Key Takeaways

Earlier this year we reported on the decision in Goodwin Street Developments Pty Ltd atf Jesmond Unit Trust v DSD Builders Pty Ltd (in liq) [2022] NSWSC 624 where a nominated supervisor was held personally liable under the Design and Building Practitioners Act (the DBP Act) for a failure to exercise reasonable care so as to not cause economic loss from defects.  A link to our earlier article is  here – https://keystonelawyers.com.au/nominated-supervisor-held-personally-liable-under-the-dbp-act/

The matter was appealed by Daniel Roberts (the nominated supervisor) to the NSW Court of Appeal. Below is a summary of the Court of Appeal’s decision in Roberts v Goodwin Street Developments Pty Ltd [2023] NSWCA 5.

The Court of Appeal upheld and affirmed the decision. In particular, the statutory duty of care:

• Is applicable to those carrying out the building works, as well as project managers and supervisors who might be engaged as consultants or subcontractors themselves; and
• The duty will be owed to both residential and commercial buildings.

Facts

Daniel Roberts (the Appellant) was the sole director of the building company DSD Builders Pty Ltd (DSD). DSD entered into a building contract with Goodwin Street Developments Pty Ltd (the Respondent) for the construction of student accommodation at a site owned by Goodwin in Jesmond, New South Wales.

It was found that between 2 March 2018 and 19 March 2018, Mr Roberts entered the site to intentionally cause damage to the buildings. This included making saw cuts through structural beams, drilling holes in water pipes and damaging power cables. On 19 March 2019, Goodwin terminated the building contract and then commenced proceedings against DSD. The proceedings against DSD paused after the company went into liquidation, but the claims against Robert remained for breach of statutory duty of care under Part 4 of the DBP Act and for trespass and conversion to the building works.

Goodwin was successful in both claims. In relation to the statutory duty of care claim, Justice Stevenson found that a boarding house (a non-Class 2 building) was a ‘building’ to which the duty of care in section 37 of the DBP Act applied. Further, by supervising and project-managing the works, Mr Roberts carried out ‘construction work’ within the meaning of section 36 of the Act. Ultimately, His Honour held that Mr Roberts acted in breach of his duty of care under section 37 of the DBP Act.

Grounds for Appeal

Following the Supreme Court’s decision, Roberts appealed to the NSW Court of Appeal on three grounds. Two of those appeal points related to the issues of trespass.

The most relevant ground of appeal was whether the primary judge erred in finding that a boarding house, a non-class 2 building, was a ‘building’ to which the statutory duty of care under section 37 of the DBP Act applied.

Appellants Argument

Mr Roberts contended that the duty of care in section 37 of the Act applied to “residential building work” within the meaning of the Home Building Act 1989 (NSW) (HBA) and thus did not include boarding houses.

Court of Appeal Decision

The Court dismissed the appeal on all three grounds.

The Court of Appeal agreed with the primary judge’s view that the definition of “building work” in section 36(1) is not a comprehensive definition and reference to “building work” including “residential building work” within the meaning of the HBA can be construed to include boarding houses.