The Owners – Strata Plan 89412 v Brookfield Residential Developments Australia Pty Ltd [2023] NSWSC 1420

Andrew Hales  |  Mark Glynn  |  Daphne Zhou

Key takeout

Legal practitioners should be careful to ensure that pleadings alleging a breach of the statutory duty of care under the Design and Building Practitioners Act 2020 (NSW) (DBP Act) are sufficiently particularised to enable the opposing party to understand the case being made against it.

Particularising a pleading by reference to a report, such as a building defects report or a Scott Schedule, without identifying the particular statements or facts being relied upon to support the assertions in the pleading may not be sufficient.

It is important to get pleading of a breach of the statutory duty of care right. The court has the power to strike out a pleading if the court considers that the pleading discloses no reasonable cause of action, defence or other case appropriate to the nature of the pleading, has a tendency to cause prejudice, embarrassment or delay in the proceedings or is otherwise an abuse of the process of the court.

Facts

Brookfield Residential Developments Australia Pty Ltd was the superintendent named in a design and construct contract for the construction of residential apartments at Little Bay (Brookfield / superintendent).

The plaintiff, The Owners – Strata Plan 89412 (owners corporation) commenced proceedings against the superintendent (as well as the subcontractors who performed the masonry works, waterproofing, window installation and architectural and consulting services) contending that the construction of the building was defective. In particular, the owners corporation claimed that there were issues relating to the flashing of the external brick walls, balconies, courtyards and roof which caused water penetration.

At the time of this decision, the builder was under external administration and the developer had been deregistered.

Issue before the court – section 37 of the DBP Act

The owners corporation sought leave to file an amended technology and construction List Statement, as well as a further amended Scott Schedule. The superintendent opposed the grant of leave.

In its amended list statement, the owners corporation sought to include a further pleading that the superintendent breached its duty of care under section 37 of the DBP Act. The owners corporation asserted that the superintendent engaged in ‘construction work’ that would be captured by the operation of section 37, namely:

• work involved in, or involved in coordinating or supervising, any works involved in the construction of a dwelling; and
• supervising, coordinating, project managing or otherwise having substantive control over the carrying out of such work.

Decision 

The court refused leave to file the amended List Statement.

The amended List Statement sought to particularise the allegation against the superintendent pursuant to section 37 of the DBP Act by reference to the appointment of Brookfield as superintendent and reference to the powers given to the superintendent under the contract.

The court held that the pleading was not particularised by any reference to what Brookfield, in its capacity as superintendent, did or did not do or should not have done. The owners corporation had, the court held, particularised the pleading only by reference to the fact that Brookfield had carried out the role of superintendent and that under the contract the superintendent was given certain powers under the particularised clauses of the contract.

The allegation that Brookfield performed ‘construction work’, as is required to bring a claim under section 37 of the DBP Act was not particularised with any allegation as to what Brookfield did or did not do that could have led to the posited conclusion that Brookfield was engaging in ‘construction work’ in the ways contended.

The court found that there were no particulars to the pleadings which set out how the superintendent ‘coordinated and supervised’ the relevant work or otherwise ‘supervised, coordinated, project managed or otherwise had substantive control’ over such work beyond providing that it carried out the role of ‘superintendent’ under the contract.

Similarly whilst the pleadings particularised the ‘standard of care’ that was to have been exercised by the superintendent, no factual basis was identified for this allegation other than a reference to ‘Section 10’ of the Spratling Report which the court held contained a range of ipse dixit (unproven) assertions by its author, including as to the role of a building superintendent, alleged obligations of a superintendent to ‘attend regular site meetings to facilitate program aims’ and ‘inspect the progress of works’, and to supervise ‘the workmanship of the contractor’. It also contained allegations as to what the author contends should have been ‘obvious’ to Brookfield as superintendent.

The court determined that the allegations made in the pleadings were not sufficiently particularised to enable Brookfield to understand the nature of the owners corporation’s case against it stating that Brookfield was left to searchthrough the nominated parts of the Spratling Report to try to ascertain what it is that the owners corporation was alleging against it and that this was itself a reason to refuse the owners corporation the leave it sought.

Clearly, the courts will give due consideration to whether sufficient pleadings have been made and whether sufficient particulars have been given to enable the opposite party to identify the case to be met (noting that this is a requirement under the Uniform Civil Procedure Rules 2005 r 15.1).

A claim brought under the DBP Act reliant on an allegation that a person carried out ‘construction work’ must be sufficiently particularised to state the manner in which it is alleged that the person carried out ‘construction work’.

Similarly a claim under section 37 of the DBP Act that a person did not exercise the requisite duty of care must:

• first particularise the standard that the defendant was required to have exercised to avoid economic loss caused by defects; and
• then, with sufficient detail, particularise the deficient manner in which it is alleged that the defendant carried out the construction work so as to establish the alleged breaches of that duty to exercise reasonable care.