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

Court of Appeal Supreme Court New South Wales Medium Neutral Citation: The Owners – Strata Plan No 66375 v King [2018] NSWCA 170 Hearing dates: 5 and 6 April 2018 Decision date: 03 August 2018 Before: Ward JA at [1]; Leeming JA at [335]; White JA at [388] Decision: 1. Allow the appeal. 2. Set aside the orders made by Ball J as between the Owners Corporation (the appellant in these proceedings) and David and Gwendoline King (the respondents in these proceedings) and in lieu thereof order that judgment be entered in favour of the Owners Corporation against the Kings in the sum of $5,093,168.08, with costs. 3. Grant the respondents a certificate under the Suitors' Fund Act 1951 (NSW), if applicable. Catchwords: BUILDING AND CONSTRUCTION – claim by owners corporation against persons alleged to be "developers" as defined by Home Building Act 1989 (NSW) s 3A – question of fact as to whether alleged "developers" were parties to building contract

APPEALS – drawing of inferences on appeal – evaluation of competing inferences – where primary judge failed to draw inference that respondents were parties to the building contract

BUILDING AND CONSTRUCTION – whether developers liable for "design defects" – statutory construction of Home Building Act 1989 (NSW) ss 18B and 18C – scope of notional contract pursuant to s 18C – whether breach of statutory warranty pursuant to s 18B(c) Legislation Cited: Building Services Corporation Legislation Amendment Act 1996 (NSW), Sch 1 Building Services Corporation Legislation Amendment Bill 1996 (NSW) Environmental Planning and Assessment Act 1979 (NSW) ss 76A(1), 81A, 122, 123, 125 Environmental Planning and Assessment Amendment Regulation 1998 Environmental Planning and Assessment Amendment Regulation 1999 Environmental Planning and Assessment Regulation 1994 (NSW), cll 78A, 79E, 79G Evidence Act 1995 (NSW), ss 69, 87 Home Building Act 1989 (NSW), ss 3, 3A, 6, 7, 7A, 7B, 10, 18A, 18B, 18C, 18D, 18E, 18F, 18G, Sch 4 cl 107 Home Building Amendment Act 2011 (NSW), Sch 1 cll 1, 2, 3, 31 Home Building Regulation 1997 (NSW), cl 8 Interpretation Act 1987 (NSW), s 33 Strata Schemes (Freehold Development) Act 1973 (NSW), s 11 Strata Schemes Management Act 1996 (NSW), s 8 Suitors' Fund Act 1951 (NSW) Supreme Court Act 1970 (NSW), ss 75A(5), 101 The Contractors' and Workmen's Lien Acts 1906 to 1921 (Qld), ss 4, 6, 9, 10, 19 Uniform Civil Procedure Rules 2005 (NSW), r 51.53 Cases Cited: Ace Woollahra Pty Ltd v The Owners – Strata Plan No 61424 (2010) 77 NSWLR 613; [2010] NSWCA 101 Atkinson v Crowley [2011] NSWCA 194 Australian Guarantee Corporation Ltd v Balding (1930) 43 CLR 140 Baron Corporation Pty Ltd v Owners of Strata Plan 69567 [2013] NSWCA 238 Bradshaw v McEwans Pty Ltd (1951) 217 ALR 1 Carr v Western Australia (2007) 232 CLR 138; [2007] HCA 47 Chan v Acres [2015] NSWSC 1885 Clark Equipment Credit of Australia Ltd v Kiyose Holdings Pty Ltd (1989) 21 NSWLR 160 Dilosa v Latec Finance Pty Ltd [1966] 1 NSWR 259; (1966) 84 WN (Pt 1) (NSW) 557 Durbin v Perpetual Trustee Co Ltd (1995) NSW ConvR 55-725 East End Dwellings Co Ltd v Finsbury Borough Council [1952] AC 109 East West Airlines Ltd v Turner [2010] NSWCA 53 Empirnall Holdings Pty Ltd v Machon Paull Partners Pty Ltd (1988) 14 NSWLR 523 Festa Holdings Pty Ltd (in liq) v Adderton [2004] NSWCA 228; (2004) 12 BPR 22,491 Fightvision Pty Ltd v Onisforou (1999) 47 NSWLR 473; [1999] NSWCA 323 Forbes v Git [1922] 1 AC 256 Gardez Nominees Pty Ltd v NSW Self Insurance Corporation [2016] NSWSC 532 Holloway v McFeeters (1956) 94 CLR 470; [1956] HCA 25 Hume Steel Ltd v Attorney-General (Vic) (1927) 39 CLR 455 Hunter Douglas Australia Pty Ltd Perma Blinds (1970) 122 CLR 49 Jones v Dunkel (1959) 101 CLR 298; [1959] HCA 8 Masters Home Improvement Australia Pty Ltd v North East Solutions Pty Ltd [2017] VSCA 88 Masters v Cameron (1954) 91 CLR 353; [1954] HCA 72 Metal Manufacturers Ltd v Lewis (1988) 13 NSWLR 315 MyEnvironment Inc v VicForests (2013) 42 VR 456; [2013] VSCA 356 National Commercial Banking Corporation of Australia Ltd v Cheung (1983) 1 ACLC 1326 NEC Information Systems Australia Pty Limited v Linton (1985) NSW ConvR 55-240 Payne v Parker [1976] 1 NSWLR 191 Pisano v Dandris [2014] NSWSC 1070; (2014) 17 BPR 33,583 Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355; [1998] HCA 28 Re Media Entertainment & Arts Alliance; Ex parte Hoyts Corp Pty Ltd (No 1) (1993) 178 CLR 379 RHG Mortgage Ltd v lanni [2015] NSWCA 56 SAS Realty Developments Pty Ltd v Kerr [2013] NSWCA 56 Scottish Amicable Life Assurance Society v Reg Austin Insurances Pty Ltd (1985) 9 ACLR 909 Stucoid Pty Ltd v Stadiums Pty Ltd (1960) 107 CLR 521; [1960] HCA 41 SZTAL v Minister for Immigration and Border Protection [2017] HCA 34; (2017) 91 ALJR 936 The Craftsmen Restoration & Renovations v Boland [2008] NSWSC 660 The Owners – Strata Plan No 64757 v MJA Group Pty Ltd (2011) 81 NSWLR 426; [2011] NSWCA 236 The Owners Strata Plan 62930 v Kell & Rigby Holdings Pty Ltd [2010] NSWSC 612 The Owners Strata Plan No 66375 v Suncorp Metway Insurance Ltd (No 2) [2017] NSWSC 739 The Owners Strata Plan No. 68372 v Allianz Australia Insurance Ltd [2014] NSWSC 1807 Valuer-General of New South Wales v In Adam Pty Ltd [2012] NSWCA 20 Vero Insurance Ltd v Kassem [2011] NSWCA 381; (2011) 86 ACSR 607 Victims Compensation Fund Corporation v Brown [2003] HCA 54; (2003) 77 ALJR 1797 West v Government Insurance Office (NSW) (1981) 148 CLR 62; [1981] HCA 38 Texts Cited: Lewison and Hughes, The Interpretation of Contracts in Australia (2012) Pearce and Geddes, Statutory Interpretation in Australia (8th ed, 2014) Category: Principal judgment Parties: The Owners – Strata Plan No 66375 (Appellant) David Russell King (First Respondent) Gwendoline Louise King (Second Respondent) Representation: Counsel: M Ashhurst SC with P Bambagiotti (Appellant) I G Roberts SC with L Shipway (Respondents)