Hartley v McRae [2018] NSWCATCD 31

Hartley v McRae [2018] NSWCATCD 31

Given no demonstrated unwillingness or incapacity of the builder, s 48MA of the Home Building Act 1989 requires that rectification of defective work by the builder is preferred; work orders should issue for agreed and owners-favoured defects. The contract required adjustment for prime cost items; builder must reimburse allowance amount. For variations, only those supported by evidence of owner’s actual knowledge, consent and absence of prohibition by contract are recoverable under quantum meruit. Builder entitled to the value of proven variations with margin and GST.

Jurisdiction
Australia
Judgment Date
20 July 2018
Procedural Posture
Building Claim / Consumer Claim / Decision After Hearing
Outcome
Orders for rectification by work or, failing agreement, by Tribunal order; monetary awards for certain claims and cross-claims; directions for potential costs applications.
Legal Topics
['defective Building Work' 'work Orders' 'money Orders' 'prime Cost Items' 'quantum Meruit' 'variations' 'statutory Warranties']
['building and Construction' 'consumer Law'] ['defective Building Work' 'work Orders' 'money Orders' 'prime Cost Items' 'quantum Meruit' 'variations' 'statutory Warranties']

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Procedural Posture

Building Claim / Consumer Claim / Decision After Hearing

Legal Issues

  1. 1 ['Whether builder is liable for alleged defective work' 'Whether owners entitled to money order or work order for rectification' 'Whether builder entitled to payment for variations not in writing under quantum meruit' 'Proper approach to prime cost items']

Ratio Decidendi

Given no demonstrated unwillingness or incapacity of the builder, s 48MA of the Home Building Act 1989 requires that rectification of defective work by the builder is preferred; work orders should issue for agreed and owners-favoured defects. The contract required adjustment for prime cost items; builder must reimburse allowance amount. For variations, only those supported by evidence of owner’s actual knowledge, consent and absence of prohibition by contract are recoverable under quantum meruit. Builder entitled to the value of proven variations with margin and GST.

Court Disposition

Orders for rectification by work or, failing agreement, by Tribunal order; monetary awards for certain claims and cross-claims; directions for potential costs applications.

Orders

  • ['The parties have 21 days to file consent work orders for defective work items agreed/found in owners’ favour, specifying rectification scope and dates.' 'If no consent work orders are filed, either party may seek re-listing for Tribunal to make orders.' 'Greg McRae must pay Janette and Terry Hartley $11,345.99...