Ku-ring-gai Council v Chan [2017] NSWCA 226

Court of Appeal Supreme Court New South Wales Medium Neutral Citation: Ku-ring-gai Council v Chan [2017] NSWCA 226 Hearing dates: 25 November 2016 Supplementary written submissions 28, 29 November 2016 Decision date: 07 September 2017 Before: McColl JA at [1]; Meagher JA at [2]; Sackville AJA at [115] Decision: 1. Appeal allowed. 2. In relation to order 1 made on 3 June 2016: (a) Set aside the judgment for the first and second respondents against the appellant in the amount of $510,096.76. (b) Note that the amount of the judgment against the third respondent and in favour of the first and second respondents, and the only amount that the third respondent is liable to pay, is $592,559.57. 3. Set aside orders 4 and 5 made on 3 June 2016. 4. Order that the first and second respondents' claim against the appellant by their Amended List Statement be dismissed. 5. Order that the third respondent's cross-claim against the appellant be dismissed. 6. Order that the first and second respondents pay the appellant's costs of the appeal. 7. Direct that the appellant and first and second respondents confer with a view to agreeing on the costs orders that should be made between them in relation to the proceedings at first instance in order to give effect to these reasons. Having done so, they are to file agreed Short Minutes within seven (7) days of the making of these orders and, in the absence of agreement, to file with Meagher JA's Associate within fourteen days (14) of the making of these orders written submissions, not exceeding three pages, with respect to the costs orders they seek. Any remaining costs question is to be decided on the papers. Catchwords: TORTS – negligence – duty of care – pure economic loss – reliance – vulnerability –where council as principal certifying authority retained by owner-builder issued occupation certificate under Environmental Planning and Assessment Act 1979 (NSW), s 109D(1)(c) in relation to structurally and non-structurally defective building works on residential property – where subsequent purchaser of property enjoyed benefit of statutory warranties against owner-builder under Home Building Act 1989 (NSW), s 18B – whether council owed subsequent purchaser duty to take reasonable care in issuing occupation certificate – where owner-builder agreed with council that he was responsible for compliance with laws and approvals – whether council liable to indemnify owner-builder due to careless issue of occupation certificate Legislation Cited: Building Professionals Act 2005 (NSW) ss 63, 65 Building Professionals Regulation 2007 (NSW), Pt 4, divs 2, 3 Conveyancing (Sale of Land) Regulation 2005 Civil Liability Act 2002 (NSW), Pt 4, ss 5B, 5D, 5R, 34, 35, 43, 43A Environmental Planning and Assessment Act 1979 (NSW), Pts 4, 4A, ss 4, 76A, 81A, 109C, 109D, 109E, 109H, 109L, 109M, 121B Environmental Planning and Assessment Regulation 2000 (NSW), regs 145, 162A, 162B Home Building Act 1989 (NSW), Pts 2C, 6, ss 3, 18B, 18C, 18D, 18E, 18G, 30, 76A, 92, 95, 95, 101, 102, 103B Home Building Amendment (Minimum Insurance Cover) Regulation 2007 (NSW), cl 60 Cases Cited: Brookfield Multiplex Ltd v Owners Corporation Strata Plan 61288 (2014) 254 CLR 185; [2014] HCA 36 Bryan v Maloney (1995) 182 CLR 609 Caltex Refineries (Qld) Pty Ltd v Stavar (2009) 75 NSWLR 649; [2009] NSWCA 258 Dansar Pty Ltd v Byron Shire Council (2014) 89 NSWLR 1; [2014] NSWCA 364 Esanda Finance Corporation Ltd v Peat Marwick Hungerfords (1997) 188 CLR 241; [1997] HCA 8 Fangrove Pty Ltd v Tod Group Holdings Pty Ltd [1999] 2 Qd R 236 Hill v Van Erp (1997) 188 CLR 159; [1997] HCA 9 MM Constructions (Aust) Pty Ltd v Port Stephens Council [2012] NSWCA 417 Mutual Life & Citizens' Assurance Co Limited v Evatt (1968) 122 CLR 556 Perre v Apand Pty Ltd (1999) 198 CLR 180; [1999] HCA 36 Pyrenees Shire Council v Day (1988) 192 CLR 330; [1988] HCA 3 Rin Rim Pty Ltd v Deutsche Bank AG [2017] NSWCA 169 Shaddock & Associates Pty Ltd v Parramatta City Council (No 1) (1981) 150 CLR 225 Tame v New South Wales (2002) 211 CLR 317; [2002] HCA 35 Tepko Pty Ltd v Water Board (2001) 206 CLR 1; 2001 [HCA] 19 Wallace v Kam (2013) 250 CLR 375; [2013] HCA 19 Wardley Australia Ltd v Western Australia (1992) 175 CLR 514 Woolcock Street Investments Pty Ltd v CDG Pty Ltd (2004) 216 CLR 515; [2004] HCA 16 Texts Cited: Building Code of Australia, Pts 3.2, 3.5, 3.8, cl A3.2 Category: Principal judgment Parties: Ku-ring-gai Council (Appellant) Rebecca Chan (First Respondent) Warren Cox (Second Respondent Robert Acres (Third Respondent) Mitchell Howes Civil & Structural Engineers Pty Ltd (Fourth Respondent) Representation: Counsel: P J Bambagiotti with V Misra (Appellant) M Dempsey SC with M Klooster (First and Second Respondents) No appearance (Third Respondent) Mitchell Howes Civil & Structural Engineers Pty Ltd (Fourth Respondent) (Submitting appearance)