Appeals dismissed: defects were proved, but no clear repair scope meant no work order (NCAT, 2026)

What happened

A mixed residential and commercial strata building at Milsons Point in Sydney was built under a contract made on 15 December 2017 between the builder, Ceerose Pty Ltd, and the developer, Zone Q Milsons Point Development Pty Ltd. The scheme has 63 lots plus common property. In about March 2019 the builder engaged a sub-contractor, Southern Cross Climate Control Pty Ltd, to design and construct the air-conditioning and ventilation works, which were carried out between about May 2019 and November 2020. An interim occupation certificate was issued on 6 November 2020.

Water got into several parts of the common property. An expert building defects report was prepared in November 2022, and on 3 November 2022 the owners corporation started proceedings at NCAT against the builder and the developer. The developer then brought its own claim against the builder, and the builder brought a claim against the sub-contractor. Some items were settled by a deed of release, leaving 19 alleged defective items to be decided at a two-day hearing in August 2024.

In its decision of 20 November 2025, the Tribunal found that 7 of the defects existed and breached the statutory warranties in section 18B of the Home Building Act 1989 (NSW), but decided not to order any work for those 7 items. It did make work orders for other items: the builder and developer were ordered to perform, or cause the performance of, the scope of works identified at paragraph [494] of the reasons by 20 March 2026, using suitably licensed and insured people and due care and skill, with the owners corporation to provide reasonable access. The builder's claim against the sub-contractor and the developer's claim against the builder were dismissed.

The owners corporation appealed about five of the items where no work order was made (recorded as M2, M11, M13, M15 and M22). Each of those items was one where its own expert, a building and refrigeration, heating and air-conditioning consultant, had said that rectification needed a "regulated design" prepared under the Design and Building Practitioners Act 2020 (NSW) as the first step. No such design was in evidence. A separate application by the owners corporation to re-open its case to argue that the design law did not apply was dismissed on 19 January 2026. The builder also appealed, out of time, against the dismissal of its claim against the sub-contractor.

What each side wanted

The owners corporation argued that the Tribunal had misread its own power under section 48O(1)(c) of the Home Building Act, that a work order could properly have been made with a requirement that the builder or developer obtain the design, and that it was denied procedural fairness because nobody at the hearing raised the missing design as a problem that could sink its claim. It also argued that a "regulated design" is simply a document recording work already worked out, not a fresh design exercise. The developer answered that the owners corporation carried the onus of proving both the defect and the proper method of repair, that a decision-maker does not have to reveal its provisional view of the evidence, and that the point was in fact raised at the hearing. The builder argued the Tribunal had the power to make an order but simply found the evidence too uncertain, which is a question of fact rather than law. In the second appeal, the builder asked for an extension of time to appeal and said the Tribunal had been wrong to find it had no jurisdiction over its contract claim against the sub-contractor; the sub-contractor opposed both.

What the tribunal decided

The Appeal Panel made five orders. In proceedings 2025/00491926 (the owners corporation's appeal), the appeal is dismissed. In proceedings 2026/00037416 (the builder's appeal against the sub-contractor), the application for an extension of time to lodge the notice of appeal is refused, and the appeal is dismissed.

On costs, in proceedings 2025/00491926 the appellant is to pay the costs of the respondents of the appeal on the ordinary basis, as agreed or assessed. In proceedings 2026/00037416 the appellant is to pay the costs of the respondent of the appeal on the ordinary basis, as agreed or assessed. No sum of money was fixed in either order.

The effect is that the first-instance decision stands: the work orders already made against the builder and the developer for the scope of works at paragraph [494] remain, and no work order was added for items M2, M11, M13, M15 and M22.

Why the tribunal decided it that way

The dispute turned on section 48O of the Home Building Act, which lets the Tribunal order a party to "do any specified work or perform any specified service". The Tribunal at first instance held that a person seeking such an order has to prove two things: that the work was defective, and the appropriate method of fixing it. Proving the defect alone is not enough. Orders also have to be clear, certain and unambiguous, so the party told to do the work knows exactly what it must do; vague orders, or orders heavily conditional on future events, are not appropriate. The Tribunal applied that approach even though section 48MA says rectification by the responsible party is the preferred outcome in a defective work claim.

For the five items still in issue, the owners corporation's own expert had said that a regulated design under the Design and Building Practitioners Act 2020 had to be prepared before the repair work, and that the repair steps were "likely to include" the items listed. No design was produced. The Tribunal said it could not simply ignore the owners corporation's own evidence that a design was required, and that making an order for work that depended on a design that did not yet exist would be speculative. It noted it could have made an order subject to conditions, but said that was not appropriate here because there was no evidence that the scope of work would be unchanged once a design was prepared. It also rejected the owners corporation's submission that the point was "unnecessarily pedantic".

On the builder's claim against its sub-contractor, the Tribunal found it had no jurisdiction over a claim based on the section 18B statutory warranties, because the builder started its proceedings more than two years (but less than six years) after the sub-contractor finished the work, which under sections 18E(1)(b) and 48K(7) limits such claims to a "major defect". The builder's contract claims were held to be, in substance, the same obligations as the statutory warranties, so they could not be used to get around that limit, and the builder led no evidence of a major defect or of any loss. The builder's appeal had been filed late on the basis that it only mattered if the owners corporation's appeal succeeded.

The Appeal Panel's overview records that it did not agree that the refusal to make work orders for items M2, M11, M13, M15 and M22 involved an error of law, and that because the owners corporation's appeal failed, the builder should not get an extension of time and its appeal should also be dismissed. The published text supplied here ends partway through setting out the statutory provisions, before the Appeal Panel's detailed reasoning on each ground, so the full basis for those conclusions is not set out in the text available.

What this means if you are in a similar position

If you are in a similar position, this decision shows how NCAT applies the requirement that a work order under the Home Building Act must specify the work to be done. Showing that something is defective, and even getting the other side's expert to agree it is defective, is only half of what the Tribunal looks at. The person asking for the order also has to show, with evidence, what the repair involves in terms clear enough for the order itself to tell the builder what to do.

It also shows that your own expert's evidence is held against you as much as for you. Here the expert said a registered design was needed before the work could be scoped, that design was never produced, and the Tribunal treated the gap as the owners corporation's failure to prove its case rather than something it should raise during the hearing. The decision records that a decision-maker is not obliged to announce its provisional view of the evidence before deciding.

For claims between a builder and a sub-contractor, the decision shows that time limits in the Act can close off a claim, and that re-labelling a warranty claim as a contract claim does not necessarily avoid them. In disputes about defective building work, the step most people take first is a written notice to the builder or developer setting out each defect and asking for it to be fixed by a date, with photographs and any expert report attached, before any tribunal application is made.

How to apply: our step-by-step guide to a NCAT application. More decisions: NCAT cases and builders and building defects.

Source: The Owners – Strata Plan No 102171 v Ceerose Pty Ltd; Zone Q Milsons Point Development Pty Ltd; Ceerose Pty Ltd v Southern Cross Climate Control Pty Ltd [2026] NSWCATAP 323 (read the full decision). This summary was prepared from the published decision for general information. It is not legal advice, and the tribunal’s own reasons are the authoritative record.