By Matthew Bell, Wayne Jocic and Rami Marginean
The central issue in Brookfield was one which is especially important given the proliferation of multi-use, multi-storey developments around Australia’s major population centres. This was whether the builder of an apartment complex owes a duty of care in negligence to protect the Owners’ Corporation (as agent for the owners of apartments in the building) from pure economic loss arising from latent defects in the common property of that building where those defects were structural, constituted a danger to persons or property in the vicinity or made the apartments uninhabitable. The High Court found that the builder owed no such duty, reversing the decision of the NSW Court of Appeal.
This result may be surprising to lay people or those not versed in construction law. For the reasons we set out below, we think that the Court’s approach is, to a certain extent, based on flawed assumptions as to the availability of legal protection for building owners by way of contractual negotiation or legislation. That said, the decision reflects the greater trend in Australian law in the past ten years to reverse the expansion of the duty of care in negligence, and to leave the question of liability to contract or legislative schemes. Moreover, the Court’s continued backing away from tortious liability is consistent with the view expounded by the Court’s most recent appointee, Justice Nettle, in a 2004 Continue reading