Multiple building defects do not result in more than one claim for breach of a statutory warranty
The NSW Court of Appeal has provided valuable insights into the procedural aspects of claims involving breaches of the statutory building warranties under the Home Building Act 1989 (NSW) in the case of Parkview Constructions Pty Ltd v The Owners – Strata Plan No 90018 [2023] NSWCA 66.
In an appeal from a decision of Justice Stevenson to allow the Owners Corporation to include three additional alleged defects in one claim for a breach of statutory warranties imposed in a contract by the Home Building Act, including one related to non-compliant façade materials, the Court (in addition to the initially pleaded defects) upheld the decision confirming there was only one cause of action.
The central question was whether separate defects gave rise to separate breaches of statutory warranties under section 18B of the Home Building Act for each defect or whether a cause of action for a breach with various defects constituted a single cause of action. The developer and builder advocated for the separate cause of action approach as it would render the Owners Corporation’s claim regarding the three new alleged defects statute barred.
Justice Leeming, delivering the judgment for the Court and dismissing the appeal, concluded that when a successor in title sues a builder or developer based on the statutory warranties in section 18B of the Home Building Act, the proceeding is considered a breach of a single contract against that party.
Furthermore, Justice Leeming noted that in general, where a claim for a breach of a statutory warranty is made before the limitation period expires, and it is amended after the limitation period by the introduction of additional deviations from the originally promised building work, there will not be a new cause of action as there is a claim in respect of breaches of the one contract.
However, the Court noted that this would not be the case if, for example, “a plaintiff sues a developer and then, out of time, applies to bring proceedings against the builder, because there is a different cause of action on a different contract.”
Builders and developers that deliver defective building works will be liable for all building defects where there is a claim for breach of a statutory warranty commenced against them before the limitation period expires, even where some of those defects are not claimed before the limitation period expires.
