Per­son­al Lia­bil­i­ty for Build­ing Defects: The scope of sec­tion 37 of the Design and Build­ing Prac­ti­tion­ers Act 2020 (NSW)

NSW Supreme Court con­firms direc­tors and project man­agers can be per­son­al­ly liable under sec­tion 37 of the Design and Build­ing Prac­ti­tion­ers Act: Alta Vale Res­i­den­tial Pty Ltd v STM123 Pty Ltd [2026] NSWSC 882.

Alta Vale Res­i­den­tial Pty Ltd (In Liq) (Rec Appoint­ed) v STM123 Pty Ltd [2026] NSWSC 882

The NSW Supreme Court’s deci­sion in Alta Vale Res­i­den­tial Pty Ltd (In Liq) (Rec Appoint­ed) v STM123 Pty Ltd [2026] NSWSC 882 (Alta Vale) pro­vides an impor­tant reminder that the statu­to­ry duty of care under sec­tion 37 of the Design and Build­ing Prac­ti­tion­ers Act 2020 (NSW) (DBP Act) can extend beyond cor­po­rate enti­ties to include indi­vid­u­als who super­vise, coor­di­nate or project man­age con­struc­tion work.

In this case, the Court ordered Thomas Cull, a direc­tor of TC Build Co Pty Ltd (TC Build Co), to per­son­al­ly pay $137,256 in dam­ages to Blank Super Pty Ltd (Blank Super) for breach­ing the statu­to­ry duty of care in con­nec­tion with the par­tial col­lapse of a neigh­bour­ing prop­er­ty dur­ing exca­va­tion works at a prop­er­ty in Bondi.

Key Take­aways

The Alta Vale deci­sion pro­vides use­ful guid­ance on estab­lish­ing per­son­al lia­bil­i­ty under sec­tion 37, the evi­dence required to demon­strate a breach of the duty of care and the recov­ery of eco­nom­ic loss aris­ing from defec­tive con­struc­tion work.

1. Indi­vid­u­als can be per­son­al­ly liable: The statu­to­ry duty is not con­fined to cor­po­rate build­ing enti­ties. Direc­tors, project man­agers and super­vi­sors may owe a per­son­al duty where they super­vise, coor­di­nate or exer­cise sub­stan­tive con­trol over build­ing work.
2. Expert evi­dence is crit­i­cal: Expert briefs should address cau­sa­tion, fore­see­abil­i­ty and the pre­cau­tions a rea­son­able builder or oth­er rel­e­vant per­son should have tak­en. Rel­e­vant engi­neer­ing doc­u­ments, con­struc­tion records and con­tem­po­ra­ne­ous pho­tographs should also be considered.
3. Warn­ings can­not be ignored: The fail­ure to respond appro­pri­ate­ly to engi­neer­ing con­cerns and warn­ings may be high­ly rel­e­vant when deter­min­ing whether rea­son­able care has been exercised.
4. Loss must be prop­er­ly estab­lished: Claimants must demon­strate a causal con­nec­tion between the breach and the eco­nom­ic loss claimed, sup­port­ed by evi­dence that allows the loss to be prop­er­ly quantified.
5. Com­mer­cial devel­op­ments are cov­ered: The deci­sion con­firms that the statu­to­ry duty of care is not lim­it­ed to res­i­den­tial con­struc­tion and can extend to work under­tak­en on com­mer­cial properties.

For devel­op­ers, builders and project man­agers, the mes­sage is clear: respon­si­bil­i­ty for over­see­ing con­struc­tion work car­ries sig­nif­i­cant legal oblig­a­tions, and fail­ing to respond appro­pri­ate­ly to engi­neer­ing advice and iden­ti­fied risks can result in per­son­al liability.

Back­ground: 

The Col­lapse

The dis­pute arose from a devel­op­ment at 21 Curlewis Street, Bon­di, involv­ing the demo­li­tion of an exist­ing retail build­ing and con­struc­tion of a new three-storey com­mer­cial build­ing. Blank Super, the own­er of the prop­er­ty and the devel­op­er of the site, engaged TC Build Co to car­ry out the con­struc­tion work asso­ci­at­ed with the development.

On 10 Decem­ber 2020, the neigh­bour­ing prop­er­ty at 19 Curlewis Street sub­sided and par­tial­ly col­lapsed into the exca­va­tion site, ren­der­ing it unin­hab­it­able. That same day Waver­ley Coun­cil issued a stop-work order, which remained in place until 26 July 2021.

The own­er of the neigh­bour­ing prop­er­ty own­er com­menced pro­ceed­ings against both Blank Super and TC Build Co. The pro­ceed­ings were ulti­mate­ly resolved by a deed of set­tle­ment under which Blank Super agreed to pur­chase the neigh­bour­ing prop­er­ty for $2.3 mil­lion. Rel­e­vant­ly Blank Super also pur­chased 17 Curlewis Street and ulti­mate­ly extend­ed the scope of the orig­i­nal devel­op­ment to include all three sites (21, 19 and 17).

Blank Super sub­se­quent­ly brought a claim against Mr Cull per­son­al­ly for breach of sec­tion 37 of the DBP Act, seek­ing to recov­er eco­nom­ic loss aris­ing from the collapse.

Who Owed the Duty of Care?

The cen­tral issue was whether Mr Cull was a per­son who ​‘carrie[d] out con­struc­tion work’ with­in the mean­ing of sec­tion 37(1) of the DBP Act. Sec­tion 36 pro­vides an extend­ed def­i­n­i­tion of con­struc­tion work, includ­ing super­vis­ing, coor­di­nat­ing, project man­ag­ing or oth­er­wise hav­ing sub­stan­tive con­trol over the car­ry­ing out of build­ing work.

Mr Cull argued that TC Build Co, as the cor­po­rate enti­ty engaged to under­take the con­struc­tion work, was the only enti­ty capa­ble of owing the statu­to­ry duty. He sub­mit­ted that sec­tion 37 did not per­mit per­son­al lia­bil­i­ty on an indi­vid­ual who was not the rel­e­vant build­ing prac­ti­tion­er that actu­al­ly car­ried out the build­ing work. The Court reject­ed that argu­ment, con­sis­tent with the ear­li­er deci­sion in Boulus Con­struc­tions Pty Ltd v War­rum­bun­gle Shire Coun­cil (No 2) [2022] NSWSC 1368, which recog­nised that the statu­to­ry duty can extend to any ​“per­son” exer­cis­ing sub­stan­tive con­trol over build­ing work.

Impor­tant­ly, Mr Cull was the Project Man­ag­er for the Curlewis Street Devel­op­ment. Mr Cul­l’s respon­si­bil­i­ties includ­ed over­see­ing project activ­i­ties, coor­di­nat­ing con­sul­tants, review­ing struc­tur­al and ser­vices draw­ings, and ensur­ing that the works com­plied with design spec­i­fi­ca­tions and qual­i­ty require­ments. Accord­ing­ly, Mr Cull was a per­son car­ry­ing out con­struc­tion work and owed Blank Super a duty under sec­tion 37(1) to exer­cise rea­son­able care to avoid eco­nom­ic loss caused by defects aris­ing from that work.

Was the Duty of Care Breached?

Blank Super relied on expert evi­dence from a struc­tur­al engi­neer to estab­lish that the con­struc­tion method­ol­o­gy adopt­ed by TC Build Co caused the col­lapse. The expert was instruct­ed to con­sid­er whether the con­struc­tion work con­tributed to the col­lapse, what pre­cau­tions a rea­son­able builder should have tak­en, and whether the risk of col­lapse was fore­see­able. His inves­ti­ga­tions iden­ti­fied that both the struc­tur­al draw­ings and geot­ech­ni­cal report pro­vid­ed to the builder con­tained warn­ings about the need for ade­quate shoring and sup­port of the exca­va­tion and neigh­bour­ing structures.

Despite those warn­ings, TC Build Co com­menced demo­li­tion and exca­va­tion with­out installing an ade­quate­ly engi­neered shoring sys­tem. Instead, deploy­ing a sys­tem of tim­ber prop­ping and hoard­ing to brace against the neigh­bour­ing prop­er­ty. This sys­tem was found to be struc­tural­ly inad­e­quate, result­ing in the loss of foun­da­tion soil beneath the neigh­bour­ing prop­er­ty and the sub­se­quent par­tial collapse.

Mr Cull chal­lenged the expert’s evi­dence on the basis that it had not been estab­lished that TC Build Co or him­self had received the struc­tur­al draw­ings and geot­ech­ni­cal report. The Court reject­ed that argu­ment, rely­ing on Mr Cul­l’s own respons­es giv­en in the pro­ceed­ings indi­cat­ing that TC Build Co had received the Con­struc­tion Cer­tifi­cate doc­u­ments, includ­ing both the struc­tur­al draw­ings and geot­ech­ni­cal report, before com­menc­ing work.

A fur­ther sig­nif­i­cant aspect of the evi­dence con­cerned warn­ings from BMC, the sub­con­trac­tor engaged by Mr Cull to install an alter­na­tive tem­po­rary sup­port sys­tem involv­ing a jet grout block wall. BMC, sent sev­er­al emails to Mr Cull rais­ing con­cerns about the sta­bil­i­ty of the wall. In one email, sent approx­i­mate­ly 10 days before the col­lapse, the BMC rep­re­sen­ta­tive indi­cat­ed that he had expe­ri­enced ​“a 2^nd night with­out sleep” because of his con­cerns and rec­om­mend­ed that an engi­neer inspect the wall. Mr Cull admit­ted in cross-exam­i­na­tion that he had not arranged for an engi­neer to under­take that inspection.

Giv­en Mr Cul­l’s respon­si­bil­i­ties for over­see­ing the project, coor­di­nat­ing con­sul­tants and ensur­ing com­pli­ance with design and qual­i­ty require­ments, the Court was sat­is­fied that he had failed to exer­cise rea­son­able care and breached the duty.

Dam­ages

Blank Super claimed just over one mil­lion in dam­ages com­pris­ing loss of rent, devel­op­ment costs and hold­ing costs. The Court accept­ed that the col­lapse caused delay to the devel­op­ment, par­tic­u­lar­ly because of the 228-day stop-work order imposed by Waver­ley Coun­cil. How­ev­er, it reject­ed the claim for loss of rent extend­ing beyond the lift­ing of that order. The sub­se­quent delay was attrib­uted to Blank Super’s deci­sion to pur­sue a sub­stan­tial­ly larg­er devel­op­ment across the adjoin­ing prop­er­ties, rather than the col­lapse itself.

Blank Super had also failed to pro­vide suf­fi­cient evi­dence demon­strat­ing how long the orig­i­nal devel­op­ment would have tak­en to com­plete fol­low­ing the lift­ing of the stop-work order. After mak­ing fur­ther reduc­tions to the dam­ages claimed, the Court ordered Mr Cull to pay Blank Super $137,256, togeth­er with pre-judg­ment interest.