LANDMARK DECISION COUNCILS CANNOT ESCAPE LIABILITY FOR BUILDING DEFECTS
We have recently launched a successful case for an Owners Corporation of a small residential strata scheme against Lane Cove Council in a recent landmark decision of The Owners – Strata Plan No 151721 –v- Lane Cove Council.
Our client brought a claim against Lane Cove Council for numerous building defects. We argued that Council is a developer and can be held responsible for various breaches of the warranties implied by the Home Building Act 1989 (NSW). These warranties included warranties that our client’s building be constructed in a proper and workmanlike manner and using materials which are fit for purpose.
By way of background, Council had owned the land upon which the building was constructed. Council engaged a builder to construct the building and approved the development itself. After registration of the strata plan, Council sold the few lots in the strata scheme to various home owners. In the various contracts for sale, Council conceded that it is a developer for the purposes of the Home Building Act.
A few years after the building was completed, the owners became aware of significant defects affecting the common property. The Builder became insolvent. As a result, the Owners Corporation commenced proceedings against Council in its capacity as the developer.
Council tried to deny that it is a developer under the Home Building Act. Council argued that it is not an “individual, a corporation or a partnership” as defined in the Home Building Act. Instead, Council argued that it is a “body politic” and so, falls outside the definition of a developer for the purposes of the statutory warranties.
This matter came before a Senior Member of the NSW Civil and Administrative Tribunal, who found in favour of the Owners Corporation and dismissed Council’s argument, with an order that Council pays the Owners Corporation’s costs of that hearing. This is a very positive outcome for the home owners in this strata scheme. This decision may also apply to other owners in similar circumstances – please contact us for detailed advice if you feel that this decision may be of assistance to you.