Pleading with precision under the Design and Building Practitioners Act 2020 (NSW)

On 18 April 2023, Justice Stevenson delivered the decision in the matter of The University of Sydney v Multiplex Constructions Pty Ltd [2023] NSWSC 383. His Honour highlights the importance of pleading with a degree of precision, namely in relation to the statutory duty of care imposed by section 37(1) of the Design and Building Practitioners Act 2020 (NSW).

Background

The plaintiff, The University of Sydney (USYD), commenced proceedings against a number of defendants in relation to allegedly defective building work in the Charles Perkins Centre at USYD’s campus (Centre).

These defendants included the builder of the Centre, Multiplex Constructions Pty Ltd, its guarantor, Brookfield Australia Investments Ltd, and a number of subcontractors and consultants including, the certifier, McKenzie Group Consulting (NSW) Pty Ltd (McKenzie).

On 11 November 2022, USYD filed a Notice of Motion seeking:

(a) leave to file a Second Further Amended Technology and Construction List Statement (List Statement);
(b) leave to adduce further lay or expert evidence; and
(c) disclosure of identified documents.

Stevenson J was primarily tasked with evaluating whether USYD should be granted leave to amend its List Statement with respect to McKenzie.

In its proposed amendments to the List Statement, USYD alleged that McKenzie breached its statutory duty of care under section 37(1) of the Design and Building Practitioners Act 2020 (NSW) (DBP Act).

Judgment

Stevenson J considered USYD’S proposed pleading in relation to section 37(1) of the DBP Act at paragraph 166A of the List Statement. Paragraph 166A stated:

“166A. Further and alternatively … at all material times, McKenzie was a person who carried out construction work in relation to the [Charles Perkins] Centre within the meaning of section 37(1) of the [DBP] Act.

Particulars

The University repeats paragraphs 24 to 30 and 155 and 162 above.

The matters relied upon to support the contention that the definition of construction work is satisfied are matters for submissions, but are expected to include:

…

(d) in the premises, McKenzie carried out:

(I) building work;

(II) the preparation of regulated designs and other designs for building work;

(III) the supply of a building product used for building work; or

(IV) supervising, coordinating, project managing or otherwise having substantive control over the carrying out of any of the above

within the meaning of ‘construction work’ in section 36(1) of the [DBP] Act.” (Footnotes added.)

His Honour indicated that paragraph 166A(d) asserts McKenzie’s involvement in each of the four activities captured in the definition of “construction work” under section 36 of the DBP Act.

However, during submissions, it was revealed that USYD’s case against McKenzie was more limited in scope than what was stipulated in paragraph 166A(d). His Honour determined that, notwithstanding the terms of paragraph 166A(d), USYD’s allegation regarding the “construction work” allegedly executed by McKenzie was restricted to the contention that McKenzie maintained “substantive control” over the implementation of the building work. This aspect constitutes one component of the fourth activity delineated within the definition of “construction work” under section 36 of the DBP Act.

On this basis, Stevenson J declined to permit USYD to amend its List Statement to include paragraph 166A.

His Honour also indicated that another issue existed. In order to demonstrate that McKenzie possessed “substantive control” over the building work, specifically, the work associated with the cladding, USYD must be able to substantiate that McKenzie either actively oversaw the installation of the cladding or that it maintained “the ability and power to control how the work was carried out”.

His Honour held that either of these two aspects could not be made out through USYD’s reliance on the “BCA Compliance Report” (Report) and “Certificate of Compliance” (Certificate) issued by McKenzie. For context:

• the Report issued by McKenzie identified areas in the Centre that “required to be assessed against the performance requirements” of the Building Code of Australia; and
• the Certificate certified, among other things, that the cladding works had been executed in accordance with the relevant standards, had reached practical completion, and would operate and function in the manner envisaged by and in accordance with the relevant building contract.

That is, McKenzie’s issuance of the Report and Certificate could not lead to the conclusion that it had the ability or power to control how the relevant work was carried out.

Accordingly, his Honour indicated that he would provide USYD with an opportunity to reformulate its proposed amendment to the List Statement. His Honour also indicated that he is not prepared to permit the amendments proposed by USYD in respect of causation (as it applies to the Design Act) until certain matters were clarified by USYD.

The contents of this publication are for reference purposes only. This publication does not constitute legal advice and should not be relied upon as legal advice. Specific legal advice should always be sought separately before taking any action based on this publication.

Liability limited by a scheme approved under Professional Standards Legislation.

Author: Maysaa Parrino & Matt Armota