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The Owners – Strata Plan No 84674 v Pafburn Pty Ltd [2023] NSWSC 116

On 13 December 2023, the Owners – Strata Plan No 84674 successfully appealed against a decision of Rees J of the Supreme Court of NSW. The appeal was in relation to the application of the proportionate liability provisions in Part 4 of the Civil Liability Act 2002 (NSW) (CLA) to a claim for breach of the duty of care contained in s 37 of the Design and Building Practitioners Act 2020 (NSW) (DBP).

In short, the Court (Basten AJA, Adamson JA and Ward P agreeing) held that the combined effect of ss 5Q and 39(a) of the CLA and s 39 of the DBP (which says that the duty under s 37 of the DBP cannot be delegated) meant that a defendant could not rely on the proportionate liability provisions of the CLA and the onus would fall on a defendant to seek contribution against potential concurrent wrongdoers.

The Court came to the view that it would be consistent with the purpose and effect of a “non-delegable duty” for a wrongdoer who breaches a non-delegable duty to be liable for the whole of the loss.

The Court also looked at it from the perspective of s 5Q of the CLA and found that the provision should not be read down to exclude a duty imposed by statute (see [70] – [88]).

The significance of this decision is exemplified in this case where nine parties had been identified as concurrent wrongdoers. In the hearing before Rees J, the defendants had argued that because of the broad categories of people to which s 37 of the DBP applies, it would be “unusual and onerous” if every defendant would be liable for 100% of the damage no matter how small or large their role. This decision signifies the onerous duty placed by s 37 of the DBP, which may serve to tighten the precautions taken in the context of construction work.

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