Owner Judgment against Builder set aside at high cost to Owner

30/04/2015

In 2013 Arthur approached Richard Watson seeking advice as he had received a Judgment against him from a Purchaser of a property from him.  Arthur had previously built the home and sold it to the current Owner. 

The Owner as Purchaser from Arthur has a right to bring claims (subject to limitation periods and other matters) for damages in the event that the builder has breached the warranties set out in Section 18B of the Home Building Act (the Statutory Warranties). 

In this case the Purchaser from Arthur obtained advice including some advice from a Building Consulting and the Purchaser believed that he had a reasonable case against Arthur for claimed defects in the home that the Owner purchased from Arthur. 

The Owner instructed Solicitors and took action at the Consumer Trader and Tenancy Tribunal (CTTT) and obtained Judgment on 26 September 2013 that the builder (Arthur) pay the Owner almost $40,000 being the cost to rectify the alleged defects.  Further the Owner obtained an Order against Arthur that Arthur pay the costs (legal and Building Consultants) of the Owner in bringing the case. 

The first that Arthur knew of the proceedings was when he received a copy of the Judgment after the Hearing had been concluded.  Richard Watson following an approach by Arthur reviewed the file at the CTTT and ascertained the true position and the problems that had occurred in the administration of the case by the CTTT and the Solicitors for the Owner.  The Owner’s Solicitor proceeded on the basis that the documents had been properly served.  There was a real issue as to this aspect.

Following consideration of the matter an Appeal was lodged to the District Court of New South Wales.  Following further negotiations with the Solicitor for the Owner by consent the Appeal was allowed and an Order was made that the Owner pay the legal and administrative costs of Arthur in relation to the Appeal.

To be successful in the Appeal we had to prove on behalf of Arthur:

1. Firstly that there had been a denial of natural justice and procedural fairness, and

2. Secondly that there was a proper Defence to the claim that had been bought by the Owner.

Richard Watson engaged an appropriate Building Consultant to consider the matter and advising as to the cost of rectification.  The Building Consultant was satisfied that the cost of rectification of the claimed defective work would be less $4,400. 

Based on the investigation of Watson and Watson the Appeal was allowed and the initial Judgment was set aside by the District Court.

There were some negotiations, however the Owner would not agree to what was a generous offer of settlement made by Arthur to the Owner.

As the Owner ascertained the joy in obtaining Judgment was short lived.  Cautioned it is encumbered upon the Applicant Owner in this case and their Solicitors to ensure that the proceedings are carried out in a manner that are procedurally fair.  The failure by the Owners was at a significant cost to the Owners.

At Watson & Watson we take great care so that our clients are advised as to costs consequences so that such inappropriate action does not adversely affect our clients.

At Watson and Watson we look at trying to achieve a cost effective both financial and emotionally outcome for a party to any dispute. 

If you are in such a dispute please telephone Richard Watson to discuss the matter and obtain the cost effective outcome.