Strict Disciplinary Liability re Builder and Subcontractor

Strict Disciplinary Liability re Builder and Subcontractor

Champion Homes Sales Pty Ltd v Commissioner for Fair Trading [2018] NSWCATOD 114


Champion Homes Sales (the Applicant) is a holder of a contractor licence under the Home Building Act 1989 (NSW) (the Home Building Act). The Applicant carried out works at two properties and subcontracted a water proofer to carry out waterproofing works at the properties.

Following a leakage complaint, an inspection of the first property was conducted by a Fair-Trading Inspector, and it was reported that there was a failure in the waterproofing membrane which caused leakage.

At the second property, upon inspection by a Fair-Trading Inspector, it was reported that the flashings to the roof was not installed correctly which caused leakage.

The Commissioner (the Respondent) concluded that according to the evidence, the Applicant was guilty of improper conduct for breaching the statutory warranty under s.18B(1)(a) of the Home Building Act on two occasions, and in being satisfied that a ground on which disciplinary action may be taken against the builder, made a determination:

At [8] ‘requiring the Applicant to pay to the Commissioner, as a penalty, an amount of $3,000 pursuant to s62(c) of the Home Building Act’.

The Applicant filed an application for review of the determination made by the respondent on the basis that the Home Building Act should not be interpreted so as to impose strict liability upon a builder for the work of its subcontractors and that a different approach and standards of liability should be applied in assessing a breach for a statutory warranty when applying the disciplinary provisions as they both serve a different purpose.


i. Whether the Home Building Act impose strict liability upon builders for the work of its subcontractors
ii. Whether a different approach and different standards of liability should be imposed when assessing breaches of statutory warranties which are being considered for the disciplinary provisions.


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