In the recent case of Stevenson v Ashton [2019] NSWSC 1689 the Supreme Court of NSW considered whether a home buyer could claim compensation for defects after settlement. In this particular case, one month after settlement and moving into his newly purchased 19th century terrace, Stevenson noticed that water was pooling in two points of the ceiling. Stevenson commenced proceedings against Ashton (the owner-builder of the property) in NCAT. As the proceedings were commenced more than 2 years after the work was completed, unless there was a major defect the right to compensation was not available. NCAT found that work to the balcony and cladding of the property that caused the leak was a major defect in that it failed to adequately waterproof the building. The tribunal awarded Stevenson $10,987.60 for the cost of rectification of the building and $31,330.09 for the cost of rectification of the cladding. On appeal to the Supreme Court, the Court stated that the consequences of the defect must have shown to have or probably have a consequence for the use or habitation of the house. Ultimately the Court found that there was insufficient evidence to prove that the defective cladding would cause or likely cause the building to become uninhabitable due to the fact that it had been in place for four years without water damage.  The NSWSC reversed the tribunal’s decision ruling that they were in error to find the defects to be major.

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