What is needed to set out and prove a Claim and the Quantum of the Claim based on a breach of the Statutory Duty of Care created by Section 37 of the Design and Building Practitioners Act 2020?

23/01/2026

The requirements were considered by Justice Stevenson of the Supreme Court of New South Wales in the case of The Owners – Strata Plan 87060 v Loulach Developments Pty Limited (No 2) [2021] NSWSC 1068 by Judgment delivered on 15 November 2021.

The facts are essentially as set out in paragraphs 1, 2, 3, 4 and 5 of the Court’s Decision, namely:

1. The Plaintiff is the Owners Corporation of a residential strata development in Parramatta.
2. The Owners Corporation alleged that there are a large number of defects in the development, principally concerning water ingress and defective cladding.
3. The Owners Corporation brought a claim against the Developer Loulach Developments Pty Limited and the Builder Loulach Steel Pty Limited, (referred to as Loulach in the Decision).
4. Originally the Owners Corporation’s claim against Loulach was based on alleged breaches of statutory warranties under the Home Building Act (NSW).
5. The Owners Corporation then sought to amend its claim by seeking to add a breach by Loulach of the statutory warranty under Section 37 of the DBP Act.
6. Loulach claimed the form of the claim submitted to the Court by the Lawyers for the Owners Corporation was inadequate, and should be struck out (with the effect that there was no valid claim).
7. The Court held that the form of the claim was inadequate and allowed the Plaintiff to replead its case.  Experienced Counsel on behalf of the Owners Corporation submitted to the Court that there was a defect in the building, established that the defect was a result of breach of the Builder of the statutory duty of care under Section 37 of the Design and Building Practitioners Act 2000.

Experienced Counsel for the Respondent, Loulach submitted that the pleading proposed leaves the question that the breach of that duty was wholly unarticulated.  The Court agreed with the Respondent’s submissions and found that the Plaintiff’s claim was inadequate.

Finding

The Court reviewed various cases and the second reading speech and said essentially, the beneficiary of the duty (such as the Owners Corporation) will be entitled to seek damages for the breach of the duty as though the duty was established by the common law.  This means that while a duty of care will be automatically owed, any person who wants to proceed with litigation, will be required to meet the test for negligence established under the Common Law and the Civil Liability Act 2002 which includes determining that a breach of the duty occurred and establishing the damage was suffered by the Owner, as a result of the breach.

The Court said the authorities establish that the Plaintiff (such as the Owners Corporation in this case) alleging a breach of duty of care (under the DBP Act) by the Builder, must identify the specific risks that the Builder was required to manage and the precautions that should have been taken by the Builder to manage those risks.

It is not sufficient simply to assert a defect and allege that the Builder was required to take whatever precautions were needed to ensure that the defect be rectified.  The Court declined to grant to the Owners Corporation leave to amend its List Statement in the form proposed, however allowed the Owners Corporation one further opportunity to formulate an amended claim in the required List Statement setting out the basis of the claim under Section 37 of the DBP Act, in the appropriate form for the claim.  That was undertaken. 

This case sets out general propositions as required and it is now established what is required in pleading one’s case for breach of statutory duty of care under Section 37 of the DBP Act. 

Notwithstanding that the Decision in Loulach’s case in November 2021 sets out the requirements to plead (and also establish by evidence complying with the requirements for evidence) to establish the case, there are many circumstances in which the Applicant/Plaintiff claiming damages for breach of statutory duty referred to in Section 37 of the DBP Act failed to set out the basis of the claim in the appropriate context and form.

The requirements to establish breach of Section 37 of the DBP Act is different to the requirements to establish a claim under the Home Building Act 1989 for breach of the Statutory Warranties provided by the Home Building Act.

Since the introduction of the Design and Building Practitioners Act 2020, we have considered numerous factual circumstances and the alternatives available to the proposed Plaintiff Claimant and separately in other matters, possible defences to the claim.  You need to consider your risks, alternatives and associated costs.

We have also dealt with circumstances in which a claim has been made against a person asserting a breach of the DBP Act Statutory Warranty, who made a claim against our client.  In one particular claim for a significant sum, we asserted that the claim had not been pleaded adequately. Following negotiations, the matter was settled essentially on the basis that no award was made in the Claimant’s favour against our client and no payment was made to the Claimant.

In each claim one needs to consider all the circumstances, alternatives and possible likely outcomes.

If you are involved as an Owner, Owners Corporation or subsequent Owner where you have received a property which has building defects in one form or another or

you are a party that has been accused of not undertaking the construction work as required either under the Contract, the Home Building Act or the Design and Building Practitioners Act contact the experienced Lawyers at Watson & Watson by contacting Richard Watson’s Personal Assistant, Shereen DaGloria to discuss the important matter and having an initial conference to discuss the circumstances, requirements and other issues in relation to the matters.

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.