The Owners – Strata Plan No 66375 v King [2018] NSWCA 170

The Owners – Strata Plan No 66375 v King [2018] NSWCA 170

On balance of probabilities, the most likely inference is that the Kings executed the relevant building contract personally, making them developers under the Home Building Act 1989 (NSW) s 3A. The liability of a developer to an owners corporation under the notional contract in s 18C is not limited by the builder's liability; the notional contract encompasses all residential building work done. Statutory warranties under s 18B, including compliance with the law, apply even where non-compliance results from design defects in plans/specifications prepared for the developer. Thus, the Kings were liable for breach of statutory warranty implied by s 18B(c), and for design defects.

Jurisdiction
Australia
Judgment Date
03 August 2018
Procedural Posture
Appeal / Judgment
Outcome
Appeal allowed
Legal Topics
["developers' Liability" 'statutory Warranties' 'home Building Act 1989 (nsw)' 'design Defects' 'drawing of Inferences' 'notional Contracts']
['building and Construction Law' 'statutory Interpretation'] ["developers' Liability" 'statutory Warranties' 'home Building Act 1989 (nsw)' 'design Defects' 'drawing of Inferences' 'notional Contracts']

Case Brief

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Procedural Posture

Appeal / Judgment

Legal Issues

  1. 1 ["Whether the Kings were parties to the relevant building contract and thereby 'developers' as defined under the Home Building Act 1989 (NSW) s 3A" "Whether the Kings are liable for 'design defects' under statutory warranties considering the scope of the notional contract in s 18C" 'Proper construction and interaction of statutory warranties under ss 18B(c) and 18C of the Home Building Act']

Ratio Decidendi

On balance of probabilities, the most likely inference is that the Kings executed the relevant building contract personally, making them developers under the Home Building Act 1989 (NSW) s 3A. The liability of a developer to an owners corporation under the notional contract in s 18C is not limited by the builder's liability; the notional contract encompasses all residential building work done. Statutory warranties under s 18B, including compliance with the law, apply even where non-compliance results from design defects in plans/specifications prepared for the developer. Thus, the Kings were liable for breach of statutory warranty implied by s 18B(c), and for design defects.

Court Disposition

Appeal allowed

Orders

  • ['Appeal allowed.' 'Orders made by Ball J as between the Owners Corporation and David and Gwendoline King set aside.' 'Judgment entered in favour of the Owners Corporation against the Kings in the sum of $5,093,168.08, with costs.' "Respondents granted a certificate under the Suitors' Fund Act 1951 (NSW), if...