The Owners – Strata Plan No 83297 v Eastern Construction Group Pty Ltd [2016] NSWSC 387

In the absence of evidence to the contrary, proof of a contract to carry out building work, coupled with the self-evident fact that the work was carried out, supports the conclusion that the work was carried out by the entity contracted to do it. Section 18D of the Home Building Act 1989 (NSW) (Home Building Act) provides that a successor in title may rely on the statutory warranties implied under section 18B of the Home Building Act in every contract to do residential building work.

Eastern Construction Group Pty Ltd (builder) entered into a contract with a developer to build a residential complex which was subsequently sold to The Owners – Strata Plan No. 83297 (owners corporation). The owners corporation sued the builder for breach of statutory warranties implied under the Home Building Act 1989 (NSW) for defective building work.

The court held that the builder had breached the statutory warranties implied by section 18B of the Home Building Act and awarded damages and interest in the sum of $2,290,347.98 and costs to the owners corporation.

McDougall J held that, in the absence of evidence to the contrary, proof of a contract to carry out building work, coupled with the self-evident fact that the work was carried out, supports the conclusion that the work was carried out by the entity contracted to do it. This conclusion was further confirmed by a rectification order issued by the Department of Fair Trading to the builder and the existence of an insurance certificate in favour of the builder.

His Honour further held that the work was self-evidently residential building work for the purposes of the Home Building Act and that its section 18D operates to extend the statutory warranties implied by section 18B of the Home Building Act to the owners corporation as a successor in title. It follows that the owners corporation was entitled to rely on the statutory warranties in a claim against the builder.