The Owners – Strata Plan No 74602 v Brookfield Australia Investments Ltd [2015] NSWSC 1916

Supreme Court New South Wales

Medium Neutral Citation: The Owners – Strata Plan No 74602 v Brookfield Australia Investments Ltd [2015] NSWSC 1916 Hearing dates: 3-6, 10-13, 17-20, 24-27 August and 16-17 September 2015; further submissions received 9, 20 and 26 October 2015; motion to re-open 9 November 2015 Decision date: 16 December 2015 Jurisdiction: Equity - Technology and Construction List Before: Stevenson J Decision: Parties to confer and agree on the orders necessary to give effect to these reasons, and the further steps necessary to resolve any outstanding issues Catchwords: BUILDING AND CONSTRUCTION – design and construct contract between developer and first defendant – plaintiff successor in title to developer – whether first defendant breached statutory warranties under s 18B(a), (b) and (f) of the Home Building Act 1989, as incorporated into the contract – whether facade was designed and constructed in accordance with the "Hyder Specification" as incorporated in the contract – proper construction of the Hyder Specification – whether a reasonable businessperson would construe the Hyder Specification as if the contractor had warranted that the facade would be fully weather tight when tested in accordance with AS 4284 for the building's entire design life – the extent to which the building has been shown not to be weather tight – whether observational evidence of two lay witnesses demonstrates water ingress in window assemblies beyond those recognised by expert witnesses in joint report – whether first defendant's failure to conduct prototype testing has any relevant consequence – whether prototype testing conducted on indistinguishable window assemblies at a different site indicates that the building would have passed prototype tests – whether plaintiff's expert witness's tests were appropriate to reveal any inadequacy in the design of the facade – whether the first defendant's proposed remedial work to the facade is necessary and reasonable to compensate the plaintiff – whether replacement of the whole facade is out of all proportion to the benefit that would be obtained – whether plaintiff has established claims in respect to defects associated with mechanical services, bathrooms and ensuites, fire services and general internal defects; BUILDING AND CONSTRUCTION – design and construct sub-contract between first and fourth defendants – whether the developer was a "non-contracting owner" vis-à-vis the sub-contract for the purposes of s 18D(1A) of the Home Building Act– whether plaintiff as successor in title to developer entitled to enforce s 18B statutory warranties against the fourth defendant sub-contractor – whether, in any event, the plaintiff's claim against the fourth defendant is statute barred – the relevant date of completion of the sub-contract under s 3B of the Home Building Act – whether the limitation period applicable to the s 18B warranties has expired; TORTS – strata titles – whether the first and third defendants owed a duty of care to the plaintiff –whether the plaintiff is relevantly vulnerable – whether case can be distinguished from Brookfield Multiplex Limited v Owners – Strata Plan No 61288 [2014] HCA 36 – whether the fact that the plaintiff has the benefit of statutory warranties under the Home Building Act against the first defendant is a reason to deny the existence of a duty of care Legislation Cited: Building and Construction Industry Security of Payment Act 1999 (NSW) Domestic Building Contracts Act 1995 (Vic) Environmental Planning and Assessment Act 1979 (NSW) Environmental Planning and Assessment Regulation 2000 (NSW) Home Building Act 1989 (NSW) Home Building Amendment (Warranties and Insurance) Act 2010 (NSW) Cases Cited: Ace Woollahra Pty Ltd v The Owners – Strata Plan No 61424 [2010] NSWCA 101; 77 NSWLR 613 Bellgrove v Eldridge [1954] HCA 36; 90 CLR 613 Brewarrina Shire Council v Beckhaus Civil Pty Ltd [2006] NSWCA 361 Brookfield Multiplex Ltd v Owners – Strata Plan No 61288 [2014] HCA 36 Building Insurers' Guarantee Corporation v The Owners – Strata Plan No 57504 [2010] NSWCA 23 Chan v Acres [2015] NSWSC 1885 Electricity Generation Corporation v Woodside Energy Ltd [2014] HCA 7; 251 CLR 640 Esanda Finance Corporation Ltd v Peat Marwick Hungerfords (1997) 188 CLR 241 Hill v Van Erp (1997) 188 CLR 159 Larking v Great Western (Nepean) Gravel Limited (in liq) [1940] HCA 37; 64 CLR 221 Moorabool Shire Council v Taitapanui [2006] VSCA 30. Mount Bruce Mining Pty Limited v Wright Prospecting Pty Limited [2015] HCA 37 Owners Corporation Strata Plan 61288 v Brookfield Multiplex [2012] NSWSC 1219 Owners Corporation Strata Plan 72535 v Brookfield Multiplex Ltd [2012] NSWSC 712 Perre v Apand Pty Ltd (1999) 198 CLR 180 Radford v De Froberville [1977] 1 WLR 1262 Robinson v Harman (1848) 1 Exch 850; 154 ER 363 South Parklands Hockey & Tennis Centre Inc v Brown Falconer Group Pty Ltd [2004] SASC 81 Tabcorp Holdings Ltd v Bowen Investments Pty Ltd [2009] HCA 8; 236 CLR 272 The Owners – Strata Plan No 74602 v Brookfield Australia Investments Ltd [2015] NSWSC 1682 The Owners – Strata Plan No 64757 v MJA Group Pty Ltd [2011] NSWCA 236; 81 NSWLR 426 The Owners Corporation – SP 69567 v Landson Alliance Australia Pty Limited [2014] NSWSC 1592 Vero Insurance Ltd v Kassem [2011] NSWCA 381 The Owners – Strata Plan No 74602 v Brookfield Australia Investments Ltd [2015] NSWSC 1144 Wheeler v Ecroplot Pty Ltd [2010] NSWCA 61 Woolcock Street Investments Pty Ltd v CDG Pty Ltd [2004] HCA 16; 216 CLR 515 Category: Principal judgment Parties: The Owners – Strata Plan No 74602 (Plaintiff) Brookfield Australia Investments Limited (First Defendant) Brookfield Multiplex Constructions Pty Limited (Second Defendant) Multiplex Corporate Agency Pty Ltd (Third Defendant) G James Glass & Aluminium Pty Ltd (Fourth Defendant) Norska Group Pty Limited (Fifth Defendant) Hastie Australia Pty Limited (Sixth Defendant) Ricdav Pty Limited (Seventh Defendant) MDS Tiling Pty Limited (Eighth Defendant) Stainless Services Group Pty Ltd (Ninth Defendant) Andec Fire Systems (Australia) Pty Limited (Tenth Defendant) Wright Pools Pty Ltd (Eleventh Defendant) Eastmark Holdings Pty Limited (Twelfth Defendant) Parklane Building Corporation Pty Limited (Thirteenth Defendant) Representation: Counsel: F Corsaro SC with A Thomas (and O Fagir on 3, 10-13 and 18-19 August 2015) (Plaintiff) M Ashhurst SC with F P Hicks (First, Second and Third Defendants) D T Miller SC (and M Dempsey SC on 3 and 5 August 2015) with C Purdy (Fourth Defendant)