Strata Plan 92183 v Samdora Pty Ltd

These proceedings are brought by the plaintiff, Strata Plan 92183, alleging defective residential building work in relation to nine town houses located in Mangerton (the property).

Samdora Pty Ltd (Samdora), was the builder of the property. It has been deregistered. The fourth defendant, Mr Ghassan Nassif, was the sole director and shareholder of Samdora.

The second defendant, 3173 Pty Ltd, was the developer of the property and is the owner of four lots in the property (lots 2,3,7 and 8). The fifth defendant, Mr Elie Chahwan, was the sole director and shareholder of 3173.

The third defendant, MS Noun Construction Pty Ltd, has also been deregistered. Its director was the sixth defendant, Mr Omar Noun, against whom judgment was entered on the first day of the hearing.

Because of the deregistration and settlement against Mr Noun, the proceedings are now confined to the plaintiff’s claim against 3173, as the developer, and Mr Chahwan, its director, and Mr Nassif personally as the nominated supervisor of the original works as director of Samdora.

The proceedings were not straightforward. An initial issue was with whom and on what terms the plaintiff had entered into a settlement agreement of NCAT proceedings against Samdora and 3173. The Court was then required to consider a number of specific alleged defects in relation to the claims against the remaining defendants. Those claims related to both the original works and repair works carried out purportedly in performance of the settlement agreement.

Insofar as quantum is concerned, there were fundamental methodological differences between the parties’ quantity surveyors. This gave rise, in my view, to a real risk of either under or overcompensation of the plaintiff. The parties ultimately accepted my suggestion that the quantum to which the plaintiff may be entitled should be determined separately and after the determination of all other issues in the proceeding, on the basis that an actual quotation for the work to be undertaken would be obtained in order to provide a reliable guide for the amount of damages (if any) that would be awarded.

For the reasons which follow, the Court’s conclusions may be summarised as:

Mr PA Horobin of Counsel appeared for the plaintiff. Mr M Klooster of Counsel appeared for 3173 and Mr Chahwan. Mr I Chatterjee of Counsel appeared for Mr Nassif.

In 2018, the plaintiff had commenced the NCAT proceedings against Samdora and 3173 under the HBA. Those proceedings were ultimately settled by the plaintiff withdrawing the NCAT proceedings.

In answer to the claims against them in these proceedings, 3173 and Mr Chahwan contended that they had a complete defence because the settlement agreement included a release. The plaintiff contended that the release was not part of the settlement agreement, and that pursuant to that agreement Samdora and 3173 were to undertake certain specified works by way of rectification. 3173 also contended that, in any event, while it was formally a party to the settlement agreement, it had no obligation to do anything under the settlement agreement.

It was common ground that the content of the settlement agreement was to be determined objectively by reference to correspondence that had passed between the parties’ solicitors. In relation to the NCAT proceedings, the plaintiff was represented by Chambers Russell Lawyers and Samdora and 3173 were represented by Nightingale Lawyers. It is necessary to set out the relevant correspondence in some detail.

On 13 November 2018, being shortly after the NCAT proceedings were commenced, Ms Hanna Ayoub of Nightingale wrote to Mr Paul Jurdeczka of Chambers, including:

There was no response to that letter in evidence.

On 18 January 2019, Ms Ayoub emailed Mr Cameron Wilson of Chambers:

On 25 January 2019, Mr Jurdeczka responded to Ms Ayoub attaching a draft deed of settlement. Mr Jurdeczka’s email included:

The parties to the proposed deed of settlement were the plaintiff, Samdora and 3173. It referred to “Agreed Works” as “the scope of works at Annexure “A” to this Deed”, but did not have any scope of works attached.

The draft deed of settlement included these terms:

3173 had no express obligations to perform any works under the draft deed of settlement.

Although dated 13 November 2018 (and not to be confused with the letter set out at [13] above), it was common ground that it was by a letter that should have been dated 3 February 2019 that Ms Ayoub responded to Mr Jurdeczka. The letter was marked “Without prejudice save as to costs” and included:

Attached to the letter was a schedule of works prepared by reference to a report known as the Acumen Report. The preface to the schedule of works stated:

By letter marked “Without prejudice save as to costs” and dated 21 February 2019, Mr Jurdeczka replied to Ms Ayoub, including:

The proposed orders referred to in the letter included:

The next day, 22 February 2019, Mr Jurdeczka emailed Ms Ayoub:

The preface to that Annexure A stated:

By letter dated 19 March 2019 and marked “Without prejudice save as to costs”, Ms Ayoub replied to Mr Jurdeczka, including:

By letter dated 27 March 2019 and marked “Without prejudice save as to costs”, Mr Jurdeczka replied to Ms Ayoub, including:

On the same date Mr Jurdeczka wrote to the Registrar of NCAT:

On 28 March 2019, NCAT notified Nightingale:

As Samdora has been deregistered, the essential dispute in relation to the settlement agreement was whether 3173 had any liability in relation to the work to be undertaken under that agreement.

3173 submitted it was not liable under the settlement agreement for two reasons:

I note in passing that the plaintiff’s further amended technology and construction statement (FATCLS) did not plead a liability in 3173 under the settlement agreement of the kind it alleged at the hearing. Nevertheless, that was the case which 3173 met. The pleaded allegation (see paragraph 54 of the FATCLS) was that the plaintiff, Samdora and 3173 reached agreement “to resolve the NCAT proceedings by [Samdora] doing certain repair work specified in that agreement”. No promise by 3173 that Samdora would carry out the work is pleaded as a term of the settlement agreement.

The most convenient way to deal with the parties’ contentions is to set out what the Court makes of the stages in the correspondence between their solicitors.

As a preliminary point, it should be noted that the correspondence between the solicitors is not perfectly consistent insofar as any distinction being drawn between Samdora and 3173. That lack of consistency extends to the uses of the word “clients” and “client’s” and “clients’”. Nevertheless, I am satisfied that viewed objectively, the context sheds dispositive light on where that distinction is of some importance.

A convenient contextual starting point is the email of 25 January 2019 (see [16] above) in which Mr Jurdeczka writes to Ms Ayoub “We refer to your email of last Friday, and confirm our client also wishes to resolve the matter by way of the builder doing repairs on reasonable terms, and not have to prosecute the proceedings.” (emphasis added).

It will be recalled that Mr Jurdeczka’s email attached the draft deed of settlement (see [18] above). Consistently with Mr Jurdeczka’s observation which I have set out in the previous paragraph, the draft deed of settlement unequivocally imposes the obligation to carry out the agreed works on Samdora. The various ancillary provisions concerning the works are also based upon Samdora and only Samdora having that liability. The draft deed of settlement imposes no express positive obligations on 3173, including whether by way of warranty or otherwise that Samdora would in fact carry out the agreed works.

Ms Ayoub’s letter of 3 February 2019 (see [20] above) attaches “our client’s proposed schedule of works”. While the schedule is itself headed “3173 Pty Ltd and Samdora Pty Ltd” it is clearly a document through which Samdora is speaking as the builder, given that it contains headings “builder’s observations of items in Acumen lists” and “builder’s comments”. Insofar as those comments contain expressions such as “we will simply replace it”, in that context the “we” was a reference to Samdora alone.

Furthermore, Ms Ayoub’s response includes agreement to the proposed deed of settlement, but with certain amendments. It is therefore a counter-offer. Those amendments did not alter the basic structure of the proposed deed of settlement that the obligation to carry out any works rested on Samdora alone. The proposed amendments did expose 3173’s interest in the resolution of the dispute. That is apparent from its request that the parties consent to an order under the Strata Schemes Management Act 2015 (NSW) such that any costs paid to the plaintiff’s solicitors must be levied against lots other than those belonging to 3173.

Turning to Mr Jurdeczka’s reply of 21 February 2019 (see [22] above), two things are clear:

For the purposes of the present interpretative task, the balance of the letter is more equivocal. It begins by noting “that the Respondents do not have at law an entitlement or right to return to do work as proposed”. Later it goes on to say:

In rejecting that 3173 should be immunised against having to pay costs as a unit holder, the letter states:

Turning to the counter offer itself, the first paragraph refers to an agreement of “[Samdora] returning to do the work set out in the schedule of works attached to your client’s offer …”. It then goes on to refer to “notwithstanding the concerns as to the lack of detail in the schedule of works, the Applicant is prepared to have [3173] do that work given it will be work done under an agreement and thus subject to the statutory warranties …”. Given other terms of the counter offer and the attached short minutes, there is much to be said for the view that the reference to 3173 is an error. However, I shall proceed on the basis that it is not.

The second paragraph of the counter offer refers to “[Samdora and 3173] agree to also attend to the additional items raised in our letter of 7 January 2019, being… by the following scope for each: [Samdora] to inspect, confirm the nature and extent of defects, and undertake such works as are properly to repair the issue”.

Finally the counter offer rejects the request for an order under s 90 of the SSMA in respect of 3173.

The attached short minutes, which are proposed to “avoid the need to enter into the proposed Deed”, say nothing about 3173. The first order is that “[Samdora] undertake repair works on behalf of [the plaintiff]” as specified in the orders. Ms Ayoub’s reply of 19 March 2019 (see [26] above) refers to “our clients’ positions in relation to the dispute”. It does maintain some degree of distinction between Samdora and 3173, including expressly referring to 3173’s position that it does “not accept your argument that it will be paying around 50% of your costs”.

There can be no doubt that the counter offer represents a rejection of Mr Jurdeczka’s previous letter. This then brings the analysis to paragraph 17 of the counter offer, which I reproduce here again for convenience:

Paragraph 17 invites two questions: who is offering to undertake the works and does the offer incorporate by reference the draft deed of settlement?

As to the first question, in my respectful opinion there are two decisive indications that it is an offer only for Samdora to undertake the relevant works. Those indications are the use of the singular “client’s offer” and the slightly garbled, but sufficiently clear, sentence in the singular “it will note undertake anything further works”. “It” is Samdora.

This conclusion is fortified by reference to the letter of 3 February 2019 (see [20] above), which in paragraph 3 invites attention to “our client’s proposed schedule of works”, which the Court finds was a schedule of works offered to be undertaken by Samdora. That must also be the case because, as I have already observed, the letter of 3 February 2019 at that point was in the context of the draft deed of settlement, which itself imposed the obligation to undertake the works only on Samdora.

As to the second question, I do not accept that the terms of paragraph 17, on their proper construction, incorporate the draft deed of settlement. In the context of the history of the negotiations, the draft deed of settlement had been “taken off the table” (see [39(2)] above). If it had been intended to incorporate the draft deed of settlement as part of the counter offer in paragraph 17, it would have required clear words. This must particularly be the case where Ms Ayoub’s letter of 3 February 2019 contained a counter proposal as to the terms of the draft deed of settlement itself.

The plaintiff’s argument on this point rested on the reference to undertaking the works “in accordance with our letter dated 3 February 2019”. The Court rejects the argument for two reasons.

The first is that, for the reason articulated in [50] above, it gives the words “in accordance with our letter dated 3 February 2019” far more work than they can bear.

Second, it is to misread the offer as being “to undertake the works … in accordance with our letter dated 3 February 2019”. In my respectful opinion, the units of meaning in the sentence are “[to undertake the works in accordance with] [its schedule of repairs in accordance with our letter dated 3 February 2019]”. In other words, “in accordance with our letter dated 3 February 2019” identifies the schedule of repairs and not the undertaking of the works generally. That specification makes sense because it was necessary for Ms Ayoub to reassert her client’s proposed schedule of works attached to the letter of 3 February 2019 to distinguish it from the schedule of works pressed for on behalf of the plaintiff by Mr Jurdeczka in his letter of 21 February 2019.

Mr Jurdeczka’s letter of 27 March 2019 accepting the offer in paragraph 17 is consistent with the analysis set out in [47] to [53] above. His letter first deals with 3173 and its failure to pay strata levies as a unit holder. The letter then changes topic (and I reproduce it again here for convenience):

The acceptance refers in the singular to “your client’s offer” which can only be Samdora. Furthermore, the steps to be taken refer to giving reasonable access to Samdora.

The Court also regards the absence of any reference to the deed of settlement in the plaintiff’s acceptance as being significant. That acceptance, correctly in my view, reflects an understanding that the offer related to undertaking works in accordance with the schedule of repairs attached to the 3 February 2019 letter, but was not an offer that extended beyond that to incorporate the draft deed of settlement (including the release) and the amendments to the draft deed of settlement proposed in Ms Ayoub’s letter of 3 February 2019. Any such acceptance would have involved accepting the requirement of consent to an order under s 90 of the SSMA, to which it is obvious the plaintiff remained firmly opposed.

It follows from the foregoing that the Court has concluded that the settlement agreement constituted by paragraph 17 as an offer and the acceptance in the Mr Jurdeczka’s letter of 27 March 2019 was an agreement that Samdora would carry out the work in accordance with the schedule of repairs provided in the 3 February 2019 letter.

It must be acknowledged that it is not entirely clear from paragraph 17 what form the settlement of the proceedings would to take if the offer was accepted. However, there can be no doubt that Samdora and 3173 acquiesced in the step taken “in reliance on that agreement” as set out in the 27 March 2019 letter.

Importantly for present purposes, the settlement agreement as found by the Court contains no express obligations undertaken or promise made by 3173 in relation to Samdora’s performance of the works. The plaintiff has not identified any basis on which such an obligation or promise can be implied. Samdora’s claims against 3173 in relation to Samdora’s performance of the repair works under the settlement agreement therefore fail.

The balance of the issues in the proceedings requires reference to the witnesses called by the parties.

The plaintiff read affidavits from seven witnesses, being the five lot owners other than 3173, and the current and former strata managers of the plaintiff. Of these witnesses, only two of the unit owners and the current strata manager were cross-examined. The Court accepts their evidence was not impugned.

3173, Mr Nassif and Mr Chahwan did not read any lay evidence. The plaintiff submitted that a Jones v Dunkel (Jones v Dunkel (1959) 101 CLR 298) inference should be drawn against the defendants such that the Court could more comfortably find facts proven from the plaintiff’s evidence that was not only uncontradicted, but had not been challenged in cross-examination.

In relation to expert evidence, there were two topics: “hydraulics” and “general”.

In relation to hydraulics, the plaintiff relied on its expert, Mr David Wood, who had ultimately prepared a joint report with Mr Fadi Taouk for 3173 and Mr Chahwan. Messrs Taouk and Wood gave concurrent evidence.

In relation to the general category of defects, the plaintiff relied on a number of reports that had been prepared by its expert Mr Mark Kavanagh. Mr Kavanagh ultimately prepared a joint report with Mr Elie Farah, who was Mr Nassif’s expert. The joint report was in the form of a Scott schedule detailing the alleged defects. In these reasons, the defects are identified by reference to the numbers assigned to them in the joint report. Messrs Kavanagh and Farah gave concurrent evidence.

In relation to quantum, the Court was provided with a joint quantum report by Mr Ben Haslam and Mr Kenneth Whyte. Their evidence was overtaken by the parties’ agreement (see [7] above) that the question of quantum would be addressed after the delivery of these reasons.

While the Court has found that in relation to the repair work 3173 had no obligation to the plaintiff under the settlement agreement, an independent claim against Mr Chahwan personally was made under the DBPA.

The cause of action advanced is for breaches of the duty of care imposed by s 37 of the DBPA:

For Mr Chahwan to have any liability, it is necessary for the plaintiff to demonstrate that Mr Chahwan carried out “construction work” in relation to the repair work required to be undertaken by the settlement agreement.

Section 36 of the DBPA contains this definition of “construction work”:

In the case at bar, the plaintiff’s claim is based upon the allegation that Mr Chahwan, in relation to the repair work, had been “supervising, coordinating, project managing or otherwise having substantive control over the carrying out of [building work]”.

The plaintiff’s evidence certainly demonstrated what was pleaded in paragraph 58 of the FATCLS that Samdora undertook the repair work by retaining MS Noun Construction Pty Ltd as a sub-contractor. There is evidence of Mr Noun attending the property to undertake the repair works.

However, the case against Mr Chahwan is circumstantial. There is no evidence that he was appointed by anyone to supervise, coordinate, project manage or otherwise have substantive control over the carrying out of the repair work. The plaintiff relies on very limited instances or exchanges deposed to by three of the unit holders: Ms Ma, Mr Choudhry and Mr Kearins.

At paragraphs 4.14 to 4.32 of the written closing submissions for 3173 and Chahwan, Mr Klooster sets out and analyses in close detail the evidence relied upon by the plaintiff to demonstrate that the plaintiff’s evidence is insufficient to show that Mr Chahwan, in relation to the repair work, carried out construction work within the meaning of s 37 of the DBPA. The Court accepts those submissions and makes these more general observations by way of additional reasons.

The evidence of the three witnesses refers to several quite specific incidents. To the extent that evidence is of their recollection of the conversations, the Court accepts it. Insofar as their evidence consists of emails and text messages, it speaks for itself. The incidents cover a substantial time period. The first matters related by Ms Ma predate the entry into the settlement agreement on 27 March 2019 and are therefore irrelevant. Mr Kearins’ evidence includes Mr Chahwan’s presence at an inspection in March 2020 and Mr Choudhry refers to an inspection conducted by Mr Nassif of Samdora at which Mr Chahwan was present in 2023.

I accept that some of that evidence refers to Mr Noun saying he would refer to Mr Chahwan whether or not some work had to be undertaken. However, the evidence does not enable the Court to make a finding that consistently over a period of time Mr Chahwan was supervising, coordinating, project managing or otherwise had substantive control over the repair work such that he would be liable in respect of any or all of the alleged defects. The case advanced was not granular, in the sense of attempting to link his alleged role to specific defects by direct evidence of him having a role in relation to a specific defect sued upon.

Mr Chahwan undoubtedly had an incidental involvement in the repair work. He was the developer who was in litigation with the plaintiff, a member of the strata committee and through 3173 owned four units in the property. He had every reason to be interested in ensuring that the work was carried out and attending from time to time. However, based on the evidence to which the Court has been referred, I am unable to reach a state of actual satisfaction, on the balance of probabilities, that what Mr Chahwan was doing in relation to the repair work satisfied the requirement that he was relevantly carrying out construction work as defined for the purposes of s 37 of the DBPA.

In reaching this conclusion, I have not overlooked that Mr Chahwan’s unexplained failure to go into evidence enables the Court to draw a Jones v Dunkel inference. It is well understood that the principle in Jones v Dunkel is that where a party who might be expected to call evidence from a witness does not do so without a relevant explanation, the Court can infer that evidence would not have assisted that party. That inference enables the Court more easily to find a fact adverse to that party where there is already existing evidence for that fact. The principle does not permit facts to be found for which there is otherwise no evidence. However, in my respectful opinion, the evidence adduced by the plaintiff against Mr Chahwan in relation to its claim under s 37 of the DBPA is of insufficient weight in and of itself. It is therefore an insufficient foundation for the Court to engage the principle in Jones v Dunkel to draw an inference adverse to Mr Chahwan to find he was relevantly carrying out construction work, notwithstanding his failure to give evidence.

This aspect of the plaintiff’s case against Mr Chahwan personally fails.

The plaintiff claims damages for breach of the statutory warranties contained in s 18B of HBA against 3173. These claims relate to the original works and concern both hydraulic issues (the subject of Mr Wood’s report) and what were described as “general & waterproofing” defects (the subject of Mr Kavanagh’s report).

It is next necessary to take into account the definition of “major defects” pursuant to s 18E of the HBA:

It was common ground that for the plaintiff’s claim under the HBA to succeed, the defects had to be “major defects” as defined.

Insofar as the defect was required to be in a “major element” of the property, it was accepted that the issue was whether the hydraulic defects related to “waterproofing”.

Furthermore, it was accepted that to be a major defect, the defect had to meet a two part test:

However, in relation to whether “waterproofing” was a major building element, Mr Klooster submitted that the Court should apply what he described as a “design and purpose” test. He submitted that only if both the design and purpose of a defective building element was to prevent water from entering the building, only then could it meet the description of “waterproofing” for the purposes of the HBA.

The reference to “design and purpose” is derived from the decision of the NSW Civil and Administrative Tribunal Appeal Panel in Ashton v Stevenson; Stevenson v Ashton [2020] NSWCATAP 233 where at [169] the Panel said:

The parties did not suggest that this Court was bound by the decision of the Panel. Nevertheless, it is appropriate for this Court to treat with respect the decision of a specialist panel. Even when viewed in that light, I do not consider that the Panel was intending by its description to establish something which, as Mr Klooster sought to do, should be elevated into a “design and purpose” test.

The Court’s tasks is to make a factual finding that a particular element is “waterproofing”. The ordinary English meaning of “waterproofing” is something that is intended to keep water out, that is to say to prevent the ingress of water (in this case) into a building. If something is designed to do something, then its purpose is to do that thing. The expression “design and purpose” is an entirely understandable usage by the Panel of a hendiadys to capture the concept of intention. In other words, an element will be waterproofing if its purpose is to prevent ingress of water into a building. This means that in some cases a particular element may be waterproofing because of how it is deployed and in other cases it will not be waterproofing.

I will now turn to consider the particular hydraulic defects which were alleged by the plaintiff to be major defects for the purpose of s 18E of the HBA. The item references are to the joint report.

It was common ground that these items were a major defect under the HBA. The scope to rectify those defects was also agreed by the hydraulic experts.

This defect is identified as being the result of a stormwater overland flow path not being allowed for and being blocked by the construction of concrete stairs and metal fences which meant that stormwater flows into the building on the property. Ms Ma, who gave evidence through an interpreter, said that while after heavy rain she could park her car in the garage, she could not place anything else in the garage itself because there would be water to a depth of about 3 centimetres in the garage.

There was a dispute between the plaintiff and 3173 as to whether these items were major defects.

The plaintiff’s expert, Mr Wood, expressed the view that these items were a major defect:

3173’s hydraulic expert, Mr Taouk, in his original report disagreed that these items were defects. However, in the joint hydraulic report which Mr Taouk prepared with Mr Wood, Mr Taouk agreed that these items were a defect. However, he did not express a view as to whether they were major defects.

Mr Klooster fastened on an answer given by Mr Wood during concurrent evidence with Mr Taouk that the purpose of a stormwater overflow path was to divert water around a building. This led to a submission that overland flow paths did not meet the definition of “waterproofing” because the design and purpose of those paths, taken without more, could not be said to be to prevent water from entering the building. Another defective building element would be required, such as the absence of a sealed bund.

I do not accept that submission. The purpose of overland flow paths is to prevent ingress of water into a building by diverting the water away from the building.

Mr Klooster also submitted that the second part of the test under s 18E(4) was not satisfied (see [84] above) because, in summary, there was no evidence in relation to any of the townhouses that there had been any inability to use the townhouses, or destruction to all linings, floorings and fixtures, as a result of the ingress of water, including during what were referred to as “heavy rain events”.

Mr Klooster’s argument does not meet Mr Wood’s evidence that the defective overflow paths are likely to cause consequences that satisfy the second part of the test. That conclusion, in my respectful opinion, also accords with common sense and Ms Ma’s evidence of the flooding of the floor of the garage.

The Court accordingly finds that these defects are “major defects” for the purpose of s18E of the HBA. The Court notes that the necessary rectification works for these items was agreed in the joint hydraulic report.

Mr Wood and Mr Taouk agreed that there was a defect insofar as rainwater overflows had not been installed on the balconies of lots 5, 6, 7 and 8. They were also agreed as to the scope of rectification. However, as with the stormwater flow paths, Mr Taouk did not express a view as to whether the defects were a “major defect” for the purpose of the HBA.

Mr Wood’s evidence was:

Mr Klooster drew to attention that in the course of giving concurrent evidence with Mr Taouk, Mr Wood agreed that the balcony overflows were overflow devices that were mechanisms that diverted water out the balcony away from the liveable areas of building. He therefore submitted that the purpose of a balcony overflow alone could not be to prevent water from entering the building because while a defective overflow would cause water to come into contact with the building, another defective building element was required for water to enter the building. This meant the balcony overflows did not meet the definition of “waterproofing”.

The Court does not accept this submission. I accept Mr Wood’s evidence that the balcony overflows are an element that have a purpose (that does not have to be their only purpose) to prevent the ingress of water into the building. Assuming, without deciding, for the sake of the argument that there would have to be another defective element for water entering the building, in my respectful opinion that does not make the balcony overflow any less an element designed to prevent the ingress of water in the building. Putting it simply, the first step to prevent water entering the building is to prevent it from pooling on a balcony.

Another way of looking at this issue is to consider the not fanciful possibility that a resident deliberately or accidentally leaves the balcony doors partly open and a heavy downpour occurs. The existence of a balcony overflow would prevent water pooling on the balcony and flooding the living area through the open balcony doors.

Mr Klooster also submitted that the second part of the test under s 18E(4) was not satisfied. He submitted that the balconies were “drying courtyards” on the upper floor of the townhouses, and were not the large balconies which were described as “terrace” on the plans on the lower floor.

Mr Klooster submitted that while Ms Ma (the owner of townhouse 5) had given evidence of water ingress at the location of the defect, she had not given evidence that she had not been able to use the upper level of her townhouse or that there had been any wall linings, floorings and fixtures near the “drying courtyard”. As to the other townhouses, he submitted there was no evidence that water ingress had ever occurred at the location of the defect or that any complaint had been made including during what had been described as “heavy rain events”.

As was the case with the stormwater flow paths, the Court does not accept that actual evidence of ingress is required. The Court accepts Mr Wood’s evidence that as a result of the defect, stormwater would overflow into the building resulting in any of the matters referred to in s 18E(4)(a). Furthermore, the position advanced on behalf of 3173 overlooks that one of the consequences was “the inability to inhabit or use the building (or part of the building) for its intended purpose”. The balcony, even if described as “drying courtyard”, must be part of the building. A flooded balcony would be unable to be used for its intended purpose, even if that purpose is for “drying”. I would regard part of that purpose as being the unit holder being able to use the balcony for drying, but without having to get their feet wet in doing so.

The Court finds that these defects are “major defects” for the purpose of s 18E of the HBA. There was no dispute as to the rectification works required

These defects relate to water tanks within the garage area of lots 1, 4, 5, 6 and 9). Mr Wood did not have access to the other lots. An essential defect, reported Mr Wood, is that the inlet pipes to the rainwater tanks are 100 millimetre pipes whereas the outlet pipe from each water tank is only 90 millimetres. His observations and conclusions were:

The Court does not accept that these defects are “major defects”, essentially for the following reasons advanced by Mr Klooster.

The parties accepted that expert evidence as to whether something constituted “waterproofing” or not, while not binding on the Court, was relevant and admissible to assist the Court in making the factual finding of whether something was “waterproofing”.

Mr Klooster submitted that a defective pipe alone cannot be part of the waterproofing. This was because it could then be argued that any pipe containing water in the building that was not of the correct size or correctly connected would form part of the waterproofing.

The Court does not accept that argument. That is because it depends upon the purpose of the pipe. There will be water pipes in the building whose function is to convey water inside the building, for example, from the mains to a tap in a unit. Such pipes are not intended to prevent the ingress of water into the building in the relevant sense. It could be said such pipes are intended to facilitate the ingress of water into the building in a controlled fashion for the benefit of the residents.

On the other hand, there will be pipes that are an element of a design that is intended to prevent the ingress of water into the building. In this case, the defective pipe is an outlet pipe for rainwater tanks. The pipe is intended to prevent the rainwater tanks overflowing. So understood, the purpose of the pipe is to prevent the ingress of water into the building in the relevant sense.

However, the Court accepts Mr Klooster’s submission that the plaintiff has failed to satisfy the second part of the test under s 18E(4). That submission is based on this exchange during the hydraulic experts’ concurrent evidence:

With no disrespect to Mr Wood, I accept Mr Klooster’s submission that Mr Wood’s evidence as to the defect having caused any of the matters that would make the defect a major defect was no more than an unverified assertion. The Court does not doubt that Mr Wood is well qualified in hydraulic matters, holding an Associate Diploma of Engineering (Hydraulic Services), as well as being a licenced plumber, drainer, gas fitter and roofer. However, the issue in the present case is whether the fact that the outlet pipe is ten millimetres smaller than the inlet pipe in the rainwater tank made it likely that the adverse consequences would follow. The Court does not accept that Mr Wood’s expertise alone, that is to say without the benefit of empirical or other testing, is a sufficient basis to express the view he does about the consequences of this defect. The Court is therefore unable to reach a state of actual satisfaction that the requisite fact has been proven.

The plaintiff’s claim in relation to these defects fails.

These defects concern moisture entry into some of the garages. The same arguments were made in relation to each of the four defects, so it is convenient if I refer only to the defect in relation to unit 1. This was described by Mr Kavanagh in his report as:

The experts were unable to come to an agreement. Mr Kavanagh maintained his position that the damage was due to a failure in the balcony membrane, which constituted a major defect related to waterproofing. Mr Farah disagreed, positing a number of other possible causes. Mr Farah’s principal criticism of Mr Kavanagh’s conclusion was that it was untested because flood testing had not been carried out. Mr Kavanagh candidly accepted that he had not carried out any empirical tests to demonstrate the waterproofing membrane had failed, but had relied on his experience.

The experts’ evidence in the course of their concurrent evidence included:

The Court accepts that Mr Kavanagh’s empirical results demonstrated that moisture had entered into the garage at the relevant places. So much was demonstrated by testing with a moisture meter. Mr Kavanagh was a well-qualified, objective witness. I do not accept the criticism that he relied on his experience to diagnose the problem. Experience is a critical element of expert evidence.

The Court prefers Mr Kavanagh’s evidence. Mr Farah’s alternative explanations were speculative rather than an experientially based definitive view. The Court finds that these defects are major defects to be remedied in accordance with Mr Kavanagh’s evidence.

It will be recalled that Mr Nassif was the sole director and shareholder of Samdora. The plaintiff makes a number of claims against Mr Nassif under the DBPA. They involve both that Act and the Civil Liability Act 2002 (NSW) (CLA)

The relevant provisions of the DBPA are:

The relevant provisions of the CLA are:

Mr Chatterjee submitted that the plaintiff’s claim against Mr Nassif should fail both at the level of principle and for want of evidence. I will consider the evidentiary argument in relation to each of the alleged defects. However, it is convenient at this point to consider the more general objection raised on behalf of Mr Nassif.

Mr Nassif was the nominated supervisor of the builder, Samdora. Unlike the position with Mr Chahwan, there was no dispute between the parties that Mr Nassif was a person who had carried out construction work for the purposes of s 37 of the DBPA such that he had a duty under that section to exercise reasonable care to avoid economic loss caused by defects of the requisite kind (s 37 duty). There was also no dispute that because a claim for breach of the s 37 duty was a claim in negligence, it also had to satisfy the relevant requirements of the CLA.

The plaintiff contended that Mr Nassif had carried out construction work within the meaning of ss 36(a) and (d) of the DBPA (i.e. building work, and supervising, coordinating, project managing or otherwise having substantive control over the carrying out of building work). Mr Nassif therefore owed a s 37 duty to the plaintiff. The duty under that section was a personal duty which Mr Nassif could not discharge merely by exercising reasonable care in arranging for another person to carry out any work or task within the scope of the duty: Pafburn Pty Ltd v The Owners – Strata Plan No 84674 [2024] HCA 49; (2024) 99 ALJR 148.

The plaintiff submitted that each of the items claimed against Mr Nassif was the result of him breaching his s 37 duty to exercise reasonable care to avoid economic loss because he had failed to ensure that the relevant work complied with the warranty in s 18B(1)(c) of the HBA that the work “would be done in accordance with, and would comply with, [the HBA] or other law”. One such law was the Building Code of Australia (BCA) such that to the extent that the BCA had not been complied with, there was a breach of s 18B(1)(c). The plaintiff relied on its expert evidence to establish that the relevant defects were a failure to comply with the relevant aspects of the BCA.

It was submitted for Mr Nassif that the plaintiff’s approach was fundamentally misconceived because it equated a defects claim pursuant to s 18B of the HBA (where all that had to be shown was a defect to make the builder liable) with a claim for breach of the s 37 duty. It was submitted that the plaintiff had neither properly pleaded nor proven the elements that needed to be satisfied under the CLA. Among those elements was a clear identification (having regard to s 5B(2) of the CLA) of what precautions it would be said should have been taken by Mr Nassif as a reasonable person against a properly identified risk of harm. It was submitted that the plaintiff had pleaded its case by wrongly conflating the alleged defects with those “risks” of harm.

The Court does not accept those criticisms put on behalf of Mr Nassif.

While I accept that Mr Kavanagh gave evidence that, as far as he was concerned, if Samdora was liable under the HBA, then Mr Nassif was liable under the DBPA, that is not how the plaintiff advanced its case. Furthermore, while Mr Kavanagh may have had that view, I do not consider that detracts from the weight of his expert evidence, such as it was, against Mr Nassif and as part of the plaintiff’s case.

As I understood it, the plaintiff put its case in this way, which reflects the requisite statutory and common law elements:

Mr Nassif’s in principle attack on the plaintiff’s case is therefore rejected. However, the Court does accept the submission made on his behalf that the evidence relied upon by the plaintiff must be considered on a defect by defect basis.

This item related to the sliding doors in all of the units described by Messrs Kavanagh and Farah in the joint report as “sliding door units and associated fixed side panels have not been marked with a line of clearly visible motifs to identify the presence of glass”. Both experts agreed that this was a minor defect. Their joint report also contains this observation: “Both experts agree this is incomplete or unknown if the Stickers were removed due to the owners of property do not want the motive stickers [sic] installed to enhance the aesthetic visualisation of the glass”.

The plaintiff relied on Mr Kavanagh’s evidence, which in his report was provided on what he described as both a “generalist” and “item specific” basis.

His generalist evidence included in relation to Mr Nassif:

The Court accepts that evidence, which applies to all of the alleged defects sued on against Mr Nassif. I will not repeat it in relation to subsequent defects.

Mr Kavanagh’s item specific evidence in relation to this defect was:

With no disrespect intended to Mr Kavanagh, his evidence in relation to each defect was given in this form with the relevant failure being linked to the particular defect. I do not, in relation to any of the alleged defects, take into account the evidence concerning failure to comply with the settlement agreement, because Mr Nassif was not a party to that agreement. There was no attempt in the evidence adduced on behalf of the plaintiff to provide any explanation of what “active supervisory role” meant beyond linking it to “regular inspections/checking of the works” and I have understood it in that way. Mr Farah did not engage with these aspects of Mr Kavanagh’s evidence. As I have already noted, Mr Nassif did not himself give any evidence.

Mr Chatterjee first submitted that the plaintiff had failed to prove that Mr Nassif had not undertaken regular inspections or checks of the works. The Court does not accept that submission.

Proving a negative is not always straightforward. However, in the present case the plaintiff invites the Court to draw an inference based on these facts that have been proven:

The Court accepts that those two facts are, prima facie, a sufficient basis for the Court to infer that Mr Nassif did not carry out regular inspections and checks. However, that is not the end of the evidence which the Court is entitled to take into account. To this may be added the application of the principle in Jones v Dunkel in circumstances where Mr Nassif had not given evidence about what he did or did not do.

As I have already discussed (see [78] above), the principle in Jones v Dunkel enables the Court more readily to draw an inference of fact where there is already evidence before the Court in support of that fact. There is, as I have noted in [142] above, such evidence. Mr Nassif’s silence enables the Court to conclude, as it does, that had he gone into evidence, it would not have been of assistance to him on this point. This finding enables the Court more easily to make the finding, which it does, that Mr Nassif did not undertake regular inspections or checks of the works.

In reaching this conclusion, I have not overlooked that the relevant inference should not be drawn where an apposite explanation is provided for why the otherwise expected witness was not called. Mr Chatterjee proffered two such explanations.

First, it was said that the plaintiff had “wholly failed to articulate its claim against Mr Nassif” such that “it would be unreasonable to require of him to give evidence, as it is not clear what case he was to meet”. The Court rejects that submission. Among the particulars of breach pleaded against Mr Nassif (by incorporation against him of the pleading made against Samdora) was a particular of breach in not taking precautions ensuring that the work was “properly supervised” and “duly overseen” (FATCLS paragraph 81(h)). Furthermore, any doubt about the allegation to be met would have been dispelled by consideration of Mr Kavanagh’s evidence which I have set out in [137] above. By reason of those matters it is not open to Mr Nassif to explain persuasively that he did not go into evidence because he did not understand the case he was to meet.

The second explanation proffered by Mr Chatterjee was by the tender of a number of certificates (including the final occupation certificate) which were said to demonstrate that there were a number of supervisory processes in place for the works. Some further examples of these certificates appear in [158(3)] below.

There are at least two difficulties with Mr Nassif’s reliance on the certificates. First, no attempt was made to show how any particular certificate would demonstrate that there was supervision or checking that related to the particular defect. Second, they are no answer to the allegation that Mr Nassif personally failed to undertake something which he should have done in exercise of his s 37 duty. He was the obvious person to respond, if he could say anything to his advantage, to an allegation that he had failed to do something.

The Court therefore finds that Mr Nassif failed to carry out any regular inspections or checks of the works that would have brought this defect to the light. The reasoning which I have set out up to this point is applicable to all of the items which follow. But for what follows in [150] to [152], the plaintiff would have made out its case in relation to this item.

Mr Chatterjee’s next submission, directed to causation, was that the plaintiff had failed to prove that the defect had existed at any relevant time. This submission was based on Mr Kavanagh’s acceptance during concurrent evidence that any supervisory responsibility which Mr Nassif may have had in relation to the original works could not have extended past the date of the final occupation certificate, being 27 October 2016. The Court accepts that evidence. In other words, as part of its case on causation, the plaintiff would have to demonstrate that the defect was in existence at some time prior to 27 October 2016 and therefore capable of being discovered if Mr Nassif had carried out his s 37 duty.

The Court accepts Mr Chatterjee’s submission that this necessary fact to establish causation has not been proven. This is because of the experts’ qualification (see [135] above) as to the possibility of the strip having been removed by owners for aesthetic reasons.

In relation to a defect of this kind, the mere fact of the existence of the defect is not sufficient to demonstrate that it must have been present at some time up to 27 October 2016 and, as such, would or should have been discovered if proper inspection and checking had been undertaken by Mr Nassif. On the contrary, the Court has some evidence of the possibility that residents may have removed the stickers. While that evidence is slight, when taken with the absence of any positive evidence, the Court cannot be actually satisfied of the existence of the defect at any time during which Mr Nassif had supervisory responsibilities.

This conclusion means that the Court accepts Mr Chatterjee’s submission that the plaintiff has failed to prove all of the necessary facts to make out any liability in Mr Nassif for this defect.

Because this submission as to lack of proof of the identifiable existence of the defect also succeeds in relation to a number of the defects which are considered in what follows, it is convenient at this point to deal with Mr Horobin’s answer to this contention in his submissions in reply. He submitted that even if the visible consequences of the defects were not apparent by 27 October 2016, the underlying defect that led to those manifestations existed at the time and would have been prevented by Mr Nassif fulfilling his s 37 duty. The difficulty with this submission is that there is no evidence from Mr Kavanagh (or anyone else) how, if Mr Nassif had fulfilled his duty, the particular defects would have been identified before they visibly manifested by, for example, observable leakage. In the absence of such evidence, the Court rejects Mr Horobin’s submission in reply.

Next, because it was put as a general answer to all of the plaintiff’s claims against Mr Nassif, I will consider at this point the final general submission made by Mr Chatterjee.

This final submission was to the effect that apart from Mr Kavanagh’s opinion, the plaintiff had led no evidence that an “active supervisory role” would have avoided the defects that are alleged to have resulted from Mr Nassif’s negligence. However, beyond a criticism that Mr Kavanagh’s opinion repeated in relation to each defect was too general such as to be effectively meaningless, Mr Nassif’s case did not engage with that opinion in relation to each defect. The Court accepts that opinion in relation to each defect as far as it goes.

The point made for Mr Nassif is to demonstrate the lack of proof of causation because, it was submitted, the Court should infer that even if there had been “active supervision”, it would not have made any difference.

The basis for this submission relied on three points:

None of these three matters is sufficient to displace the Court’s acceptance of Mr Kavanagh’s opinion for these reasons:

For these reasons, this final, general objection advanced on behalf of Mr Nassif is rejected.

This item relates to the wet area exhausts in all of the units, described in the joint report as “the wet area exhaust fans are not discharging the exhausted air external of the individual units”. The experts agreed that this was a minor defect “since a window is evident that a fan is not required when an operable window is installed”.

The Court accepts Mr Kavanagh’s evidence:

The Court accepts from the nature of the defect that it would have been observable prior to 27 October 2016.

Conformably with its reasoning in [136] to [149] above, the Court concludes that the plaintiff has made out its case in relation to this defect against Mr Nassif for breach of his s 37 duty. The plaintiff’s damage is the costs of the rectification in accordance with the steps agreed as set out it the joint report.

This defect relates to the internal stairs in unit 1 and is described in the joint report as “there is less than the required 2000 millimetres of head height between the main stairs tread and bulkhead for the first floor area over”. The Court accepts from the nature of the defect that it would have been observable prior to 27 October 2016.

The Court accepts Mr Kavanagh’s evidence:

In reaching this conclusion the Court has taken note of the position expressed by the experts in their joint report:

Mr Farah’s report described the defect as a minor defect. The Court does not accept Mr Farah’s evidence that the “deviation’s acceptable compliance there is no loss.”. Mr Kavanagh’s evidence is accepted that the defect is a breach of the BCA.

Conformably with its reasoning in [136] to [149] above, the Court finds that the plaintiff has made out its case in relation to this defect against Mr Nassif for breach of his s 37 duty. The plaintiff’s damage is the costs of the rectification in accordance with the steps agreed as set out it the joint expert schedule.

This defect relates to bedroom 2 in unit 4 and is described in the joint report as “moisture entry in the form staining and damage the skirting, lower wall area, carpet and underfelt was observed to the North/East corner of bedroom 2”.

The Court accepts Mr Kavanagh’s evidence:

However, this is a not a defect which of its nature allows the Court to conclude that it must have been present at some point prior to 27 October 2016. The Court accepts Mr Chatterjee’s submission that the plaintiff has failed to prove (to use Mr Kavanagh’s words) that “an external water leak was occurring within the bed 2 area” at any time prior to 27 October 2016 such that it would have been identified by the regular inspections and checking of the works which Mr Nassif should have undertaken in discharge of his s 37 duty.

This claim against Mr Nassif fails.

This defect affects the sub-floor area of unit 5. It is described in the joint report as “the foundation soils within the sub-floor area had not been graded to ensure that surface water is prevented from ponding”. Both experts agreed that this was a minor defect.

The Court accepts Mr Kavanagh’s evidence:

The Court accepts from the nature of the defect that it would have been observable prior to 27 October 2016.

Conformably with its reasoning in [136] to [149] above, the Court concludes that the plaintiff has made out its case in relation to this defect against Mr Nassif for breach of his s 37 duty. The plaintiff’s damage is the costs of the rectification in accordance with the steps agreed in the joint report.

This defect affects the balcony of unit 7. It is described in the joint report as “the render finish to the vertical face of the lounge to rear balcony threshold step is poor in quality in that it is not set to a uniform plan and thickness as well as not being finished up hard underneath the threshold tiles”. The experts agreed that this was a minor defect.

The Court accepts Mr Kavanagh’s evidence:

The Court accepts from the nature of the defect that it would have been observable prior to 27 October 2016. Conformably with its reasoning in [136] to [149] above, the Court concludes that the plaintiff has made out its case in relation to this defect against Mr Nassif for breach of his s 37 duty. The plaintiff's damage is the costs of the rectification in accordance with the steps agreed and set out in the joint report.

This defect affects the entrance to building A, being the entrances to units 1 to 4, and is described in the joint report as “non uniform tread and riser dimensions are evident to the four sets of stairs leading down from the Council path to the entrance areas of units 1 through 4.” The Court accepts from the nature of the defect that it would have been observable prior to 27 October 2016.

The experts agreed that this was a minor defect. They also agreed that insofar as the defect related to units 2 and 3 it had been rectified such that the liability is limited to units 1 and 4.

Conformably with its reasoning in [136] to [149] above, the Court concludes that the plaintiff has made out its case in relation to this defect against Mr Nassif for breach of his s 37 duty for units 1 and 4. The plaintiff's damage is the costs of the rectification in accordance with the steps agreed as set out it the joint report.

This defect affects the garage of unit 1. It is described in the joint report as “moisture entry into the garage northern elevation wall at the western end (under the main upper-level open balcony) as observed in the form of moisture and efflorescence staining to the soffit slab along with efflorescence damage to the rendered and painted finish of the northern elevation wall”.

The experts agreed that this was a major defect. It is the defect the subject of Mr Kavanagh’s report extracted in [118] above.

The Court accepts Mr Kavanagh’s evidence:

However, the Court accepts Mr Chatterjee’s submission that the plaintiff has failed to establish (to use Mr Kavanagh’s words) “that the balcony was leaking into the unit” at any time prior to 27 October 2016 such that it would have been observable had Mr Nassif fulfilled his s 37 duty.

It follows that the plaintiff has failed to make out Mr Nassif’s liability for this defect.

This defect relates to the garage to unit 1, in this case the northern elevation wall at the western end. It is described in the joint report as “moisture entry into the garage northern elevation wall at the eastern end (under the rear upper level open ledge) is observed in the form of moisture and efflorescence staining to the soffit slab along with efflorescence damage to the rendered and painted finish of the northern elevation wall.”

The Court accepts Mr Kavanagh’s evidence:

The experts agreed that this was a major defect.

However, the Court accepts Mr Chatterjee’s submission that the plaintiff has failed to establish that, to use Mr Kavanagh’s words, “the ledge area waterproofing membrane had failed and was leaking water out over the external wall’s surface resulting in staining” had been the case any time before 27 October 2016 such that it would have been detected had Mr Nassif fulfilled his s 37 duty.

It follows that the plaintiff has not made out its claim against Mr Nassif in relation to this defect.

This defect relates to the garage for unit 4. It is described in the joint report as “moisture entering into the garage southern elevation wall at the western end (under the main upper level open balcony) is observed in the form of moisture and efflorescence staining to the soffit slab along with efflorescence damage to the rendered and painted finish of the southern elevation wall’.

There was a dispute between the experts as to the cause of this defect.

Mr Kavanagh’s evidence was:

Mr Farah’s opinion was that the damage was caused by water ingress from overhanging trees causing blockages in the box guttering, leading to overflow and damage to the parapet flashings. This could not be visited upon the builder (or Mr Nassif) if it was caused by lack of maintenance resulting in blockage by the overhanging tree.

It is not necessary for the Court to resolve this dispute. That is because, even if Mr Kavanagh’s evidence is accepted, the Court accepts Mr Chatterjee’s submission that the plaintiff had failed to prove, to use Mr Kavanagh’s words, “that the balcony was leaking into the unit” at any time prior to 27 October 2016 such that it would have been observable had Mr Nassif fulfilled his s 37 duty.

It follows that the plaintiff’s claim in relation to this defect against Mr Nassif fails.

This defect relates to the garage for unit 4. It was described in the joint report as “moisture entry into the garage southern elevation wall at the eastern end (under the rear upper level open ledge) is observed in the form of moisture and efflorescence staining to the soffit slab along with efflorescence damage to the rendered and painted finish of the southern elevation wall’.

There was a dispute between the experts as to the cause of this defect.

Mr Kavanagh’s evidence was:

Mr Farah’s opinion was that the damage was caused by water ingress from overhanging trees causing blockages in the box guttering, leading to overflow and damage to the parapet flashings. This could not be visited upon the builder (or Mr Nassif) if it was caused by the lack of maintenance resulting in blockage by the overhanging tree.

It is not necessary for the Court to resolve this dispute. That is because, even if Mr Kavanagh’ evidence is accepted, the Court accepts Mr Chatterjee’s submission that the plaintiff had failed to prove, to use Mr Kavanagh’s words, that “the waterproofing membrane had failed and was leaking water out over the external wall surface” at any time prior to 27 October 2016 such that it would have been observable had Mr Nassif fulfilled his s 37 duty.

It follows that the plaintiff’s claim in relation to this defect against Mr Nassif fails.

This defect relates to the loungeroom in unit 4. It is described in the joint report as “exposed downpipe in loungeroom from failure to complete previous repairs involving removal of bulkhead”.

While the experts agreed that this was a minor defect, there remained a dispute between them as to liability. This is recorded in the notes in their joint report as:

Mr Kavanagh himself did not see the pipe in its allegedly original cracked state.

It is not necessary for the Court to resolve this dispute because of Mr Kavanagh’s evidence in relation to the origins of the defect. That evidence was:

The Court accepts Mr Chatterjee’s submission that the plaintiff has failed to prove, to use Mr Kavanagh’s words, that “the roof water drainage systems were subject to leakage within the unit” at any time prior to 27 October 2016 such that it would have been observable had Mr Nassif fulfilled his s 37 duty.

It follows that the plaintiff’s claim against Mr Nassif in relation to this defect fails.

This defect relates to the bathroom in unit 4. It is described in the joint report as “water damage and damage caused by the removal of the ceiling sheets during rectification works are yet to be rectified.”

While both experts agreed this was a minor defect, there was a dispute between them summarised in their joint report:

Mr Kavanagh had only inspected the defect after the allegedly incomplete or defective repairs to the original defect.

The Court does not have to resolve this dispute, because Mr Kavanagh’s evidence was:

The Court accepts Mr Chatterjee’s submission that the plaintiff has not proven that, to use Mr Kavanagh’s words, that the “roof water drainage systems were subject to leakage within the unit” at any time prior to 27 October 2016 such that it would have been observable had Mr Nassif fulfilled his s 37 duty.

It follows that the plaintiff’s claim against Mr Nassif in relation to this defect fails.

This defect relates to the west elevation of building A (units 1 to 4). It is described in the joint report as “water leakage is observed from around the outside of the drainage pipes running down through the small open ledge areas out from the front of the upper level balcony areas of units 3 & 4”.

While the experts agree this was a minor defect, there remained a dispute between them as to the cause. This was summarised in the joint report as:

It is not necessary for the Court to resolve this dispute because Mr Kavanagh’s evidence was:

The Court accepts Mr Chatterjee’s submission that the plaintiff has failed to prove that, in Mr Kavanagh’s words, the “ledge area water proofing membrane had failed and was allowing water to leak out from the ledge around the outside of the drainage pipes” at any time prior to 27 October 2016 such that it would have been observable had Mr Nassif fulfilled his s 37 duty.

It follows that the plaintiff’s claim against Mr Nassif in relation to this defect fails.

This defect relates to the east elevation of building A (units 1 to 4). It is described in the joint report as “water leakage is observed from around the outside of the drainage pipes running down through the small open ledge areas over the garages of both units 2 & 3”.

Both experts agreed that this was a minor defect. However, there continued to be dispute between them as to the cause of the defect. This was summarised in the joint report as:

It is not necessary for the Court to resolve this dispute. This is because Mr Kavanagh’s evidence was:

The Court accepts Mr Chatterjee's submission that the plaintiff has failed to prove that, in Mr Kavanagh's words, the "ledge area water proofing membrane had failed and was allowing water to leak out from the ledge around the outside of the drainage pipes" at any time prior to 27 October 2016 such that it would have been observable had Mr Nassif fulfilled his s 37 duty.

It follows that the plaintiff's claim against Mr Nassif in relation to this defect fails.

The parties will be given an opportunity to consider what orders should be made to give effect to these reasons and to enable the process of quantification of the repair costs to be carried out.