By Robert Riddell and Bruce Hale of Gadens Lawyers,
One of the first things a bricklayer is told when starting his
apprenticeship is that when making mortar, the correct proportion
of components is essential. Proportions of liability are the
legal equivalent and are an equally important consideration to
those contemplating litigation.
Proportionate liability as a doctrine has been the saviour of
many and the scourge of others. In its purest sense, it is a
logical concept that makes the wrongdoer accountable for only its
share of the blame for the consequences of a failure to take
reasonable care. In a practical sense, it can be supremely
frustrating to a plaintiff and escalate the time and costs involved
Owners Corporation SP 72357 v Dasco Constructions Pty
Ltd  NSWSC 819 (Dasco's case) is an
example of proportionate liability coming to the rescue, from the
builder's perspective that is! Dasco's case involved
a claim by an Owners Corporation against a builder for breaches of
the statutory warranties under the Home Building Act 1989
(NSW) (HBA). The builder's defence
included a ground that the principles of proportionate liability
should apply, i.e. a proportion of the liability should be borne by
the subcontractors. The plaintiff responded seeking an order
that this response be struck out.
The question arose as to whether the proportionate liability
provisions of the Civil Liability Act 2002 (NSW)
(CLA) apply to claims for a breach of a statutory
warranty implied by the HBA? Up until the date of this
decision, it had been assumed by many that proportionate liability
provisions had no application to breaches of the statutory
Part 4 of the CLA sets out the regime for proportionate
liability and defines the qualification requirements for
'apportionable claims'. Under section 34 of the CLA,
an apportionable claim is a claim for economic loss or damage to
property in an action for damages arising from a failure to take
reasonable care, not including any claim arising out of a personal
Proportionate liability allows for liability to be allocated to
concurrent wrongdoers in accordance with their level of liability
for the wrongful act and resulting damages. Where a defendant
is of the view that others contributed to loss, the CLA entitles
the defendant to have its liability limited to the proportion of
the loss for which it is found to be responsible.
Under Part 2C of the HBA, statutory warranties are implied into
every contract for residential building work. This allows for
an action for breach of contract and warranty to be brought against
the offending contractors. A question arose in Dasco's
case as to whether the doctrine of proportionate liability applies
to claims for breach of an implied statutory warranty by a
successor in title (here, the Owners Corporation) to the owner with
whom the builder contracted.
Einstein J concluded that the defence of proportionate liability
as provided in the CLA can be available to those defending claims
brought under Part 2C of the HBA. He applied 'the
ordinary and natural meaning' of the legislation in determining
the legislative intention of section 18D of the HBA.
The decision in Dasco's case leaves open the possibility of
the proportionate liability provisions ameliorating the impact of
the statutory warranties on builders, provided the homeowner (or
owners corporation) prosecuting the claim is not a party to the
Although not the subject of Dasco's case, the legislation
also has the potential to significantly reduce developers'
exposure to statutory warranty claims, particularly given that it
is unlikely the developer performed much of the work. The
question also arises as to whether it will provide an answer, at
least in part, to claims by home warranty insurers seeking
reimbursement for insurance claims paid out.
The Council announced planning policies to encourage more inner suburban retirement village and aged care development.
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