NSW Con­struc­tion Update

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

In a recent deci­sion hand­ed down by the NSW Court of Appeal it has been con­firmed that the duty of care pro­vi­sions intro­duced under Part 4 of the Design and Build­ing Prac­ti­tion­ers Act 2020 (NSW) (DBP Act) on 10 June 2020, in par­tic­u­lar a claim under sec­tion 37 of the DBP Act, is not lim­it­ed in appli­ca­tion to class 2 build­ings but applies to all class­es of buildings. 

The appeal was brought by Daniel Roberts, deter­mined to be the rep­re­sen­ta­tive of DSD Build­ings Pty Ltd, which nego­ti­at­ed the build­ing con­tract with Good­win Street Devel­op­ments Pty Ltd who was named as the Sec­ond Defen­dant in Good­win Street Devel­op­ments Pty Ltd atf Jes­mond Unit Trust v DSD Builders Pty Ltd (in liq) [2022] NSWSC 624. The appeal was dismissed.

This deci­sion con­firms a broad inter­pre­ta­tion of these statu­to­ry pro­vi­sions in its appli­ca­tion to con­struc­tion works, whilst also pro­vid­ing guid­ance on the scope of its appli­ca­tion. The appeal con­firmed that a duty to exer­cise rea­son­able care to avoid eco­nom­ic loss caused by defects con­tained under s 37 of the DBP Act applies to all build­ing work, whether res­i­den­tial or com­mer­cial, as long as it relat­ed to the con­struc­tion of a build­ing’ defined under the Envi­ron­men­tal Plan­ning and Assess­ment Act 1979 (NSW) (the EPA Act).

The EPA Act1.4 defines build­ing’ as includ­ing part of a build­ing, and also includes any struc­ture or part of a struc­ture (includ­ing any tem­po­rary struc­ture or part of a tem­po­rary struc­ture), but does not include a man­u­fac­tured home, move­able dwelling or asso­ci­at­ed struc­ture with­in the mean­ing of the Local Gov­ern­ment Act 1993. If the struc­ture is not clas­si­fied as a build­ing’, or the work under­tak­en relates to mat­ters sep­a­rate to the con­struc­tion of a build­ing’, the duty of care does not apply.

Part 4 of the DBP Act there­fore relies on a dif­fer­ent def­i­n­i­tion of build­ing work’ than the remain­der of the Act.

The appeal not­ed that the duty of care can apply to any per­son’ engag­ing in con­struc­tion work, includ­ing employ­ees, direc­tors, and agents of a com­pa­ny that entered into a design and/​or con­struc­tion con­tract, even if they did not them­selves enter into the con­tract or were mere employ­ees. See our arti­cle.

A copy of this deci­sion can be found at: https://​www​.caselaw​.nsw​.gov​.au/​d​e​c​i​s​i​o​n​/​1862436​a​e​3​d​b​e​5​e​f​d​35​f1108

New South Wales Leg­is­la­tion (Build­ing Class­es) Reg­u­la­tion 2023

The New South Wales Leg­is­la­tion (Build­ing Class­es) Reg­u­la­tion 2023 has been pub­lished with some amend­ments to come into effect imme­di­ate­ly, where­as on the most part oth­er amend­ments come into effect from 3 July 2023

The pri­ma­ry pur­pose of the new reg­u­la­tion is to expand the Design and Build­ing Prac­ti­tion­ers Act 2020 (NSW) (the DBP Act) and the Res­i­den­tial Apart­ment Build­ings (Com­pli­ance and Enforce­ment Pow­ers) Act 2020 (the RAB Act) to include class 3 and 9c build­ings in its appli­ca­tion by amend­ment of the Design and Build­ing Prac­ti­tion­er Reg­u­la­tion 2021 (DBP Reg­u­la­tion) from 3 July 2023. Class 3 and 9c build­ings include aged care, board­ing hous­es, hos­tels, mixed use build­ings if they con­tain a class 3 or 9c part.

Of impor­tance for reme­di­al design­ers and builders is that ini­tial­ly the amend­ments do not apply to build­ing work in rela­tion to a class 3 or 9c build­ing for the mak­ing of alter­ations or addi­tions to the build­ing or the repair ren­o­va­tion or pro­tec­tive treat­ment of the build­ing, with the addi­tion of clause 13(1)(m) in the DBP Reg­u­la­tion. How­ev­er, note that this exclu­sion is to be repealed on 1 July 2024. Tran­si­tion­al pro­vi­sions for class 3 or 9c build­ing work are includ­ed under a new Divi­sion 3B and include some exemp­tions for reg­u­lat­ed build­ing work com­menced before 3 July 2023 but there is still a require­ment to lodge designs on the NSW Portal.

As not­ed in the Good­win appeal case above, Part 4 of the DBP Act adopts a dif­fer­ent def­i­n­i­tion of build­ing work’ in its appli­ca­tion. How­ev­er, the new reg­u­la­tion in sec­tion 4(1) amends the def­i­n­i­tion of build­ing work to add class 3 and 9c build­ings, along­side class 2 build­ings for the remain­der of the DBP Act and the RAB Act provisions.

Effec­tive from 1 July 2023 is an amend­ment to sec­tion 106 of the DBP Act to extend the exemp­tion applic­a­ble to build­ing prac­ti­tion­ers from the insur­ance require­ments under the DBP Act to 1 July 2024 instead of 1 July 2023

Some of the fur­ther amend­ments include:

  • the replace­ment of clause 14(1) of the DBP Reg­u­la­tion to pro­vide that engi­neer­ing work is not pro­fes­sion­al engi­neer­ing work unless the work is car­ried out direct­ly in rela­tion to the design or con­struc­tion of a class 2, 3 or 9c build­ing, or part of a class 2, 3 or 9c build­ing (rather than sim­ply class 2). Of note is that clause 14(2) is not amend­ed which pro­vides that con­struc­tion for the pur­pos­es of clause 14(1) includes…the mak­ing of alter­ations or addi­tions to a build­ing, and the repair, ren­o­va­tion or pro­tec­tive treat­ment of a build­ing where­as the new clause 13(1)(n) in effect until 1 July 2024 excludes these works in rela­tion to class 3 or 9c buildings.
  • there has been an exten­sion of alter­na­tive path­ways for some cat­e­gories of design prac­ti­tion­ers until 31 Decem­ber 2023 (rather than 30 June 2023) under clause 97A and 97B of the DBP Regulation
  • the addi­tion of a new class of reg­is­tra­tion as design prac­ti­tion­er at Sched­ule 1 (1)(b1) design prac­ti­tion­er – build­ing design which is, inter alia, in addi­tion to design prac­ti­tion­er – build­ing design (low rise) and design-prac­ti­tion­er – build­ing design (medi­um rise). 
  • The work autho­rised to be per­formed by a design prac­ti­tion­er – build­ing design is includ­ed at a new clause 7A in the DBP Reg­u­la­tion effec­tive 3 July 2023 and excludes a design that con­sti­tutes an archi­tec­tur­al ser­vice under the Archi­tects Act 2003, pro­fes­sion­al engi­neer­ing work and cat­e­gories of fire sys­tems work.
  • The qual­i­fi­ca­tions to be held by a design prac­ti­tion­er – build­ing design are includ­ed in a new clause 5C to be insert­ed in the DBP Reg­u­la­tion which qual­i­fi­ca­tions include a post­grad­u­ate mas­ters degree from an Aus­tralian Uni­ver­si­ty in build­ing design or archi­tec­tur­al design.
  • By way of infor­ma­tion archi­tec­tur­al ser­vice under the Archi­tects Act 2023 means a ser­vice pro­vid­ed in con­nec­tion with the design, plan­ning or con­struc­tion of build­ings that is ordi­nar­i­ly pro­vid­ed by archi­tects’ which in our view is extreme­ly broad and not par­tic­u­lar­ly help­ful for those build­ing prac­ti­tion­ers who are involved in build­ing design.