S Turnell and W Turnell v Atlantic Construction Pty Ltd

S Turnell and W Turnell v Atlantic Construction Pty Ltd - [2014] NSWCATCD 89 - NSWCATCD 2014 case summary — Zoe

[6]

In relation to a claim for a breach of a statutory warranty pursuant to Part 2C of the Act 9Part 2C of the Act comprises sections 18A to 18G inclusive of the Act. Section 18B lists the warranties which are implied in every contract. Section 18E of the Act provides the time limitations imposed in relation to the commencement of proceedings for a breach of a statutory warranty. The section states: 18E Proceedings for breach of warranties (1) Proceedings for a breach of a statutory warranty must be commenced within 7 years after: (a) the completion of the work to which it relates, or (b) if the work is not completed: (i) the date for completion of the work specified or determined in accordance with the contract, or (ii) if there is no such date, the date of the contract. (2) The fact that a person entitled to the benefit of a statutory warranty specified in paragraph (a), (b), (c), (e) or (f) of section 18B has enforced the warranty in relation to a particular deficiency in the work does not prevent the person from enforcing the same warranty for a deficiency of a different kind in the work (the other deficiency) if: (a) the other deficiency was in existence when the work to which the warranty relates was completed, and (b) the person did not know, and could not reasonably be expected to have known, of the existence of the other deficiency when the warranty was previously enforced, and (c) the proceedings to enforce the warranty in relation to the other deficiency are brought within the period referred to in subsection (1). 10Section 3B(1) of the Act further states that the date of completion occurs on the date that the work is complete within the meaning of the contract under which the work was done. Where there is no such provision in the contract, or where there is no contract, the completion date occurs on the date of the practical completion of the work. 11In relation to practical completion, section 3B of the Act state as follows (emphasis added) (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. 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).

[9]

The applicant's evidence in relation to a claim for a breach of a statutory warranty 14The applicants assert that their application was lodged within time. The applicants assert that construction commenced in 2005 and concluded sometime in 2006. There has been a problem with water penetration from the balcony into the room below since the construction ended. The applicant asserts that this is not in dispute and the builder has attended the property numerous times and has not resolved the problem. 15Mrs Turnell gave sworn evidence in which she provided a copy of the building contract (exhibit A). The contract was dated 17 May 2005. The applicants moved into the property on 28 February 2006. The water ingress was first noticed in June 2006. The builder was contacted and attended the premises to rectify the water ingress. It was not fixed. In summary, the applicants complained to the builder on numerous occasions. The builder attended the premises on many occasions to try and rectify the issue and has been unsuccessful to date. Mrs Turnell provided a phone log, summarised from the phone records available to her, which indicates the applicants contacted the builder on at least 62 occasions from February 2009 to July 2013. 16The applicants lodged a complaint with Fair Trading in 2012. A Fair Trading Inspector attended the premises and made a Rectification Order on 17 May 2012. 17Mrs Turnell stated that the last invoice she paid the respondent was on 13 March 2006, by way of an electronic funds transfer. The Occupation Certificate was issued after the applicants engaged a private certifier. Mrs Turnell agreed in cross examination that the private certifier delayed the issuing of the Occupation Certificate due to the landscaping work not being completed. Mrs Turnell did not agree that the proposition that the landscaping was not one of the inclusions in the scope of works. However, Mrs Turnell did state that there had been a difference of opinion between the parties as to the extent to the landscaping work to be included in the scope of works 18Mrs Turnell was question extensively regarding the subject matter of the Rectification Order. The effect of Mrs Turnell's evidence in relation to that issue is that the matters to be rectified were all related to the ingress of water, either preventing it or repairing items damaged through water penetration from the balcony. Mrs Turnell further advised that she told the Fair Trading Inspector that the Rectification Order work had been completed. Mrs Turnell denied telling the Inspector that she was satisfied with the work.

[12]

The respondent's submissions 23The respondent argued that there were two causes of action in relation to the claim. 24The respondent argued that the first cause of action was pursuant to Part 2C of the Act, namely an allegation of a breach of the statutory warranties. The respondent argues that this part of the claim has been lodged out of time, namely that it was not lodged within 7 years from the date of completion. 25The respondent submits that s 3B of the Act applies in relation to determining the date of practical completion, as clause 26.1 of the contract has not been complied with. 26The respondent submits that being the case, the provisions of s 3B of the Act are applicable in determining the date of practical completion. The respondent submits that the date of practical completion is on or about 28 February 2006, that being the date that the applicants took possession of the premises. The respondent relies upon the following evidence in support of this contention: (i)The applicants moved into the property within a few days of taking possession of the property; (ii)The applicant paid the last moneys owning under the contract to the respondent on 13 March 2006; and, (iii)The respondent did not undertake any further work on the property after that date, with the exception of rectification work. 27The respondent also relies upon the provisions of the contract which stipulate that the obtaining of any statutory approvals, including the Occupation Certificate, is the applicant's responsibility. Refer Item 11, Schedule 1, and Clause 7. 28The respondent states that in the absence of a notice being issued under the contract, the contract is silent as to when the building works are completed. It is to be noted that both parties ignored the requirements of Clause 26. 29The respondent argues that the second cause of action is one in relation to s 48K(3), which relates to an allegation that the work undertaken by the respondent in compliance with the Rectification Order was defective. A claim pursuant to s 48K(3) is required to be lodged within 3 years of the date of supply. The respondent is of the view that the Rectification Order related only to minor works of a more cosmetic nature and did not specifically relate to the ingress of water from the balcony into the room below. Therefore, any claim pursuant to s 48K(3) is subject to that limitation. 30All of the material provided by the parties has been taken into account in determining the matter, even if it has not been specifically referred to in these reasons.

[13]

Findings 31The Tribunal makes the following findings in relation to the matter - (i)The parties entered into the contract in relation to the matter on 17 May 2005. (ii)The applicants lodged the application on 27 August 2013. (iii)The applicants took possession of the premises on or about 28 February 2006. (iv)The applicants are out of time in relation to any claim pursuant to s 48K(7), as the date of practical completion is on or about 28 February 2006. A claim for a breach of the statutory warranties therefore had to be lodged before 28 February 2013. (v)The applicants are within the statutory time period in relation to their claim pursuant so s 48K(3), it having been lodged within 3 years of the date of the rectification work being undertaken. The Tribunal formally grants leave for the applicants to amend their application to include a claim pursuant to s 48K(3). 32In coming to that determination the Tribunal has been persuaded by the following evidence- (i)The applicants concede that they took possession of the premises on or about 28 February 2006 and moved into the premises shortly thereafter. (ii)The premises were reasonably capable of being used for their intended purpose on that date. That is, there is no evidence that the premises were not able to be used as residential premises from that date. (iii)Therefore 28 February 2006 is the earliest of the presumptions listed in s 3B(3). (iv)In relation to the claim pursuant to s 48K(3) of the Act, the parties agree that the work the subject of the Rectification Order was carried out in June 2012. Any application must therefore be lodged before June 2015, which is the case here. 33The parties are in conflict as to the scope of work included in the Rectification Order. The applicant asserts that the work is in relation to the leak itself, not merely the sequelae of the leak. The respondent asserts to the contrary: that the Rectification Order is in relation to cosmetic issues only which have been completed. 34The matter is to be listed for a Directions Hearing as soon as practicable to clarify the outstanding issues in dispute in relation to the claim pursuant so s 48K(3)and for orders in relation to the service of evidence. (signed) F E Gray General Member Civil and Administrative Tribunal of New South Wales 29 May 2014 I hereby certify that this is a true and accurate record of the reasons for decision of the New South Wales Civil and Administrative Tribunal. Registrar

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Judgment (14 paragraphs)

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