An ACT Civil and Administrative Tribunal ruling that could cost Canberra building companies tens of millions of dollars is headed for the Supreme Court.
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The decision has been hailed as a colossal win for homebuyers in that it compels builders and developers to construct exactly what is on the approved plan.
"It (the Tribunal) has taken the view purchasers should be able to rely on the plan (for a development) as an indication of what will be built," Steven Gavagna of Goodman Law and a member of the legal team representing the body corporate of Forrest's prestigious $30 million Empire Apartments development said.
Homeowners who feel they have been shortchanged between what was shown on a building plan and what was eventually built now have a $500,000 precedent under which to seek potentially costly rectification work.
The Empire Apartments body corporate had complained to the ACT Planning and Land Authority that B & T Developments and B & T Constructions, substituted rendered finishes and painted fibre cement for the polished stone and aluminium facade shown on the approved plans.
It was also claimed B & T had substituted concrete panels for glass balustrades planned for the penthouse apartment balconies.
The body corporate argued the variations had "the consequence of reducing the value and quality of the building".
ACTPLA agreed and, on October 18, 2011, more than two years after Empire Apartments was granted a certificate of occupancy, issued a rectification order calling for the facade and balustrades to be reworked at a cost of about $500,000.
B & T appealed the ruling to ACAT which upheld the ACTPLA orders on August 6.
B & T appealed this latest ruling last week with Tony Hinwood, the group's financial controller, saying the organisation wanted the matter heard by the Supreme Court.
"We lodged an appeal late in August," he said. "The ACT Government has indicated it will object to our appeal being heard by the Supreme Court. (We believe) it is the sort of case that needs to be heard by the Supreme Court."
While unwilling to explain why the changes had been made, Mr Hinwood said the substitutions did not affect the structural integrity of the building and would have been approved if an amended development application had been lodged.
"B & T's understanding, at the time, was that the substitution could be made without amending the plans and that under the terms of the Planning and Development Act it would not have been possible to apply for an amendment as the facade was regarded as an 'exempt activity'," he said. "In the case of Empire Apartments the work was signed off on by the certifier at every step of the way."
B & T is of the view ACAT may have placed too much emphasis on what it perceived as a consumer protection role.
"Nobody is claiming the facade is not structurally compliant (with the building code) or otherwise fit for its purpose," Mr Hinwood said. "The alleged non-compliance stems from the deviation from the plans; not from issues with design or execution."
He does not believe unit buyers have been conned into paying for one thing and then receiving another.
"Some units were sold off the plan and those purchasers, when they made their initial inquiries, may have been of the understanding a stone and aluminium facade was proposed," he said. "(But) none of the units were settled on by the buyers until the building, including the facade, was complete.
"More than half of the 30 units (which were marketed for between $750,000 and $1.2 million) were sold after the building was completed.
Mr Gavagna said while he could only speculate on why B & T, which is controlled by Ivan Bulum whose involvement in the local building scene dates back four decades, made the substitution, it would be surprising if cost was not a factor.
