Crack in the wall of a home

Defects Claims

In The Owners SP 76841 v. Ceerose Pty Ltd, the Supreme Court recently refused an Owners Corporation’s application to amend its claim to add a substantial defect that had not previously been notified to the builder and developer.

The case is a reminder that a claim based on breaches of the statutory warranties incorporated by section 18B of the Home Building Act is a single cause of action and defects are particulars of that claim.

It also reminds claimants that particulars can be added to a claim if the warranty period has expired, but there remains an argument whether those particulars are “out of time”.

Importantly, if the 10 year limitation period (section 109ZK of the Environmental Planning and Assessment Act – the long stop limitation) has expired, the court is likely to refuse leave to add new defects if the defendant has thereby lost a right to bring a viable cross-claim against a sub-contractor, consultant or certifier.

Clearly, this is a lesson to homeowners, Owners Corporations, strata managers, legal practitioners and building consultants to ensure that defects are comprehensively assessed at the earliest opportunity and, when proceedings are commenced in court, every effort is made to ensure that all defects are properly identified and included in the Application, Statement of Claim or List Statement.

Sachs Gerace Broome

sachs@sglawyers.com.au
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