Oxford (NSW) Pty Ltd v KR Properties Global Pty Ltd trading as AK Properties Group ABN 62 971 068 965 (No 3)

I published my principal judgment on 6 April 2023. [1] I published a further judgment on 21 June 2023. [2]

I shall use the same abbreviations here.

An issue in the proceedings was whether the Owners were entitled to Hungerfords v Walker [3] damages arising from the interest they incurred on borrowings as a result of the works not being completed by the date of practical completion under the Contract: 4 July 2017. The Owners claimed such damages against both the Builder and Mr Kazzi.

In the principal judgment, I held that the Owners were entitled to such interest against the Builder from 20 March 2019. [4]

However, I did not deal with the Owners’ claim for Hungerfords damages against Mr Kazzi.

After the principal judgment was delivered, the Owners raised this point and invited me to reconsider it.

In that regard, in my second judgment I said:

However, as the Owners have now pointed out, in expressing those views I overlooked the fact that, during the hearing, it was accepted on behalf of Mr Kazzi that he had been in breach of his duty under s 37 of the Design and Building Practitioners Act 2020 (NSW) (“the DBP Act”) in relation to the defective works that I described in the principal judgment as “Boundary Encroachments” [9] and “Concrete Strength”. [10]

Thus, in closing submissions Mr Lynch SC and Ms Cameron, for the Builder and Mr Kazzi, submitted, in relation to the Owners’ claim against Mr Kazzi under the DBP Act:

Further, in closing oral submissions, I had this exchange with Mr Lynch:

In the principal judgment, I found that the Owners had not proved what damage they had incurred in rectifying those two defects.

In the principal judgment I also said: [11]

What I did not record was that, not only had the Builder admitted a breach of its duty in respect of those two defects, but, as I have set out, so had Mr Kazzi.

The precautions necessary to be taken by the Builder in relation to Boundary Encroachments and Concrete Strength were the subject of this evidence from Mr Mahedy:

Each of these matters was developed in the Owners’ closing submissions.

Mr Kazzi’s admission of his breach of duty necessarily carried with it an admission that he had not caused the Builder to take these steps, and thus an admission of “how it is said” [14] that he was negligent.

The evidence revealed what the consequences were of Mr Kazzi’s admitted breaches of his duty under s 37 of the DBP Act.

That evidence was summarised in a schedule attached to Mr Horowitz’s submissions of 5 July 2023. A copy of that schedule is attached to these reasons. It was submitted on behalf of Mr Kazzi that the schedule should be “disregarded” because it was “not provided during the hearing”. But the schedule does no more than summarise evidence that was adduced at the hearing.

The evidence summarised in the schedule shows that the work necessary to rectify the Concrete Strength defect commenced on 17 July 2019 and was not complete until 1 December 2019.

As to the Boundary Encroachments defect, the evidence summarised in the schedule shows that the necessary work commenced on 30 May 2019 with demolition of the western pergolas encroaching on the Council land fronting Noble Street and was not concluded until an easement from Mr Kazzi over his land to the north was registered in July 2020. Mr Mahedy gave evidence that although practical completion of the building works occurred in late 2019, he was unable to register the strata plan or obtain an occupation certificate for the development until mid-2020, because of the encroachment over Mr Kazzi’s property. [15]

Thus, the Owners were correct to submit that those defects alone caused the Owners to continue to incur interest on their borrowings beyond the date of practical completion, until July 2020.

In my principal judgment, I held that the Owners were entitled to Hungerfords interest from the date they demanded the Builder to resume work: 20 March 2019. Although the work necessary to rectify the Concrete Strength and Boundary Encroachments defects commenced slightly later (30 May 2019 for the Boundary Encroachments defect and 17 July 2019 for the Concrete Strength defect), both defects existed when the Owners demanded the Builder resume work. In those circumstances, I see no reason why Hungerfords interest as against Mr Kazzi should not also commence on 20 March 2019.

The formal order that the Owners seek, in these circumstances, is that I “recall” pars 9 to 14 of my 21 June 2023 judgment. I do not think that is necessary. The reasons in this judgment will speak for themselves.

I will now invite submissions as to costs, as to any further matters requiring determination and as to the orders necessary to finalise the proceedings.