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The New South Wales NCAT decision of Huynh v Devine Building Pty Ltd [2016] NSWCATCD 93 handed down by Senior Member Robertson is a timely reminder of the key issues to consider for defective work claims made in NCAT under the Home Building Act 1989 (NSW) (“HBA”).

This case was brought by a homeowner, who was self-represented, against a purported builder for defective residential building works. The key takeaways for the decision are as follows:

The first issue is that an applicant bringing a claim against a builder for alleged defective works under the statutory warranties pursuant to the HBA, has the onus of establishing the existence of defects on the balance of probabilities. The way that an applicant would prove this would be by way of lay and/or expert evidence.

The second issue is that you have to bring a claim against the right party, generally the builder who you are contracted with. In this case, the applicant originally brought proceedings against “Mark Devine” but later added Devine Building Pty Ltd as the second respondent.

Devine was in fact the supervisor of the works and Devine Building Pty Ltd was the builder. Given there was no “written contract” for the works, the parties produced evidence which included quotes on Devine Building Pty Ltd’s letterhead. Accordingly, Senior Member Robertson held that Devine Building Pty Ltd was the party contracted to complete the works and that Devine himself had “no liability in respect of the work carried out.”

In the event that the applicant only pursued Devine in the proceedings, it is likely that the claim would have failed as they were brought against the wrong party.

The third issue is that the limitation period of the Statutory Warranties under the HBA will be strictly enforced. In basic terms, the time limits are six years for major defects and two years for any other case (in accordance with section 18E of the HBA).

Section 18E(4) of the HBA states:

"major defect" means:

(a) a defect in a major element of a building that is attributable to defective design, defective or faulty workmanship, defective materials, or a failure to comply with the structural performance requirements of the National Construction Code (or any combination of these), and that causes, or is likely to cause:

(i) the inability to inhabit or use the building (or part of the building) for its intended purpose, or

(ii) the destruction of the building or any part of the building, or

(iii) a threat of collapse of the building or any part of the building, or

(b) a defect of a kind that is prescribed by the regulations as a major defect.

"major element" of a building means:

(a) an internal or external load-bearing component of a building that is essential to the stability of the building, or any part of it (including but not limited to foundations and footings, floors, walls, roofs, columns and beams), or

(b) a fire safety system, or

(c) waterproofing, or

(d) any other element that is prescribed by the regulations as a major element of a building.”

Accordingly, there is only limited scope to claim for major defects under the HBA, which would mean most defect claims would need to be made within two years.

Under section 48K(7) of the HBA, NCAT does not have jurisdiction to hear a claim made outside of the above-mentioned time limit. Furthermore, under section 48K(3) of the HBA, NCAT does not have jurisdiction:

“in respect of a building claim relating to building goods or services that have been supplied to or for the claimant if the date on which the claim was lodged is more than 3 years after the date on which the supply was made (or, if made in instalments, the date on which the supply was last made).”

In this case, most of the claims were not major defects, apart from waterproofing. Accordingly, only the waterproofing claim could be maintained.

The fourth issue is an expert who provides expert evidence which a party seeks to rely on should be available for cross-examination. Building defect cases in NCAT generally involves a homeowner bringing a claim for defective works against a builder. The homeowner will need to serve expert and/or lay evidence to support the claim.

The builder will then serve their lay and/or expert evidence in reply, and the homeowner may then have a right to reply with further evidence. In circumstances where experts differ on the extent of defects, the experts should be available to attend court to give oral evidence. In this case, the homeowner’s expert was not available for cross-examination. Senior Member Robertson held the following in relation to the evidence provided by the Homeowner (at 43):

“Although I received the report in evidence, its weight must be affected by the fact that Mr Ryan did not attend to give evidence and was not exposed to cross-examination.”

The fifth issue is that the preferred outcome as set out under section 48MA of the HBA is that rectification of defective works by the original builder is the preferred outcome. Senior Member Robertson noted that in the event that defects were found in this case, a work order would have been made for the builder to rectify the defective works. However, given the circumstances, no defective works were found and accordingly, no work order was given.

 
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