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 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.

As the financial pressure heightens with rising interest rates and cost of living increases we’re seeing more and more people default on their levy payments.

We all know that raising and collecting strata levies for building maintenance and scheme administration is fundamental to an efficiently run strata complex.

When owners corporations allow owners to fall behind in their levy payments it leads to cash flow problems for an owners corporation which could lead to critical building works not being addressed and many other issues.

Recovering Overdue Levies

The recovery of strata levies is unique and requires a detailed understanding of the various strata laws as they apply in NSW.

So, when it does become a legal issue, recovering overdue levies is highly technical with a number of steps that must be taken before commencing legal action to recover the overdue levies from an owner.

Muellers WINS Huge Levy Debt Case and Rewrites the Law!

Sale of Apartment Owned by Monk who Disappeared Overseas Sets Legal Precedent!

Owners Corporations and strata managers in NSW sometimes wonder how they can recover outstanding strata levies from owners of strata units who’ve disappeared and are nowhere to be found. Well, do not be disillusioned JS Mueller & Co Lawyers has now given hope to owners corporations and strata managers.

Read on…Sydney Morning Herald (SMH) Domain

Overwhelmed and Need Assistance with Levy Debt Recovery?

We are expert collectors and negotiators highly skilled in all essential aspects of levy debt collection.

• We have been collecting overdue levies for 30+ years.
• Our dedicated team of paralegals do nothing but levy debt collection.
• We do levy debt collection across regional and metropolitan NSW.
• We will get results.

Now you can, sit back, relax and let us collect those overdue levies for you!

Contact Us

Speak to the specialist NSW levy collections experts here, we’d be happy to assist.

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.

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.

In a recent Law case JS Mueller & Co Lawyers acted for the successful owners corporation for a levy recovery matter from an owner who had disappeared.

Did you know that in NSW a court judgment obtained against a lot owner for outstanding levies, interest and costs can be enforced in several ways? This will depend on the amount involved and what assets, if any, the owner holds.

One way of enforcing a judgment for at least $10,000 is by issuing a writ against the owner’s property.

So, what was the outcome of the levy recovery Law case? Levy Recovery and Writ of Execution

For NSW strata legal or levy collection advice contact us here or call 02 9562 1266, we’re happy to assist.

We all know that raising and receiving strata levy funds for building maintenance and scheme administration is fundamental to an efficiently run strata complex.

That’s why it’s imperative that any strata levies in arrears are recovered in a timely manner to ensure that sufficient funds are always readily available.

So what is the process for:

1. Levy Issues
2. Levy Payments
3. Levies in Arrears
4. Collection of Levies in Arrears

To find out download our paper here NSW Levy Debt Collection Process

Specialist paralegals and lawyers are not only expert collectors and negotiators; they are highly skilled in all essential aspects of levy recovery.

Speak to the specialist NSW levy collections experts here or call 02 9562 1266, we’re happy to assist.

After becoming a monk, a landlord in Sydney, named Law Siek Hong, “gave up” his property and disappeared in Malaysia, leaving a large levy debt behind.

Law Siek Hong property is located in Darlinghurst, the owner of the property committee spent 12 years, more than 60,000 Australian dollars (RMB300,000) trying to find him, forcing him to pay a cumulative tax of more than 280,000 Australian dollars (RMB1.4 million).

Recently, the owners committee won a supreme court suit, debuting the apartment for the first time by auctioning off the debt.

Senior lawyer, JS Mueller & Co, Faiyaaz Shafiq said: “This is a big issue in Australia because some overseas buyers are usually from Asia, but they never live in it and no one knows where they are and they are usually hard to find.”

To read the full Sydney Morning Herald Domain article click here.

For NSW strata legal or levy collection advice contact us here or call 02 9562 1266, we’re happy to assist.