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Residential Focus

02 November 2022

14 min read

#Property, Planning & Development, #Construction, Infrastructure & Projects

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Residential Focus

Design and Building Practitioners Act – approach to the application of the statutory duty of care

In Boulus Constructions Pty Ltd v Warrumbungle Shire Council [2022] NSWSC 1368, the Court took a broad view of the definition of “person” who owes the statutory duty of care and affirmed its approach in The Owners – Strata Plan No 84674 v Pafburn Pty Ltd [2022] NSWSC 659.

Background

The decision concerned two applications:

  • by the builder to rely on amended pleadings which asserted that Council was not entitled to succeed in a claim against the builder for defects as the work was illegal in that it was not subject of a valid development consent or construction certificate
  • by Council to amend its pleadings to include a claim for breach of statutory duty, including against a number of additional new parties, the managing director of the builder and the project site supervisor.

The defence of illegality

The Court found that the defence of illegality could not affect the statutory duty. The fact that the works were performed in breach of the Environmental Planning and Assessment Act 1979 (NSW) did not justify denying the Council the relief it sought.

The claim against individuals

This turned on whether the two individuals concerned could be persons for the purposes of the Act.

The Court noted that, in the matter of The Owners – Strata Plan No 84674 v Pafburn Pty Ltd [2022] NSWSC 659, it had held that a person “having substantive control over the carrying out of any work” for the purpose of ss (d) of the definition of “construction work” in section 36(1) of the Act, included a person able to control how the work was carried out.

The Builder argued that what constitutes as a “person” should be construed more narrowly so that a person is, for the purposes of the definition under ss (d) of section 36(1) of the Act, “a person who carries out construction work in their own capacity”, not including a person who acts as agent for another.

The word “person” is not defined under the Act to be limited to practitioners. The Act refers to persons who are practitioners if they carry out certain prescribed works (s 49). There are also other provisions of the Act where reference is made to persons who, because of the context, cannot be practitioners.

The Court noted that there is a presumption that the word “person” has the same meaning throughout the Act, unless the context of the usage of that word contemplates otherwise. Here, depending on the context of the usage of the word “person”, the word may be limited to practitioners, or contemplate a broad application of the word. The Court did not make a finding that Part 4 of the Act (which establishes the statutory duty of care) has such a limitation.

The Court also suggested that persons in the position of the managing director of the builder and the project site supervisor could find comfort in the statutory duty of care being subject to the proportionate liability regime under the Civil Liability Act 2002 (NSW), allowing them to identify concurrent wrongdoers and seek to have their liability for breach of the statutory duty limited under section 35 of that Act.

Way forward

If there is a theme running through these decisions, it is that the scope and application of the duty under the Act is being given its broadest possible interpretation. It remains to be seen what the limits of that are. For now, whether or not a person is a “person” for the purposes of Part 4 of the Act will be a question of fact in each case, although not limited to a practitioner.

Author: Christine Jones

In the media

Australian construction exodus driven by stress and burnout
New industry research has revealed over half (52%) of Australian construction leaders report losing skilled workers due to higher levels of stress and burnout. Still, work health and safety (WH&S) remains a top priority and the industry has increased investment in technology and data to reduce risk and improve safety outcomes (19 October 2022).  More…

Australian home prices fall for six months in a row as interest rate rises bite
National property prices have fallen for the sixth month in a row as higher interest rates make the cost of borrowing more expensive. Property data firm CoreLogic said home values across the country fell a further 1.2 per cent in October from a month earlier, with the median home price now at $721,018 (1 November 2022).  More…

Budget addressing the fundamentals
The Australian Institute of Architects (AIA) has welcomed the Federal Budget’s National Housing Accord to improve housing outcomes for all Australians by increasing the supply of sustainable social and affordable housing. The Treasurer has announced the government’s commitment to see one million new affordable and well-located homes built over 5 years from 2024 bringing together states and territories, local government, investors, and representatives from the construction sector (27 October 2022).  More…

Construction sector should start reap the rewards of digital systems
Two years ago the construction sector was experiencing record building approvals, activity and strong profits. With the benefit of hindsight this was the time many construction firms should have retired their spreadsheets and legacy IT and invested in new digital systems (21 October 2022).  More…

First Home Buyer Choice adds up for majority of first-time buyers
First home buyers who opt in to the NSW Government’s First Home Buyer Choice could be saving money for up to 63 years when compared to paying upfront stamp duty. Two-thirds of first home buyers purchasing a home between $800,000 and $1.5 million are expected to choose the smaller annual property fee rather than upfront stamp duty under First Home Buyer Choice, NSW Treasury analysis shows (31 October 2022).  More…

Flood Recovery Coordinators appointed
Recovery Coordinators have been appointed by the NSW Government to manage clean up and repair efforts following significant flooding across the State. Minister for Emergency Services and Resilience and Minister for Flood Recovery Steph Cooke said Mel Gore will oversee efforts for the North Coast and North West, Ken Harrison will oversee efforts for the Central West and Donna Argus will oversee efforts for the Riverina, Murray and Murrumbidgee (29 October 2022).  More…

NSW considering mandatory decennial liability cover for high-rises
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NSW takes bold step to address housing supply crisis
Urban Taskforce CEO, Tom Forrest, today praised the Perrottet Government’s announcement to take on the assessment of three major planning proposals that could deliver around 19,000 new homes in Southwest Sydney. “Urban Taskforce has been calling for State led assessment of major projects for years” (2 November 2022).  More…

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VIDEO: NSW Premier orders development heights to be reduced
NSW Premier Dominic Perrottet has blocked the development of a new skyscraper in Barangaroo citing height limits (21 October 2022).  More…

In practice and courts

Draft Climate Change Policy and Action Plan
The EPA is taking action to protect the environment and community from the impacts of climate change, and will work with industry, experts and the community as part of its new draft Climate Change Policy and draft Climate Change Action Plan: 2022-2025, which are now open for public comment. Read more here.

Have Your Say: Interactive Building Guide
The NSW Government wants input as they explore the concept of an Interactive Building Guide. In wanting to help make the process of building a home clearer and easier to understand, the NSW Government is exploring the idea of an Interactive Building Guide. The concept is an end-to-end guide of all the necessary steps and information needed to help build a home in NSW. Submissions are open and invited until 11 November 2022. Read more here.

Have Your Say: Reforming building laws in NSW
The NSW Government is working to increase confidence in the building industry. They are creating a new foundation for construction by looking at how they can improve laws, better protect consumers and support workers. Key areas of focus include: improving safety, accountability and transparency; ensuring high-quality design, construction and maintenance; modernising and simplifying building legislation. Submissions are open and invited until 25 November 2022. Read more here.

Published – articles, papers, reports

Apartment energy efficiency – what’s new for 2022
There’s new energy efficiency requirements and compliance pathways for apartments in NCC 2022. Here’s an overview of what you need to know (10 October 2022). Read more here.

Australian Building and Construction Commission Industry Update – September 2022
This release from the ABCC provides an overview of their work in and out of the Australian courts since August. Read more here.

Australia Construction Industry Report 2022: Analysis, Trends and Forecasts, 2017-2021 & 2022-2026
Business Wire (Berkshire Hathaway) has released its report on expected output of the Australian construction industry compared to pre-pandemic and pandemic levels of growth (10 October 2022). Read more here.

Building Approvals, Australia
The ABS has provided the number of dwelling units and value of buildings approved for August 2022 (10 October 2022: Release).

Major changes to the functions of the ABCC
From 10 November 2022, the ABCC’s role enforcing the Fair Work Act 2009 (FW Act) in the commercial building and construction industry will transfer to the Fair Work Ombudsman. The ABCC is available to provide advice and assistance on all issues impacting building industry participants until the transfer date of 10 November 2022. Read more here.

Cases

Aksan v Godfrey [2022] NSWCATAP 338
BUILDING AND CONSTRUCTION – Home Building Act 1989 (NSW) – building dispute – tribunal powers – consent order for work to be done – completion of work to applicable building standards to be signed-off by independent expert – sign-off provided – challenge to sign-off – principles applicable to challenging expert determination agreed to by parties.

Anjoul v Anjoul (No 3) [2022] NSWSC 1456
EQUITY – general principles and maxims – they who seek equity must do equity – defendant provisionally successful in defending enforcement of deed on grounds of unconscionable conduct and Contracts Review Act 1980 (NSW), s 7 – Court finds that defendant ought to pay plaintiff compensation as condition to making order declaring deed void – parties granted leave to adduce certain evidence on issue of quantum of compensation payable to plaintiff – assessment of compensation – competing expert reports – over-capitalisation in renovating residential property – plaintiff entitled to $400,000 in compensation.

Boulus Constructions Pty Ltd v Warrumbungle Shire Council (No 2) [2022] NSWSC 1368
BUILDING AND CONSTRUCTION – where no valid development consent or construction certificate in relation to building works – whether defence of illegality available in relation to claim for breach of statutory duty under s 37 of the Design and Building Practitioners Act 2020 (NSW) – whether managing director and project site supervisor of builder capable of being persons for the purposes of s 37 of that Act.

Boulus Constructions Pty Ltd v Warrumbungle Shire Council (No 3) [2022] NSWsc 1455
COSTS – where cross-claimant granted leave to amend its Technology and Construction Cross-Claim Cross-Summons and Cross-Claim List Statement – costs thrown away by the amendment – whether such costs should include any costs cross-defendant will incur in revisiting existing evidence – whether cross-defendant should pay costs of amendment application.

Sillitoe v Commissioner for Fair Trading [2022] NSWCATOD 135
HOME Building Act – whether evidence establishes a wide range of building construction work experience – whether experience relevant industry experience – individual contractor licence – general building work – whether evidence that work performed can be verified by witnesses who are not supervisors.

Sunaust Properties Pty Ltd v The Owners SP no 64807 (No 2) [2022] NSWCATAP 335
APPEAL – slip rule-s63 of the Civil & Administrative Tribunal Act – whether grounds one and two of appeal not considered was an omission – whether the grounds of appeal not considered should be considered – whether a caretaker agreement predating the 2002 amendments to the strata legislation may be terminated under s72 of the current strata legislation introduced in 2016.

The Owners – Strata Plan No 90189 v Parkview Constructions Pty Ltd (No 2) [2022] NSWSC 1477
COSTS – indemnity costs – defendant makes unsuccessful application for advanced ruling on evidence pursuant to section 192A, Evidence Act 1995 (NSW) – plaintiff makes “walk away” offer – application more strange than novel – defendant asks the Court to depart from good law – rejection of offer unreasonable.

Tom v Commissioner of Fair Trading [2022] NSWCATOD 130
ADMINISTRATIVE LAW – REVIEW OF DECISION BY EXTERNAL DECISION-MAKER – decision to cancel contractor licence and disqualify a licence holder pursuant to section 62 of the Home Building Act 1989 (NSW).
PRACTICE AND PROCEDURE – INTERLOCUTORY ORDER – interim decision – factors relevant to exercise of the power to make the interim decision under section 60 of the Administrative Decisions Review Act 1997 (NSW) – interlocutory decision to take effect retrospectively.

Legislation

Statute Law (Miscellaneous Provisions) Act (No 2) 2022 (NSW) – commenced 26 October 2022

Environmental Planning Instruments
Blacktown Local Environmental Plan Amendment (Precincts – Central River City) (Map Amendment No 1) (2022-642) – published LW 28 October 2022
Canterbury Local Environmental Plan 2012 (Map Amendment No 1) (2022-643) – published LW 28 October 2022
Cessnock Local Environmental Plan 2011 (Amendment No 35) (2022-623) – published LW 21 October 2022
Coffs Harbour Local Environmental Plan 2013 (Map Amendment No 5) (2022-644) – published LW 28 October 2022
Gunnedah Local Environmental Plan 2012 (Amendment No 15) (2022-624) – published LW 21 October 2022
Hawkesbury Local Environmental Plan Amendment (Pitt Town Common House) 2022 (2022-645) – published LW 28 October 2022
Lachlan Local Environmental Plan 2013 (Amendment No 3) (2022-646) – published LW 28 October 2022
Lake Macquarie Local Environmental Plan 2014 (Amendment No 45) (2022-647) – published LW 28 October 2022
Parkes Local Environmental Plan 2012 (Amendment No 6) (2022-625) – published LW 21 October 2022
Shellharbour Local Environmental Plan Amendment (Precincts – Regional) (Map Amendment No 1) (2022-648) – published LW 28 October 2022
Shoalhaven Local Environmental Plan 2014 (Amendment No 46) (2022-626) – published LW 21 October 2022
Shoalhaven Local Environmental Plan 2014 (Amendment No 47) (2022-627) – published LW 21 October 2022
Standard Instrument (Local Environmental Plans) Amendment (Canal Estate Development and Public Bushland) Order 2022 (2022-628) – published LW 21 October 2022
State Environmental Planning Policy Amendment (Water Catchments) 2022 (2022-629) – published LW 21 October 2022
State Environmental Planning Policy (Resources and Energy) Amendment (Dartbrook Mine) 2022 (2022-649) – published LW 28 October 2022
Sydney Local Environmental Plan (Green Square Town Centre) 2013 (Amendment No 4) (2022-630) – published LW 21 October 2022
Wagga Wagga Local Environmental Plan 2010 (Map Amendment No 9) (2022-650) – published LW 28 October 2022
Waverley Local Environmental Plan 2012 (Amendment No 23) (2022-631) – published LW 21 October 2022
Wentworth Local Environmental Plan 2011 (Map Amendment No 2) (2022-632) – published LW 21 October 2022
Wingecarribee Local Environmental Plan 2010 (Amendment No 66) (2022-633) – published LW 21 October 2022
Wingecarribee Local Environmental Plan 2010 (Map Amendment No 5) (2022-634) – published LW 21 October 2022

Disclaimer
The information in this publication is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, we do not guarantee that the information in this article is accurate at the date it is received or that it will continue to be accurate in the future.

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