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ARTICLE · 15 SEPTEMBER 2012

Professional Indemnity: No duty of care by builder and developer

Norton Rose Fulbright Australia
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Builders and developers of residential premises do not owe a duty of care to owners when statutory warranties apply.

AustraliaReal Estate and Construction
Katherine Czoch
Katherine Czoch
Randall Walker
Randall Walker
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Owners Corporation Strata Plan 72535 v Brookfield [2012] NSWSC 712

Introduction

In the recent decision, Owners Corporation Strata Plan 72535 v Brookfield (Brookfield),1 the NSW Supreme Court provided further guidance on the common law duty of care, with Justice McDougall determining that builders and developers of residential premises do not owe a duty of care to an owners corporation where the statutory warranties provided by section 18B of the Home Building Act 1989 (NSW) (HB Act) apply.

The decision should provide some comfort for builders and developers in NSW and, if followed, elsewhere across Australia. However, there may be implication for Home Owners Warranty insurers considering any subrogated recovery actions.

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