners – Strata Plan No. 90018 (Parkview), confirmed that an owners corporation can add new defects to an existing claim if the statutory warranty period in the Home Building Act 1989 (HBA) has not expired.

Supreme Court Amends Building Defects Statement of Claim

In the Parkview case, in the Supreme Court, the owners corporation sought to amend its Statement of Claim to add new defects. The Supreme Court granted permission to the owners corporation to add new defects to its existing claim.  The new defects that were added were not manifest when the owners corporation-initiated proceedings in the Supreme Court. Parkview appealed against the decision of the Supreme Court to the Court of Appeal.

Court of Appeal Win for Owners Corporation

The Court of Appeal upheld the decision of the Supreme Court by confirming that the owners corporation was entitled to add new defects to its existing claim and the addition was not a new cause of action but part of a single cause of action being a breach by the builder of the statutory warranties under the HBA.

Parkview argued that the addition of new defects introduced a “new” cause of action, and those new causes of action were not the same as the existing cause of action that was on foot. The Court of Appeal rejected that argument. It held that in a conventional case for breach of contract, there is a single cause of action.  That cause of action is complete when a defective structure is provided irrespective of the number of ways in which those defects have manifested themselves.  The Court of Appeal said that even though the HBA has created inroads into common law principles, however, those changes brought by the HBA do not alter the nature of the owners corporation’s claim.

Furthermore, the Court of Appeal said that a successor in title like an owners corporation sues a builder or a developer for statutory warranties under the HBA. The proceeding is based upon a breach of a single contract.  An amendment does nothing more than introduce further departures from the building contract that the builder and the developer had promised and that does not give rise to a new cause of action because the cause of action remains one, that is for a breach of the same contract.  Accordingly, the Court of Appeal held that the owners corporation’s amendments seeking to add new defects did not introduce a new cause of action and so the owners corporation was entitled to add them to its existing claim.

A Victory for Owners Corporations in NSW

This confirmation from the Court of Appeal is a great victory for owners corporations in NSW and it reconfirms the willingness of the judiciary to protect owners in strata schemes wherever it may be necessary.


Faiyaaz Shafiq Lawyer JS Mueller & Co Lawyers specialising in Strata Law

Faiyaaz Shafiq I LLB GDLP I Lawyer

A highly experienced and respected, results driven Litigation Lawyer specialising in the areas of strata litigation, building & construction, commercial litigation, debt recovery, personal and company insolvency. Profile I Linked

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For all strata law advice including by-laws, building defects and levy collections contact our specialist NSW and Sydney strata lawyers here or call 02 9562 1266, we’re happy to assist.




Do You Have Strata Buildings Less than 6 Years Old?

The NSW Government has announced a win for strata managers and owners corporations who have buildings under 6 years old.

You now have an avenue to pursue the rectification of any common property for major building defects, subject to eligibility.

Here we share the following:

  • Key information
  • What is Project Intervene?
  • Who is Eligible?
  • What is classified as common property?
  • What is a serious defect?
  • How do I register for ‘Project Intervene’?
  • Related information

For specific information visit NSW Government ‘Project Intervene

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For all strata law advice including by-laws, building defects and levy collections contact our specialist NSW and Sydney strata lawyers here or call 02 9562 1266, we’re happy to assist.




Have Your Say on the NSW Proposed Building Reforms!

The NSW Government is working to increase confidence in the NSW building industry by creating a new foundation for construction, by looking at improvement of laws and consumers/workers protection.

The Government is committed to:

  • Improving safety, accountability and transparency
  • Ensuring high-quality design, construction and maintenance
  • Modernising and simplifying building legislation

How to Have Your Say!

To have your say on the proposed building laws reform in NSW you can:

  • Complete the all-in-one survey which allows you to skip through all topics to those that are of interest to you or;
  • If you are only interested in a single topic, you may complete one or more of the 7 individual survey topics
  • You may also make a submission which allows you to give detailed feedback or respond directly to the questions in the regulatory impact statements

Deadline for Your Feedback

To provide feedback please Friday 25 November 2022.

For more information, please refer to the NSW Government here.

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For all strata law advice including by-laws, building defects and levy collections contact our specialist NSW and Sydney strata lawyers here or call 02 9562 1266, we’re happy to assist.




ABCB Announces NCC 2022! What are the Differences?

The Australian Building Codes Board (ABCB) has announced the following in relation to the recent launch of the National Construction Code (NCC) 2022:

  • As of 1 May 2023, NCC 2022 will be adopted with a transition period until 1 October 2023
  • The transition period is for the modern homes provisions for energy efficiency, condensation mitigation and liveable (accessible) housing
  • While the transition dates from 1 May to 1 October 2023 are in place NCC 2019 will remain in force
  • Following 1 October 2023, NCC 2022 is to be adopted

How Different is NCC 2022?

  • Consistency improvements have been implemented across all volumes with a new structure and number convention
  • It is more web accessible with a significantly improved user experience and reorganised code’s
  • As part of the transition old clause numbers will be listed to the right of documents
  • You will be able to save a PDF version directly to your device or purchase a printed copy of NCC 2022
  • You will no longer need to sign in to NCC Online but you will need to register to ensure you stay up to date with notifications

For more information the National Building Code 2022 is available here NCC 2022

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For all strata law advice including by-laws, building defects and levy collections contact our specialist NSW and Sydney strata lawyers here or call 02 9562 1266, we’re happy to assist.




Proposed Laws to Give NSW Building Commissioner Power

An owners corporations duty to maintain and repair defective common property in NSW is likely to undergo a major change if the proposed Building Compliance and Enforcement Bill 2022,NSW is passed by the NSW Parliament and becomes law.

The major changes are designed to give the NSW Building Commissioner Mr David Chandler draconian powers to force owners corporations to fix common property defects.

 

What are the New Powers Under the Bill?

The new powers under the Bill includes:

  • A right to enter a strata scheme to inspect and investigate defects
  • Organise and undertake destructive testing
  • Forcing people associated with strata schemes to answer questions in writing
  • Issue compliance notices
  • Accept compliance undertakings
  • Issue search warrants
  • Applying to the Land and Environment court for restraining or remedial orders

The proposed changes will allow fines to be issued to owners corporations who are in breach of the Commissioner’s orders to a maximum of $22,000 and $2,000 per day for any continuing breach.

Consultation on the proposed bill ends on 25 November 2022 and if the bill is passed it will give the Building Commissioner more muscle against those owners corporations who fail to recognise that the duty to maintain and repair defective common property is an immediate duty that cannot be delayed or suspended.

 

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For all strata law advice including by-laws, building defects and levy collections contact our specialist NSW and Sydney strata lawyers here or call 02 9562 1266, we’re happy to assist.




A Great WIN for Owners Corporations in NSW!

Existing Claims: Statutory Warranties and Defects

On 24 August 2022, in a recent case, the New South Wales Supreme Court confirmed that an owners corporation can add to an existing claim for a breach of statutory warranties new defects that may manifest after the owners corporation has commenced its legal action.

Did You Know?

This applies, even if the warranty period for those defects has expired at the time they are added to the claim.

Here we share the recent case: A Great Win for Owners Corporations in NSW

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For all strata law advice including by-laws, building defects and levy collections contact our specialist NSW and Sydney strata lawyers here or call 02 9562 1266, we’re happy to assist.




Can Tenants Apply to NCAT for Rent Relief for Defects?

Tenants, Building Defects, NCAT and Rent Relief

 

In a recent case, a property manager failed to inform a landlord of defects in the common property of a strata building and take any steps to investigate issues that a tenant had complained about.

The tenant applied to NCAT for a rent reduction as the landlord had breached their obligation to keep the rented premises in a reasonable state of repair as water leaked into the premises. The tenant was successful.

Who Could be Liable?

 

If a tenant claims rent relief from NCAT due to defects in a strata building, it’s important to note that NCAT could deem that it is the responsibility of the:

  • Landlord who could lose rent (or worse) if they do nothing;
  • Property manager if they fail to fix defects in the premises that they are authorised to repair following a tenant’s complaint in a timely manner;
  • Property manager if they have not advised the landlord of defects (where they are not authorised organise repairs) following a tenant’s complaint;
  • Owners corporation who could also be held liable for a landlord’s loss of rent.

A Timely Reminder for Managing Agents!

Ensure your professional indemnity insurance is current;

  • Ensure your professional indemnity insurance is current
  • Obtain landlord consent on a minimum amount for repair works which can be dealt with without the landlord’s approval;
  • Allocate sufficient resources to attend to repair requests in a timely manner to avoid issues which could lead to court proceedings;
  • Request that any common property defects are promptly repaired by the owners corporation;
  • Ensure that the relevant strata by-laws for the apartment block are up to date to minimise your risk

Here we share some cases…

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For all strata law advice including by-laws, building defects and levy collections contact our specialist NSW and Sydney strata lawyers here or call 02 9562 1266, we’re happy to assist.




Court Widens People Liable for Building Defects!

Building Defects – Who is Liable?

Can the director of a building company that is responsible for the construction of a new strata building be held personally liable for defects in the building?

The Design and Building Practitioners Act 2020 (Act) was introduced in 2020 and provides that a duty of care is owed by “a person who carries out construction work” to an owners corporation to avoid defects in the construction of the building. But who exactly is classified as “a person who carries out construction work”?

Is “a person who carries out construction work” limited to the entity that was contracted to do the work such as the builder or does it also include all persons involved in completing the project such as a supervisor, project manager and even the director of the builder’s company or the developer?

Personal Liability of Project Manager

A recent decision by the Supreme Court of NSW has found that the husband of a director of a building company was personally liable for defective building works done by the builder under the Act because he acted as the project manager and supervisor of the builder: see Goodwin Street Developments Pty Ltd atf Jesmond Unit Trust v DSD Builders Pty Ltd (in liq) [2022] NSWSC 624.

In this case, the builder was placed into liquidation and the developer brought proceedings against Mr Roberts the husband of a director of the builder.  According to the Court, Mr Roberts was a project manager of the builder, supervising construction works for the project. Therefore, Mr Roberts was found to be “a person who carried out construction work” under the Act and was found liable for the defects.

Liability of Developer

In another recent Supreme Court case, an owners corporation sued the builder and developer for damages arising from defects.

The Court found, among other things, that a developer could be held liable for defects under the Act as a person who carried out construction work.

The Court also said that under the Act, a person could be liable for defects if they could (but did not necessarily) have control of the building works: see The Owners – Strata Plan No 84674 v Pafburn Pty Ltd [2022] NSWSC 659.

Conclusion

These cases have far reaching consequences for directors, supervisors, project managers, developers and sub-contractors involved in construction work who all could be liable to owners corporations for defects under the Act, even for work done up to 10 years ago (as the Act is retrospective). However, for those persons to be liable, it must be proven that they have had or could have had some control over the building works.

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For all strata law advice including by-laws, building defects and levy collections contact our specialist NSW and Sydney strata lawyers here or call 02 9562 1266, we’re happy to assist.




Rain and Common Property Repairs – Who’s Responsible?

Who is Responsible for Common Property Repairs Caused by Rain?

Australia recently had its wettest November in 122 years. March and April 2022 have also seen unprecedented rainfall in New South Wales.

Extensive rainfall events test the patience of every strata manager resulting in numerous complaints about water leaks into strata lots.

Faced with endless demands, owners corporations need to be very clear about their responsibilities, so it’s timely to revisit some of the “fundamentals”.

In the article below we discuss…

Step 1 – Is it the owners corporation’s responsibility?

Step 2 – If it leaks has the common property failed?

Step 3 – Are damages payable by the owners corporation for common property failures?

For more read Rain and Maintaining Common Property – Who is Responsible?

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For all strata law advice including by-laws, building defects and levy collections contact our specialist NSW and Sydney strata lawyers here or call 02 9562 1266, we’re happy to assist.




NSW Strata Laws – Have Your Say Now!

Did you know there are 81,717 strata schemes registered in NSW and every year this number grows by more than 1,000 across Sydney and regional NSW?

That’s why the NSW government has recently recognised the importance of strata living laws and the need to ensure that they stay relevant and address some fundamental issues that have arisen since the laws were re-written in 2015.

An online survey has been developed and the NSW Government is asking you to ‘have your say’ here now.

For all NSW strata legal including by-laws, building defect and levy collection advice contact us here or call 02 9562 1266, we’re happy to assist.