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.




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.

 

Contact Us

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.




Landmark Ruling and WIN for Any Owners Corporations!

Relevant for Any Owners Corporation with Combustible Cladding on Their Building.

On 18 October 2021, the NSW Supreme Court delivered a landmark judgment in the case of Taylor Construction Group Pty Ltd v The Owners – Strata Plan No. 92888 [2021] NSWSC 1315, confirming that biowood cladding is combustible cladding that poses a risk of fire spread between levels on the façade of an apartment building. Muellers represented the successful owners corporation in NCAT and also in the Supreme Court – a WIN for all owners corporations.

Senior Lawyer, Faiyaaz Shafiq, JS Mueller & Co Lawyers, said, “The outcome of the case represents a major win for owners corporations strengthening the basis for claims by owners corporations against builders and developers who have installed combustible cladding on their buildings.”

“I have no doubt it will see a marked shift in the way in which builders and developers respond to combustible cladding claims”, said Faiyaaz.

The owners corporation initially commenced proceedings in NCAT against the builder and developer seeking orders that biowood cladding installed on the façade of its building be replaced or compensation be paid to cover the cost to replace the cladding.

The owners corporation claimed that the cladding was combustible or created an undue risk of fire spread in breach of the statutory warranties under the Home Building Act 1989 because it did not comply with the Building Code of Australia and was not fit for its purpose.

NCAT ordered that the defective biowood cladding be rectified by the builder and developer. The builder/developer appealed NCAT’s findings to NCAT’s Appeal Panel which dismissed the appeal.

The builder/developer then appealed to the NSW Supreme Court.

The NSW Supreme Court on 18 October 2021 gave a comprehensive judgment dismissing the appeal. In doing so, the Court accepted the owners corporation’s arguments that:

  1. biowood cladding is combustible;
  2. there is a risk that fire will spread beyond the floor of origin because the material from which the biowood is made will support fire spread between the levels of the building;
  3. there was evidence from the fire safety engineer of the owners corporation that there is an undue risk of fire spreading due to the biowood;
  4. there was no evidence to support the contention of the builder/developer that a slower rate of fire spread does not present an undue risk in comparison with a higher rate of spread; and
  5. there was evidence that sprinklers or any other fire safety measure would have no relevance to external fire spread.

Furthermore, the Court also agreed with the owners corporation’s submission that combustible cladding is not fit for purpose which is one of the categories of the statutory warranties under the Home Building Act 1989.

The Court has reaffirmed the view that the fundamental fire safety requirement for a class 2 apartment building requires external walls to be non-combustible, and cladding installed in a multi-storey apartment building which does not comply with the BCA is not suitable for the purpose for which it is used.

The Court’s judgment confirms the view the owners corporation always held that biowood poses an unacceptable fire safety risk.

The Court’s judgment is a landmark ruling that is relevant to any owners corporation that has combustible cladding on its building.

The ruling strengthens the basis for claims by owners corporations against builders and developers who have installed combustible cladding on their buildings and should see a marked shift in the way in which builder and developers respond to those claims.

Note: Faiyaaz Shafiq of JS Mueller & Co Lawyers acted for the successful owners corporation and was assisted by barristers Tom Davie and Anita Power of Queen’s Square Chambers.

If you or your owners corporation require advice about combustible cladding, please contact our expert team now.

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




NSW Combustible Cladding Taskforce – Who is Eligible?

The NSW Government has recently established a Cladding Taskforce known as ‘Project Remediate’.

This Taskforce will:

  • Identify residential buildings with potential combustible cladding issues
  • Address the use of non-compliant cladding materials with local councils

As of February 2021, 185,000 building records have been audited by the Taskforce with 4,127 buildings inspected.

It is important to note that not all cladding is dangerous. Fire + Rescue NSW (FRNSW) have been engaged to assist the Taskforce in determining building risk. Those buildings considered a higher risk will be further referred to consent authorities such as their Local Council or the Department of Planning, Industry and Environment (DPIE) for further investigation.

Register your interest in ‘Project Remediate’ here.

What is ‘Project Remediate’?

‘Project Remediate’ is a 3 year program designed to help remove combustible cladding from eligible residential buildings who will receive:

  • Interest free loans over a 10 year period with loan payments commencing after the completion of work
  • Assurance and project management services offering technical, risk and practical support to owners corporations and strata managers
  • A free 2-hour course on Project Remediate (free until 30 September 2021, following a fee of $140.00 will apply). This course is designed for strata managers and committee members of affected buildings to help them explain ‘Project Remediate’ to lot owners, to enable lot owners to make informed decisions.

Who is Eligible for ‘Project Remediate’?

To be eligible for ‘Project Remediate’ support, the building must be either:

  • A residential apartment building (Class 2) located in NSW approved by the Taskforce to have a high-risk combustible cladding façade which requires remediation
  • A multi-use building which has part commercial/residential located in NSW approved by the Taskforce to have a high-risk combustible cladding façade which requires remediation

Do you need More Information on ‘Project Remediate’?

For more specific information please visit:

Do You Need Further Assistance with Combustible Cladding Issues?

Combustible cladding (and building defects) is a complex area of the law.

The team at JS Mueller & Co Lawyers has unparalleled knowledge and experience dealing with many cases in this complex area of the law.

JS Mueller & Co Lawyers published flammable cladding cases:

If you would like assistance with flammable cladding (and/or building defect) issues, please contact us now, we are here to help you.




NCAT Confirms Biowood Cladding is Combustible

Late 2019 a major development occurred for the strata industry when the New South Wales Civil and Administrative Tribunal (NCAT) held that Biowood cladding is combustible, poses an undue risk of fire spreading and is a major building defect.

As of yesterday 4 August, 2020…

In a first for Australia, NCAT’s Appeal Panel upheld a 2019 finding by NCAT that Biowood cladding installed on the facade of a multi-storey building in Sydney is combustible and must be removed.

The owners corporation of the building was successfully represented by Mueller’s and is the first reported case where a Court or Tribunal has upheld a finding that a particular type of cladding is combustible.

The outcome of the case represents a win for owners corporations and sends another timely warning to builders and developers that use of combustible cladding is fraught with risk and carries with it substantial consequences.

The first case in Australia (and globally) the decision in this case sets a precedent A Win for Owners Corporation – Biowood Cladding Confirmed Combustible

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