I work in construction – Can I be held personally liable in a dispute with an owner?
Ongoing delays, lack of materials and staff shortages are just some of the challenges faced by builders and owners since the inception of the Covid-era.
Author: Rachael Parr
26 July 2022
To add to the cocktail of issues faced by the construction industry, the Supreme Court of NSW has determined that a project manager of a builder was personally liable for defective works under the Design and Building Practitioners Act (“DBP Act”) in the 2022 decision of Goodwin Street Developments Pty Ltd atf Jesmond Unit Trust v DSD Builders Pty Ltd (in liq).
In this case, the builder was placed into liquidation and the developer commenced proceedings against Mr Roberts – the husband of a director of the builder. The Court found that Mr Roberts was a project manager of the builder, and he supervised the construction works. The Court identified that Mr Roberts was a “person who carried out construction work”, falling within the meaning of the DBP Act. Accordingly, Mr Roberts was found liable for the existing defects in the works.
Additionally, in the 2022 decision in the case of The Owners – Strata Plan No 84674 v Pafburn Pty Ltd, the Court found that a developer could be held liable under the DBP Act as a person who carried out construction work. The Court also found that a person could be liable under the DBP Act if that person could have control (but not necessarily exercise control) of the construction works carried out.
What does this mean for businesses and owners?
Based on the above cases, directors, project managers, developers, nominated supervisors, and subcontractors can be held liable to owners under the DBP Act if it can be shown that the person did, or could and should have, exercised control over the carrying out construction works.
These decisions made by the Courts have certainly broadened the scope of personal liability for construction workers and created more avenues for relief for owners. Based on these cases, the Courts will be looking closer at the personal responsibilities of individual people within the construction industry moving forward.
For more information about building and construction disputes, contact Access Law Group for your initial 30-minute consultation so we can bridge the gap between the law and you.
Call us on (02) 4220 7100 or email firstname.lastname@example.org.