The Design and Building Practitioners Act 2020 (NSW) (Design Act) received assent last week with the Residential Apartment Buildings (Compliance and Enforcement Powers) Act 2020 (NSW) (RBA).
The Acts are part of NSW’s response to the flaws in the compliance and enforcement systems in the building industry and the public outcry that has followed the defects arising in NSW developments including the Opal Tower and Mascot Towers.
The Design and Building Practitioners Act 2020 is a far-reaching reform of the circumstances in which a person who carries out construction work can be found liable to subsequent owners of the land on which the work is carried out.
Duty of Care—Scope
Part 4 imposes a duty of care on a large number of persons to exercise reasonable care to avoid economic loss caused by defects in or relating to a building where the work is done or arising out of construction work. It is owed to current and future owners (including lot owners and OCs).
Construction work includes building work, preparation of designs, the manufacture or supply of a building product, and supervisory or other project management services. Building work includes but does not seem to be limited to residential building work.
Generally, the imposition of a tortious duty to builders is contrary to the High Court decision in Brookfield Multiplex Ltd v the Owners – Strata Plan 61288  HCA 36.
The definition of construction work is so broad that the liability may well attach to almost all participants in the industry, perhaps to nominated supervisors of building companies, but perhaps not to certifiers.
The apportionment rules under the Civil Liability Act 2002 do not apply to statutory warranty claims but as claims for breach of the statutory duty of care are additional to warranty claims a builder may be able to defend a claim for out of time defects by raising apportionment.
In practice, the number of defendants in a building claim before NCAT is likely to rise as a result of this legislation.
Duty of Care—When does it apply?
The duty applies immediately from 11 June 2020 and can be retrospective for up to 10 years.
Schedule 1 says the duty extends to work carried out prior to the commencement of the Act in two instances. First, if the loss became apparent to the owner within a 10 year period before the statutory duty came into effect. Second, if the loss first became apparent on or after the commencement of the duty.
A second plank of the Design Act is the introduction of the concept of ‘regulated design.’ This includes a design that is prepared for a building element or a performance solution for building work. A building element is broadly defined and includes fire safety systems, waterproofing, load-bearing components and mechanical, plumbing and electrical services that are required to comply with the BCA.
Design practitioners and builders are now required to declare respectively that their regulated designs and their building work comply with various matters, including the BCA, by the issue of design compliance or building compliance declarations.
Enforcement powers are wide and include stop-work orders, applications for injunctive relief and fines. Further detail on these changes is expected in the foreshadowed Regulation.
Do you need advice regarding the Design and Building Practitioners Act 2020?
Clare Peacock is an experienced construction lawyer working on Sydney’s Northern Beaches. Clare provides practical, cost-effective building approval advice to property owners, builders and strata managers. Services include residential building disputes, body corporate issues and strata building problems.