Design and Building Practitioners Act 2020 - Provides a further basis of claim for an Owner (or subsequent Owners) of land in relation to construction work – Time Limits Apply

29/07/2020

The Design and Building Practitioners Act 2020 became law in 2020 and extends the duty of care of various specific persons relating to the carrying out of construction work, namely a duty to avoid economic loss by defects in or related to a building which work arising from the construction work. 

The duty is owed to each Owner of land in relation to the construction work carried out and to each subsequent owner of the land.

The Act places obligations on Design Practitioners and Building Practitioners to which the Act applies.  Practitioners include Design Practitioner, Principal Design Practitioners, Professional Engineer, Specialist Practitioner or Building Practitioner. 

The Act covers regulated designs, which includes:

1. A design that is prepared for a building “element” for building work; or
2. A design that is prepared for performance solution for building work (including a building element); or
3. Any other design or class prescribed by regulation that is prepared for building work. 

Building elements include:

1. Fire Safety system for a building within the meaning of the Building Code of Australia;
2. Waterproofing;
3. Any internal or external works to a load bearing component of a building that is essential to the stability of the building, or a part of (including but not limited to in-ground and other foundations and footings, floors, walls, roofs, columns and beams).
4. A component of the building that is part of the building enclosure.
5. Those aspects of the mechanical, plumbing and electrical services for a building that are required to achieve compliance with the Building Code of Australia.
6. Other things prescribed by the regulations for the purpose of the section.

Extension of Duty of Care

The Act provides for an extension of duty of care

The extension of the duty of care is that the relevant person who carries out construction work (covered by the Act) has a duty to exercise reasonable care to avoid economic loss caused by defects:

1. In or related to a building for which the work is undertaken; and
2. Arising from the construction work.

A person to whom the duty of care is owed is entitled to damages for the breach of the duty as if established by the common law.

The duty of care is owed to an owner whether or not the construction work was carried out:

1. Under a Contract or other arrangement entered into within the Owner or another person; or
2. Otherwise than under a Contract or arrangement.

Limitation Period to Claim

The Act does not extend the limitation period in relation to a breach of duty however extends the duty owed. 

The breach of such a duty is likely to be a tort and in those circumstances in New South Wales, an action on a “cause of action founded on tort including a cause of action for damages for a breach of a statutory duty” must be commenced within a limitation period of 6 years commencing from the date on which the cause of action first accrues to the plaintiff or a person to whom the plaintiff claims (Limitation Act NSW).  Accordingly, the claim must be filed in the appropriate Court before the 6 year period has expired.

A cause of action accrues commencing from the date damage is suffered.  This can be at a later point in time to the actual breach of the duty in the context of latent defects.  The date of damage is generally the date of the defect was discoverable.

However the Act does provide a limitation to the period in that the relevant section only applies to economic loss caused by a breach of the duty of care extended if:

1. The loss first became apparent within the 10 years immediately before the commencement of Section 37 of the Act; or
2. The loss first became apparent on or after the date of the commencement of the Act.

The above does not appear to extend to the period in which one must make the claim but limits it.  However at this stage, there are no cases decided on to question of the limitation period.

By its very nature this can occur either before or after the expiration of the 10 year period referred to above.  If the cause of action accrues before the 10 year period and the defect is discovered at that time, then the limitation period may not pose a problem however the defect does not manifest itself so that the cause of action in tort does not accrue within the 10 year period then there may be difficulties. 

If you are an Owner, Developer and/or Design Practitioner and wish to know your rights in relation to building and construction work carried out in the past or that is proposed, please contact Watson & Watson Lawyers to obtain advice from our experienced Building and Construction Solicitors who can assist you.

Be aware that time limits do apply and delayed action could impact a positive outcome.  Please contact Richard Watson Accredited Specialist Building & Construction or Shereen Da Gloria his Personal Assistant and seek appropriate advice without delay.

This is only a preliminary view and is not to be taken as legal advice without first contacting Watson & Watson Solicitors on 9221 6011.