On June 11, 2020 the NSW Parliament passed new building laws that centre on Duty of Care responsibilities in construction and design.
Put simply, under the new Design and Building Practitioners Act 2020 [the DBP Act 2020,] anyone carrying out construction work now has a real duty to exercise reasonable care to avoid financial loss to the owner caused by defects.
The Duty of Care applies to all classes of buildings including existing buildings built in the last ten years. It also applies to new constructions.
The laws make all contracted participants within the scope of works responsible for fixing building defects including draftspersons, architects, structural engineers, project managers, and individual subcontractors.
These contractors might typically include concreters, plumbers, electricians, and carpenters. The Duty of Care also extends to all suppliers of building materials.
Duty of Care also includes the manufacture or supply of building products used.
Duty of care also extends to the all-important supervising, co-ordinating and project managing of works where “substantive control” may be exercised over these works.
In the case of residential buildings, the DBP Act 2020 are in essence an addendum to the existing rights that relate to under the Home Building Act 1989 with the limitation period for claims at 6 years [under the Limitation Act 1969.]
Claims under the DBP Act 2020 are subject to a 10-year period from date of completion of the building under s.6.20 of the Environmental Planning and Assessment Act 1979.
Breach Of Duty
The Civil Liability Act 2002 [the CLA] provides some guidance as to how a court may determine whether there has been a breach of a Duty of Care e.g. that the builder knew about the potential for action or inaction to cause harm and did nothing.
Under the CLA “harm includes damage to property and economic loss.”
The owner would have to prove that harm suffered or economic loss occurred by direct negligence of the builder, designer or a contractor.
An example might be that building works were carried out for a residential renovations project where walls were removed to create more open and sociable spaces. However, once completed the owner finds significant cracking in the walls. The failure by the builder to engage a structural engineer caused economic harm to the owner. This omission on the part of the builder to consult with a structural engineer is a breach of Duty of Care.
Not every defect will have resulted from a breach of the Duty of Care. Therefore homeowners will have to prove in a court or tribunal that the work carried out was performed negligently.
If the works were carried out in a manner that is widely accepted by other professional builders as being a suitable professional practice or standard common to the industry then it may be deemed that there was no actual breach of Duty of Care.
It is unlikely that a court would find that a builder breached their Duty of Care obligations if, when carrying out the work, they exercised reasonable care and followed the requirements of the Building Code of Australia and relevant Australian Standards.
Under the CLA if the homeowner who is claiming a breach of Duty of Care has contributed to the harm by failing to take precautions against the risk of that harm, then homeowner can be found liable for the damage and associated costs as well. The term used here is “contributory negligence.”
A reasonable person in the position of homeowner who would have known that their non-disclosure, actions or inactions would contribute to the risk of harm or economic loss is contributory in their negligence. In such cases the claim amount may be deemed as 100% as owed from the homeowner, [thereby potential monies owed to the builder] if the court thinks it just and reasonable to do so.
It is generally thought that the new laws are intended to ensure that quality skilled contractors, designers and builders are engaged in construction work within the building industry and that the laws will produce a greater and restored public confidence in the NSW construction industry.
Kirribilli Homes welcome and embrace the new Design and Building Practitioners Act 2020 and view Duty of Care is a core value aiming to not only provide acceptable stewardship of homeowners / clients, their project quality, budget and fiscal aspects, but also to protect the reputation of Kirribilli Homes as a trusted renovation specialist earning the right for multiplied referrals to others beyond the completion date of the owner’s project.
DISCLAIMER: the above article is intended as a plain English overview for our clients and potential clients in understanding the new Design and Building Practitioners Act 2020. It is not intended for legal interpretation or advice.