The NSW Civil and Administrative Tribunal has held a builder and developer jointly and severally liable for a number of proven defects in a residential building’s mechanical ventilation and air-conditioning systems. The decision also provides guidance on the evidentiary standard required before the Tribunal will make orders requiring defective work to be rectified.
The dispute involved claims by The Owners of Strata Plan 102171 against Ceerose Pty Ltd as builder and Zone Q Milsons Point Development Pty Ltd as developer in relation to mechanical works undertaken between May 2019 and November 2020. An interim occupation certificate was issued on 6 November 2020. The proceedings were commenced within the two-year limitation period under s 18E of the Home Building Act 1989 (NSW), so the Owners were not required to establish that the defects were ‘major defects’ to pursue their claims.
The Tribunal accepted that several defects were established, including issues with duct installation, air filtration, condensate drainage, fan coil unit access, and corrosion affecting rooftop equipment. However, it declined to make rectification orders in respect of some alleged defects where the evidence was insufficient, no breach was proven, or the proposed remedial works were not supported by compliant design documentation. It confirmed that where the Building Design and Practitioner Act 2021 (NSW) applies, compliant design documentation must be provided before rectification orders will be made, otherwise the scope of work is too uncertain. The Tribunal also refused to order rectification where the proposed works were disproportionate or unlikely to deliver meaningful benefit, even where minor non-compliances were identified.
The builder’s cross-claim against a subcontractor was dismissed as it was filed out of time and failed to establish defects meeting the ‘major defect’ threshold. The developer’s indemnity claim against the builder also failed due to ambiguity in the contractual wording and the operation of the statutory warranty regime.
The Tribunal ultimately ordered the builder and developer to rectify the proven defects by March 2026, reinforcing that rectification orders will only be made where claims are clearly supported by sufficient evidence and properly defined scopes.