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 Act s 1.4 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/decision/1862436ae3dbe5efd35f1108
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.