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© Copyright 2011 Teys Lawyers Who’s Responsible for These Defects and How Do I Get Them to Pay? Webinar, 1 September 2011

Whos responsible for these defects and how do i get them to pay 1 september 2011

Dec 07, 2014


Economy & Finance

TEYS Lawyers

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  • 1. Whos Responsible for These Defects and How Do I Get Them to Pay? Webinar, 1 September 2011 Copyright 2011 Teys Lawyers
  • 2. Seven Things You Need to Know About Building Defects 1 2 3 Do you have home When did the defect Defects liability warranty insurance? become apparent? periods 4 5 6 O H S issues Lot v common Maintenance property 7 When should you get an expert? Copyright 2011 Teys Lawyers
  • 3. Sources of Defects Workmanship Design (Engineer / (Builder / Architect) Subcontractor) Has designer exercised Either not building reasonable skill, care Combina]on of according to the design and diligence Workmanship & or good building Design prac]ce (BCA, Australian Standards or other industry standards) Copyright 2011 Teys Lawyers
  • 4. Causes of Ac]on for OCs 1. Negligence Possible defendants Builder / subcontractor Designer (architect, engineer etc) Developer (in limited circumstances) Principal cer]fying authority (PCA) Strata manager Building materials supplier 2. Statutory warran]es Possible defendants Builder Developer 3. Other Copyright 2011 Teys Lawyers
  • 5. Relevant Limita]on Periods 6 years from the Negligence date the cause of ac]on accrues (s.14 Limita]on Act) Statutory 7 years a_er the comple]on of the Warran]es work (s.18E(1) HB Act) 10 years a_er date Building on which the nal occupa]on Ac]on cer]cate is issued (s.109ZK(1) EPA Act) Copyright 2011 Teys Lawyers
  • 6. Jurisdic]on 1. Consumer Trader and Tenancy Tribunal (Home Building Division) Applica]ons up to $500k Applica]ons about insurance claims must be lodged within 10 years of comple]on Must fall within deni]on of building claim in s.48A of Home Building Act Mandatory jurisdic]on for building claims 2. Supreme, District and Local Courts Copyright 2011 Teys Lawyers
  • 7. Case Study 1 Background Outcome OC approached TEYS Lawyers for OC of over 200 units leier of demand TEYS Lawyers advised need to Signicant water penetra]on issues determine defect (not describe it) Consultant engaged and invited OC independently retained expert builder to observe tes]ng. who described defect but not cause Rec]ca]on work iden]ed and es]mated at >$5m Builder rejected content of report Builder conceded responsibility and ci]ng wind-driven rain as cause agreed to rec]fy Outcome achieved in 6 months less OC wasted a year in the process than $10k in legal fees billed to date Copyright 2011 Teys Lawyers
  • 8. Case Study 2 Background Outcome OC of over 100 units OC approached TEYS Lawyers Consultant engaged and invited Signicant defects aec]ng many builder to observe tes]ng. units (cost es]mate circa $10m) Rec]ca]on categorised as type and cause Legal proceedings commenced by Prototypes for rec]ca]on devised another law rm claimed against and agreed with builder HOW policy TEYS Lawyers discon]nued Builder aiempted rec]ca]on, unnecessary proceedings. Deeds of was unable and engaged lawyer to seilement agreed with builder for defend claim rec]ca]on at his cost On-going legal spend on li]ga]on OC spent a year in the process reduced to $nil Copyright 2011 Teys Lawyers
  • 9. Home Warranty Insurance HWI Mark 1 1 May 1997 30 June 2002 HWI Mark 2 1 July 2002 30 December 2003 HWI Mark 3 31 December 2003 Present Copyright 2011 Teys Lawyers
  • 10. Managing Legal Risk Master Builders Royal Australian Assoc GCC 3 Circa Ins]tute of Architects 1980 CIC 1 1997 Master Builders Australian Australian Standards Australian Property Assoc Deacon 2 Australian Standards Standards AS AS 4300 1995 Standards Council PC1 1998/2005 AS4905 2002 4902 [D&C] [D&C] AS 2124 - 1981 1998 Very Very Contractor / Builder Owner / Principal Friendly Friendly Australian Australian Australian ABIC MW-1 Standards AS400 Standards Standards 2003 1997 AS 2124 - 1992 AS 2124 - 1986 Copyright 2011 Teys Lawyers
  • 11. Access Issues Access to Neighbouring Land Act 2000 Conveyancing Act 1919 (s.88K and s.177) Deeds (indemni]es, security, insurance, OHS, etc) Copyright 2011 Teys Lawyers
  • 12. Building and Construc]on Industry Security of Payment Act 1999 (NSW) Issue a Payment Claim Full payment is made prior to expiry of period in which a Payment Schedule can be issued whenever a contractual entitlement to make a progress claim arises, otherwise on the last day of the month PAYMENT PAYMENT PAYMENT PAYMENT PAYMENT PAYMENT 2 days no]ce of Failure to Issue a Payment Schedule Payment Schedule Issued Respondents steps Claimants steps Adjudicators steps inten]on to suspend within 10 days of Payment Claim indica]ng Scheduled Amount which is approved works before suspending (or less if contractually required) Or for payment and providing reasons as to why References to days in this owchart are references to business days. Scheduled Amount may be less than the Claimed This owchart demonstrates the payment mechanism set down by the Act Amount must be issued within 10 days of and should not be construed as legal advice. Payment Claim (or less if contractually required) NoMce of IntenMon to Apply Recover as a debt For AdjudicaMon due in Court Or giving further 5 days (2nd chance) to issue a Payment Schedule to be given within 20 days of expiry of due date for payment Scheduled amount must be paid by the contractual due date for payment otherwise , within 10 business days of the Payment Claim Schedule Amount Failure to Issue Payment Schedule Issued Failure to Pay Scheduled Amount 2 days no]ce of within 5 days of No]ce If less than For approved inten]on to suspend a Payment Schedule Or by the due date for payment under Claimed Amount part of Claimed within 5 days of No]ce the contract works before suspending Amount AdjudicaMon ApplicaMon AdjudicaMon ApplicaMon made within 10 days of made to determine en]tlement to AdjudicaMon ApplicaMon Recover as a debt expiry of 5 day 2nd chance balance, within 10 days of receiving made within 20 days of expiry due in Court Payment Schedule of due date for payment Or Adjudicator Accepts Appointment within 4 Days of AdjudicaMon ApplicaMon Being Made (or failing acceptance, a new Adjudica]on Applica]on can be made within 5 days of expiry of the 4 day period for accep]ng rst applica]on) Adjudica]on Response AdjudicaMon Response not permiied within 5 days a_er receiving Adjudica]on Applica]on, or 2 days a_er receiving no]ce of Adjudicators acceptance, whichever ]me expires later Payment within 5 days of determina]on unless later ]me determined by Adjudicator Adjudicator Determines Adjudicated Amount, due date for payment and applicable rate of interest within 10 days of accep]ng appointment to act as Adjudicator, unless the par]es agree to extend the ]me for determina]on Failure to pay Adjudicated Amount Debt recovery process (including process set File Adjudica]on Cer]cate as out in the Contractors Debts Act) Request Adjudica]on Cer]cate and give 2 days no]ce of inten]on to suspend works judgment for unpaid amount in Court Copyright 2011 Teys Lawyers
  • 13. Join our next webinar Join us for our next webinar at 4.00pm on 6 October 2011 How To Prevent Building Defect Li7ga7on Tearing Your OC Apart Reserve your seat now at: hips://www3.gotomee] Copyright 2011 Teys Lawyers
  • 14. About The Presenter Chris worked for many years in leading commercial construc]on law prac]ces ac]ng for government, developers and contractors in disputes in the building, transport infrastructure and resources sectors. He has been involved in all forms of dispute resolu]on including li]ga]on, arbitra]on and alterna]ve dispute resolu]on in a range of jurisdic]ons in Australia. In the last few years, he has brought his specialist construc]on industry knowledge to the strata sector and now only acts for owners corpora]ons in a range of disputes in various jurisdic]ons. TEYS Lawyers prac]ce na]onally in strata ]tle law represen]ng owners corpora]ons, bodies corporate and apartment owners. The rms prac]ce groups include building defects, management rights, strata community disputes, by-laws and rules and levy and fee collec]on. Subscribe for their free e-newsleier StrataSpace and nd out more about them at Copyright 2011 Teys Lawyers