Can a director of a developer company be held personally liable for defective building works? Under the Design and Building Practitioners Act 2020 (NSW) (DBPA), the statutory duty of care may indeed extend to individuals, where their role involves real control over construction. Section 37 of the DBPA establishes a personal, non-delegable duty of care owed by anyone who carries out construction work, including supervision or project management, to avoid causing economic loss to owners due to defects. The duty is not confined to builders or tradespeople, and can extend to directors who actively oversee or influence how the works are executed.Liability hinges on whether the individual exercised or had the capacity to exercise “substantial control” over the construction process. Mere position or title is insufficient; the practical reality of the person’s involvement is what matters.
The High Court clarified this in Pafburn Pty Ltd v The Owners – SP 84674 [2024] HCA 49. In that matter, the Owners – Strata Plan No. 84674 (Owners) commenced proceedings against both the builder (Pafburn) and the developer (Madarina), alleging that each had breached the statutory duty of care under section 37 of the DBPA in the course of a residential development at 197 Walker Street, North Sydney. Whilst the Builder admitted to owing the duty, both the Builder and Developer sought to invoke the proportionate liability regime under the Civil Liability Act 2002 (NSW), asserting that subcontractors and consultants involved in the project were concurrent wrongdoers. The Owners applied to strike out these defences, arguing that the DBPA duty is non-delegable under section 39. The High Court held that the DBPA imposes a personal and indivisible duty, meaning liability cannot be apportioned to others. Where a person had ‘substantial control’ over the construction work, and owes the duty under section 37, that obligation cannot be contracted out of (s 40) or delegated (s 39). Subcontracting arrangements do not diminish the legal responsibility of those in control. The statutory obligation here binds notwithstanding internal arrangements or disclaimers. For directors who assume hands-on roles in development projects, especially in smaller firms where lines between corporate oversight and site-level decision-making can often blur, this creates a real and direct risk of personal exposure.