High profile defects within buildings in various parts of the country saw the enactment of the Design and Building Practitioners Act 2020 (NSW) (‘DBPA’) by the NSW Government.
The DBPA imposes a new duty of care and other obligations upon design and building practitioners. It is designed to improve the quality and compliance of construction work.
On 11 June 2020, Part 4 of the DBPA came into force. Part 4 of the DBPA introduced a duty of care on those who carry out construction work, with the duty being to exercise reasonable care to avoid economic loss caused by defects in relation to a building for which the work is done and/or arising from the construction work. The duty is owed to each owner of land in relation to which construction work is carried out and all subsequent owners.
The statutory duty of care is not only owed by those who carry out “building work”, but also by those who prepare designs for building work, those who manufacture or supply building products, and those who supervise, coordinate, project-manage or “otherwise have substantive control over the carrying out of” building work, preparing designs, or the manufacture and supply of building products (per the definition of “construction work” under section 36(1) of the DBPA). The duty is owed with respect to construction work carried out on all classes of buildings (Roberts v Goodwin Street Developments Pty Ltd [2023] NSWCA 5) and applies retrospectively if a loss became apparent within 10 years immediately before the commencement of Part 4.
It has been held that developers can be liable if it can be shown that they actually exercised substantive control over the work or had the ability to do so. In The Owners – Strata Plan No 84674 v Pafburn Pty Ltd [2022] NSWSC 659 the Court gave an example of a developer who owned all the shares in a builder and had common directors.
The DBPA does not limit damages or other compensation that may be available at common law or under any other statute. For an owner to be successful in a claim under the DBPA, they need to prove that they have suffered (or will suffer) economic loss. The DBPA provides that an owner will suffer economic loss if they bear the costs of rectifying defects that are subject of the breach of duty of care. The loss also can also the reasonable cost of providing alternative accommodation.
The majority of the remaining Parts of the DBPA were effective from 1 July 2021. They apply to Class 2 buildings, which are usually multi-level residential building, class 3 and class 9c buildings. The DBPA also includes mixed use buildings comprising class 2, class 5 and class 6 buildings. Section 42 of the DBPA and Schedule 1 of the Design and Building Practitioners Regulation 2021 (NSW) (Regulation) provide for classes of registration as a “design practitioner”. Obligations upon design practitioners are imposed relating to insurance and there is scope under the DBPA for potential disciplinary action.
For “building elements” for building work, “regulated designs” and “design compliance declarations” must be obtained and lodged with the NSW Planning Portal. Certain exceptions to these requirements are provided for in the Regulation.
“Design Compliance Declarations” are declarations that the “regulated designs” are compliant with the Building Code of Australia, other applicable requirements that may be prescribed and whether other applicable standards, codes or requirements have been applied in preparing the design and other matters as prescribed. Following completion of the building work, “registered building practitioners” are required to provide a “building compliance declaration” to the person for whom work is done and must lodge such a declaration and other stipulated documents on the NSW Planning Portal.
A “building compliance declaration” must declare such matters as:
- whether or not the building work complies with the requirements of the Building Code of Australia, other applicable requirements prescribed.
- If the building work does not comply with the aforementioned requirements, the steps required to be taken to ensure compliance.
- If a regulated design was used for the building work, whether or not the design was prepared by a registered design practitioner and the building work was built in accordance with the design and whether or not a design compliance declaration has been obtained in relation to regulated designs used for the building work.
While it may complicate the initial phase of a project and potentially incur additional cost and time this new system was created to increase the quality of designs and building practices for new works.
This is general information and should not be considered to be legal advice. You should obtain legal advice specific to your individual situation.
Authors: Tom Waugh & Allison Benson