Following some well publicised cases of major defects in fairly new high-rise residential apartment buildings in Sydney, the Design and Building Practitioners Act 2020 (NSW) came into effect. It provided that any person who carries out “construction work” (including architects, engineers and those who are engaged to do building work) owes a duty to landowners to take reasonable care to avoid economic loss caused by defects.
However, until recently it was unclear whether the duty of care under the Act applied to all classes of building or just residential building work. The NSW Court of Appeal has answered the question in the case of Goodwin Street Developments Pty Ltd atf Jesmond Unit Trust v DSD Builders Pty Ltd (in liq) [2023] NSWCA 5.
In that case the Court of Appeal considered what constitutes “construction work” under the Act which includes the definition of “residential building work “under the Home Building Act. It concluded that the new statutory duty of care extends to building work carried out on classes of building whether they be residential or commercial or infrastructure like bridges or pipelines.
As a result, there is no doubt that there will be an increase in the number of claims against all those involved in the construction and their insurers who will have no option but to markedly increase premiums to all industry participants thus increasing the pressure on an industry already under severe financial stress.
April 2023