Major further obligations on Persons who undertake Building Works Required under the Design and Building Practitioners Act 2020 (“DBP Act”) – Builders, Contractors and Proprietors and Owners be aware of Requirements and your Obligations and Rights

04/12/2025

Watson & Watson Lawyers have years of extensive experience in commercial litigation in particular, in relation to building and construction and strata disputes and advice. When there is a dispute between a Builder and Owner there is most often, disputes about numerous different aspects of the relationship and contractual issues. 

The DBP Act commenced in June 2020 and some provisions commenced later. There have been numerous cases in the Supreme Court of New South Wales and the Supreme Court of Appeal which provides guidance and assistance as to the interpretation of the Design and Building Practitioners Act 2020, including rights and obligations of a design practitioner, professional engineer, specialist practitioner or building practitioner and other critical procedural matters.

This article considers Pafburn case referred to below decided by the High Court of Australia.

Part 4 (Sections 36-41 of DBP Act) headed DUTY OF CARE sets out provisions relating to the Statutory Duty of Care under the DBP Act including the following:

(36)    Definitions

(37)    Extensions of duty of care

(39)    Duty must not be delegated.

The Owners – Strata Plan 84674 v Pafburn Pty Limited [2023] NSWCA 301 (13 December 2023.  The High Court of Australia Decision

Brief Facts

1.       Pafburn’s case involves consideration of the construction of a residential building at Walker Street, North Sydney, being a seven storey residential apartment building with multiple level basements below.

2.       Prior to the Registration of the Strata Plan, the land was owned by Madarina Pty Limited (“Madarina”) and Pafburn Pty Limited (“Pafburn”) was engaged by Madarina as the Builder/Head Contractor for the project.  As in a building project such as this, there were numerous other parties involved in the construction works to complete the project.

Questions for Decision

1.       The High Court was required to consider the Decision in the Supreme Court of New South Wales (Court of Appeal) commenced by Pafburn v The Owners – Strata Plan 84674 (“Owners Corporation”) in which Pafburn appealed the original Decision of the Supreme Court of New South Wales.

2.       The issue that arose in the Pafburn case was the duty of care required under the Design and Building Practitioners Act 2020 (which extended to the Owners Corporation of the Strata Scheme being the subsequent Owners of the land). 

The main issues considered by the New South Wales Supreme Court of Appeal and the High Court were:

2.1     Whether the non-delegable duty created by Section 37(1) of the DBP Act is a tort for the purposes of Section 5Q of the Civil Liability Act 2002 (CLA); and

2.2      The proportionate liability provisions in Part 4 of the Civil Liability Act 2002.

3.        Section 37(1) of the DBP Act provides:

(1)           A person who carries out construction work has a duty to exercise reasonable care to avoid economic loss caused by defects –

(a)     In or related to a building for which the work is done; and

(b)     Arising from the construction work.

4.       The Civil Liability Act extensively relates to liability for damages and negligence in New South Wales.  It contains a proportionate liability provision in Part 4 modifying the common law.

5.       Section 5Q of CLA is headed “Non-Delegable Duties and Vicarious Liability” and states:

(1)      The extent of liability in tort of a person (“the defendant”) for breach of a non-delegable duty to ensure that reasonable care is taken by a person in the carrying out of any work or task delegated or otherwise entrusted to the person by the defendant is to be determined as if the liability were the vicarious liability of the defendant for the negligence of the person in connection with the performance of the work or task.

(2)      This section applies to an action in tort whether or not it is an action in negligence, despite anything to the contrary in section 5A.

6.        Section 39 of the DBP Act states:

“A person who owes a duty of care under this Part “(Part 4 Duty of Care)” is not entitled to delegate that duty”.

The question that arose in Pafburn’s case was whether the Developer (Madarina) or Head Contractor (Pafburn) could claim against others for the failure of those others, to take reasonable care in carrying out construction work or otherwise performing any function in relation to that work, to limit their liability under Part 4 of the CLA.

Decision

The High Court by a majority of 4 Judges with 3 Judges dissenting, found that neither Madarina nor Pafburn could exclude or limit their liability by apportioning any part of that liability to any other person whom they had delegated or otherwise entrusted any part of the construction work in relation to the building. 

The facts of each case must always be considered to ascertain if there are other obligations, factual matters or other matters and laws which may bear on the responsibility and legal liability for construction of the building and consequences thereof.

If you are involved in a possible dispute in relation to the issues that could arise, the law that applies and the evidence required, we recommend that you make contact and seek our advice as early as possible.  Do not delay, contact our experienced Building and Construction Lawyers at Watson & Watson by contacting Richard Watson who has been since 1995, an Accredited Specialist by the Law Society of New South Wales in Commercial Litigation in the stream of building and construction or his Personal Assistant, Shereen Da Gloria to discuss your very important matter.

The above in our view, is not based on your particular factual matters and it is critical that one considers the factual matters and the law that applies to your circumstances. The above is not to be taken as legal advice to be relied upon, without first contacting Richard Watson as referred to above.

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