Face of Nation : A Sydney woman who bought an $8.5 million harbourside property has seen her dream home transformed into a million-dollar nightmare after discovering the property was riddled with defects.
Marcelle Carr has spent $1.9 million fixing the issues and another $1.7 million in legal and consultancy fees after discovering the problems at her beautiful northern beaches property.
On the surface the property at 4 Laura St, Seaforth appeared to be the perfect home with six bedrooms, six bathrooms, four-car garage, swimming pool, 180-degree views of Middle Harbour as well as its own jetty and pontoon.
At the time, it was valued at $9 million by real estate valuers Pontons.
When Mrs Carr bought the home in 2012, the “magnificent” property was advertised as “newly built” even though it was actually an extensive redevelopment of the 976sq m lot.
Once she moved in, it didn’t take long for the cracks to start showing.
According to the Australian Financial Review, a problem with the airconditioning emerged within months followed by cracks in the marble bench tops. Condensation started covering the floor-to-ceiling windows and lights began blowing out. Other water damage and mould began appearing.
When Mrs Carr decided to take legal action, she was confronted with even more issues.
The previous owner of the property, Joseph Pascali, had actually asked his son-in-law Jason Nowytarger to handle the redevelopment.
But instead of hiring a licensed builder to oversee the work, the NSW Supreme Court found Mr Nowytarger had instead acted as an unlicensed builder, hiring and supervising tradesman on site.
Complicating the issue, Mr Nowytarger had colluded with a licensed builder, Daniel Miller, to create “sham contracts” in order to get retrospective home warranty insurance cover over some of the building works, the court was told.
Mrs Carr’s lawyers had insisted this insurance cover be provided before the sale was completed to ensure the work had been completed by a licensed builder.
However, Mr Miller, a friend of Mr Nowytarger, agreed to sign a misleading letter suggesting he had overseen the work in order to obtain the insurance cover in exchange for a $6000-$8000 payment, according to the Supreme Court judgment.
Justice Robert McDougall found the men concocted “sham contracts” to persuade the insurer to cover them.
“The contracts themselves were shams. They were concocted to conceal the fact that in substance the work had been done by Mr Nowytarger, who was neither a licensed builder nor an owner-builder,” Justice McDougall said in his judgment.
He also noted that “it is by no means immaterial” that Mr Nowytarger’s wife was set to receive $4.17 million out of the sale of the property so he was “prepared to do all that he could, including making false representations, to procure the necessary home warranty insurance certificate”.
But the deceit has come back to bite those involved.
Justice McDougall ruled on June 20 that builder Mr Miller would have to be responsible for the defective work covered by the “sham contracts”, despite the fact that they weren’t real.
He ordered Mr Miller to pay $567,966 for the defective building work, although Mr Miller has since filed for bankruptcy.
Mrs Carr will also have difficulty getting money from Mr Nowytarger, who was found to be liable for the defective or “incomplete work” on the property and has also declared bankruptcy.
Justice McDougall awarded Mrs Carr $1.1 million against Mr Nowytarger (or $1.09 million against his father-in-law Mr Pascali) to cover the difference between the price paid for the house and its true value.
Her only option now is to pursue Mr Pascali even though there was no suggestion he was involved in or had any knowledge of deceit. Regardless he is now liable by default for the consequences of his son-in-law’s actions.
