27th February, 2014

Top legal construction cases in 2013

Protecting ourselves and our businesses from professional indemnity and public liability claims can be as simple as taking out a comprehensive tradesman insurance policy.

However, relying on inadequate public liability insurance or similar cover can leave individuals vulnerable to legal costs and other expenses their benefits can’t cover. It is therefore important for tradesmen to be aware of the risks they face in the course of duty.

One of the easiest ways to address the hazards and liabilities threatening your business or trade is to learn from the past mistakes of others. To help with this, the top legal construction case from Australia last year has been outlined below, according to a February 13 media release from global law firm Norton Rose Fulbright.

Owners – Strata Plan No 61288 v Brookfield Australia Investments Ltd

This case addresses the question of whether a builder owed a duty of care to prevent pure economic loss for subsequent owners of a commercial building.

When latent defects were discovered in the 22-storey building in Chatswood, the Owners Corporation that controlled the strata-title laid a claim against the original developer to cover the cost of rectifying defective building complaint.

The New South Wales Court of Appeal found the builder should be expected to complete construction is such a manner that future structural defects were minimised to avoid loss for any subsequent owners.

This result was significant because previously it was considered the duty of commercial building holders to minimise these losses, and a builder’s duty of care extended only to residential property owners.

While the builder was found liable in this case, the Court of Appeal was quick to outline a range of potential factors that could affect future decisions in similar cases. This includes the vulnerability of the plaintiff and the level of negligence found to have taken place.

Author: Murray Bruce