Stra­ta Plan 92183 v Sam­do­ra Pty Ltd [2026] NSWSC 406  'Substantive Control' over Works & s37 of the DB&P Act

In this case, the plain­tiff (Stra­ta Plan 92183) brought pro­ceed­ings alleg­ing defec­tive res­i­den­tial build­ing work in rela­tion to 9 town hous­es locat­ed in Manger­ton, NSW.

Rel­e­vant­ly SP92183 claimed that both the builder’s direc­tor (Mr Nas­sif) and the developer’s direc­tor (Mr Chah­wan) had both breached their duty to exer­cise rea­son­able care to avoid eco­nom­ic loss caused by defects as pro­vid­ed for by sec­tion 37 of the Design & Build­ing Prac­ti­tion­er’s Act 2020 (DB&P Act).

Claim against Mr Chah­wan (devel­op­er) for breach of s37 duty of care

SP92183’s claim against Mr Chah­wan was based on the premise that Mr Chah­wan had car­ried out ​‘con­struc­tion work’ (as defined by s36 of the DB&P Act), in rela­tion to the repair work, because he had been ​‘super­vis­ing, coor­di­nat­ing, project man­ag­ing or oth­er­wise hav­ing sub­stan­tive con­trol over the car­ry­ing out of [build­ing work]’.

The Court dis­missed the s37 claim against Mr Chah­wan find­ing there to be insuf­fi­cient evi­dence of the req­ui­site weight to prove that Mr Chah­wan had car­ried out ​“con­struc­tion work” as required by the DB& P Act. 

The Court held that Mr Chah­wan, being the devel­op­er who was involved in lit­i­ga­tion with SP 92183, a mem­ber of the stra­ta com­mit­tee and an own­er of four units in the prop­er­ty, had an ​‘inci­den­tal involve­ment in the repair work…and had every rea­son to be inter­est­ed in ensur­ing that the work was car­ried out’.

How­ev­er, on the evi­dence put before it, the Court could not con­clude, on the bal­ance of prob­a­bil­i­ties, that what Mr Chah­wan was doing in rela­tion to the repair work sat­is­fied the require­ment that he was car­ry­ing out ​“con­struc­tion work” as defined for the pur­pos­es of s 37 of the DB&PA. That is. the Court held that Mr Chah­wan did not have sub­stan­tive con­trol over the works.

The evi­dence adduced by SP 92183 was, accord­ing to the Court, of insuf­fi­cient weight in and of itself to con­sti­tute the car­ry­ing out by Mr Chah­wan of ​“con­struc­tion work” and accord­ing­ly the claim against Mr Chah­wan for fail­ure to exer­cise rea­son­able care, failed.

Key Take­away No 1

Sub­stan­tial evi­dence of super­vi­sion, coor­di­na­tion, plan­ning or project man­age­ment must be put before the court to sup­port a claim that a per­son was exer­cis­ing ​‘sub­stan­tive con­trol’ over the works.

Claim against Mr Nas­sif (builder)for breach of s37 duty of care

Mr Nas­sif was the sole direc­tor and nom­i­nat­ed super­vi­sor of the builder, Sam­do­ra Pty Ltd.

There was no dis­pute between the par­ties that Mr Nas­sif had car­ried out ​“con­struc­tion work” for the pur­pos­es of the DB&P Act and that he there­fore owed a duty of care to SP 92183.

A claim for breach of the s37 duty is a claim in neg­li­gence. SP92183 bears the onus of sat­is­fy the rel­e­vant neg­li­gence require­ments of the Civ­il Lia­bil­i­ty Act 2002 (NSW) name­ly that the risk of loss was fore­see­able, sig­nif­i­cant and that a rea­son­able per­son in the posi­tion of Mr Nas­sif would have tak­en pre­cau­tions to avoid that loss.

SP 92183 sub­mit­ted that:

1. Mr Nas­sif had breached his s37 duty because he had failed to exer­cise rea­son­able care to ensure that the work com­plied with the war­ran­ty in sec­tion 18B(1)(c) of the Home Build­ing Act 1989 (NSW) that the work ​‘would be done in accor­dance with, and would com­ply with [the HBA] or any oth­er law’, includ­ing the BCA;
2. The pre­cau­tion which Mr Nas­sif had failed to take was to have prop­er­ly car­ried out ​‘an active super­vi­so­ry role’ dur­ing the con­struc­tion process by ​‘reg­u­lar inspections/​checking of the works’, such that the defects should or would have been iden­ti­fied and rec­ti­fied pri­or to com­ple­tion of the development.
3. If that ​‘active super­vi­so­ry role’ had been under­tak­en, the harm would not have arisen because the defects would not have occurred.

The Court found that Mr Nas­sif had failed to car­ry out any reg­u­lar inspec­tions or checks of cer­tain of the works that would have brought those defects to the light.

Key Take­away No 2

In order to suc­ceed on a breach of s37 duty claim, the alleged defects must be capa­ble of being iden­ti­fied and pre­vent­ed by the per­son who has ​‘sub­stan­tive con­trol’ over the works. That is, in this case that an ​‘active super­vi­so­ry role’ would have avoid­ed the defects that were alleged.

Link to the case: https://​www​.caselaw​.nsw​.gov​.au/​d​e​c​i​s​i​o​n​/​1​9​d​b​3​0​6​d​c​3​2​3​5​1​5​4​f​9​3​e0d38