Australia: Residential Focus - Part 1: Design and Building Practitioners Act 2020 (NSW)

Design and Building Practitioners Act 2020 (NSW) - case digest update

The Design and Building Practitioners Act 2020 (NSW) (DBPA) has now been in force, in various forms, for 18 months. Its density, complexity and impact on day-to-day industry practice, particularly in the class 2 space, has seen industry participants struggling to come to terms with its introduction. Unsurprisingly, there remains uncertainty regarding its interpretation.

There is a growing body of decisions which provide insight into the application of the DBPA. In seminars and previous editions of our Residential Focus, we have reflected on some of those cases and their potential implications.

In this edition, we consider five of the most recent decisions regarding the DBPA and what impact they may have.

The Owners - Strata Plan No. 61285 v Taylor (No. 2) [2022] NSWCATCD 117

The primary issue for determination in this September 2022 decision of NCAT was whether a penalty under section 247A of the Strata Schemes Management Act 2015 (NSW) should be imposed on the respondent for failing to comply with a work order made by NCAT.

The respondent tendered a report prepared by an engineer that included comments on the suitability of the roof works the subject of the work order. The applicant objected to the admissibility of the engineer's report on grounds which included that the engineer was not registered under the DBPA and so could not lawfully prepare the report by virtue of section 32 of the DBPA.

Section 32 of the DBPA prevents a person from carrying out "professional engineering work in a prescribed area of engineering" unless the person is registered under the DBPA or is supervised by a person that is registered under the DBPA.

NCAT reviewed the definition of "professional engineering work" in section 31 and the exclusions to the definition of professional engineering work in regulation 14 of the Design and Building Practitioners Regulation 2021 (NSW) (DBPR).

Regulation 14 of the DBPR provides that engineering work that is not professional engineering work under the DBPA ".unless the work is carried out directly in relation to the design or construction of a building."

NCAT found that the report was prepared "in connection with civil penalty proceedings" and was not work carried out directly in relation to the design or construction of a building. As the report fell within the professional engineering work exclusion in regulation 14 of the DBPR, section 32 of the DBPA did not apply.

NCAT further found that it was unlikely that the admissibility of the report would be affected by any prohibition on the engineer issuing the report under the DBPA. NCAT noted that further consideration would need to be given to the admissibility of such a report if (unlike here) NCAT were being asked to make work orders based on a scope in the report.

The Owners - Strata Plan No 90018 v Parkview Constructions Pty Ltd [2022] NSWSC 1123

The plaintiff owners corporation sought leave to add new defects to its claim for breach of the statutory warranties in section 18B of the Home Building Act 1989 (NSW) (Warranties), and to bring a new claim against the builder under section 37 of the DBPA, which imposes a duty of care on a person carrying out construction work to each subsequent owner of the land.

The Court held that the limitation for making a claim under the DBPA had not lapsed. It then considered whether allowing the owners to add the new claim would prejudice the builder.

In reaching its decision to permit the claim to be added as there would be limited prejudice to the builder, the Court noted that section 41(3) of the DBPA provides that a claim under section 37 is subject to the proportional liability regime under the Civil Liability Act 2002 (NSW). Accordingly, section 37 imposes the same duty of care on the builder as on its subcontractors. This means a builder can say that its subcontractors were responsible for any breach of section 37, without having to bring a claim against those subcontractors.

The Court also granted the owners leave to add the new defects into its claim for breach of the Warranties as the new defects did not represent new claims, which meant that the claims were not outside the limitation period.

Kaltoum v Commissioner for Fair Trading [2022] NSWCATOD 138

This November 2022 decision involved an administrative review brought under section 63 of the DBPA. The applicant applied to NSW Fair Trading (NSWFT) to become a registered practitioner under the DBPA, under the category of 'building practitioner - body corporate nominee.' His application was unsuccessful. The applicant applied for an internal review of the decision, which upheld the original decision. The applicant then applied to NCAT for an administrative review of the review decision.

The respondent contended that the plaintiff had not provided sufficient evidence of his experience, knowledge and skills to support the registration. Specifically, there were apparent inconsistencies in the dates given by the applicant as to when he had worked on the nominated projects, and his two reference letters were unsigned.

NCAT concluded that the applicant had failed to provide compelling evidence to support an opinion that he had the requisite level of experience, knowledge and skill under section 45(3) of the DBPA, and that the two unsigned reference letters should be given little weight.

Alzaaim v Commissioner for Fair Trading [2022] NSWCATOD 139

This November 2022 decision involved the review of a decision by NSWFT to cancel the deemed registration of the applicant of four classes of licensed activities under the DBPA and the DBPR.

The respondent had issued a notice of intent to cancel the applicant's deemed registration under section 52(1)(a) DBPA on the basis that the applicant had not provided sufficient proof that he had the appropriate qualifications for those licence classes.

NCAT held that the applicant had not provided sufficient evidence of his qualifications and competency to be granted registration for three licence classes.

In respect of the fire systems class, NCAT found that the applicant had completed tertiary courses equivalent to the prerequisite units of competency required under the DBPA and so set aside the decision to cancel the deemed registration of the applicant.

Conclusion

These decisions indicate that, particularly as regards the regulatory and compliance aspects of the DBPA, the courts and NCAT are taking a vigorous approach to uphold the intention of the DBPA, to improve the quality of construction.

This publication does not deal with every important topic or change in law and is not intended to be relied upon as a substitute for legal or other advice that may be relevant to the reader's specific circumstances. If you have found this publication of interest and would like to know more or wish to obtain legal advice relevant to your circumstances please contact one of the named individuals listed.