Owners SP 92450 v JKN Para 1 Pty Limited [2023] NSWCA 114

Court of Appeal Supreme Court New South Wales Medium Neutral Citation: Owners SP 92450 v JKN Para 1 Pty Limited [2023] NSWCA 114 Hearing dates: 15 March 2023 Date of orders: 26 May 2023 Decision date: 26 May 2023 Before: Gleeson JA at [1] White JA at [115] Brereton JA at [116] Decision: (1) Grant leave to appeal. (2) Appeal allowed. (3) Direct the appellant to file a notice of appeal in the form contained in the White Book within seven days. (4) Set aside the answers to separate questions (c), (d), (e), (f), (g) and (h) given on 19 July 2022, and in lieu, answer those questions as follows: (c) Not necessary to answer. (d) Not necessary to answer. (e) Yes. JKN and Toplace breached the statutory warranty in s 18B(1)(c) of the Home Building Act 1989 (NSW). (f) Yes. (g) The Owners Corporation's loss is assessed as the reasonable cost of removing the cladding and replacing it with cladding which is non-combustible within the meaning of that term in the Building Code of Australia. (h) The defendants are liable to the plaintiff for the reasonable cost of having the cladding removed and replaced with cladding which is non-combustible within the meaning of that term in the Building Code of Australia. (5) Set aside orders (1) and (2) made on 27 July 2022 and in lieu, make the following orders: (a) Pursuant to r 28.4 of the Uniform Civil Procedure Rules 2005 (NSW), the plaintiff's claim, insofar as it relies upon the contentions in paragraphs 27A, 27B, 27C, 27F and 28 of Part C of the Amended Technology and Construction List Statement filed on 5 April 2019, be allowed; (b) Direct the parties to bring in short minutes of order before the primary judge in relation to the monetary judgment for damages in favour of the plaintiff in respect of the agreed cost of removal and replacement of the cladding. (6) The respondents pay the appellant's costs of the appeal and the determination of the separate questions in the court below. Catchwords: BUILDING AND CONSTRUCTION — Contract — Implied terms — Statutory warranties — Whether building complied with Building Code of Australia (BCA) — Where performance requirements of BCA specified that external walls must be "non-combustible" — Whether external cladding met performance requirements for fire resistance — Where cladding did not comply with "deemed-to-satisfy" provisions — Where no "alternative solution" prepared prior to issue of construction certificate —Home Building Act 1989 (NSW), s 18(1)(c) — Where breach of s 18(1)(c) conceded BUILDING AND CONSTRUCTION — Contract — Damages — Claim for reinstatement damages — Evidentiary onus of proving reinstatement would be unreasonable Legislation Cited: Building Products (Safety) Act 2017 (NSW), s 9(1) Environmental Planning and Assessment Act 1979 (NSW), s 109H Environmental Planning and Assessment Regulation 2000 (NSW), regs 98(1)(a), 145, 198 Home Building Act 1989 (NSW), ss 18B, 18C, 18D, 18E, 18F Supreme Court Act 1970 (NSW), s 103 Uniform Civil Procedure Rules 2005 (NSW), rr 28.2, 42.1 Cases Cited: Bellgrove v Eldridge (1954) 90 CLR 613; [1954] HCA 36 Bowen Investments Pty Ltd v Tabcorp Holdings Ltd (2008) 166 FCR 494; [2008] FCAFC 38 Brewarrina Shire Council v Beckhouse Civil Pty Ltd [2006] NSWCA 361 Builders' Insurers' Guarantee Corp v Owners – Strata Plan No 57504 [2010] NSWCA 23 Kirby v Coote [2006] QCA 61 Kuru v State of New South Wales (2008) 236 CLR 1; [2008] HCA 26 Metricon Homes Pty Ltd v Softley (2016) 499 VR 746; [2016] VSCA 60 Owners of Strata Plan No 77475 v Walker Group Constructions Pty Ltd [2016] NSWSC 1127 Purkess v Crittenden (1965) 114 CLR 164; [1965] HCA 34 Radford v De Froberville [1977] 1 WLR 1262 Renown Corporation Pty Ltd v SEMF Pty Ltd [2022] NSWCA 233 Roberts v Goodwin Street Developments Pty Ltd [2023] NSWCA 5 Robinson v Harman (1884) 1 Exch 850; 154 ER 363 Scott Carver Pty Ltd v SAS Trustee Corporation [2005] NSWCA 462 South Parklands Hockey & Tennis Centre Inc v Brown Falconer Group Pty Ltd [2004] SASC 81 Strata Plan 92450 v JKN Para 1 Pty Ltd [2022] NSWSC 958 Tabcorp Holdings Ltd v Bowen Investments Pty Ltd (2009) 236 CLR 272; [2009] HCA 8 Tanah Merah Vic Pty Ltd v Owners Corp No 1 of PS613436T [2021] VSCA 72 Taylor Construction Group Pty Ltd v Strata Plan 92888 [2021] NSWSC 1315 The Owners of Strata Plan 76888 v Walker Group Constructions Pty Ltd [2016] NSWSC 541 Wheeler v Ecroplot Pty Ltd [2010] NSWCA 61 Category: Principal judgment Parties: Owners SP 92450 (Appellant) JKN Para 1 Pty Ltd (First respondent) Toplace Pty Limited (Second respondent) Representation: Counsel: J Steele SC / R Size (Appellant) R J Cheney SC / H Pintos-Lopez (Respondents)