Can a Builder Return to Site to Undertake Rectification of Defective Work rather than pay Money to cover the Cost of Rectification by Others? Court and NCAT’s obligations under Section 48MA of the Home Building Act

14/12/2020

Watson & Watson act on behalf of many Owners and many Builders in relation to disputes as to defective work undertaken by a Builder in construction of a residential property.  Claims up to $500,000 are generally dealt by NSW Civil and Administrative Tribunal (NCAT).  There are hundreds of cases before NCAT dealing with the issue and possible claims by a Home Owner against a Builder for Orders relating to defective work. 

The case proceeds on the basis of the evidence.

The primary evidence in such a case by an Owner is:

1. Evidence from the Owner setting out the basis of the Contract with the Builder, claims by the Builder, payments and associated matters.
2. There are often issues as to whether the work that was undertaken by the Builder is defective.  In those cases, the usual evidence to support a claim is evidence from a Building Consultant who inspects the works and prepares the necessary report.  It is critical that the Building Expert be one that not only appears at NCAT often but also is generally accepted by the Tribunal.  At Watson & Watson Lawyers we are aware of many Building Consultants and their strengths and weaknesses.

Similarly, we act on behalf of Builders from time to time in relation to defending such claims.

One of the main questions that is not considered often enough by advisers, is the issue as to whether the Builder should be allowed back to undertake rectification of defective work and what is the approach of NCAT in this regard.  Usually by the time proceedings are commenced, the relationship has broken down as between the parties and often Owners and sometimes Builders do not wish to be any further involved.

However the Tribunal has an obligation under 48MA of the Home Building Act to consider whether the Builder should be able to return to undertake rectification of the defective work.  Further Section 48MA provides that the Tribunal must have regard to the principle that the rectification of defective work by the responsible person for example the Builder, is the preferred outcome.

In those circumstances, in particular on acting on behalf of the Owner who does not wish the Builder to return to the site, one needs to assemble and submit the appropriate evidence to enable a submission to be made to the Tribunal that in circumstances of that particular case notwithstanding the usual preferred outcome, the Builder should not be entitled to return to undertake rectification work.  Usually very little consideration is given by parties to proceedings as to this aspect and it is an afterthought submission at the end of the hearing. 

We have been successful in recent cases obtaining the outcome preferred by our client having regard to the evidence that has been provided as part of the evidence in the case.  The evidence needs to establish on a rational basis, why either the Builder should not be allowed to return to the site or for a Builder, the basis that the Builder should be allowed to return to the site.

There are numerous cases where a Money Order is made where circumstances were inappropriate for the Builder to return to the Site.  Justice Ball in the case of The Owners Corporation – Strata Plan 76674 v Di Blasio Constructions Pty Limited [2014] NSWSC 1067 at page 45 noted that:

“The question of what is reasonable depends on all the circumstances of the particular case.  One relevant factor is what attempts the Builder has made to repair the defects in the past and whether in light of the Builder’s conduct, the Owner has reasonably lost confidence in the willingness and ability of the Builder to do the work”.

This is a very general statement as to what is relevant.  What is really important is to have in evidence, the information and factual basis which will assist you in your submissions as either an Owner or Builder as to the Order which you seek.

At Watson & Watson Lawyers we are experienced and know the situations in which it is likely that NCAT or a Court will make one Order or another.

There are different views by different Members of the Tribunal as to what are the appropriate circumstances.  However as we have indicated, the best course is to have the appropriate substantive evidence.

If you find yourself in a situation in relation to a dispute between a Home Owner and Builder or as a subsequent Purchaser of a home which is found to be defective, please contact us.  At Watson & Watson our highly experienced Lawyers have conducted many cases at NCAT and other Courts dealing with these aspects.  Please contact Richard Watson Accredited Specialist Commercial Litigation stream of Building & Construction or his Personal Assistant Shereen DaGloria to discuss your matter relating to building and/or strata issues.

This is only a preliminary view and is not to be taken as legal advice without first contacting Watson & Watson Solicitors on 9221 6011.