Builder’s liability to future owners for latent defects clarified

Builders are not liable to future owners of commercial buildings for defects – High Court re-affirms the law

In the recent case of Brookfield Multiplex Ltd v Owners Corporation Strata Plan 61288 the High Court of Australia has reaffirmed the current law relating to claims against builders for latent defects. In short, with the exception of owners of dwelling houses that fall into a class of persons incapable of protecting themselves from the consequences of the builder's lack of reasonable care, the general rule is that a builder owes no duty of care in negligence to protect a subsequent owner from incurring the cost of repairing latent defects. Justice Gageler explained that: "[This] is because, by virtue of the freedom they have to choose the price and non-price terms on which they are prepared to contract to purchase, there is no reason to consider that subsequent owners cannot ordinarily be expected to be able to protect themselves."