21 November 2019

NSW Parliamentary Inquiry recommends reforms to building laws

This article was written by Jock Hamilton.

On 13 November 2019, the New South Wales Parliament’s Legislative Council Public Accountability Committee released an interim report into its Parliamentary Inquiry into the regulation of building standards, building quality and building disputes. This is the first report prepared by the Legislative Council following the terms of reference dated 4 July 2019. The committee has since received 175 submissions (together with supplementary submissions) and conducted 4 public hearings at Parliament House in Sydney.

The terms of reference are widely cast and include a review of the role of private certifiers, the adequacy of consumer protections, the role of strata committees and the status of how the NSW Government has implemented recommendations from the previous Lambert Review as well as the Shergold Weir report of 2018. This Inquiry is timely given the range of issues plaguing residential tower developments over the past 12 months, including defects at Opal Tower (now the subject of a Class Action in the Supreme Court of NSW) and the evacuation of Mascot Tower in June this year.

The interim report makes a series of recommendations which, if implemented, would change the regulatory framework in which building practitioners, designers, private certifiers and insurers operate, particularly in respect of residential constructions. For example, the report recommends that the statutory limitation period to bring claims for breach of statutory warranty under the Home Building Act 1989 be increased from 6 years for major defects and 2 years for all other defects to 7 years for both. The Society of Construction Law had previously submitted to the Inquiry that the limitation periods should be increased to 10 years, being in line with Victoria, although that submission does not appear to have been adopted.

The report also recommends that the draft Design and Building Practitioners Bill 2019 be brought forward to 31 March 2020, although the recommendation notes that the NSW Government should not proceed with the legislation until it has consulted closely with the Insurance Council of Australia and other stakeholders. If this bill is passed in its current premise, it would impose a statutory duty of care on a range of building practitioners and designers, legislating out of the common law position arising from Brookfield Multiplex[1] in which a builder – generally speaking – does not owe a subsequent owner a duty of care to avoid causing economic loss. The Inquiry notes the draft bill is a framework only however if such legislation is passed, that position from Brookfield Multiplex will be reversed for residential projects. There are a range of possible issues which have been identified in this Interim Report including how any proportionate liability will be addressed in a practical sense and whether the legislation should apply retrospectively (for which the Committee recommends it should).

The interim report can be accessed here.

We are monitoring the progress of this Parliamentary Inquiry and will keep you updated with any further reports or recommendations.

In the meantime, if you have any queries, please do not hesitate to contact us.

[1] Brookfield Multiplex Ltd v Owners Corporation Strata Plan 61228 [2014] HCA 36.

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