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[2025] NSWDC 357
General information, not legal advice.
District Court of NSW
2025-09-12
Newlinds SC DCJ
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Source: NSW Caselaw (www.caselaw.nsw.gov.au). Converted to plain text by ZoeLaw. Not the official version.
Medium Neutral Citation: Allan v Renfay Projects Pty Ltd [2025] NSWDC 357
Hearing dates: 2-4 September 2025, 10 September 2025
Date of orders: 12 September 2025
Decision date: 12 September 2025
Jurisdiction: Civil
Before: Newlinds SC DCJ
Decision: (1) The Plaintiff’s case is dismissed.
(2) The Plaintiff is to pay the Defendant’s costs of the proceedings.
Catchwords: BUILDING AND CONSTRUCTION — Residential building work — Claim by homeowner against builder for breach of statutory and contractual warranties
CONTRACT — Proper construction of standard form of Master Builders Association Residential Building Contract
STATUTORY CONSTRUCTION — Home Building Act 1989 (NSW) — Proper construction of s 18B and s 7E warranties as incorporated in contract
STATUTORY CONSTRUCTION — Home Building Act 1989 (NSW) — Proper construction of “relates solely” in Schedule 2 cl 2(2)
STATUTORY CONSTRUCTION — Home Building Act 1989 (NSW) — Proper construction of “specific purpose or result” for purpose of s 18B(1)(f) — Various defects the subject of the claim relating to leaking roof caused by and thus relating solely to defective design — Claim dismissed
STATUTORY CONSTRUCTION — Home Building Act 1989 (NSW) — To what extent can builder be liable for failures caused by design — The Owners – Strata Plan No 66375 v King [2018] NSWCA 170 distinguished and explained
Legislation Cited: Environmental Planning and Assessment Act 1979 (NSW)
Home Building Act 1989 (NSW) s 7E; s 18B; s 18F; Schedule 2
Cases Cited: Bellgrove v Eldridge (1954) 90 CLR 613
Blatch v Archer (1774) 98 ER 969
Malec v JC Hutton (1990) 169 CLR 638
Ruxley Electronics v Forsyth [1995] 3 All ER 268
Sellars v Adelaide Petroleum NL; Poseidon Ltd v Adelaide Petroleum NL (1994) 179 CLR 332
The Craftsmen Restoration & Renovations v Boland [2008] NSWSC 660
The Owners – Strata Plan No 66375 v King [2018] NSWCA 170
Tranquility Pools & Spas Pty Limited v Huntsman Chemical Company Australia Pty Limited [2011] NSWSC 75
Willshee v Westcourt [2009] WASCA 87
Category: Principal judgment
Parties: Iain Allan (Plaintiff)
Renfay Projects Pty Ltd (Defendant)
Representation: Counsel:
M Klooster (Plaintiff)
I Chatterjee (Defendant)
Solicitors:
Somerville Legal (Plaintiff)
G & S Law Group (Defendant)
File Number(s): 2023/155240
Publication restriction: Nil
Iain Allan (“the Plaintiff”) claims damages against Renfay Projects (“the Defendant”) arising out of what he alleges are a series of breaches of express terms of a written contract for residential building work (“the Contract”) and/or breaches of the statutory warranties in s 18B of the Home Building Act 1989 (NSW) (“Home Building Act”).
The parties entered into a fixed price contract in the sum of $178,185 on 11 February 2016 for residential building works. The form of contract used was the standard Master Builders Association form of contract for residential building work.
For all intents and purposes, the statutory claim is the same as the contractual claim because the terms said to have been breached by the Defendant are the statutory warranties incorporated by force of law into the Contract by virtue of s 18B of the Home Building Act. In any event, they were incorporated as express terms of the Contract. As to the “quality of construction” breaches alleged, again, they are express terms of the Contract, they mirror the provisions of the prescribed terms in s 7E and Schedule 2 of the Home Building Act.
The works, the subject of the Contract, were remedial roof and guttering for a strata unit owned by the Plaintiff at 22A Woollcott Street, Waverton, that had a long history of water leaks causing flooding inside the unit. The common intention of the parties was clearly that the works would put a stop to water leaks.
During the life of the Contract, it is common ground that it was amended so that a different design prepared by the Plaintiff himself became the design, the subject of the Contract.
There is no issue that the Defendant performed the works in accordance with the amended design. I find that, whilst the works carried out were not exactly pursuant to the amended design, the works performed did not deviate in any material way from that amended design. In any event, I am satisfied that such difference as there is between the works done and the design has no connection at all with the complaints the Plaintiff has about the outcome. All but one of those complaints would exist even if the work conformed exactly with the design.
There is at the centre of this case a series of questions of construction of the Contract and/or the Home Building Act.
I will return to those issues in due course.
“if the design does not work, that is the builder’s responsibility.”
For that proposition, he relies on a series of cases in the NSW Court of Appeal being The Craftsmen Restoration & Renovations v Boland [2008] NSWSC 660 and The Owners – Strata Plan No 66375 v King [2018] NSWCA 170 (“King”).
I do not consider those cases stand for the stark proposition contended for. Apart from anything else, if they did, s 18F and s 7E; clause 2 sch 2 would have no work to do.
Moreover, such a broad proposition may often inevitably lead to what I consider to be an absurdity, being that the only way a builder can comply with its contractual obligations is to breach the very contract that creates those obligations by building something different to that required by the contract. That cannot have been the intention of the legislation. Work that is not done because it is not contemplated by the contract and is well beyond the scope of the contract does not become the subject of a statutory warranty or a contractual breach because of the existence of the warranties. The proper way to consider the matter is that the starting point must be to identify the works required to be done under the contract and then, by reference to those requirements, to judge whether the statutory warranties have been complied with or not. No doubt this involves a question of degree and evaluation. It also requires an application of common sense, but I consider the stark legal proposition contended for by the Plaintiff must be rejected. The cases relied on by the Plaintiff, in my opinion, turn on their own facts and the observations in those cases relied on must be read and understood against those facts.
In any event, it ought be clear that there must be a causal connection between an alleged breach of warranty and some damage to the homeowner.
I set out now what I consider to be the relevant provisions of the Contract which in large part mirror various provisions of the Home Building Act. I have tried to cross-reference between terms of the Contract and the statutory provisions.
In the usual way, the Contract incorporated the tender documents and, in particular, reference to designs that were part of the tender, which as I have said were later superseded by the amended design.
In Schedule 1 to the Contract, there was a checklist which is mandatory under the Home Building Act, which contained the following provisions:
“4 #a Did the Builder provide (i.e. have prepared) the contract drawings and specification detailing the work to be done? "No" means the Owner is or was responsible for having such documents created [The box marked “No” is then ticked]
…
“10 #b Is the Builder responsible for getting any approval? [The box marked “No” is then ticked].”
“9. Identification of Special Purpose o****r Result
If a special purpose or result is required other than that of completion of the work under the contract then it must be listed here. Refer to Clause 1(b) (vi) and paragraphs following.
Renfay projects quoted the job as per the Engineers specification including quote no. 3369 dated 21/12/15.
Note If a purpose listed here alters the work to be done relative to the contract drawings then a variation will be involved. If the Owner does not sign a Variation for such work then the drawings will override any special purpose or result listed above. In other words in such circumstances the drawings represent what is required to be done by the Builder and if a special purpose alters that position then a written variation must be provided by the Owner to the Builder.”
“SCHEDULE 3
THE WORK & DOCUMENTS DETAILING THE. CONTRACT WORK
a) Description of the Work to be completed by the Builder eg as per attached quotation; as per drawings and details in (b) and (c) below:-.
Roof replacement as per Renfay Projects quote no- 3369 dated 21/12/15.
b) IS ANY aspect of the WORK set out in what are the contract drawings and specifications excluded from the CONTRACT WORK and therefore the contract sum?
[The box marked ‘NO” is then ticked]
…”
“1. Responsibility of Builder and Results of Construction
a) The Builder will, subject to these Conditions and the work particulars set out In Schedule 3, execute and complete the works required by the Contract.
…
Statutory Warranties for Residential Building Work [s 18B(1) Home Building Act]
b) Pursuant to s18B of the Home Building Act 1989 (the "Act") the Builder warrants that:-
i) the work will be performed in a proper and workmanlike manner and in accordance with the plans and specifications set out in the contract;
ii) all materials supplied by the Builder will be good and suitable for the purpose for which they are used and that, unless otherwise stated in the contract, those materials will be new;
iii) the work will be done in accordance with, and will comply with, the Act or any other law;
iv) the work will be done with due diligence and within the time stipulated in the contract, or if no time is stipulated, within a reasonable time;
v) the work will result, to the extent of the work conducted, in a dwelling that is reasonably fit for occupation as a dwelling;
vi) the work under the contract or the relevant part will be reasonably fit for the specific purpose or result, if any, identified as a special purpose or result in this document (Refer to Schedule 2 point 9.)
Further to point vi) above if a purpose listed in Schedule 2 point 9 alters the work to be done relative to the contract drawings then a variation will be involved.
If the Owner does not sign a variation for such work then the drawings will override any special purpose or result listed at Schedule 2 point 9.
In other words in such circumstances the drawings represent what is required to be done by the Builder and if a special purpose alters that position then a written variation must be provided by the Owner to the Builder. Clause 14 will then apply.
Quality of Construction [s 7E; cl 2 sch 2 Home Building Act]
c) i) The work done under this contract will comply with:
a) the Building Code of Australia to the extent required under the Environmental Planning & Assessment Act 1979 (including any instrument made under that Act); and –
b) all other relevant codes, standards and specifications that the work is required to comply with under any law; and
c) the conditions of any relevant development consent or complying development certificate and any construction certificate.
ii) This contract limits the liability of the Builder for a failure to comply with (c)(i) above if the failure relates solely to:
a) a design or specification prepared by or on behalf of the Owner (but not by or on behalf of the Builder); or
b) a design or specification required by the Owner, if the Builder has advised the Owner in writing that the design or specification contravenes 1(c)(i) above.”
“18F Defences
(1) In proceedings for a breach of a statutory warranty, it is a defence for the defendant to prove that the deficiencies of which the plaintiff complains arise from—
(a) instructions given by the person for whom the work was contracted to be done contrary to the advice of the defendant or person who did the work, being advice given in writing before the work was done, or
(b) reasonable reliance by the defendant on instructions given by a person who is a relevant professional acting for the person for whom the work was contracted to be done and who is independent of the defendant, being instructions given in writing before the work was done or confirmed in writing after the work was done.
…”
By reference to the terms of the Contract found in Clause 1 [s 18B(1) and s 7E; cl 2 sch 2 of the Home Building Act], the Plaintiff alleges the following breaches by the Defendant:
The work was not performed in a proper and workmanlike manner and in accordance with the plans and specifications set out in the Contract (Clause 1(b)(i)) [s 18B(1)(a)];
The work has resulted in a dwelling that is not reasonably fit for occupation as a dwelling (Clause 1(b)(v)) [s 18B(1)(e)];
The work under the Contract is not reasonably fit for the specific purpose or result, if any, identified as a special purpose (in alleged breach of Clause 1(b)(vi) [s 18B(1)(f)]; – the special purpose is said to be, by reference to Schedule 2 point 9, the engineer’s specifications contained in the tender documents which incorporates various Australian Standards.
The work done under the Contract did not comply with the Building Code of Australia to the extent required under the Environmental Planning and Assessment Act 1979 (NSW) (“Environmental Planning and Assessment Act”) (Clause 1(c)(i)(a)) [s 7E; cl 2(1)(a) sch 2]; and
The work does not comply with all other relevant codes, standards, and specifications that the work is required to comply with under any law (Clause 1(c)(i)(b)) [s 7E; cl 2(1)(b) sch 2].
Before dealing with each alleged breach, I record the following findings of fact:
The Contract was amended at the Plaintiff's request so as to change the design of the guttering work.
Other than the alleged defect to the connection between the box gutter and the downpipe to which I will come, there is no issue but that the building work actually performed by the builder was of a good and workmanlike standard and did, in material ways, accord with the amended plans.
As the sketch plan provided by the Plaintiff was schematic and lacked detail, the work performed by the builder necessarily did not and cannot be shown to equate exactly with those plans but, as I have said, in all material ways it did accord with the amended design.
In the 9 years since the work was carried out, there have been “leaking events" on three occasions. These involved water getting into the premises but in no way could be described as “flooding.”
Dealing first with the alleged breaches of Clause 1(c) [s 7E cl 2 sch 2] (that is, (4) and (5) above).
The Defendant's answer is that Clause 1(c)(i)(a) [s 7E cl 2 sch 2] is not applicable because there was no Development Consent issued in relation to the works and, therefore, the provisions under the did not apply. This is accepted by the Plaintiff. This alleged breach therefore fails.
“ii) This contract limits the liability of the Builder for a failure to comply with (c) (i) above if the failure relates solely to:
a) a design or specification prepared by or on behalf of the Owner (but not by or on behalf of the Builder); or”
There is no issue between the parties that the amended design was prepared, not just on behalf of the Plaintiff, but by the Plaintiff himself.
The next question is whether the work was done pursuant to that design, or to use the words of the statute, do the alleged failures “relate solely to a design”?.
On behalf of the Plaintiff, Mr Klooster submits that, because it is self-evident that the work done was not precisely in accordance with the amended design (which, after all, was more a schematic sketch), the Clause cannot apply. His submission is that the phrase “relates solely to*,*" properly construed, means that the limitation of liability for a builder is only engaged if the work is done precisely in accordance with the plans and specifications.
I do not consider that to be the proper construction of s 7E cl 2 sch 2 [Clause 1(c)].
In my opinion, what must “relate solely” to the design or specification is a “failure."
That “failure" is a failure to comply with the quality of construction provisions found in Clause 1(c) [s 7E cl 2 sch 2] itself.
Thus, to focus on whether or not the work was done precisely in accordance with the contractual plans or specifications is to ask the wrong question. The correct question is whether the alleged failure “relates solely” to the design or specification.
The phrase “relates solely" is, to put it mildly, a difficult one.
The reason it is an awkward phrase to construe is that the word “relates” is a connecting word, which has in very many cases been interpreted to have a broad and wide meaning. It usually connotes a reasonably tenuous connection. On the other hand, the word “solely" is specific in the extreme and ordinarily directs attention to one single thing.
The phrase needs to be considered, not as individual words, but as a composite of those words in the context of where it is found in both the legislation and the Contract.
In my opinion, in this context, the phrase “relates solely" means that, if the failure to comply with a provision of Clause 1(c)(i) [s 7E cl 2 sch 2] is the immediate consequence of a design or specification issue, rather than a failure of the builder to build in accordance with the plans or specification or the product of substandard building work, then the builder is not liable for that failure.
I consider “relates solely to” means “caused solely by.” In other words, I think the word “relates” is meant to connote a concept of causation and “solely” is meant to capture the design or specification being the immediate or proximate cause of any breach – accepting that it must be acknowledged that there is almost never one sole cause of anything.
Put another way, by reference to the facts of this case, the differences, such as they are, between the building work done and the design in no way contributed to the leaks. Leaving to one side, for the moment, the Plaintiff’s alternative case, the leaks would have occurred anyway because the design was fundamentally flawed. On the Plaintiff’s case, the size of the box gutter in the design was too small.
“We say the only way you can build something that works, and I will concede this, is to build something that is larger than what is called for under the original Contract.”
This is an example of the absurd outcome that I have referred to at [12] and [44] of these reasons. If the builder had built something larger and different to what the Contract required, that would itself be a breach of contract. As I have said, I consider the statutory warranties need to be assessed in the context of what the Contract required.
For those reasons, I consider the breaches identified at items (4) and (5) above have not been made out in a way to make the Defendant liable.
Turning then to the other alleged breaches (that is items (1), (2), and (3) above).
All of these alleged breaches need to be judged in the following factual context. The works reached practical completion in 2016, and the premises have been lived in by either the Plaintiff or his daughter as a residence since that time.
Taking the Plaintiff's evidence at its highest, there have been water ingress events at the property on 4 January 2021, 22 March 2021, and 3 January 2022. There are photographs of water on walls and some damp carpet. This, no doubt, is very annoying, but not such as to make the premises unsuitable to live in.
There is no direct evidence that there have been any incidents since then, but I am prepared to infer that, from time to time in extreme weather events, water does get into the property.
It is against those findings that the alleged breaches of the statutory warranties/clause 1(b) provisions need to be judged.
Dealing with them in order.
The Plaintiff relies on a series of alleged deficiencies in the work carried out by the Defendant. They are as follows:
The first is the box gutter is constructed so as to not have the required width of 200mm as prescribed by the Australian Standard. I think this alleged deficiency can be disposed of by observing that it is common ground that the box gutter as installed was as large as it could possibly be within the physical confines of the roof and was in fact larger than that described in the amended design. In any event, there is no evidence at all to connect any such deficiency with the leaking. As such, even if it be a breach, it caused no consequence to the Plaintiff and would not be a basis for anything other than nominal damages.
The second is it is suggested that the fall in the box gutter is less than the minimum requirement imposed by Australian Standards. Again, this may or may not be so. However, there is no suggestion that the fall in the box gutter has anything to do with any of the leaking problems that bring the parties before the Court. Again, if there be such a breach, it has caused no damage to the Plaintiff.
The third is that the overflow devices are insufficient for the box gutter as required by Australian Standards. Again, there is no suggestion that, if this breach has been made out, it has made any difference to the functionality of the gutter.
The fourth is that the capacity of the box gutter is such that the downpipes are insufficient to discharge the water when the box gutter is full. Again, there is no suggestion by any expert that this has anything to do with the problems about which the Plaintiff complains.
I have left to one side the stand-alone issue, which I have described as the Plaintiff's alternative case.
As to the balance of the allegations set out above, the short answer to these is that the works were done materially in accordance with the plans and specifications set out in the contract as amended. Such deviation as there was from those plans have not caused the Plaintiff any damages in that they are not the cause of the leaks. There is no suggestion the work was not carried out in a proper and workmanlike manner. More directly, there is no sensible basis to connect any damage to the Plaintiff to these alleged deficiencies. The guttering system as installed is not functioning in any way below how it would function if none of these alleged failures existed.
The factual question is whether the result of the works leaves a dwelling that is reasonably fit for occupation as a dwelling. This involves an evaluative judgement about which reasonable minds may come to different conclusions.
In my opinion, notwithstanding that it leaks from time to time, the premises are reasonably fit for occupation as a dwelling. True it is that they leak from time to time in extreme weather events and some water gets in, but there is no suggestion that these leaks are so significant so as to cause the property to not be fit to live in. Indeed, on the evidence, the property has been lived in at all times since the work was completed. The height of the Plaintiff’s case is 3 incidents of leaks in 9 years.
I do not consider the alleged breach of Clause 1(b)(v) [s 18B(1)(e)] has been made out. The premises are, and have been since practical completion, reasonably fit for occupation as a dwelling.
This raises another question of construction. What is meant by “specific purpose or result” in Clause 1(b)(ii) [s 18B(1)(b)]
The starting point is that this warranty is located directly after the warranty providing that the dwelling will be reasonably fit for occupation as a dwelling. Obviously enough, when residential building work is being considered, the assumption is that the property will be used as a residential dwelling. Clause 1(b)(v) [s 18B(1)(e)] deals with that.
Clause 1(b)(vi) [s 18B(1)(f)] deals with something different, that is a circumstance where the Contract stipulates that the premises need be reasonably fit for what is described as the “specific purpose or result, if any, identified as a special purpose or result in schedule 2 point 9.” I consider that special or specific purpose to be something other than ordinary use as a residence. However, a “specific result” could capture something like a promise that, regardless of fault, the premises will not leak.
I have already set out Schedule 2 point 9. The printed form part of the Contract says:
“If a special purpose or result is required other than that of completion of the work under the contract then it must be listed here. Refer to Clause 1(b)(vi) and paragraphs following.”
“Renfay projects quoted the job as per the Engineers specification including quote no. 3369 dated 21/12/15.”
Those specifications were in the tender documents and quote, which were accepted and became incorporated in the Contract. In my opinion, properly construed, the special purpose or result being referred to in Clause 1(b)(vi) [s 18B(1)(f)] is something over and above the completion of residential building work fit to be occupied as a residence.
The reference to the engineering drawings is not, in my opinion, a special purpose or result at all.
However, in the engineering drawings there is contained the following:
“1.4 PERFORMANCE REQUIREMENT
The performance requirement of the Works Under Contract (W1JC) is to install a new roof and drainage system that is to prevent water ingress into the property in compliance with the Building Code of Australia performance requirements FP1.1 to FP1.7”
“PERFORMANCE REQUIREMENTS
FP1.2
Surface water, resulting from a storm having an average recurrence interval of 100 years must not enter the building.
FP1.3
A drainage system for the disposal of surface water resulting from a storm having an average recurrence interval of-
(a) 20 years must –
i. convey surface water to an appropriate outfall; and
ii. avoid surface water damaging the building; and
(b) 100 years must avoid the entry of surface water into a building.
FP1.4
A roof and external wall (including openings around windows and doors) must prevent the penetration of water that could cause -
(a) unhealthy or dangerous conditions, or loss of amenity for occupants; and
(b) undue dampness or deterioration of building elements.”
Mr Klooster’s submission is that, by reference to those standards, there was a specific result identified for the purpose of Clause 1(b)(v) [s 18B(1)(e)]. Which, if the building is leaking in storms of less than 1/100 year force, in the way described, has been breached.
To this, Mr Chatterjee, who appears for the Defendant, responds by identifying that the engineer is itself a party to the Contract and that the warranty is given by both the builder and the engineer, and that in the circumstances the risk allocation was always intended to be that of the engineer.
I do not think this submission can be accepted. When one reads the Home Building Act and/or the Contract as a whole, it seems to me pellucidly clear that the person giving the statutory warranties is the builder and not any other professional involved. Moreover, the plain words of the preamble to s 18B(1) [Clause 1(b)] put it beyond doubt that it is only the builder who is providing the warranties.
Even though one needs to go through quite a tortured process to identify the particular result, which I am not at all convinced was the legislative intention because I consider the intention was that the specific purpose or result would be spelt out clearly in the Contract, I am prepared to conclude that, subject to the defence based on s 18F of the Home Building Act, this breach has been made out.
“18F Defences
(1) In proceedings for a breach of a statutory warranty, it is a defence for the defendant to prove that the deficiencies of which the plaintiff complains arise from—
(a) instructions given by the person for whom the work was contracted to be done contrary to the advice of the defendant or person who did the work, being advice given in writing before the work was done, or
(b) reasonable reliance by the defendant on instructions given by a person who is a relevant professional acting for the person for whom the work was contracted to be done and who is independent of the defendant, being instructions given in writing before the work was done or confirmed in writing after the work was done.
…”
The Defendant's case is that the instructions given in relation to the amended plans were given by Costin Roe Consulting Pty Ltd who were engineers engaged by the Plaintiff to prepare the original plans, conduct the tender, and then acted as the supervisor under the Contract.
On 12th of July 2016, when the Plaintiff prepared the plan that became the amended design, he sent it to Mr Mackay of Costin Roe, as well as representatives of the Defendant in an email. He asked them, amongst other things, to “please consider the attached."
After some correspondence going backwards and forwards, Mr Mackay wrote to the Plaintiff, copying in the Defendant, in the following terms:
“Hi Dale,
As per your attached sketch, I think this will be a good alteration to the proposal.
Fady [on behalf of the Defendant] can you please confirm the cost saving if this option was adopted?”
Thereafter, the option was adopted and, after the work was done, Costin Roe certified it as satisfactory. I am satisfied that, in those circumstances, Costin Roe was a relevant professional acting for the Plaintiff who was independent of the Defendant and, by the exchange of emails that I have referred to, gave instructions in writing for the work to proceed and, by certifying the work as having been performed satisfactorily after it was completed, also confirmed in writing the change in plans at that time.
In my judgement, the Defendant reasonably relied on those instructions when embarking on the work in conformity with the amended plans.
Leaving to one side the Plaintiff’s alternative claim, I consider the Defendant's submissions based on s 18F to be sound.
When the matter came on for hearing, there was a significant issue between the experts as to whether a particular flooding experiment carried out by Mr Frizzell, the Plaintiff's expert, had been adequately conducted. The issue had devolved into a debate about whether a sketch plan prepared by the Plaintiff's expert properly recorded what had happened during the experiment.
It seemed to me that the only sensible thing to do was to have the parties jointly conduct the experiment again, so that there could be agreement as to its methodology and result. Whilst the Plaintiff himself did not provide instructions to consent to such a course, because I think he was concerned about invasive inspections of his property, both counsel agreed it was a sensible solution which would allow the matter to be determined quicker and with less speculation and hopefully on an agreed factual position.
The matter was then stood down for a day to allow that experiment to take place, the end result being an agreement between the experts that, upon a flooding experiment being conducted, there had been some leaks into the premises, with the experts jointly concluding as follows:
“Based on observations and testing, the issue is either the connection from the BG [Box Gutter] to the DP [Downpipe] or the outlet in the BG to the DP bends/connections down the line. No invasive inspections (cutting ceilings and/or eaves) were undertaken.”
“1.11 Water testing of the box gutter directly above the east wall resulted in water penetration to the interior adjacent both downpipes.
1.12 In my opinion the downpipe outlets in the box gutter are undersized and not sealed adequately, resulting in the water flow from the box gutter into the downpipes and stormwater system being severely restricted in a heavy storm, causing water to back up in the box gutter and penetrating to the interior of the building.”
What I describe as the Plaintiff's alternative case is a narrow case which is based on the assertion that there what has been a breach of cl 1(b)(i) and/or (v) [s 18B(1)(a) and/or (e)] because I should conclude on the above evidence that the leaking is a consequence of faulty workmanship concerning the connection between the box gutter to the downpipe or something to do with the outlet in the box gutter.
This was Mr Frizzell's original opinion, but I consider he revised that opinion to the much more equivocal joint opinion I have set out above. That joint opinion is that there is a third possibility, being that the leaking is a consequence of “connections down the line."
That is a reference to the downpipe itself, which was never part of the scope of works or the design.
On no sensible reading of the Contract, the legislation, or the various authorities I have referred to, could it be suggested that the builder had responsibility for issues that might be caused by anything going on within the downpipe. The downpipe itself was beyond the Scope of Works. This is but one example of why Mr Klooster’s submission that what the Contract required was “something that worked” is, in my opinion, too broad. Cases such as King do not support such an outcome. At the risk of repetition, if the Defendant had replaced the downpipe, it would have been in breach of contract and would have been interfering with the Body Corporate’s property without consent.
I accept that if, as a matter of fact, there was defective building works that have caused the leak at all around the connection from the box gutter to the downpipe, the builder would be liable for that because such a defect would have nothing to do with the design but would rather be faulty workmanship and a breach of Clause 1(b)(i) [s 18B(1)(a)].
I am not satisfied that the evidence establishes on the balance of probabilities that the cause of the leak as identified by the joint experts can be said to be the consequence of any breach by the Defendant. It is one of three equal possibilities and, whilst I accept the other possibilities are possible, the equally open explanation cannot be ruled out and is equally likely, which is an issue “down the line" in the downpipe.
For this reason, the Plaintiff's alternative case must fail.
Against the possibility that I am found to be wrong as to liability, I will shortly deal with damages.
On the Plaintiff's primary case, there was no issue between the parties that the amount claimed of $368,091.47 is appropriate.
As I have explained, this amount represents the cost, not to carry out the design and specifications as mandated by the Contract, but rather to rebuild the guttering system in accordance with a different design.
I have real difficulties with this as a legal concept. I consider it to be wrong. However, if that be the appropriate measure of damages, the quantum is as claimed.
As to the Plaintiff's alternative claim, because it became a particular focus of the case very late in the piece and because the Plaintiff had chosen not to put forward specific quantification evidence as to, firstly, the proper methodology of rectification work – on the assumption that the leaking is caused by faulty workmanship in the connection between the downpipe and the box gutter. Mr Klooster was forced to improvise by reference to what evidence there was.
He first claims the cost identified in the expert evidence of rectifying damage within the premises from water ingress. The quantum of that aspect is $33,009.25.
That amount is the total of works quantified by Mr Frizzell, which works are said to be necessary to rectify internal damage to the premises caused by water damage. Mr Chatterjee accepts that, if it can be demonstrated that this work is necessary remediation work for water damage, then, of course, his client would be liable. However, his submission is that there is no evidence to support that necessary connection. For example, the claim for the carpet is total replacement of all of the carpet on one floor. The evidence as to the necessity for that work is no more than evidence that, on each of the three flooding occasions identified in the evidence, the carpet (and I infer, part of it) became saturated. Other than perhaps an implicit opinion by Mr Frizzell that he considers the work necessary by dint of the fact that the work is included in his Report, there is no evidence that it is necessary.
The same can be said about the painting work and other aspects.
On the other hand, I am satisfied that there is some damage, internal to the unit, caused by the ingress of water. A lot of speculation and guesswork is involved to determine the cost of fixing those issues. I am conscious that what Mr Klooster is doing here is that he is acting for a party who had the ability to prove these matters by direct evidence but instead seeks to prove them by piecing together some aspects of the direct evidence and inviting the Court to draw inferences connecting the dots. As Lord Mansfield explained in Blatch v Archer (1774) 98 ER 969 (“”) at 970, the preparedness of a court to draw inferences in favour of a party seeking to prove a fact is often dependent on the Court’s understanding of what better and more direct evidence was available to that party. Then again, there is the principle of damages, to the effect that if a court is satisfied on the balance of probabilities that some damages have been caused to a proving party, the fact that it is difficult to quantify those damages ought not stand in the way of an award: see for example (1994) 179 CLR 332 (“”) at 355; and (1990) 169 CLR 638 at 643.
My orders are:
The Plaintiff’s case is dismissed.
The Plaintiff is to pay the Defendant’s costs of the proceedings.
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Allan
Renfay Projects Pty Ltd [2025] NSWDC 357
(1954) 90 CLR 613
(1990) 169 CLR 638
(1994) 179 CLR 332
As far as any other relevant codes, standards, and specifications the work is required to comply with under any law, there is dispute between the parties as to whether there were any such rules or regulations in existence that had the force of law.
I do not think that matters because the Defendant’s direct answer to all of the claims based on Clause 1(c) is the provisions of Clause 1(c)(ii)(a) [s 7E; cl 2(2)(a) sch 2], which for convenience I will set out again:
I accept Mr Klooster’s submissions that the legislation is obviously designed and intended to be protective of consumers of residential building work. His submission is that, in that context, it can be seen that there is a legislative intention to allocate all risks of failure to comply with the statutory warranties on the builder, regardless of fault. In other words, the builder becomes liable for the consequences of faulty design and/or specification, and for that matter engineering issues, notwithstanding that the builder would not be expected to have qualifications in those areas. In short, he contends that building to a defective design does not necessarily provide any defence to a builder. He submits King supports this position.
As I have explained at [11]-[12] of these reasons, I do not think that submission is right. King was dealing with the quality of construction matters set out in Clause 1(c) [cl 2 sch 2]. King was concerned with a conflict between the requirements of a contract and a legal requirement. I consider Mr Klooster’s reading of King to be too wide. Apart from anything else, it leaves no work for Clause 1(c) [cl 2 sch 2] to do. To the extent it captures work said to be required that is beyond the scope of the Contract, it leads to results which I consider to have not been intended by Parliament.
I consider that, with one exception, the alleged failures relating to Clause 1(c) [cl 2 sch 2] (that is items (4) and (5) above) were directly the consequence of flaws in the contractual design. I am satisfied that there is a sufficiently direct nexus between the alleged failures and the designs so as to engage Clause 1(c)(ii)(a) [s 7E cl 2 sch 2] of the Contract.
So much is implicitly accepted by the Plaintiff in the way he frames his primary damages case, which has embedded in it the proposition that, to do remediation work to a level of his satisfaction, requires a significantly different design to either the original design in the Contract or the amended design. The box drains are a different size. As Mr Klooster said in opening:
I think those two principles are reconcilable. Sellers v Adelaide Petroleum was dealing with a situation where, despite its best efforts, the proving party cannot call compelling evidence. In those circumstances, the court does its best on the material that is available to come to a just conclusion. This is consistent with Blatch v Archer. That is not this case. In this case, it was open to the Plaintiff to call much more compelling and direct evidence on the topic.
I propose to resolve this issue by adopting a reasonably arbitrary approach and giving the benefit of any doubt to the Defendant by allowing two thirds of the claimed $33,009.25 as damages for the rectification of the internal aspects of the premises. Accordingly, for this component, if I am wrong as to liability, I would allow $22,000.
The second is a much more complicated aspect, being what needs to be done so as to rectify a problem with the connection, and having done so, how much that would cost?
As to the former, there really is no evidence. Mr Klooster has put to me that it is obvious that to do that work either the box gutter would need to be accessed from below, which would involve trespassing on common property, or would have to be accessed from above, which would involve cutting into the box gutter and then patching or repairing the box gutter itself.
I can find no evidence as to the proper method of doing such repair work. Common sense does suggest that the two methods propounded on behalf of the Plaintiff are almost certainly the two options available. Whilst there is no evidence that the Body Corporate would consent to accessing the gutter through common property, I am not prepared to infer or assume that it would not. After all, it would be to the Body Corporate's advantage to fix this problem as the gutter itself is on common property and so the Body Corporate must be exposed to a claim by the Plaintiff. However, the matter can be more simply disposed of than that. The history of the matter is the Body Corporate gave permission for the original work, and I see no reason to assume that it would not do so again.
As to the other method, true it is that the end result would be that there would be a box gutter that had been repaired, but there is no evidence that the repair work would cause the box gutter to be functionally inferior to one that had not been repaired. The Plaintiff says this is irrelevant, relying on Bellgrove v Eldridge (1954) 90 CLR 613 at 618-619; Ruxley Electronics v Forsyth [1995] 3 All ER 268; Willshee v Westcourt [2009] WASCA 87; and Tranquility Pools & Spas Pty Limited v Huntsman Chemical Company Australia Pty Limited [2011] NSWSC 75. I do not think, on any sensible analysis of the law of damages, that in those circumstances the Plaintiff would be entitled to recover the cost of a full replacement of the box gutter. An element of common sense must always be applied in this area of the law.
As an alternative, Mr Klooster has prepared a document entitled “Plaintiff's closing submissions on quantum." In that document, he has sought to identify work necessary to repair a faulty join between the box gutter and the downpipe to stop the leak. This aspect of the claim is vexed because an awful lot of guesswork, speculation, and rough and ready estimates is required to pull apart the evidence that had been prepared for the wider claim in damages, so as to reduce it back so that it can be useful and probative on the alternative claim for damages. It is clear that it is Mr Klooster who has undertaken that process. I do not in any way intend to criticise him, indeed the job he has done has been very sensible, rational, and helpful. However, the very fact that the process has been undertaken by a barrister, albeit an experienced one, rather than a person with expert qualifications does demonstrate the difficulties confronted by the Plaintiff, which, after all, are a direct consequence of his forensic decision made long ago to conduct the case by reference to evidence prepared on an all or nothing basis.
I will not set out in this judgment all of those items and submissions, but for the purpose of proving the cost of rectification of the gutter so as to fix defective joints between the box gutter and the downpipe, Part Four of Mr Klooster’s submissions is a detailed schedule by reference to the evidence dealing with complete remediation where Mr Klooster has adjusted figures so as to reflect a likely cost on the hypothesis of the alternative claim. The details are in the submissions, which I have marked as MFI-3.
I have decided, on a very rough and ready basis, again giving the benefit of any doubt to the Defendant, to allow some, but not all, of the items as claimed in that document. The items I allow are 1, 2, 4, 7, 10, 12, 13, 15, 21, 22, 24, 30, and 32, which totals approximately $9,428.
I have then added adjustments of 5% in accordance with the Expert’s Report, 15% for builders preliminaries in accordance with the experts evidence, 25% for builders margin, and 10% for GST which totals $15,653.43.
I have then allowed a further 5% adjustment for the experts opinion as to increased costs over the last 12 months, which brings the total to close enough to $18,000. The effect of this adjustment is that no pre-judgment interest will be awarded.
For those reasons, if, contrary to my finding, the correct result of the case is that the Defendant is liable to rectify the work so as to fix a faulty join between the box gutter and the downpipe, the appropriate measure of damages for that work is $18,000.
In conclusion, the damages I would have awarded on the Plaintiff's alternative claim if liability had been established would have been $40,116.20 (rounded to $40,000), being the direct cost of rectifying damages within the premises resulting from water ingress of $22,000, together with $18,000 representing the likely cost of doing the remediation work. Interest on the $22,000 would be awarded from the midpoint of the identified leaking events until judgment. No interest would be awarded on the $18,000 because it has been assessed as at the date of judgment.