NSW Court of Appeal confirms extension of builder’s statutory duty of care

Roberts v Goodwin Street Developments Pty Ltd [2023] NSWCA 5

The New South Wales Court of Appeal recently confirmed the decision in Goodwin Street Developments Pty Ltd atf Jesmond Unit Trust v DSD Builders Pty Ltd (in liq) [2022] NSWSC 624.

At first instance, the New South Wales Supreme Court found that the statutory duty of care under section 37(1) of the Design and Building Practitioners Act 2020 (NSW) (the Act) extended to work done on boarding houses. In reaching this decision, Stevenson J held that the legislative requirements were as follows:

• The definition of ‘building work’ in s 36 of the Act is not limited to ‘residential building work’ within the meaning of the Home Building Act (NSW).
• Section 36(1) includes a non-exhaustive list. Further, pursuant to s 36(2), any references to building work can only apply to building work ‘relating to a building within the meaning of this Part’.
• For the purpose of Part 4, including s 37(1) above, ‘building’ is defined in s 36 by reference to the meaning given to it in the Environmental Planning and Assessment Act 1979 (the EPA Act).
• Under the EPA Act, ‘building’ is broadly defined to include ‘any structure or part of a structure’.
• In making amendments to the Act, Parliament’s intention was to give broad coverage to the statutory duty of care, such that the duty should apply in respect of ‘all buildings’.
• The definition of ‘building work’ in s 4(1) has no application to Part 4 of the Act.

We have previously prepared an update on the New South Wales Supreme Court decision which can be found here.

Mr Roberts, a representative of one of Goodwin’s subcontractors, appealed the decision of the New South Wales Supreme Court on a number of grounds including that the Court had wrongly construed the Act in finding that the statutory duty of care extended to work done on boarding houses.

The Court of Appeal unanimously rejected Mr Roberts’ appeal, with Kirk JA and Griffiths AJA agreeing with the primary judge that the definition of ‘building work’ under the Act extended to boarding houses. However, the Court disagreed with the construction adopted by the primary judge that the general definition of ‘building work’ in section 4(1) has no application to Part 4 of the Act. Applying statutory interpretation principles, the Court of Appeal found that the construction which best gives effect to Parliament’s intention is one where the general definition of ‘building work’ in section 4(1) of the Act applies to the further definition of building work in section 36(1) of the Act, but only with regard to the type of work being undertaken.

The Court found that that the type of ‘building’ to which section 36(1) of the Act applies is exhaustively defined by reference to the meaning of ‘building’ within the EPA Act. Consequently, the general definition of ‘building work’ in section 4(1) of the Act does not extend to define the type of buildings that works are undertaken on. It therefore followed that the type of work Mr Roberts undertook still fell within the definition of ‘building work’, such that the statutory duty of care in section 37(1) of the Act to exercise reasonable care to avoid economic loss caused by defects applied.

The full decision can be found here.