More Setbacks for Strata Building Defect Claims

Last week I blogged about one of my client's successes in their building defect claim (see A Strata Corporation Win on Building Defects) in the NSW Supreme Court.


But, its not all good news for strata corporations with building defects.


The flip side of winning the argument about the application of the protections under the Home Building Act is that the NSW Supreme Court also decided that common law duties of care about the quality of building construction did not exist in favour of strata corporations.


Although this is a very complex area of Australian law, in the simplest terms the decision is based on -

• Changes to the tests that apply for negligence claims for economic loss from proximity to vulnerability since the High Court decision in Woolcock's case 
• The reduced vulnerability of strata corporations that have the benefit of Home Building Act warranties
• Difficulties with imputing duties in negligence in favour of strata corporations as the ultimate owners of buildings when it's unlikely builders owe those duties to developers

So, things just got a bit harder for strata corporations that need to sue in negligence for building defects.  At the very least they need to get past the NSW Supreme Court to the NSW Court of Appeal to overturn this decision (and probably need to be prepared to take the issue to the High Court).  As Justice MacDougall said in his decision 'I think that the question of imposition of a duty of care is one for consideration either at the final appeal level or by the legislature'.


You can read the decision for yourself here.


And, if you want to read what the builder's lawyers say about the implication of the decision read their legal Alert here.


Given these developments, I'm very interested to see (and be part of) the next chapter in strata building defect legal claims.


Francesco ....