No Surprises about Strata Defect Laws

Why is everyone so surprised that one judge in the NSW Supreme Court decided that builders and developers don't owe strata corporations a duty of care in negligence for the quality of construction?


Since the decision in the Star of the Sea case last month (see A Strata Corporation Win on Building Defects and More Setbacks for Strata Building Defect Claims) there's been some frantic activity by strata corporations, managers, executives and lawyers over building defect claims.  For instance, Teys Lawyers issued a Bulletin telling everyone to quickly check the details, timing and status of their defect claims and others are doing the same.


But, there should be no surprises about this set back for strata defect claims.  After all, this is still new legal territory in this country, there's a lot at stake and the following things are not new.

• There has only ever been one Australian case (in the Northern Territory by a single judge) that decided  there were such duties.
• The High Court has changed the rules about negligence for this kind of damage a few times in the last 20 years and most lawyers will say that the law remains unsettled and confusing.
• Builders and developers have many good commercial reasons to defend these kinds of legal claims (and are well organised and equipped to do so).
• Conversely, most strata corporations are poorly organised and under resourced to run complex (and costly cases).

What's really surprising to me is that strata corporations leave their building defects unresolved to the point where they have to rely on such difficult legal principles to try to get redress.   Most buildings have rights to sue builders and developers for defects and have had up to 6 or 7 years to do so without ever having to worry about common law rights, yet they ignore problems, defer investigation and action, accept compromised fixes from builders and try to save money on experts and lawyers - all of which weaken their position when things don't turn out as they had hoped.


Plus, one unfavourable decision in the ongoing strata building defect battle is not the end of the legal debate in this area - it's just the beginning of the argument.




Francesco ...