Chan v Acres (No 2) [2016] NSWSC 557

Supreme Court New South Wales

Medium Neutral Citation: Chan v Acres (No 2) [2016] NSWSC 557 Hearing dates: On the papers Date of orders: 06 May 2016 Decision date: 06 May 2016 Jurisdiction: Equity - Technology and Construction List Before: McDougall J Decision: Two paragraphs of earlier reasons withdrawn and corrected. Parties to submit draft orders to give effect to these and (as corrected) earlier reasons. Catchwords: PROCEDURE – application for correction to earlier reasons pursuant to UCPR r 36.17 – rule does not apply – discretion by the Court to withdraw reasons for the purpose of correction – correction of earlier reasons Legislation Cited: Uniform Civil Procedure Rules 2005 Category: Procedural and other rulings Parties: Rebecca Chan (First Plaintiff) Warren Cox (Second Plaintiff) Robert Acres (First Defendant) Alpha Building Services Pty Ltd (Second Defendant) Mitchell Howes Civil & Structural Engineers Pty Ltd (Third Defendant) Ku-ring-gai Council (Fourth Defendant) Representation: Counsel: M Walsh (Plaintiffs) R R Acres (First Defendant) (In person) P J Bambagiotti (Fourth Defendant)

Solicitors: Snelgroves (Plaintiffs) R R Acres (First Defendant) (In person) Mills Oakley (Fourth Defendant) File Number(s): 2012/48496

Judgment 1. HIS HONOUR: The plaintiffs own a residence at Wahroonga. It is severely affected by defective building work. The plaintiffs sued the defendants seeking to cover the costs of rectification. On 11 December 2015, following a 12 day hearing between 29 September and 15 October 2015, I published reasons for judgment ([2015] NSWSC 1885) holding that the plaintiffs were entitled to recover, from the second and fourth defendants only, some but not all of the damages they sought. 2. I directed the parties to seek to agree on the orders to be made following delivery of my reasons. The parties could not agree. Instead, they raised further issues for my decision. 3. Before I describe those further issues, I set out [1] to [10] of my earlier reasons, to give some content to what follows: 1 HIS HONOUR: The plaintiffs (Ms Chan and Mr Cox) own a house situated at Roland Avenue, Wahroonga. They bought it from the first defendant (Mr Acres) and his then wife in March 2010. Mr Acres' former wife played no part in these proceedings. No one took the point that she should have been, but was not, a party. I shall refer to activities in fact undertaken by Mr Acres and his then wife as though he alone had undertaken them. 2 Mr Acres, as an owner-builder, carried out significant renovations and extensions to the house in 2008 and 2009. He had obtained a development consent issued by the fourth defendant (the Council) on 22 April 2008, and a construction certificate issued by the Council on 6 May 2008. He engaged the Council as Principal Certifying Authority (PCA) for the purposes of Part 4A of the Environmental Planning and Assessment Act 1979 (NSW) (the EPA Act) and Part 8 of the Environmental Planning and Assessment Regulation 2000 (NSW) (the EPA Regulation). 3 Mr Acres engaged what he called an architect, but what appears in fact to have been a design or drafting company, called Actron Design Pty Ltd (Actron). Actron is not a party to these proceedings. 4 On the advice of Actron, Mr Acres retained the third defendant (MHE) to prepare certain structural drawings, and to carry out inspections of the structural work as requested from time to time. 5 Mr Elliott of Counsel, for MHE, submitted that the retainers were each ad hoc, not all effected by the one contract. I think that this is correct, but in the event, nothing seems to turn on it. 6 Before the plaintiffs bought the house, they procured a pre-purchase inspection report from the second defendant (Alpha). The claim against Alpha has been settled. 7 Essentially, the plaintiffs' case is that, based on the pre-purchase report prepared by Alpha and other matters, they decided to buy the house knowing of some defects (relating principally to water damage to the ceiling and walls in a bedroom located in the extension that Mr Acres had constructed, at the rear, or west, of the house). There were some other problems relating to surface water, drainage and subfloor ventilation, and some cosmetic matters. However, the plaintiffs say, after they moved into the property, they discovered that there were very serious structural and other defects, particularly in the work that Mr Acres had carried out. The real issues in dispute 8 The plaintiffs sue: (1) Mr Acres, for breach of some of the statutory warranties set out in s 18B of the Home Building Act 1989 (NSW) (the HB Act), the benefit of which was extended to them by the "deemed contract" for which s 18C of that Act provides; (2) MHE, for breach of a common law duty of care said to be owed by it to them in respect of its inspections of elements of the structural works carried out by Mr Acres; and (3) the Council, for breach of a common law duty of care said to be owed by it to them in its capacity as PCA, in respect of inspections and certifications from time to time carried out and given by a Council building surveyor, and in respect of the Occupation Certificate issued by the Council, again in its capacity as PCA. 9 The defendants deny liability. Further, each argues that if he or it is liable, the others should be held responsible in whole or in part. 10 The essential issues are: (1) did either MHE or the Council owe the plaintiffs any common law duty of care in respect of the work each did under its contract with Mr Acres? (2) Did Mr Acres breach the statutory warranties, and did MHE or the Council breach any duty of care owed to the plaintiffs? (3) What work was defective, and what is the cost of rectification? (4) How should any liability be apportioned between the three active defendants? The further applications 1. The plaintiffs sought "corrections" to my earlier reasons, they said pursuant to UCPR r 36.17. In terms, that rule is irrelevant. It provides for the correction of judgments and orders, in the circumstances to which it applies. There is no relevant judgment or order to be corrected in the present case. However, it is unnecessary to say more, since it is clear beyond doubt that the Court has power, in an appropriate case, to withdraw part or all of its reasons for the purpose of correcting them. It is equally clear that the power should be exercised, where appropriate, to prevent needless appeals. 2. The first correction sought by the plaintiffs relates to their claim for the costs of relocation and alternative accommodation whilst the repair works are carried out. By oversight, I did not deal with that claim in my earlier reasons. 3. This correction was sought as between the plaintiffs and the Council. The Council accepted that I had overlooked this claim in my reasons. 4. The second, third and fourth corrections relate to [90], [91] of my earlier reasons. I set out those paragraphs: [90] Mr Acres said that some of the works that had been the subject of complaint were not works done by him as owner-builder. The works that Mr Acres said fell into this category were (by reference to the list set out above) items 12, 15 and 16. In addition, as to item 20, Mr Acres said that he did not carry out or arrange for the carrying out of any work on the existing roof or skylight. Finally, as I have noted, Mr Acres said that if there were defects in the skillion roof over the western extension, he was not responsible because that roof had sustained storm damage when a tree fell on it, and had been repaired by tradesmen retained by his insurer. [91] Those aspects of Mr Acres' evidence were not challenged. Accordingly, I accept them. It must follow that Mr Acres cannot be held liable for those defects. But he is liable for the others. 1. The plaintiffs submit that I erred in what I said at [90] because: 1. item 12 (of the version of the Scott Schedule that had been agreed between the experts, and by reference to which I dealt with the plaintiffs' claims) included two matters – rectification of external ground levels (12a), and rectification of the front patio structure (12b) – that in fact did relate to work done by Mr Acres; and 2. as to Item 20, Mr Acres' evidence did not go so far as to say that he had not been responsible for the construction of the roofing over the new entry portico that undoubtedly he did cause to be constructed. 1. Mr Acres' submissions on this application appeared to accept that [90] of my earlier reasons went too far in respect of items 12a and 12b. However, he continued to insist that he had not been responsible for any roofing, and thus that what I have said as to item 20 was correct. 2. Mr Acres then raised two applications of his own. First, he said, in respect of items 12a, 12b and (if I found against him) 20, he was entitled to be indemnified by the Council. Second, he submitted, I had erred in my treatment of the question of his liability for a "Dincel" retaining wall on or adjacent to one of the boundaries of the property. 3. As I have said, the Council accepted that I had erred in overlooking the claim against it for the costs of relocation and alternative accommodation. The Council accepted that the claim had been quantified in the amount sought by the plaintiffs. 4. However, the Council itself raised two issues. First, it referred to the settlement as between the plaintiffs and Alpha. It said that the settlement sum, $90,000.00, should be brought to account in reduction of its liability to the plaintiffs, on the basis that otherwise there would be double recovery. Second, the Council submitted (although in the course of a further directions hearing, not in the written submissions that it provided pursuant to my direction), on my findings it and Alpha were concurrent wrongdoers in respect of the same loss, and I should apportion responsibility between them. 5. Neither of those issues had been raised by the Council in the course of the 12 day hearing, and it will be seen that neither of them is reflected in my statement at [10] of my earlier reasons of the essential issues for decision. It may be noted that the Council has never submitted that I had misconceived, or failed to state all of, the issues in dispute.