Australia: Duty Of Care, Where Does It Stop?

A Case Note on Roberts v Goodwin Street Developments Pty Ltd [2023] NSWCA 5

Extension of the Duty of Care under DBPA

The Supreme Court in Goodwin¹ held that the coverage of duty of care under section 37(1) of the Design and Building Practitioners Act 2020 (NSW) (DBPA) extends beyond residential buildings. This decision clarified the scope of the duty of care under DBPA.

Recently, the New South Wales Court of Appeal (Appeal case)² confirmed the Supreme Court's decision in Goodwin, although for different reasons.

The Appeal case has provided better clarity and strengthened the broad applicability of the DBPA. The DBPA now applies to most (if not all) buildings in New South Wales.

Two definitions of “building work” in the DPBA

The difference in the two definitions of “building work” of section 4(1) and section 36(1) of the DBPA created ambiguity for design and building practitioners in determining the extent of their duty of care under the DBPA.

Clarification in Goodwin and the Appeal case

Goodwin (Supreme Court)

Previously, Goodwin expanded the meaning of “building work” to non-residential building work due to the broad definition of “building” in section 36(1) of the DBPA by its reference to the Environmental Planning and Assessment Act 1979 (NSW) where it covers most of the buildings in New South Wales.

Court of Appeal

The Court of Appeal affirmed the decision of Goodwin and agreed with the extension of duty of care to non-residential buildings although for different reasons.

The Court of Appeal further clarifies that the word “includes” used by “building work” in section 36(1) of the DBPA merely means that the DBPA also applies to residential building works. Section 36(1) was not meant to exclude other non-residential building works.

Key takeaway

All design and building practitioners should be aware that it is now confirmed that the duty of care under section 37(1) of the DPBA applies to almost all building works in New South Wales.

To avoid potential liability under the DPBA, it is critical that practitioners:

1. take reasonable steps in minimising defects that will cause economic loss to owners & subsequent owners; and
2. record what reasonable steps the practitioner has taken.

Footnotes

1 Goodwin Street Developments Pty Ltd atf Jesmond Unit Trust v DSD Builders Pty Ltd (in liq) [2022] NSWSC 624 (Goodwin).

2 Roberts v Goodwin Street Developments Pty Ltd [2023] NSWCA 5 (Appeal case).

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.