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Brooks v Gannon Constructions Pty Limited

By October 23, 2017 No Comments
Brooks V Gannon Constructions Pty Limited

The Tribunal was asked to, amongst other things, determine whether rectification by the builder of the alleged defects, being the preferred outcome pursuant to s 48MA of the Home Building Act 1989 (NSW) (Act), was a presumption rebutted by the homeowner. The Tribunal at [64] provided that “The assessment about whether the preferred outcome should be ordered is an objective one and the Tribunal must weigh up the factors in each case and make the decision accordingly”.
The homeowner opposed the rectification order on a number of grounds including:

  • the builder did not comply with an earlier rectification order made by Fair Trading
  • the defects were extensive.
  • the relationship of the parties had broken down.
  • the homeowner said he ‘would be sick in the stomach’ if the builder had to come back to his house.
  • the homeowner had lost confidence in the builder’s ability to do the work.
  • the homeowner had serious doubts as to whether the builder had the financial capacity to complete the job  and the means to do it; and
  • the builder is aggrieved by the proceedings and lacks the necessary mindset to undertake the works in a workmanlike manner and there is a real risk of the matter being relisted and further delays and costs being incurred.

The builder’s position was that he should be allowed to return to complete the works and that the presumption contained in s 48MA of the Act has not been rebutted by the homeowner. In support, the builder submitted, amongst other things, that:

  • the builder had previously rectified defects to the homeowner’s satisfaction and all retention monies were returned to him.
  • the builder’s willingness to undertake the works was contained in written correspondence where he agreed to rectify 27 of the 30 items in the rectification order.
  • the reason why the defective works contained in the rectification order were not rectified by agreement was because of the commencement of the proceedings.
  • given the size of the project, the defects now complained of by the homeowner were not significant and the majority consisted of matters such as the underside of doors not being painted.
  • it would be a rare case that the Tribunal were to find that the parties’ relationship was not strained and that is insufficient to justify a monetary order. The builder refers to the case of Maiolo v Chiarelli (2016) NSWCATAP 81 where the Appeal Panel ordered rectification by the builder despite there being “considerable animosity between the parties”.
  • if the homeowner had concerns regarding the builder being under financial pressure it would seem a rectification order would be preferable as it would be cheaper for the builder to do the work himself, than to pay for another builder to do the work.
  • the builder is now more likely to take care to ensure the works are done well so as to avoid further disputes and further costs being incurred.

Whilst the Tribunal was not satisfied that the homeowner’s statement that he would feel ‘crook in the stomach’ was objectively a reason not to order rectification, the other factors weighed in support of a finding that the homeowner had discharged the preferred outcome presumption in s 48MA of the Act (being, rectification of the defective works by the responsible party).
Overall, the Tribunal ordered that a money order in accordance with s 48O of the Act was an appropriate order and ordered the builder pay the homeowner $105,836.57.