Admitted in 2006, Richard is a highly experienced lawyer with experience in multiple areas of law, having had carriage and responsibility for the conduct and supervision of all kinds of litigation matters at all court and tribunal levels, including the High Court of Australia.
Richard has conducted various matters in commercial litigation including building and construction related disputes, corporation disputes, equity, and related matters. He has also had conduct of administrative law, environmental law, employment, criminal law, defamation and family law matters.
Richard has appeared pro bono for various individual clients and was a regular contributor to the NSW Bar Association’s Pro Bono Scheme during his 10 year tenure as a barrister.
Early in his career at the Bar, Richard was a headnote reporter for the Australian Corporations & Securities Reports Law Books and he has published and edited various literary works.
Richard was the treasurer for lawyers’ Thomas More Society for seven years, was the president of the Liberal Party’s Marsfield branch (Attorney General Greg Smith’s branch) during Mr Smith’s tenure, taught taxation law at undergraduate level, and started his working career as a software developer prior to coming to the law.
Richard has a flexible style of solving problems, who will try to find the most cost-effective solution to any legal problem and has always been recognised as a commercially minded lawyer.
Richard holds a Bachelor of Laws and a Master of International Law.
Richard has acted for large multinational NYSE listed clients including Detroit Diesel (Daimler) involving large scale projects such as power supply/generation and related services for the likes of Chevron, and the Mercedes-Benz Group. He has acted in relation to large scale technology and related firms, the likes of Fiserv and KKR (Kohlberg Kravis Roberts).
Richard is fluent in Farsi (Persian), Assyrian (Syriac/Aramaic) and has an understanding of Arabic as well as Latin.
1. In the recent case of The Owners – Strata Plan 89412 v Brookfield Residential Developments Australia Pty Ltd [2023] NSWSC 1420, his Honour Justice Stevenson refused to allow The Owners – Strata Plan 89412 (Owners) to amend its List Statement to further expand the ambit of its claim under the Design and Building Practitioners Act 2020 (NSW) (DBPA) against Brookfield Residential Developments Australia Pty Ltd (Brookfield).
2. The Owners are the owners corporation in respect of an apartment complex containing 55 apartments (Building).
3. The Owners contended that the Building contains defects, some of which allegedly constituted water ingress related defects.
4. The Building was built by a builder who had entered into a design and construct contract with a developer (Contract). Both the builder and developer were under external administration.
5. Brookfield was not a party to the Contract, however Brookfield was named as the superintendent in the Contract.
6. The Contract contained provisions that the superintendent:
a) act as the agent of the developer;
b) undertake usual superintendent functions of certification and determination, dealing with payment claims, issuing payment certificates and issuing a certificate of practical completion if appropriate; and
c) has certain powers to have defective works or material tested and/or rectified,
(collectively to be referred to as the Superintendent Provisions).
7. The Owners sought to amend their List Statement to expand their already pleaded claim against Brookfield for breaches of the duty of care set out in section 37 of the DBPA (Statutory Duty of Care).
8. The Owners further amendments included allegations that:
a) Brookfield engaged in “construction work” of the kind referred to in subparagraphs (a) and (d) of the definition of “construction work” in section 36(1) of the DBPA, namely “building work” (which includes residential building work as defined in the Home Building Act 1989 (NSW)) and “supervising, coordinating, project managing or otherwise having substantive control over the carrying out of” such building work; and
b) Brookfield was the superintendent in respect to the construction of the Building by reference to the Superintendent Provisions.
9. The Court noted that those allegations made by the Owners were not supported by any particulars that indicated that:
a) Brookfield, although listed as the superintendent in the Contract, did in fact undertake the role of superintendent in respect to the construction of the Building; and
b) Brookfield actually carried out building work or the supervision or coordination of building work, which would indicate that Brookfield undertook “construction work” of the kind referred to in subparagraphs (a) and (d) of the definition of “construction work” in section 36(1) of the DBPA.
10. The Court noted further issues with the Owners’ proposed amendments which included that the proposed amended List Statement particularised a table in a building defects report that set out a series of alleged defects, nominated breaches and rectification methodologies.
11. In respect to that table, the Court highlighted that it made no mention of acts or omissions by Brookfield.
12. The Court also noted that the proposed amendment which dealt with the “standard of care” that the Owners contended was to be exercised by Brookfield, had no factual basis as it simply contained a generic list of the obligations that Brookfield would have had in reference to the Contract.
13. The Court ultimately refused to provide the Owners with leave to amend its List Statement given what it held was a lack of particularisation and a failure to provide a factual basis for the allegations made.
a) It is not enough to simply plead that a person owed the Statutory Duty of Care or had a certain role in respect to a construction project;
b) The pleading of assertions that a person had a particular role or undertook “construction work” in relation to a construction project must be support by facts;
c) Interestingly, pleadings are to be deemed inadequate if they merely assert that a person had a particular role or undertook “construction work” in relation to a construction project based on document such as a contract;
d) Prior to commencing proceedings or amending a claim against a person in respect to the Statutory Duty of Care, a claimant should ideally ensure that there is enough documentation or information that can clearly point to a person’s involvement in respect to a construction project; and
e) Owners corporations, who are usually not fully aware of the events that occurred in respect to the construction of their schemes, should carefully consider whether they have enough information/particulars to make a claim against a person for breaches of the Statutory Duty of Care. If it is the case that there is not enough information on hand, documentation should be sought well before the expiry of limitation periods by way of preliminary discovery or through general requests for documentation.
15. A lasting impact of this case seems to be that all particularisation of claims in respect to the Statutory Duty of Care have to be appropriately vetted, and as part of that process, one should ensure that the particulars do not simply refer in general, to acts, or the conduct of a defendant or a potential defendant, but that they are targeted to specific acts which can be proven in fact.
16. However, this is at times extremely difficult to achieve because ascertaining and discovering such facts without proper and successful discovery is very difficult.
17. What complicates things further is that discovery in the Technology and Construction List of the Supreme Court of NSW is generally only allowed after the service of evidence, unless there are exceptional circumstances necessitating disclosure of documents.
18. It’s a kind of a “catch-22” situation for many plaintiffs in the Technology and Construction List of the Supreme Court, especially for owners corporations who were not involved in the construction process. An owners corporation may find itself in a situation where it is unable to plead its case properly because there are not enough particulars available, and yet to plead its case properly, discovery may need to be undertaken, which is in turn generally unavailable until the parties have served their evidence, unless there are exceptional circumstances necessitating disclosure of documents.
19. To overcome this “catch-22” situation, potential plaintiffs can make applications for preliminary discovery prior to the commencement of formal proceedings.
If you would like more information on the above or need any assistance, please contact us on 02 8329 6500 or excellence@kreisson.com.au
This communication is sent by Kreisson Legal Pty Limited (ACN 113 986 824). This article contains general information only and is not a substitute for considered legal, accounting or business advice. It does not take into account your particular circumstances, objectives, appetite for risk or financial situation. We are not tax or BAS agents or specialist tax advisers. You should not rely on this article without seeking detailed advice from discipline experts. The contents are copyright and should not be reproduced, re-published, adapted or used without the author’s permission
INTRODUCTION
1. The NSW Civil and Administrative Tribunal (Tribunal) has the power to make a money order or a work order in relation to building claims involving defective works.
2. A money order is an order that requires the payment of a sum of money to an aggrieved party for the costs to rectify defective works.
3. On the other hand, a work order is an order requiring a party to rectify its own defective works.
4. Pursuant to section 48MA of the Home Building Act 1989 (NSW) (HBA), the “preferred outcome” in building claims is that defects be rectified by the responsible party.
5. Accordingly, the Tribunal makes work orders more readily and regularly than it does money orders.
6. Despite the “preferred outcome”, the Tribunal can (and does) make a money order if it comes to the view that the preferred outcome in the resolution of a dispute is to make a money order instead of a work order. The Tribunal will make this decision based on evidence submitted by the parties.
7. The decision of Denmeade v Travers [2023] NSWCATCD 3 is an example of where the Tribunal made a money order instead of a work order.
CASE NOTE – DENMEADE V TRAVERS [2023] NSWCATCD 3
8. Denmeade v Travers [2023] NSWCATCD 3 involved an applicant landowner (Owner) seeking a money order against the respondent builder (Builder) for the payment of the costs of rectifying defective works by the Builder at the Owner’s property.
9. The Owner sought a money order instead of the Tribunal’s preferred work order, and provided the following evidence in that regard:
(a) The Owner had, without success, given the Builder:
(i) seven to eight opportunities to rectify the shower screens; and
(ii) four opportunities to rectify plaster works;
(b) The Builder had not acknowledged the defective sliding door installation and the incomplete back step;
(c) The Builder had not provided a certificate of practical completion nor certificates for waterproofing, glazing or plumbing, despite numerous requests;
(d) As a result, the Owner had lost faith in the Builder which meant that the Owner did not wish for the Builder to return to the property and rectify the defective works; and
(e) Moreover, the Builder caused the Owner to have an unacceptable level of anxiety and stress, which was confirmed by a medical certificate tendered by the Owner.
Correct assessment of damages
10. In relation to money orders, the Tribunal confirmed that the assessment of damages recoverable by an owner for the breach of a building contract due to the defective works was to be based on the cost to rectify the defective works.
11. This principle is subject to the qualification that the rectification work must be necessary to produce conformity and be the reasonable course to adopt.
Work order or money order?
12. In its judgment, the Tribunal recognised that the making of a work order was the preferred outcome in respect of matters which involved defective residential building works.
13. Furthermore, the Tribunal also recognised that personal animosity was not sufficient to displace the preference that a work order be made, as the test is objective and the flexibility of section 48O of the HBA allows, under a work order, for a builder to engage another party to carry out the required work on behalf of the builder.
14. However, the Tribunal held that a departure from the making of work orders was possible and noted that the following elements were relevant to the objective assessment of whether, in the alternative, a money order should be made:
(a) Relational breakdown;
(b) A builder’s conduct on unrelated projects;
(c) A builder’s capacity or skills to undertake rectification work;
(d) A builder’s ability to undertake rectification work based on qualifications (i.e. being appropriately licensed to carry out those works);
(e) A builder’s attitude to the standard of work done and willingness to return to site and complete rectification works; and
(f) The likelihood of further dispute arising between the parties, and whether a work order would be a timely or cost-effective resolution of any dispute.
15. Ultimately, the Tribunal accepted that the Owner’s evidence established an objective breakdown of the relationship between the Owner and Builder because of the Owner’s loss of confidence in the Builder.
16. Accordingly, the Tribunal made a money order instead of its preferred work order given that it held that the Owner had proven that, in all circumstances, the preferred outcome in that case was for a money order to be made.
KEY TAKEAWAYS
17. The key takeaways from the decision of Denmeade v Travers [2023] NSWCATCD 3 are as follows:
(a) The Tribunal prefers to make a work order over a money order in respect of matters which involve defective residential building works;
(b) However, the making of a work order is not mandatory;
(c) The Tribunal has the discretion to make a money order if it comes to the view that, in the circumstances, the primacy of a work order has been displaced by the making of a money order;
(d) The onus is on the applicant to tender objective evidence which would discharge that onus and enliven the Tribunal’s discretion to make a money order;
(e) The objective evidence needs to prove more than personal animosity between an owner and a builder (see paragraph 14 for more information regarding what the objective evidence may need to show);
(f) In relation to money orders, the assessment of the damages caused by defective works is to be based on the costs to rectify the defective works; and
(g) This principle as to damages set out in paragraph 15(f) above is applicable to most cases and will only be displaced in exceptional circumstances where it can be shown that ordering a party to carry out rectification works is not reasonable.
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CONTACT US
If you would like more information on the above or need any assistance, please contact us on 02 8329 6500 or excellence@kreisson.com.au
This communication is sent by Kreisson Legal Pty Limited (ACN 113 986 824). This article contains general information only and is not a substitute for considered legal, accounting or business advice. It does not take into account your particular circumstances, objectives, appetite for risk or financial situation. We are not tax or BAS agents or specialist tax advisers. You should not rely on this article without seeking detailed advice from discipline experts. The contents are copyright and should not be reproduced, re-published, adapted or used without the author’s permission
14 November 2023
Two laws were introduced in 2020 by the NSW Government[1] which had a significant impact upon the building and construction industry in NSW.
These were:
These laws relate to defective works and claims which consumers could pursue as against the practitioners and the residential building and construction professionals (DBP Act), as the well as to the grant of powers for the NSW Building Commissioner and authorised officers taking of action against defective building work.
One of the most important features of these laws was the classification of buildings and structures to which they referred.
Initially, these laws only applied to class 2 residential apartment buildings. However, from 3 July 2023, these laws also applied to class 3 and 9c buildings.
These laws are meant to ‘intertwine’ to ensure that the classification regime of the DBP Act, is to be enforced through the RAB Act.
In this short article we examine the classification relevant to these laws and briefly outline the steps which professionals need to take to be compliant.[2]
Buildings are classified in a particular way as set out under the ‘National Construction Code’ (NCC).
As stated by the the Australian Building Codes Board[3]:
[NCC] sets out the minimum technical requirements for new buildings (and new building work in existing buildings) in Australia. In doing so, it groups buildings by their use. These groups are assigned a classification which is then how buildings are referred to throughout the NCC[.] Building classifications are labelled ‘Class 1’ through to ‘Class 10’. Some classifications also have sub-classifications, referred to by a letter after the number (e.g. Class 1a).
Class 1 buildings are generally houses.
Class 2 buildings are generally apartment buildings and multi-unit residential buildings but can also include single storey buildings with sub-building areas, such as common carparks.
Class 3 buildings can include boarding houses, guest houses, hostels for backpackers, dormitory style accommodation, or ‘care-type’ buildings such as accommodation buildings for the elderly.
Related to these ‘care type’ buildings, are ‘Class 9c’ buildings which include:
“residential care buildings that may contain residents who have various care level needs. They are a place of residence where 10% or more of persons who reside there need physical assistance in conducting their daily activities and to evacuate the building during an emergency. An aged care building, where residents are provided with personal care services, is a Class 9c building.” [4]
As from 3 July 2023 DBP Act and RAB Act will now encompass the above building classes as detailed above. The laws apply specifically to the time of construction certificate (see further below).
Additionally, from 1 July 2024, existing class 3 and 9c buildings will also be subject to the alteration-and-renovation-works provisions of these laws.
There are of course consequences for practitioners resulting from all these changes.
One of the main issues which arises with these changes is the ‘time and cost’ problem for practitioners, where for example, regulated designs are required to be certified by properly qualified practitioners. (see further below in respect of ‘qualifications’, and the definition of a ‘design practitioner’).
Design practitioners who are engaged in preparing designs and completing design compliance declarations, need to register under the laws. A design practitioner is simply a person who is responsible for preparing regulated designs and declaring that the designs comply with the BCA and other relevant standards (as defined under section 3 of the DBP Act).
In turn “regulated designs” are designs which relate to a building element or the development of a performance solution on a regulated building (which as we have explained herein, constitute class 2, 3 or 9c buildings). The designs are called “regulated” because these are regulated under the DBP Act (see section 5 of the DBP Act).
Design practitioners who must be registered are those who either:
You will need to contact your respective professional association such as the Engineers Australia for details. Full details of registrations and who will qualify are available at Fair Trading NSW link: https://www.fairtrading.nsw.gov.au/trades-and-businesses/licensing-and-qualifications/design-practitioner-registration
Some practitioners cannot meet the qualification and experience requirements immediately and so a transitional period is allowed for them to attempt and fulfill the requirements by 2024. The period expires on 31 December 2023. These provisions are available for professional engineers and design practitioners (for both low rise and medium rise building design).
As part of the registration process, design and building practitioners are required to have completed two required modules which constitute the course “Navigating the Design and Building Practitioners (DBP) legislation” and “The value of Australian Standards”
Of course, the design practitioner needs to have the requisite qualification (e.g. engineering or architectural degrees), as well as the requisite skills, experience and knowledge to be meet registration requirements (Police check and age requirements also need to be met).
The New South Wales Court of Appeal has recently confirmed that building practitioners owe a statutory duty of care under the DBP Act for all building work, not just works undertaken in respect of Class 2 buildings. (Goodwin Street Development judgment, or “Judgment”).[5]
The prima facie effect of the amendments subject of this article seems to be that these extend the requirement of regulated designs to two other classes in addition to class 2, However the duty of care applies to all classes, and the Judgment makes it quite clear that under the DBP Act itself, the duty of care requirements extend to all classes and not just those regulated classes 2, 3 and 9c.
Given the foregoing, all practitioners need to be aware of the following.
Importantly, as Fair Trading NSW says, where the designs for building works which are to be commenced after 3 July 2023 “have been prepared before 3 July 2023 by a practitioner who is not eligible for registration, those designs will need to be reviewed by a registered design practitioner who is able to provide a Certificate for designs prepared before 3 July 2023. The Certificate allows the building practitioner to use the design for building work as though it was a regulated design.”[6]
Consequence of a failure to register or, contravention of the laws, or failure to meet any conditions of registration can be severe including hefty fines (for example up to a $66,000 for a corporation in respect of a contravention of a condition — see section 56 of the DBP Act) or suspension and even cancellation of the registration.
Accordingly, it is extremely important that proper registration steps are undertaken by the appropriate personnel in your organisation and at the appropriate time in light of the dates furnished above so that compliance is achieved.
Generally, the sooner, the better, especially as we near the end of 2023.
[1] NSW Fair Trading, “Changes to regulated buildings 2023”, at https://www.fairtrading.nsw.gov.au/news-and-updates/notices/changes-to-regulated-buildings-2023
[2] the term “professionals” or “Professionals” refers to, inter alia, builders, developers, design practitioners, and related entities, as well as other building and construction related professionals.
[3] Australian Building Codes Board, “Understanding the NCC Building Classifications”, at https://www.abcb.gov.au/sites/default/files/resources/2022/UTNCC-Building-classifications.PDF, last visited 10 October 23
[4] Australian Building Codes Board, “Understanding the NCC Building Classifications”, at https://www.abcb.gov.au/sites/default/files/resources/2022/UTNCC-Building-classifications.PDF, last visited 10 October 23
[5] See Roberts v Goodwin Street Developments [2023] NSWCA 5
[6] NSW Fair Trading, Op. Cit
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The contents of this article are not a substitute for legal advice. You should obtain legal advice appropriate for your specific circumstances.
