Construction Law Review

Construction Law Review – January

See below our Construction Law Review selected from AR Conolly’s Daily Bulletins covering Insurance, Banking, Construction & Government.

122 Pitt Street Pty Ltd v Universal 1919 Pty Ltd [2015] NSWCA 390
Court of Appeal of New South Wales
Bathurst CJ; Macfarlan & Meagher JJA

Contract – landlord and tenant – lessor leased part of building to defendant lessee – lease was for term of 10 years with option for further 10 years – lessee exercised option – lease provided for market review of base rent upon exercise of option to renew – lessor proposed new base rent – lessee engaged rent dispute mechanism under lease resulting in appointment of independent valuer – valuer determined market rent approximately $500,000 less than figure proposed by lessor – if valuer complied with lease by disregarding value of fitout parties accepted they were bound by determination – primary judge found valuer complied with lease – lessor challenged determination – whether primary judge erred in finding that “to take into account an obligation about ‘Fitout Work’ did not involve taking anything into account about ‘fitout’” – whether primary judge erred in finding valuer disregarded value of the “fitout” – held: nothing in clause of lease or elsewhere in lease to suggest “the Tenant’s Fixtures or fitout” included reference not only to premises’ condition at relevant time but also to future work likely to be carried – lessor did not establish valuer took value of future work into account – appeal and cross-appeal dismissed.
122 Pitt Street

Chan v Acres [2015] NSWSC 1885
Supreme Court of New South Wales
McDougall J

Negligence – damages – plaintiffs bought house from first defendant and former wife – before plaintiffs bought house they procured pre-purchase inspection report from second defendant – claim against second defendant settled – plaintiff claimed on basis of report they decided to buy house knowing of some defects but that after they moved in they discovered very serious defects, particularly in first defendant’s work – first defendant had engaged third defendant to prepare structural drawings – fourth defendant was Council – whether third or fourth defendants owed and/or breached duty of care to plaintiffs – whether first defendant breached statutory warranties – whether work defective – costs of rectification – apportionment – held: first defendant breached statutory warranties under Home Building Act 1989 (NSW) – third defendant did not owe plaintiffs a duty of care – Council as Principal Certifying Authority (PCA) owed duty of care to plaintiffs in performance of inspections and issuing final occupation certificate – duty of care coextensive with duty Council owed to first defendant under PCA Agreement – substantial allegations of breach of duty against Council proved – parties to bring in draft orders to give effect to reasons.

Kalabakas v Chubb Insurance Company of Australia Ltd [2015] VSC 705
Supreme Court of Victoria
McMillan J

Insurance – plaintiff own property on which home was constructed – plaintiff had insured the property with defendant for 7 December 2010 to 7 December 2011 – plaintiff renewed initial policy for 7 December 2011 to 7 December 2012 – dwelling and contents on property damaged by fire on 6–7 July 2012 – defendant declined plaintiff’s claim under renewed policy on basis of fraudulent misrepresentations and non-disclosures by plaintiff pursuant to s28(2)Insurance Contracts Act 1984 (Cth) – ss21(1), 26 & 28 – held: plaintiff’s failure to disclose four relevant matters to defendant was fraudulent and plaintiff’s misrepresentations to defendant were also fraudulent – defendant entitled to avoid renewed policy pursuant to s28(2) or to reduce its liability to nil pursuant to s28(3).