By Christopher Kerin and Mia Haas -
Snapshot
- A recent Court of Appeal decision has provided clear guidance on who bears the evidentiary onus of establishing loss in combustible cladding disputes.
- Where the plaintiff claims damages for its losses, the courts have found the prima facie measure of damages is the cost of reinstatement, not the diminution in value of the defective building.
- Parties engaged in similar cladding litigation should consider whether alternative solutions to full replacement are possible.
On 26 May 2023, the NSW Court of Appeal handed down its decision in The Owners – Strata Plan No 92450 v JKN Para 1 Pty Limited [2023] NSWCA 114 (‘Strata Plan No 92450’). The decision involved a claim made by the owners corporation (‘the Plaintiff’) of ‘Parramatta Rise’, a 28-storey mixed use tower in Parramatta (‘the Building’), against JKN Para 1 Pty Ltd (‘the Developer’) and Toplace Pty Ltd (‘the Builder’) in connection with the installation of non-compliant cladding on the Building. The cladding used was aluminium composite panels known as Vitrabond FR (‘the Cladding’).
After the interim occupation certificate was issued, Fire & Rescue NSW provided a Final Fire Safety report to the certifier recommending that the Cladding be certified compliant with an internationally recognised fire protection listing for full scale façade tests. Fire & Rescue NSW requested written confirmation once the necessary rectification works had been completed. However, a final occupation certificate was issued without this certification.
The Plaintiff sought rectification damages in the order of $5 million to replace the Cladding.
