So... What are you pleading?

06 March 2023

The NSW Supreme Court strikes out parts of a defective building claim after finding that the claim failed to properly plead the material facts necessary to establish a cause of action in negligence.

In issue

  • Whether a builder’s cross-claim under the Design and Building Practitioners Act 2020 (NSW) against a building supervisor ought to be struck out on the grounds that it failed to properly plead the facts and circumstances necessary to establish a claim in negligence.

The background

The owners’ corporation of a strata development in Randwick, NSW (Property) commenced proceedings against the builder of the Property, Farad Electric Co Pty Ltd (Builder) in respect of alleged defects at the Property which were said to have breached the implied warranties in s 18B of the Home Building Act 1989 (NSW).

The Builder filed a cross-claim against the building supervisor, Peter Smith Constructions Pty Ltd (Building Supervisor) which it had engaged to provide design, consultancy, and supervision services for the building works at the Property. The Builder alleged that if the building work was defective, the Building Supervisor was liable for breaching its statutory duty of care under s 37 of the Design and Building Practitioners Act 2020 (NSW).

The Building Supervisor filed a notice of motion seeking to strike out and/or summarily dismiss the cross-claim on the basis that it failed to plead the facts and matters said to establish the Building Supervisor’s breach of duty.

The decision at trial

The court agreed with the Building Supervisor. While not prepared to summarily dismiss the cross-claim, the court struck out critical parts of the cross-claim, directed the Builder to re-plead its claim, and awarded costs to the Building Supervisor.

In coming to its decision, the court noted that:

  • The mere fact that the building works may have been defective did not of itself establish that the Building Supervisor was negligent (in accordance with The Owners-Strata Plan No 87060 v Loulach Developments Pty Ltd (No 2) [2021] NSWC 1068).
  • It was necessary for the Builder to identify what precautions would have been taken by a reasonable person in the Building Supervisor’s position (for example, the inspection of wall cavities at identified intervals), and how those precautions would have prevented the harm. The Builder’s bald assertion that the Building Supervisor 'failed to take adequate steps' was not sufficient.

Implications for you

Whilst the imposition of the statutory duty is relatively recent, the requirement to properly plead a claim in negligence is long standing. The decision highlights the importance of proper pleadings and drawing a connection between the material facts and the elements of the cause of action. In the context of building claims, the decision warns litigants against making bald assertions of a failure to take reasonable care, unless such precautions are properly identified and causally connected to the harm.

The Owners – Strata Plan No 89005 v Stromer (No 3) [2022] NSWSC 1707

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