DAMAGES exceeding $30M paid out in five years for defects … the tip of the iceberg …

Hundreds of Millions of dollars more have been paid out confidentially

MEANWHILE how many thousands of Home Owners are living with cracking, water pouring into apartments, suffering illness from mould, roofs blown off … etc, etc … ?

CAVEAT EMPTOR … BUYER BEWARE … it appears defects occur across all home building …

Search to find out more in our Website Category: ENGINEERS AUSTRALIA Reports; Apartments defective on completion; defective building materials incl. Cladding

‘We’ve had ceilings collapse’: Sydney’s $30 million in defect payouts revealed

Carrie Fellner
By Carrie Fellner

View all comments

Damages exceeding $30 million in five years have been paid out to the owners of buildings across Sydney where defects have been discovered, in court judgments said to reflect the “tip of the iceberg” of the city’s building standards crisis.

Experts say hundreds of millions of dollars more have been paid out confidentially in cases that settled before reaching the courthouse steps.

More than $30 million has been paid out in five years for defective buildings across the city.
More than $30 million has been paid out in five years for defective buildings across the city. CREDIT:DOMINIC LORRIMER

Scores of other owners have missed out on compensation for problems emerging outside NSW statutory warranty periods of two years for minor defects and six years for major defects.

The 20 successful lawsuits since 2014 span fashionable warehouse conversions in the city’s inner west, to skyscrapers on George Street and luxury apartments atop the headland at Clovelly.

Among the most hefty payouts were $5.1 million for a townhouse development in Thornleigh alleged to have more than 1500 defects, and $5 million for a Camperdown apartment block after the NSW Court of Appeal overturned a family’s argument that they were not the “developers”.


Survey equipment at Mascot Towers

How to lift building standards: check the job is done right in the first place

The Herald has chosen not to publish the addresses of the properties.

Sydney-based Bannermans Lawyers has acted for owners corporations in about 300 matters over the past decade.

Principal David Bannerman said his firm was focused on early resolution and the vast majority of cases settled. Only about five per cent progressed to a court judgment, he estimated.

That could potentially put the total sum of payouts to owner corporations since 2014 in NSW in the vicinity of half-a-billion dollars.

“We’ve had ceilings collapse in peoples’ apartments that weren’t affixed to the slab properly,” Mr Bannerman said.

“There’s buildings where the roofs have blown off … we’ve had matters where bricks have fallen out of walls and landed on peoples’ beds.

“Countless videos of water pouring into apartments through holes and light fittings. And what’s a growing trend at the moment is people getting serious illnesses as a result of mould due to waterproofing issues.”

Mr Bannerman said the cases that ended in court usually involved large disparities in the parties’ cost estimates for fixing the defects or where builders were “trying to get out of liability based on poor drafting in the Home Building Act”.

But Steve Mann, the chief executive of the NSW branch of the Urban Development Institute of Australia (UDIA), argued that incidents involving building standards were “quite rare”.

He said NSW has some of the most rigorous building standards in the world, requiring that builders fix defects at their cost.

“There is an average of around 40,000 dwellings completed each year, and last year there were 163 complaints made to the Building Practitioners Board,” Mr Mann said.

“Of those complaints, only seven resulted in disciplinary action.

“While the building industry has recently been in the spotlight with the unfortunate events at Mascot Towers, the UDIA NSW urges caution before a thorough investigation is completed.”


Residents packing up items including a piano from their units in the Mascot Towers Building.

VIEW this report also on CAAN WEBSITE in the event of a Paywall!

Building defects ‘crisis’ not fixed by government’s package: lawyers

Strata agent from the People’s Choice Strata in Marrickville, Marian Hart, has been involved in pursuing many protracted legal battles which often took a heavy emotional and financial toll.

“A lot of people buying into these buildings are everyday average working people,” she said.

Ms Hart said there was frequently “conflict in the room” between owners who wanted to abandon the legal action and those that wanted to see it through.

“All they see is money coming out of their pocket and nothing happening. They’re asking when is it going to end? We’re borrowing money, we’ve got no money to do this.”

The owners of a two-storey apartment block at Narrabeen waged a “hotly contested” battle for compensation after discovering a myriad of defects from 2009.

Supreme Court Justice David Hammerschlag ordered the builder, M.D. Constructions, to pay the owners just over half-a-million dollars in 2016.

The Manly-based company went into liquidation the same year.

“The defendant’s original work is systemically defective,” Justice Hammerschlag wrote.

It failed, for reasons best known to itself, to install any of the required flashings for window and door apertures, a basic building requirement. Almost every shower leaks.

The court heard that when two owners approached the builder, Kiumars Hashemizadeh, over water leakages, he made multiple failed attempts to repair the defects.

A crack subsequently formed in the ceiling of one of the homes and a large water and mould stain appeared in the other.

Mr Hashemizadeh allegedly told the second owner: “It is not my problem. The staining and mould is caused by your tenant showering too often and not ventilating the unit.”

His lawyer, Elee Georges of G&S Law Group, said it was often tradespeople and subcontractors who were to blame for defects rather than the builder.

He welcomed changes to the Home Building Act in 2015 which note the “preferred outcome” is that the party responsible repair the defective work.

“Ninety per cent of the time they [the builder] don’t do the building work, they’re the manager,” Mr Georges said.

“If the waterproofer didn’t do his job properly it’s concealed. How does the builder know until five years later when it leaks?”

In another case over defects in a block of flats near Ettalong Beach on the Central Coast, a Supreme Court judge found the builder’s representatives adopted an “unnecessarily aggressive approach”.

The complex was developed by Galyan Pty Ltd and built by ACH Clifford. In a series of emails their solicitors attacked the owners corporation’s complaints as “bogus” and “spurious”.

“If your clients intent to persist with these, apparent, frivolous claims, they should at the very lease [sic] withdraw all complaints they have made to the Department of Fair Trading,” one email said.

The justice ruled in favour of the owners corporation, awarding it $1.2 million in May. A spokesperson for ACH Clifford said the decision was being appealed.

Do you know more? Email

Carrie Fellner

Carrie Fellner is an investigative reporter for The Sydney Morning Herald.


More than $30 million has been paid out in five years for defective buildings across the city.