Australia, July 14 -- New South Wales Land and Environment Court issued text of the following judgement on June 13:

1. The plaintiffs, Adrian and Letticia Di Lullo ('the Di Lullos') engaged JG King Pty Ltd ('the Builder') to build a house on the Di Lullos' property in a town in south-western New South Wales ('the property'). The house was completed in June 2017. Subsequently, elements of the house, including the roof, the wall bracing, the walls, wet areas, cornices, floors and fixtures have suffered damage because of significant movement in the house. The movement has been attributed to the slab on which the house is built, which is a waffle slab, becoming distorted in a process referred to as 'edge heave'.

2. In these proceedings, the Di Lullos allege that the Builder has breached statutory warranties provided for under s 18B(1) of the Home Building Act 1989 (NSW), has breached its contract with them, and has breached the duty of care imposed on it under s 37 of the Design and Building Practitioners Act 2020 (NSW). The Builder denies that it breached statutory warranties, breached the contract and/or breached the duty of care under s 37 of the Design and Building Practitioners Act 2020.

3. The Builder has brought a cross-claim ('the First Cross-Claim') against both Mr Enio Sciessere, the engineer who designed the slab for the Di Lullos' house pursuant to an agreement with the Builder, and against Newpoint Reinsurance Company Ltd ('Newpoint'), the reinsurer for General Professional Indemnity Ltd, which is allegedly in liquidation. The applicable version of the First Cross-Claim is the amended version of 18 May 2023. The First Cross-Claim needs to be considered only in the event that the Builder is found to be liable to the Di Lullos on at least one of the bases alleged. A claim was made against Newpoint under the insurance policy in force from 1 June 2021 to 1 June 2022.

4. Mr Sciessere has brought a cross-claim ('the Second Cross-Claim') against Newpoint seeking an order that Newpoint indemnify him against any liability that he may have arising out of the slab design. Mr Sciessere was the sole director and principal engineer of Enrik Engineering Pty Ltd ('Enrik'), which was the firm engaged by the Builder to design the waffle slab. Enrik is now in liquidation.

5. This judgment deals only with the liability issues raised by the claim and cross-claims. The plaintiff bears the onus of proof, in relation to its claim, on the balance of probabilities. The cross-claimants bear the onus of proof, in relation to their cross-claims, on the balance of probabilities (s 140 Evidence Act 1995).

6. At the hearing of the matter, oral evidence was given by Ms Di Lullo, Mr Di Lullo, Mr Andrew Simmie (Building Manager of the Builder), Dr Peter Redman and Mr Robert van Heusden (Geotechnical Engineering evidence, concurrently) and Mr Philip Xeros, Mr John Tamaressis and Mr van Heusden (Structural Engineering evidence, concurrently).

Facts

7. The Di Lullos purchased the property in October 2010. The Di Lullos engaged the Builder to construct the house and the parties entered into a contract on 31 August 2016. The contract was a contract to which the Home Building Act 1989 applies. In Schedule 3, the contract listed plans prepared by the Builder as the plans identifying the work to be completed by the Builder under the contract. The contract provided for 'standard inclusions', including (see CB p 226 and 228):

3. FOUNDATIONS and FOOTINGS:

Thermally efficient, engineer designed 'M' class concrete waffle pod slab (site specific).

...

25. EXTERNAL CONCRETE:

Plain concrete paving to porches, verandahs, porticos, and alfresco area (product specific - to suit Class 'M' soil conditions).

*Rest of the document can be viewed at: (https://www.caselaw.nsw.gov.au/decision/19761f7c0754bc632e3a6c24)

Disclaimer: Curated by HT Syndication.