1. In the recent case of The Owners – Strata Plan 89412 v Brookfield Residential Developments Australia Pty Ltd [2023] NSWSC 1420, his Honour Justice Stevenson refused to allow The Owners – Strata Plan 89412 (Owners) to amend its List Statement to further expand the ambit of its claim under the Design and Building Practitioners Act 2020 (NSW) (DBPA) against Brookfield Residential Developments Australia Pty Ltd (Brookfield).
2. The Owners are the owners corporation in respect of an apartment complex containing 55 apartments (Building).
3. The Owners contended that the Building contains defects, some of which allegedly constituted water ingress related defects.
4. The Building was built by a builder who had entered into a design and construct contract with a developer (Contract). Both the builder and developer were under external administration.
5. Brookfield was not a party to the Contract, however Brookfield was named as the superintendent in the Contract.
6. The Contract contained provisions that the superintendent:
a) act as the agent of the developer;
b) undertake usual superintendent functions of certification and determination, dealing with payment claims, issuing payment certificates and issuing a certificate of practical completion if appropriate; and
c) has certain powers to have defective works or material tested and/or rectified,
(collectively to be referred to as the Superintendent Provisions).
7. The Owners sought to amend their List Statement to expand their already pleaded claim against Brookfield for breaches of the duty of care set out in section 37 of the DBPA (Statutory Duty of Care).
8. The Owners further amendments included allegations that:
a) Brookfield engaged in “construction work” of the kind referred to in subparagraphs (a) and (d) of the definition of “construction work” in section 36(1) of the DBPA, namely “building work” (which includes residential building work as defined in the Home Building Act 1989 (NSW)) and “supervising, coordinating, project managing or otherwise having substantive control over the carrying out of” such building work; and
b) Brookfield was the superintendent in respect to the construction of the Building by reference to the Superintendent Provisions.
9. The Court noted that those allegations made by the Owners were not supported by any particulars that indicated that:
a) Brookfield, although listed as the superintendent in the Contract, did in fact undertake the role of superintendent in respect to the construction of the Building; and
b) Brookfield actually carried out building work or the supervision or coordination of building work, which would indicate that Brookfield undertook “construction work” of the kind referred to in subparagraphs (a) and (d) of the definition of “construction work” in section 36(1) of the DBPA.
10. The Court noted further issues with the Owners’ proposed amendments which included that the proposed amended List Statement particularised a table in a building defects report that set out a series of alleged defects, nominated breaches and rectification methodologies.
11. In respect to that table, the Court highlighted that it made no mention of acts or omissions by Brookfield.
12. The Court also noted that the proposed amendment which dealt with the “standard of care” that the Owners contended was to be exercised by Brookfield, had no factual basis as it simply contained a generic list of the obligations that Brookfield would have had in reference to the Contract.
13. The Court ultimately refused to provide the Owners with leave to amend its List Statement given what it held was a lack of particularisation and a failure to provide a factual basis for the allegations made.
a) It is not enough to simply plead that a person owed the Statutory Duty of Care or had a certain role in respect to a construction project;
b) The pleading of assertions that a person had a particular role or undertook “construction work” in relation to a construction project must be support by facts;
c) Interestingly, pleadings are to be deemed inadequate if they merely assert that a person had a particular role or undertook “construction work” in relation to a construction project based on document such as a contract;
d) Prior to commencing proceedings or amending a claim against a person in respect to the Statutory Duty of Care, a claimant should ideally ensure that there is enough documentation or information that can clearly point to a person’s involvement in respect to a construction project; and
e) Owners corporations, who are usually not fully aware of the events that occurred in respect to the construction of their schemes, should carefully consider whether they have enough information/particulars to make a claim against a person for breaches of the Statutory Duty of Care. If it is the case that there is not enough information on hand, documentation should be sought well before the expiry of limitation periods by way of preliminary discovery or through general requests for documentation.
15. A lasting impact of this case seems to be that all particularisation of claims in respect to the Statutory Duty of Care have to be appropriately vetted, and as part of that process, one should ensure that the particulars do not simply refer in general, to acts, or the conduct of a defendant or a potential defendant, but that they are targeted to specific acts which can be proven in fact.
16. However, this is at times extremely difficult to achieve because ascertaining and discovering such facts without proper and successful discovery is very difficult.
17. What complicates things further is that discovery in the Technology and Construction List of the Supreme Court of NSW is generally only allowed after the service of evidence, unless there are exceptional circumstances necessitating disclosure of documents.
18. It’s a kind of a “catch-22” situation for many plaintiffs in the Technology and Construction List of the Supreme Court, especially for owners corporations who were not involved in the construction process. An owners corporation may find itself in a situation where it is unable to plead its case properly because there are not enough particulars available, and yet to plead its case properly, discovery may need to be undertaken, which is in turn generally unavailable until the parties have served their evidence, unless there are exceptional circumstances necessitating disclosure of documents.
19. To overcome this “catch-22” situation, potential plaintiffs can make applications for preliminary discovery prior to the commencement of formal proceedings.
If you would like more information on the above or need any assistance, please contact us on 02 8329 6500 or excellence@kreisson.com.au
This communication is sent by Kreisson Legal Pty Limited (ACN 113 986 824). This article contains general information only and is not a substitute for considered legal, accounting or business advice. It does not take into account your particular circumstances, objectives, appetite for risk or financial situation. We are not tax or BAS agents or specialist tax advisers. You should not rely on this article without seeking detailed advice from discipline experts. The contents are copyright and should not be reproduced, re-published, adapted or used without the author’s permission
Special Counsel | 02 8239 6511
