A High­er Evi­den­tiary Bur­den For Work Orders: The Prac­ti­cal Impli­ca­tions Of The Own­ers – Stra­ta Plan No 102171 V Ceerose Pty Ltd [2025] NSW­CATCD 137

The deci­sion in The Own­ers – Stra­ta Plan No 102171 v Ceerose Pty Ltd; Zone Q Mil­sons Point Devel­op­ment Pty Ltd v Ceerose Pty Ltd; Ceerose Pty Ltd v South­ern Cross Cli­mate Con­trol Pty Ltd [2025] NSW­CATCD 137 is a sig­nif­i­cant devel­op­ment in under­stand­ing the evi­den­tiary oblig­a­tions of an appli­cant when seek­ing a work order under sec­tion 48O of the Home Build­ing Act 1989 (NSW) (HBA).

In the prin­ci­pal pro­ceed­ings, the own­ers cor­po­ra­tion sought work orders under sec­tion 48O of the HBA against the builder and devel­op­er in respect of alleged breach­es of the statu­to­ry war­ranties implied by sec­tion 18B of the HBA. 

The Tri­bunal con­firmed that the bur­den rests sole­ly on the appli­cant to estab­lish not only the exis­tence of a defect, but also the appro­pri­ate method of rec­ti­fi­ca­tion. At para­graph [75], the Tri­bunal held that an appli­cant must prove the rec­ti­fi­ca­tion method­ol­o­gy nec­es­sary to achieve com­pli­ance with the con­trac­tu­al oblig­a­tions, includ­ing the statu­to­ry war­ranties implied by the HBA. The applic­a­ble test, set out at para­graph [77], is “what is nec­es­sary to achieve com­pli­ance with the con­tract (rel­e­vant­ly, the statu­to­ry war­ranties implied into the con­tract) and a rea­son­able course to adopt.”

Impor­tant­ly, the Tri­bunal held that estab­lish­ing the exis­tence of a defect alone is insuf­fi­cient to jus­ti­fy the mak­ing of a work order under sec­tion 48O. At para­graph [149], the Tri­bunal empha­sised that any work order must be clear, cer­tain and unam­bigu­ous so that the par­ty sub­ject to the order under­stands pre­cise­ly what is required to com­ply. The Tri­bunal fur­ther observed at para­graphs [151] and [152] that cer­tain­ty is par­tic­u­lar­ly impor­tant in future renew­al pro­ceed­ings, where it may lat­er be nec­es­sary to deter­mine whether the ordered works have in fact been completed.

Con­sis­tent with that approach, the Tri­bunal reject­ed the own­ers cor­po­ra­tion’s pro­pos­al that the builder sim­ply be ordered to engage an appro­pri­ate­ly qual­i­fied con­sul­tant to pre­pare a reg­u­lat­ed design under the Design and Build­ing Prac­ti­tion­ers Act 2020 (NSW). As no reg­u­lat­ed design had been pro­duced in evi­dence as part of the scope of works for the work order, the Tri­bunal found at para­graph [157] that such an order would be spec­u­la­tive and con­tin­gent upon future doc­u­men­ta­tion that had not yet been pre­pared or tendered.

Although the Tri­bunal accept­ed that sev­er­al defect items exist­ed in prin­ci­ple, work orders were not made in cir­cum­stances where the own­ers cor­po­ra­tion had failed to pro­duce reg­u­lat­ed designs in the scope of rec­ti­fi­ca­tion works. The deci­sion there­fore con­firms that, where expert evi­dence estab­lish­es that reg­u­lat­ed designs are required before rec­ti­fi­ca­tion works can be under­tak­en, those designs must form part of the appli­can­t’s evi­dence if enforce­able work orders are to be obtained.

The deci­sion is par­tic­u­lar­ly note­wor­thy because it sub­stan­tial­ly increas­es the evi­den­tiary bur­den on own­ers cor­po­ra­tions seek­ing work orders. It is not suf­fi­cient to estab­lish that defects exist and that fur­ther design work is required before rec­ti­fi­ca­tion can occur. Instead, appli­cants must effec­tive­ly prove each stage of the pro­posed rec­ti­fi­ca­tion process before the Tri­bunal will make a work order.

The prac­ti­cal con­se­quence of this approach is like­ly to be increased costs for own­ers cor­po­ra­tions. Prepar­ing reg­u­lat­ed designs as part of the appli­can­t’s evi­dence inevitably requires sig­nif­i­cant upfront expen­di­ture. For many schemes, this may present a con­sid­er­able finan­cial hur­dle before rec­ti­fi­ca­tion orders can even be pursued.

The deci­sion also rais­es prac­ti­cal con­cerns regard­ing the prepa­ra­tion of reg­u­lat­ed designs. In many cas­es, the final design solu­tion can only be sat­is­fac­to­ri­ly devel­oped once a con­trac­tor has a detailed under­stand­ing of the con­di­tion of the exist­ing works and the issues encoun­tered dur­ing the rec­ti­fi­ca­tion process. Requir­ing com­plete reg­u­lat­ed designs at the out­set may there­fore prove chal­leng­ing in cir­cum­stances where the appro­pri­ate method­ol­o­gy can­not be ful­ly deter­mined until fur­ther inves­ti­ga­tions or pre­lim­i­nary works have been undertaken.

While the deci­sion pro­vides greater cer­tain­ty as to the detail required in the scope of works for a work order to be made under 48O of the HBA, it also estab­lish­es a demand­ing evi­den­tiary stan­dard for appli­cants. Own­ers cor­po­ra­tions will now need to ensure that com­pre­hen­sive reg­u­lat­ed design doc­u­men­ta­tion accom­pa­nies their expert evi­dence wher­ev­er such designs are required, fail­ing which they may estab­lish the exis­tence of defects but nonethe­less be unable to obtain the work orders nec­es­sary to rec­ti­fy them.

For further information please contact:

Michael Byrnes, Partner
Phone: + 61 2 9233 5544
Email: mjb@swaab.com.au

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.