Persons who carry out construction work owe a duty of care to exercise reasonable care to avoid economic loss caused by defects in or related to a building for which the work is done and arising from the construction work: Design and Building Practitioners Act 2020 (NSW) (DBP Act) s 37.
For further information about the operation of the statutory duty of care in the DBP Act, see our previous article entitled “The Labyrinthine Design and Building Practitioners Act”.
Recent decisions have further clarified the duty of care under the DBP Act.
Non-Delegable Nature of the Duty of Care
Under DBP Act s 39, a person who owes a duty of care under the DBP Act cannot delegate the duty.
The NSW Supreme Court in The Owners-Strata Plan No. 86807 v Crown Group Constructions Pty Ltd (No 2) [2023] NSWSC 520 confirmed that the non-delegable nature of the duty extended to all activities included in the scope of works in a construction contract even if the work was eventually being carried out by another party. In the case, the contractual scope of works for the builder, Crown Group Constructions Pty Ltd (Crown) included the design of the building. Even though the design was eventually carried out by architects which Crown had retained, the Court held that Crown continued to owe a duty of care in relation to work carried out by the architects they retained.
A copy of the full judgment can be found here.
Substantial Control
The NSW Supreme Court provided further clarification on the meaning of ‘substantial control’ in The University of Sydney v Multiplex Constructions Pty Ltd [2023] NSWSC 383.
The dispute related to defects at the Charles Perkins Centre at the University of Sydney (the University). The key issue was whether the University should be granted leave to amend its list statement as against McKenzie Group Consulting (McKenzie), who were the ‘certifying consultants’ on the project. The proposed list statement alleges that McKenzie, as the ‘certifying consultants’, carried out construction work within the meaning of DBP Act s 36.
The Court did not grant leave to amend. Submissions by the University that McKenzie should have declined to certify any work and thus the ability to prevent certification constituted ‘substantive control’ were rejected because the Court found that McKenzie did not actually control how the cladding was installed and McKenzie did not have the ability and power to control how the work was carried out. Causation issues were also present in the University’s pleadings as ‘the pleading does not state how the giving of warnings to Multiplex … would have “caused” or “contributed to” the bringing about of the states of affairs’.
A copy of the full judgment can be found here.
If you require any advice on the DBP Act, including if you have a potential claim under the DBP Act or have a claim made against you pursuant to the DBP Act, please do not hesitate to contact us. Our expert construction lawyers will be on hand to assist you.
The information contained in this article is general information only and not legal advice. The currency, accuracy and completeness of this article (and its contents) should be checked by obtaining independent legal advice before you take any action or otherwise rely upon its contents in any way.
Contributors: Harry Chen
