The Owners – Strata Plan 94800 v Aushome Construction Pty Ltd & Anor [2025] NSWDC 143

Andrew Hales | Grace Black | Tiger Le

Key takeouts

• It is arguable that the District Court of New South Wales is empowered to make a work order under section 48O(1)(c) of the Home Building Act 1989 (NSW) (HB Act).

• This is where a claim that would otherwise have fallen within the jurisdiction of the New South Wales Civil and Administrative Tribunal (NCAT) (being a building claim for less than $500,000), is instead brought in the District Court.

Facts

The first defendant, Aushome Construction Pty Ltd (builder) engaged the second defendant, South Summit Group Pty Ltd (developer) to provide construction works on a residential apartment building. The plaintiff, The Owners – Strata Plan 94800 (owners corporation), as a successor in title to the developer, was entitled to the benefit of the statutory warranties in section 18B of the HB Act. The owners corporation commenced proceedings in NCAT claiming relief arising from breaches of warranty resulting in major defects in the construction works.

The proceeding was transferred to the District Court, which was required to determine whether the appropriate relief was a work order or an order for damages. The owners corporation sought a work order and an order for damages as alternative forms of relief. The defendants initially denied that the District Court had power to issue a work order but subsequently argued that only a work order was appropriate.  

Decision

The District Court held that an order for damages was the most appropriate relief.

In reaching its decision, the Court considered, but was not ultimately required to decide, whether it is empowered to make a work order under section 48O of the HB Act. The Court noted that if it had been required to make this decision, it is arguable that it is empowered to make a work order under section 48O(1)(c) of the HB Act, where a claim that would otherwise have fallen within NCAT’s jurisdiction is instead brought in the Court. In reaching this view, the Court considered that:

• for the purpose of section 48A of the HB Act, a ‘building claim’ may encompass both a work order and a monetary claim (including for damages);
• in accordance with section 48K(1) of the HB Act, NCAT has non-exclusive jurisdiction for building claims for less than $500,000;
• in accordance with section 48L of the HB Act, NCAT, and not a court, is the preferred forum for building claims for less than $500,000;
• in accordance with section 48O of the HB Act, NCAT, in determining a building claim, is empowered to make certain orders it considers appropriate, including a work order;
• although section 48O of the HB Act does not expressly refer to a ‘court’, the power to be exercised under that section should be understood in the context of section 48MA of the HB Act;
• section 48MA of the HB Act contemplates that when determining a building claim, a ‘court’ or tribunal is to have regard to the principle that rectification of the defective work is the preferred outcome; and
• although ‘court’ is not defined in the Act, in circumstances where the Court has concurrent jurisdiction with NCAT to hear building claims for less than $500,000 pursuant to section 48K(1) of the HB Act, the District Court (even if it is not the preferred forum) could be considered a ‘court’ for the purpose of section 48MA of the HB Act.

The Court distinguished its view from that of Ball J in Ippolito v Cesco [2020] NSWSC 561, where Ball J stated that the Supreme Court of New South Wales is not empowered to make a work order under section 48O(1)(c) of the HB Act, by highlighting that the HB Act expressly contemplates that there are circumstances in which the District Court, but not the Supreme Court of New South Wales, has concurrent jurisdiction with NCAT.

The Court granted the owners corporation an order for damages rather than a work order, considering this is to be appropriate in circumstances where the extent and seriousness of the defects undermined trust in the defendants’ ability to properly perform the rectification works.