Icons/Ionic/Social/social-pinterest

Residential Focus

10 April 2019

#Property & Real Estate

Residential Focus

Date of completion for residential building work

In the recent decision of Ashton v Stevenson [2019] NSWCATAP, the NSW Civil and Administrative Tribunal Appeal Panel (Appeal Panel) considered the application of section 3B of the Home Building Act 1989 (NSW) (the Act), which concerns date of completion of residential building work.

As the date of completion triggers the commencement of the statutory warranty periods, its determination is significant, particularly where there is an argument that proceedings may have been commenced out of time.

Section 3B

Section 3B of the Act provides:

3B Date of completion of residential building work

(1A) This section does not apply to residential building work to which section 3C applies.

Note. Section 3C provides for the date of completion of new buildings in strata schemes.

(1) The completion of residential building work occurs on the date that the work is complete within the meaning of the contract under which the work was done.

(2) If the contract does not provide for when work is complete (or there is no contract), the completion of residential building work occurs on practical completion of the work, which is when the work is completed except for any omissions or defects that do not prevent the work from being reasonably capable of being used for its intended purpose.

(3) It is to be presumed (unless an earlier date for practical completion can be established) that practical completion of residential building work occurred on the earliest of whichever of the following dates can be established for the work:

(a) the date on which the contractor handed over possession of the work to the owner,

(b) the date on which the contractor last attended the site to carry out work (other than work to remedy any defect that does not affect practical completion),

(c) the date of issue of an occupation certificate under the Environmental Planning and Assessment Act 1979 that authorises commencement of the use or occupation of the work,

(d) (in the case of owner-builder work) the date that is 18 months after the issue of the owner-builder permit for the work.

(4) If residential building work comprises the construction of 2 or more buildings each of which is reasonably capable of being used and occupied separately, practical completion of the individual buildings can occur at different times (so that practical completion of any one building does not require practical completion of all the buildings).

(5) This section applies for the purposes of determining when completion of residential building work occurs for the purposes of any provision of this Act, the regulations or a contract of insurance under the Home Building Compensation Fund.

As the work was owner builder work, section 3B(3)(d) of the Act was relevant.

Competing arguments

It was the new owner’s position that the completion date was 7 February 2015, which was 18 months after the date the owner builder permit (7 August 2013). On this basis, the claim for defects, commenced in November 2016, other than major defects fell in the two year warranty period.

The owner builder relied on the exception contained within section 3B(3), “unless an earlier date for practical completion can be established”. The owner builder led evidence from a family member who had moved in to the property on 16 May 2014 and observed that the renovation of the property was complete except for a parquetry floor and carpet in the attic. Evidence from the carpenter also established that the floor was completed during May 2014.

Findings on date of completion

The Appeal Panel held the former owner successfully established an earlier practical completion date.

The evidence led by the former owner was held to show that at May 2014, the residential building works were substantially complete and reasonably capable of being used for its intended purpose.

This was despite the fact that an occupation certificate had not been issued until 22 September 2015. The Appeal Panel noted that although the Council required the owner builder to resolve discrepancies between the work as completed and the approved plans in correspondence in July 2014, no further works were required by the Council or carried out by the owner builder, which would bear upon the date of practical completion.

Accordingly the claim in so far as it related to defects other than major defects was outside of the two year statutory warranty period.

Implications

This decision illustrates the dangers of relying on (for example) the date of an occupation certificate for the commencement of the statutory warranty periods. The Act allows the Tribunal to look beyond that date for earlier practical completion dates. This is particularly hard on subsequent owners who are unlikely to have knowledge of the facts at the time the works were carried out and therefore may not be aware of just when warranty periods will expire.

Author: Christine Jones & Jeffery Shi

To receive Residential Focus direct to your inbox each fortnight, please click here.

In the media

Conditions remain fairly dire for Australia's residential construction sector
Conditions across Australia’s construction sector remain weak, but they’re not quite as severe as they were earlier in the year. Activity levels for residential and commercial construction are going backwards but are stable for engineering firms (05 April 2019). More...

Timber towers: In pursuit of perfect high-rise
A high-rise built out of timber, not steel? It’s a solid idea according to QUT structural engineering researcher Dr Craig Cowled, who’s embarked on a three-year project to work out the perfect way to build carbon-storing, timber-framed “plyscrapers” (05 April 2019). More...

Federal Court penalises CFMMEU $78,000 after coercing worker to pay union fees
The Federal Court has today imposed total penalties of $78,000 against the CFMMEU and two of its shop stewards for coercing a worker to pay union fees on two separate construction sites in the Melbourne CBD (04 April 2019). More...

‘Near misses like you wouldn’t believe’: Tradies detail workplace dangers
Tradies have revealed the danger and violence that unfolds on construction sites following two horror incidents at Sydney projects this week. Two tragic workplace deaths have prompted terrified tradies to speak up about unsafe construction sites, fearing further accidents (04 April 2019). More...

Crane Spotting: Sydney construction falls while Melbourne peaks
Melbourne construction continues to surge with an increase of cranes standing across its CBD and suburbs reaching a peak of 222, a 40 per cent rise since March last year. In contrast, Sydney’s residential sector has recorded a slight 10 per cent decline (28 March 2019). More...

Home values continue to cool but selling days begin to shorten
Home values slipped mostly around the country, but held steady in one capital city, according to the latest CoreLogic data. Combined, the daily home value index fell by 0.2 of a percentage point in the week ending 24 March. Houses remained more popular than units, and the average time for houses on market continued to remain high in most capital cities (26 March 2019). More...

SafeWork continues its investigation of Macquarie Park scaffolding site
SafeWork will examine a range of factors including the qualifications of relevant workers, environmental conditions, the load carried by the scaffolding, as well as the design, construction and maintenance of scaffolding (04 April 2019). More...

Published

Re-building the social license for asset recycling
Consult Australia: March 2019
Consult Australia argues that the case for asset recycling cannot be ignored and calls on the government to increase their focus on creating the right conditions for successful transfers that are in the public interest. To support this renewed focus, the report outlines six recommendations for governments across Australia. More...

ABCC industry update February - March 2019
Welcome to the February - March 2019 edition of Industry Update, our quarterly online newsletter. Industry Update provides updates on the latest activities of the ABCC, industry trends, and emerging issues (25 March 2019) More...

Australian Bureau of Statistics
02 April 2019 Building Approvals, Australia, Feb 2019 (cat no. 8731.0)

Practice and courts

ABCB: Accessible Housing Options Paper Consultation Report now available
The feedback from the Accessible Housing Options Paper has been summarised into a Consultation Report (04 April 2019) More... 

ABCB reminder: NCC 2019
All three volumes of the NCC 2019 preview, as well as The Guide to Volume One, are now available to download. To get your copy, log into your NCC account through the NCC Online or create your NCC account and login to access. NCC 2019 will be adopted from 1 May 2019. If you’d like an overview of the key changes and dates, please check out the latest ABCB Connect article. 'What to expect in NCC 2019'

ABCC fitness for work audits of code covered entities
The desktop audits assess whether code covered contractors that are required to have an ABCC approved Workplace Relations Management Plan (WRMP) in place are complying with the drug and alcohol testing requirements in their WRMP. Contractors with WRMPs are reminded of the Code’s requirement to conduct as a minimum, frequent and periodic testing (at least once per month) of the workforce. Find out more about your fitness for work responsibilities and WRMPs. (March 2019)

Australian Industry Standards 2019
All 11 IRCs we support have held their first meetings for the year to finalise the draft 2019 Skills Forecasts and Proposed Schedules of Work which prioritise the skill needs of their industry sectors and propose future Training Package development activity. All industry stakeholders will have the opportunity to review the draft Skills Forecasts and provide feedback until 8 April. Each IRC will approve the final version to be submitted to the Australian Industry Skills Committee (AISC) on 30 April 2019. More...

City of Sydney: Alternative Housing Idea Challenge
The community will have the opportunity to provide feedback on the short-listed concepts as part of the City’s consultation to shape Sydney 2050. The Alternative Housing Ideas Challenge will close on Wednesday 8 May 2019. More...

New dates for Environmental Planning & Assessment Act updates
Councils, certifiers and other industry practitioners have more time to implement some of the recent EP&A Act updates. Changes affect new provisions for building and subdivision certification, Local Strategic Planning Statements for councils in the Greater Sydney Region and Community Participation Plans. While most of the changes will commence on 1 March 2018, there will be a number of other changes that will involve further design and consultation from mid to late 2018 outlined here

Cases

Webster v Tom [2019] NSWCATAP 75
APPEALS – home building claim against builder – allegation of home owners as to a misclassification of building site by an engineer not joined as a party by the owners – terms of builder’s engagement – agreed scope of works for builder - no error of law – competing expert evidence on ongoing cracking and the construction of piers - whether the Tribunal’s findings were not fair and equitable or against the weight of evidence – whether new evidence was reasonably available - no other grounds for leave to appeal – appeal dismissed .

Tom v Jenkins [2019] NSWCATAP 74
APPEALS – builder’s claim against engineer for indemnity in respect of builder’s liability to home owners for defective residential building work – builder’s claim based on allegations of negligence and misleading conduct - extension of time required to appeal – lack of procedural fairness – statutory interpretation of s 48K of the Home Building Act – lack of jurisdiction for the Tribunal to determine the builder’s claim – appeal dismissed.

Scarano v Palm Pools and Spas Pty Ltd [2019] NSWCATAP 79
HOME BUILDING – Whether the Tribunal erred in failing to find that an agreed damages clause is a penalty clause – Whether the appellant should be granted leave to raise a ground on appeal which was not argued before the Tribunal –– Whether the Tribunal should have considered the appellant’s claim under the Australian Consumer Law instead of the Contracts Review Act.

Ashton v Stevenson; Stevenson v Ashton [2019] NSWCATAP 67
In AP 18/31090: (1) The appeal on grounds 1, 2, 3 and 4 allowed. (2) Set aside Order 1 in the Decision and the Respondent is to immediately pay to the Appellant any amount paid under the Order. Home Building – Date of Completion of residential building work – major defect – proof of elements – limitation periods. Home Building Act 1989; Environmental Planning and Assessment Act 1979; Civil and Administrative Tribunal Act 2013.

Botany Bay Apartments Pty Ltd v Badolato [2019] NSWSC 296
BBA is a building company. LAND LAW – conveyancing - two contracts for sale – off-the-plan purchase CONSUMER LAW – misleading or deceptive conduct – whether the vendor breached ss 18 and/or 30 of the Australian Consumer Law – whether the vendor made a representation as to the size of the properties – vendor denied making such a representation – assessment of the relative credibility of representor and representee – fallibility of human memory – reliance upon contemporaneous documents to resolve dispute – where the contemporaneous documents pointed strongly to the representation not being made – where, in any event, the purchaser was on notice within the cooling off period that no such representation was being made – claim unsuccessful CONSUMER LAW – unconscionably – where the purchaser alleged that the vendor was aware of new plans affecting the size of the properties – where such knowledge was purported to have been acquired during the cooling off period - whether the vendor indeed had such knowledge – paucity of evidence in support – purchaser under no special disadvantage – claim unsuccessful CONSUMER LAW – harassment and coercion under s 50 Australian Consumer Law – unsuccessful settlement conference after the commencement of proceedings – purchaser given three options including continuing with court proceedings – whether this amounted to coercion – meaning of coercion – no negation of choice or freedom to act – claim entirely misconceived.

Dassouki v Department of Fair Trading [2019] NSWCATOD 45
The applicant’s application for costs is dismissed.
COSTS - where parties disagreed as to the meaning of the Tribunal’s orders – where applicant brought contempt proceedings to enforce orders – where, at first directions hearing, applicant conceded that respondent’s interpretation of Tribunal’s orders was correct - whether special circumstances exist which would justify a costs order. Administrative Decisions Tribunal Act 1997 (NSW);  Civil and Administrative Tribunal Act 2013 (NSW); Home Building Act 1989 (NSW).

The Owners - Strata Plan 87265 v Saaib [2019] NSWSC 289
COSTS – security for costs – relevant factors – impecuniosity – delay – risk of stultification – plaintiff’s impecunious attributable to the defendant’s conduct.
COSTS – security for costs – plaintiff strata corporation – liability of members.

Hutchings v Hope [2019] NSWCATAP 59
CONTRACT LAW – Contract to do residential building work – Sham – Unenforceable of contract under Home Building Act 1989 – “just and equitable” to recover on a quantum merit basis.
ADMINISTRATIVE LAW – Adequacy of reasons – failure to provide analysis of evidence – failure to make relevant findings.

Onethree Pty Ltd v Seaman [2018] NSWCATCD 83
BUILDING AND CONSTRUCTION - Liquidated damages – Right to claim common law damages.

Buckley v Ashby; Ashby v Buckley [2018] NSWCATCD 82
BUILDING AND CONSTRUCTION - Extrinsic evidence – Use of to identify the subject matter of the contract, Termination of contract - Acceptance of repudiation Home building – unenforceable claims - Restitution.

The Owners – Strata Plan No. 80412 v Vickery [2019] NSWCATAP 71
APPEALS – Leave to appeal an interlocutory decision – application for summary dismissal – principles applicable – issue raised on appeal not raised in proceedings at first instance – relevance of prospect if appeal to superior court in exercise of discretion to grant leave. SUPREME COURT – Referral of questions of law – refusal to refer.

Contacts:
Brisbane
Troy Lewis, Partner & National Head of Construction and Infrastructure 
T: +61 7 3135 0614 
E: troy.lewis@holdingredlich.com

Stephen Burton, Partner 
T: +61 7 3135 0604 
E: stephen.burton@holdingredlich.com

Suzy Cairney, Partner 
T: +61 7 3135 0684 
E: suzy.cairney@holdingredlich.com

Melbourne
Stephen Natoli, Partner 
T: +61 3 9321 9796 
E: stephen.natoli@holdingredlich.com

Kyle Siebel, Partner 
T: +61 3 9321 9877 
E: kyle.siebel@holdingredlich.com

Sydney
Scott Alden, Partner 
T: +61 2 8083 0419 
E: scott.alden@holdingredlich.com

Christine Jones, Partner 
T: +61 2 8083 0477 
E: christine.jones@holdingredlich.com

Helena Golovanoff, Partner 
T: +61 2 8083 0443 
E: helena.golovanoff@holdingredlich.com

Disclaimer
The information in this publication is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, we do not guarantee that the information in this publication is accurate at the date it is received or that it will continue to be accurate in the future. We are not responsible for the information of any source to which a link is provided or reference is made and exclude all liability in connection with use of these sources.

Share this