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ARTICLE · 08 NOVEMBER 2014

High Court adjudicates on builder’s liability to subsequent property owners

Cooper Grace Ward
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A recent High Court decision has far reaching implications for builders, developers, body corporates and owners.

AustraliaReal Estate and Construction
Rocco Russo
Rocco Russo
Sean Henderson
Sean Henderson
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The High Court recently handed down an important decision that has far reaching implications for builders, developers, body corporates and owners.

In Brookfield Multiplex Ltd v Owners Corporation Strata Plan 61288 [2014] HCA 36 the High Court confirmed that the builder of a serviced apartment complex did not owe a duty of care to the Owners Corporation to avoid causing it economic loss arising from latent defects in the common property.

In reaching its decision, the High Court unanimously overturned a decision of the NSW Court of Appeal.

The facts

Brookfield constructed an apartment complex in Chatswood pursuant to a design and construct contract with the developer, Chelsea Apartments Pty Ltd. The contract included detailed provisions about the quality of the works and Brookfield's responsibility to rectify defects.

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