Statutory Duty of Care in Building Cases: Constructive Criticism by the Courts

The Supreme Court is taking a strict view on pursuing claims for statutory duty of care for construction work under the Design and Building Practitioners Act.

As owners, developers and contractors are now mostly aware, the Design and Building Practitioners Act 2020 (NSW)(the “DBP Act”) establishes that those who carry out construction works owe a statutory duty of care to the owner of the land and each subsequent owner.

What is less known is the fact that the Supreme Court is taking an increasingly strict view of how parties pursue a claim for breach of the statutory duty of care.

Since the DBP Act’s introduction, practitioners have seen the courts limit their discretion when dealing with matters that do not comply strictly with the technical objectives and rules of pleadings. This is particularly true of matters that deal with the new duty of care provisions under the DBP Act.

To pursue a claim for breach of the statutory duty of care, a party must identify:

  • the specific risks that a person who carries out construction work was required to manage, and
  • the precautions that should have been taken to manage those risks.

Construction Work under the DBP Act has a wide meaning including:

  1. building work;
  2. preparation of regulated designs and other designs for building work;
  3. the manufacture or supply of a building product used for building work;
  4. supervising, coordinating, project managing or otherwise having substantive control over the carrying out of any work referred to in (a)-(c) above.

In University of Sydney v Multiplex [2023] NSWSC 383, his Honour Justice Stevenson found fault with the way that the University had pursued its case against the contractor, Multiplex:

1. Substantive control of the building work – Stevenson J considered that McKenzie, a Building Code of Australia (BCA) consultant, did not have substantive control over the building work merely because it was a certifier over the works and had issued a BCA Compliance Report and a Certificate of Compliance.

To show that the certifier had ‘substantive control’ over building work, the University had to particularise the factual matters that show the certifier had control over how the materials were installed, or that the certifier had the ability or power to control how the work was carried out.

However, Stevenson J allowed the university another opportunity to reformulate its case.

2. Causation – the University failed to specify how the certifier’s actions caused the non-compliant ‘Substitute Thermal Insulation’ products to be installed.

The University pleaded that had the certifier warned the builder that the Substitute Thermal Insulation products did not comply with the performance requirements of the BCA, then the builder and the fire engineer would not have used the Substitute Thermal Insulation products.

Stevenson J did not accept that the causation element went far enough as it failed to identify how the warning to the builder would have then led to the builder fire engineer developing an alternative solution to the Substitute Thermal Insulation products being used. Stevenson J considered that in this instance a plaintiff must identify, with specificity what steps a reasonable person in the position of the builder should have taken.

This was similarly the case in the Supreme Court case Owners SP89005 v Stromer (No 3) [2022] NSWSC in which a builder’s cross-claim was struck out on the basis that they failed to adequately set out the facts and matters needed to establish that a breach of statutory duty of care had occurred. The builder was however, also given an opportunity to correct the deficiencies.

These decisions highlight the need for parties bringing cases for statutory duty of care to provide specific details when pleading claims under the DBP Act. This is in stark contrast to the typical way construction cases are dealt with in the early stages of preparation at Court.

Stromer and Multiplex also serve as a warning against the overgeneralisation of the factual matters by owners and Owners Corporations when pursuing DPB Act claims.

If you would like more information on this article, please contact a member of the Construction team.

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