Renewal proceedings in building disputes in NCAT, what does it mean for Builders?
What is a renewal proceeding?
In NSW, the New South Wales Civil and Administrative Tribunal (NCAT) has the power to hear and determine applications made under the Home Building Act 1989 (NSW) (HBA) regarding disputes in residential building work up to the amount of $500,000. In this article we will use the Owner/Builder relationship as the example.
THE FIRST PROCEEDINGS AND WORK ORDERS
In 2014, the HBA was amended to incorporate a preference for the builder to be afforded an opportunity to rectify defective works or complete works that remained outstanding under the Contract. This preference resulted in the NCAT making numerous work orders requiring the builder to return to the site and rectify the found defects (Works Order).
A Work Order will usually contain:
- the scope of works to be undertaken; and
- the time for the works to be completed (Specified Period).
The NACT can also include any other order the Tribunals sees fit, such as a requirement for access, or that a building inspector inspect the works.
The Work Order will also include a right for the party in whose favour the Order has been made (i.e Owner in this example) to renew proceedings. The usual position is that if the obligations in the Work Order have not been complied with before the Specified Period expires, the party in whose favour the order was made can make a renewal application.
RENEWAL PROCEEDINGS IN NCAT
A renewal application is commenced in accordance with Clause 8(1) and (2) in Schedule 4 of the Civil and Administrative Tribunal Act 2013 (NSW) (the CAT Act). It must be made within 12 months of the end of the Specified Period if there is non-compliance.
The renewal application will be determined by NCAT either:
- Making any other appropriate order under the CAT Act or HBA as it could have made when the matter was originally determined; or
- Refuse to make such (requested) order by the party seeking relief.
What does it mean for builders?
The usual position in renewal proceedings is that the owner will claim damages to rectify defective or incomplete work as a result of the builder not complying with the original orders.
To defend a claim in renewal proceedings the builder would usually need to show that either:
- The work has been rectified and the now claimed defects or incomplete works are different to the Work Order works; or
- The owner denied the builder proper access to do the works (not unusual in these circumstances);
- That the owner has not been compliant with any obligations under the Work Order; or
- Some other reason that allows to builder to show why they did not complete the works required under the Work Order.
The builder will also be required to put on quantum evidence as to the cost of completing or rectifying the defects.
Often there is a dispute as to the obligations in the Work Order, which means the form of the work order must be sufficiently clear between both parties. If you have any reason to dispute the content of the Work Order, contact us immediately.
How to avoid renewal proceedings
The simplest way to avoid renewal proceedings is to comply with the Work Orders, however, this is often difficult or impossible. In many cases, the relationship between builder and owner has entirely broken down, and there is no longer a working relationship. Despite builders best intentions, access is denied, payments (if required) aren’t being made and instructions aren’t being provided.
If this is occurring, contact us now to help assist you to resolve the dispute. Without the proper documentation and compliance, defending any claim for damages in renewal proceedings is very difficult.
If you have any questions about renewal proceedings or its application to your claim, please do not hesitate to contact Morrissey Law & Advisory.
Disclaimer: This publication by Morrissey Law & Advisory is for general information and commentary only and should not be considered or relied upon as legal advice. Formal legal advice should be sought in relation to any matters or transactions that may arise in relation with communication.
 Clause 8(1) and (2) in Schedule 4 of the CAT Act.
 Clause (8)(5), Ibid.