Builders and designers of commercial properties are currently in an advantageous position in the law. So far, courts have declined to hold them liable for claims by subsequent owners for latent defects following the decision of the High Court in Woolcock.[1] 

Courts have taken the view that commercial building owners can protect themselves by using professional advisers, boilerplate clauses and insurance. Unsophisticated home owners, on the other hand, are still able to sue builders, designers and subcontractors.

Recovery against subcontractors for latent defects in a commercial property is also fraught with difficulties for the same reason.

Currently a commercial building owner will only have a claim against a builder where the builder’s negligence results in personal injury or property damage. However, where the builder or the designer’s work causes a latent defect, the law is complex and in dire need of untangling.

On 18 June 2014, the High Court will hear a challenge to the NSW Court of Appeal’s decision to allow a claim by the body corporate of a commercial building against a builder for defective workmanship.[2]

The decision affirms the trend in Australian cases towards liability which had been arrested by the High Court’s decision in Woolcock. The fact that Australia’s senior Courts have been unable to draw the line with certainty reflects the complexity of this area of the law. 

The High Court’s decision could be significant for builders, designers, subcontractors, and owners of commercial premises. Depending on the outcome, it could affect a building owner’s right of redress where building works were carried out negligently.

A decision is likely to be handed down by the end of the year.


[1] Woolcock Street Investments v CDG Pty Ltd [2004] HCA 16
[2]Owners - Strata Plan No 61288 v Brookfield Australia Investments Ltd ([2013] NSWCA 317)

Authors: Ben Patrick & Andrew Milne 




Chris Edquist, Partner
T: +61 3 9321 9919


Troy Lewis, Partner
T: +61 7 3135 0614

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 publication is accurate at the date it is received or that it will continue to be accurate in the future. We are not responsible for the information of any source to which a link is provided or reference is made and exclude all liability in connection with use of these sources.  

Follow us on Linkedin & Twitter

Holding Redlich Weekly Brief

To receive invitations to upcoming seminars and articles that may be of interest to you
please click here to subscribe to the Holding Redlich Weekly Brief.


Holding Redlich © + Legal Notices + Site Map + Search + Contact Us +linkedin +twitter