Opal Tower Owners Launch Class Action

Residents of Sydney’s defective Opal Tower have moved to sue the NSW government for compensation in a class-action lawsuit.

In documents lodged with the NSW Supreme Court, owners of the western Sydney apartment tower are suing the Sydney Olympic Park Authority (SOPA), the owner of the land on which the Opal Tower sits.

Documents filed by lawyers Corrs Chambers Westgarth claimed a “breach of warranty” and that the $165 million apartment complex was not designed or constructed with “due care and skill”.

It is claiming a breach of the Home Building Act, in that the tower was not built in accordance with the plans and specifications.

Owners are seeking compensation for the difference between the actual pre-defect value and their current market value, with many fearing the reputation of the building is now so decimated that apartments were unsellable.

The owners, hundreds of whom have now been in temporary accommodation for more than seven months, are also claiming a loss of rental value. Owners will ask to be compensated for not just retrospective rental income but any future predicted rental losses.

The claim from the lawsuit is now expected to run into multiple millions of dollars.

▲ Figures released in June revealed 155 out of 392 units at the 36-storey tower were unable to be reoccupied six months after the evacuation. Image: Tim Pascoe
▲ Figures released in June revealed 155 out of 392 units at the 36-storey tower were unable to be reoccupied six months after the evacuation. Image: Tim Pascoe

The newly-built 392 unit tower in Sydney Olympic Park was evacuated last Christmas Eve after cracks were found in the building, sparking fears it could collapse.

The problems had occurred in “garden slots” — recesses in the facade on the fourth, 12th, 16th and 26th levels of the building — where precast concrete panels joined structural columns.

Non-compliant construction and structural design of precast fabricated concrete beams were subsequently found to be the cause of the cracks.

Some owners of apartments in the 36-storey building paid up to $2.5 million for apartments, and larger apartments demanded rents of more than $750 per week.

Although Ecove, the developer of Opal Tower, and Icon, the builder, are not the focus of the lawsuit, they could still be liable through cross-claims.

Icon, which is understood to have full liability insurance for the project, has been funding the accommodation costs of ­displaced residents with allocations of between $220 and $500 a day, plus expenses.

Earlier this year, Icon's parent company, Japan's Kajima Corporation — which operates in 50 countries and is one of the largest construction companies in the world — agreed to extend the warranty on defects at the tower to 20 years, compared with the statutory six years.

In an update to residents in mid-July, Icon, said site works have been “progressing well” and structural works should be completed by the end of the month.

▲ Builder Icon has paid millions in temporary lodging expenses for owners. Image: EPA
▲ Builder Icon has paid millions in temporary lodging expenses for owners. Image: EPA

“I don’t blame anybody for taking legal action to defend their own rights,” NSW premier Gladys Berejiklian said.

“This is an unfortunate set of circumstances. We inherited the system we have today and we're aiming to fix it by the end of the year through legislation.”

Residents of Sydney’s 132-unit Mascot Towers were also left homeless when their building was evacuated on June 14 over cracking in its primary support structure and facade masonry.

The building is still under investigation and cannot be occupied.

With early estimates of repairs put at $5 million, some owners have flagged possible bankruptcy because of unaffordable costs imposed on them.

Plans to overhaul the building and construction industry in NSW have advanced in recent weeks, with the State Government releasing a discussion paper on the proposed reforms.

The planned reforms include requiring building practitioners who provide designs, specifications or plans to declare they comply with the Building Code of Australia and requiring builders to declare the building was constructed according to those plans.

The State Government also intends to amend laws to ensure an industry-wide “duty of care” to homeowners, owners’ corporations, subsequent titleholders and small businesses.


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Article originally posted at: https://www.theurbandeveloper.com/articles/opal-tower-owners-sue-nsw-goverment