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No Duty Owed by a Certifier

The question as to what an Occupation Certificate (OC) actually means is articulated within the following extract taken from a lawyer’s account of a recent case involving the prosecution of a Certifier who issued an OC on a property that contained some structural defects. The outcome is interesting to say the least, whilst most Certifiers understand the bounds of an OC the general public’s perception of what it may mean is not so clear or factual.


The New South Wales Court of Appeal recently handed down a long awaited reserved decision in a recent court case. This was an appeal from an earlier decision in the NSW Supreme court where the court found that the Certifying Council had a duty to a subsequent home owner to ensure that the certification of the subject premises was not undertaken negligently.


The owner-builder renovated their property and then obtained and Occupation Certificate (OC) from the Certifying Council who issued the Construction Certificate (CC).


In time the property was then sold to a person/s who was not aware that the renovations undertaken by the owner-builder contained structural defects.


The Supreme Court had decided that the claim against the engineer should be dismisses because the engineers did not owe a subsequent purchaser any duty of care.


In that decision the judge found that the subsequent purchases were relevant “vulnerable” because it must have been reasonable foreseeable to the Council Certifier that any purchaser would suffer a loss if the defects were not at least identified and the rectified before the new purchasers bought the property.


In the appeal the Court of Appeal held unanimously that the purchasers must be able to establish that they were owed a duty of care by the Certifying Council.


Although it is not determinative the Court of Appeal decided that as the purchasers were able to protect themselves by negotiating terms in their contracts of sale with previous owner/s and because they had the benefit of the statutory warranties for defective building works which ran with the property they were not entitled to any further duty.


The Court of Appeal looked in particular at the role of the Certifier and the issue of the Occupation Certificate. In particular in this case the purchaser’s barrister in their opening remarks stated that their case against the council was “not one of actual reliance” on any certificate provided but one of reliance in a general sense.


The Court found that as we are all aware the suitability of a building for occupation and use, does not require that all of the building work which is the subject of a Development Consent has been carried out in accordance with the approval plans and specifications and in a proper and workmanlike manner.


In other words, as we so often say to owners, the fact that an Occupation Certificate has been issued does not mean that there has not been any breach of the builder’s statutory warranties. In fact, the Court of Appeal went on to find that the Occupation Certificate does not actually certify that the building does not contain any defective building works or even that the building complies with the plans and specification.


Whilst there still may possibly be cases where a person can bring a claim against a certifier for misleading and deceptive conduct, it will be necessary to establish what the certifier actually did and that the claimant actually relied specifically upon the certificate/s in question when making the decision to purchase.

Reference:

Bannermans Lawyers. No Duty Owed by Certifying Council. Retrieved from http://www.bannermans.com.au/files/No_duty_owed_by_certifying_council_20_11_17.pdf. Accessed on 01.06.2018