Residential Focus – Lexology

Failure to be properly authorized to perform work may result in a serious breach, giving rise to termination and damages.

In this edition, we look at a recent Tribunal decision, in which a builder was found guilty of a serious breach of contract by failing to ensure that he and his subcontractors were duly authorized to carry out the work.

The ruling reminds builders to ensure they only carry out work that they are permitted to carry out under the Home Building Act 1989 (NSW)(Law).

Background

In December 2020, the owner entered into a contract (Contract) with the builder to carry out work in the property. The contract was partly written and partly oral. The written component of the contract included text messages. The contract price was $108,000.

The owner alleged that in March 2021, the parties entered into an additional written contract for additional work.

The Tribunal found that the total price of the two contracts was $143,200 and that the owner paid the builder $120,000 in connection with these contracts.

At all material times, the builder held a license under the law which authorized it to carry out painting and decorating work only. The scope of work under the contracts exceeded this authority.

In May 2021, the owner discovered the building permit post. The owner asked the builder to stop work on the property.

The builder admitted that the landlord told him to stop work and claimed that the landlord unlawfully terminated the contract. The builder claimed that the owner’s conduct constituted a repudiation of the contract. The builder claimed to have accepted the repudiation and terminated the contract.

The owner claimed that the builder terminated the contract by agreeing to perform work under the contract for which he had no license under the Act.

According to section 12 of the law, insofar as it relates to the builder, “an individual may not carry out residential construction work or specialized work, except as the holder of a contractor’s license authorizing the holder to undertake to do this work. .”

The owner’s claim related primarily to reimbursement of the consideration it had paid to the builder. The builder was claiming unpaid work.

The written elements of the contract were in Mandarin and the requirements of the law regarding the nature and form of the contracts were not respected. The parties’ translations of the contract differed in some respects.

Findings of the Tribunal as to repudiation of the builder

The Court concluded that the builder had seriously breached the contract, which was sufficient to authorize the owner to rescind.

Although the requirement for the builder to hold an appropriate license was not an express term of the contract, it was implied under the statutory warranties contained in section 18B(1) of the Act, in particular the guarantee that “the work will be carried out in accordance with and will comply with this law or any other law”.

In this regard, section 21(1)(a) of the Act only authorized the builder to contract to carry out the residential construction work that was described in his contractor’s license when it was issued. , namely decoration and painting. In addition, section 12 establishes an offense under the Act if a work is not within the authority conferred by the permit.

It was ruled that the owner was entitled to damages to rectify any faulty work done by the builder before May 7, as well as damages for the cost of completing work not then completed by the builder .

Carry

Deviating from your license category is not only an offense under the Act, but has serious consequences under your contract, even if it is not an express condition that proper authority is held.

In this regard, it is not enough to have a license, the scope of authority and the scope of work must align.

Authors: Christine Jones and Nicholas Achurch

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Published – articles, documents, reports

Construction safety blitz on both sides of the border WorkSafe Victoria and SafeWork NSW are partnering to help employers and trades in Mildura and Buronga reduce the risk of falls, crystalline silica dust and other construction safety hazards. Learn more here.

Australian Building and Construction Commission – Industry Update August 2022 The ABCC has released its monthly industry update, with this month’s edition focusing on significant building code changes, removal of WRMP requirements and contentious issues the Commission is in involved. Read the August 2022 issue here.

Case

YTO Construction Pty Ltd v Bhatt [2022] NSWDC 348CONSUMER LAW – misleading or misleading behavior – whether the statements were misleading or misleading – whether the statements made to an arbitrator were also made to the plaintiff – whether the statements were made in commerce – whether the defendant made the statements – whether the defendant was involved in making the representations – whether the plaintiff suffered any loss or damage as a result of the representations

Rengasamy v Chief Commissioner of State Revenue [2022] NSWCATAD 272TAXES AND FEES — Grant for first owner (new houses) — substantially renovated house

Wong vs. Novakovic [2022] NSWSC 1072CONTRACTS – Unfair contracts – Contracts Review Act 1980 (NSW) – Whether the contract is unfair in the circumstances at the time the contract was made – The contract is not unfair in the relevant sense although the cross-plaintiff suffered some pressure to sign it. POSSESSION – Authorization to issue writ of possession – Authorization granted.

Sillitoe v Fair Trade Commissioner [2022] NSWCATAD 263HOME Building Act – if evidence establishes a wide range of building construction work experience – if experience is industry relevant – Individual Contractor License – General construction work – if evidence that work performed can be verified by witnesses who are not supervisors

O’Loughlin v Fair Trade Commissioner [2022] NSWCATAD 281ADMINISTRATIVE LAW – administrative review – license – contractor license approved – restoration of authority – if non-renewal due to inadvertence – if fair and equitable to allow restoration of authority – if applicant meets requirements of issuance of the license – application of the instrument – qualifications

Life Structures Pty Ltd v Burton [2022] NSWCATAP 272BUILDING AND CONSTRUCTION – Does Section 18G of the Home Building Act 1989 (NSW) operate to void or reduce a contractual provision?

Legislation

New South Wales Protection of the Environment Operations (Clean Air) Amendment Regulation 2022 (2022-468) – issued LW August 19, 2022 Environmental Planning and Assessment Amendment (Evoided Land) Regulation 2022 (2022-460) – issued LW August 17, 2022 Electricity Infrastructure Investment Amendment (Governance and Fees) Regulation 2022 (2022-465) – published LW August 19, 2022 Environmental Planning and Assessment Amendment (Housing Supply) Regulation 2022 (2022-448) – published LW August 12, 2022 Protection of the Environment Operations (General) Regulation 2022 ( 2022-449) – issued LW August 12, 2022 Workers’ Compensation (Dust Diseases) Amendment (Scheduled Diseases) Regulation 2022 (2022-455) – issued LW August 12, 2022

Environmental planning instruments Nambucca Local Environmental Plan 2010 (Amendment No 27) (2022-471) – published LW August 19, 2022 Parkes Local Environmental Plan 2012 (Amendment No 8) (2022-472) – published LW August 19, 2022 State Environmental Planning Policy (Biodiversity and Conservation ) Amendment (Strategic Conservation Planning) 2022 (2022-461) — published LW 17 August 2022 Wollongong Local Environmental Plan 2009 (Amendment No 52) (2022-473) — published LW 19 August 2022

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