Written by In Pafburn Pty Limited v The Owners – Strata Plan No 8467 (2023), the NSW Court of Appeal has clarified the operation of proportionate liability in construction defect claims involving statutory duties. The dispute concerned defects in a residential strata development at 197 Walker Street, North Sydney, where the Owners Corporation brought proceedings against the builder and developer for breach of duty of care under section 37 of the Design and Building Practitioners Act 2020 (NSW).
Pafburn attempted to dilute its liability by attributing responsibility to subcontractors and other parties as ‘concurrent wrongdoers’ under Part 4 of the Civil Liability Act 2002 (NSW). While this position was accepted at first instance in the Supreme Court, it was rejected on appeal. The Court of Appeal held that the statutory duty imposed under the Act is non-delegable, meaning the builder remains responsible for compliance regardless of who carried out the work. The Court compared this form of liability to vicarious liability, which cannot be divided between multiple parties under the proportionate liability regime.
As a result, the builder could not reduce its liability by relying on others involved in the project. Although Pafburn may pursue separate claims against those parties, they remain fully liable to the Owners Corporation for the loss. This decision has significant implications for the construction industry, confirming that where non-delegable statutory duties apply, builders and developers may be entirely accountable for any defects, increasing risk in projects involving multiple contractors.