Brookfield Multiplex Ltd v The Owners — Strata Plan No 61288

Matthew Bell, Wayne Jocic and Rami Marginean, ‘Mind the Gaps! High Court Confirms Negligence Will Not Protect Economic Interests where Contractual Protection is Available’, 17 December 2014.

The High Court has unanimously allowed an appeal against the decision of the NSW Court of Appeal, in The Owners — Strata Plan No 61288 v Brookfield Australia Investments Ltd. After discovering severe defects in a new apartment complex, the owners corporation of the apartments brought a negligence claim against the builder (there was no contractual relationship between the parties). The Court of Appeal held that the builder of an apartment complex owed a duty of care to the future owners to avoid pure economic loss to the owners resulting from latent defects that were structural, dangerous to people and property in and around the apartments, or rendered the building uninhabitable.

In four separate judgments (French CJ, Hayne and Kiefel JJ, Crennan, Bell and Keane JJ and Gageler J), the Court held that no duty of care was owed to the future owners. Such a duty would have required vulnerability, which looks to ‘a plaintiff’s inability to protect itself from the defendant’s want of reasonable care … which would cast the consequences of loss on the defendant’ (at [51]). The contract between the appellant and developers laid out specifications and the extent of the appellant’s obligations: recognising an additional duty to take reasonable care to avoid future economic loss from latent defects would alter the allocation of risks provided for in the contract (see [58], [144]). As no duty of care was owed to the initial owners, no duty could be owed to the respondent as a subsequent owner.

High Court Judgment [2014] HCA 36 8 October 2014
Result Appeal allowed
High Court Documents Brookfield Multiplex
Full Court Hearing [2014] HCATrans 126  18 June 2014
Special Leave Hearing [2014] HCATrans 52  14 March 2014
Appeal from NSWCA [2013] NSWCA 317 25 September 2013
Trial Judgments, NSWSC
[2012] NSWSC 1586  12 December 2012

[2012] NSWSC 1219 10 October 2012

3 thoughts on “Brookfield Multiplex Ltd v The Owners — Strata Plan No 61288

  1. Hi Martin, Has this case been concluded and if so who won? I see the case was adjourned on the 18th of June but can’t find what has happened since. I am an owner of one of the apartments but leave in the UK.

  2. Hi Ken, the hearings before the Full Court have now finished and judgment has been reserved (ie, the Court is currently coming to its decision and writing reasons for judgment) — it’s never easy to predict how long that process might take, but you can sign up for the judgment delivery notification emails from the Court itself which will tell you when it’ll be handed down —

  3. It is worth noting the exchange between Justices Hayne and Bell and Senior Counsel for the respondent recorded in the transcript of the proceedings:

    BELL J: If you take vulnerability out of the equation, in relation to a tortious duty respecting pure economic loss, what feature do you rely on, apart from foreseeability to establish a duty?

    MR CORSARO: Proximity, reliance.

    BELL J: What does proximity mean?

    MR CORSARO: It means the fact that…

    HAYNE J: Answer in not more than three hours, write in your number at the head of each sheet, Mr Corsaro. Commence writing.

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