Disproportionate apportionment? A caution to defendants involved in claims under the Building Act 2004 (ACT)

Earlier this month, the ACT Supreme Court released the judgment of Hyblewski v Bellerive Homes Pty Ltd [2019] ACTSC 44. This decision has serious implications for defendants involved in actions over defective building works under the Building Act 2004 (ACT) as it raises serious questions regarding the apportionment of liability in the context of building cases in the ACT.

Facts

The plaintiff purchased land in the ACT to build a residential property. She sued the first defendant, the builder of the house and the second defendant, the building certifier, for various defects in building works. During the course of the hearing, the plaintiff settled with the builder, so the case proceeded against the certifier only.

The plaintiff claimed damages against the certifier for a number of defects in the construction of the building, including poor brickwork, the failure to provide an adequate foundation for the building works, the failure to install a moisture barrier between slabs and the failure to build nib walls in accordance with the approved plans.

The certifier denied his responsibility for the defects, arguing that the standard of care required by the certifier is lessened by the fact that the builder has to provide statutory warranties. He also argued that issues relating to aesthetic appearance and quality of building work were not the certifier’s responsibility, and that it was not his role to second guess variations from the approved plans. Both of these arguments were rejected by the Court.

Decision

The certifier was found to be liable for the defects in the building works. The Court held that if the certifier had performed his statutory and contractual duties with reasonable care and skill, he would have identified the defects and notified the builder such that the builder would have remedied them. Whilst the certifier was not required to detect and rectify every defect in the works, the judge found that these particular defects were such that the certifier should have caused them to be remedied. As such, the certifier’s breaches were found to cause the whole of the loss suffered.

With regards to apportioning liability, the Building Act 2004 (ACT) only permits apportionment of liability where each defendant was found to be liable. In this case, the certifier was the only defendant who was found to be liable, since the other previous defendant (the builder) had settled with the plaintiff before judgment. Therefore, apportionment of liability to the builder was not available, and the certifier had to bear all liability for the damage suffered.

Key Messages

1. Where a plaintiff sues two or more parties for defective building work, but there is only one party that is found to be liable (because for example, the other parties had settled with the plaintiff prior to judgment), no apportionment of liability will be available under the Building Act 2004 (ACT), and the relevant defendant will be liable for the totality of damages.
2. Building certifiers will not be able to shirk liability by claiming that issues of aesthetic appearance and quality of work are not their responsibility.
3. Certifiers will not be able to escape liability by deferring their responsibilities to a builder. For example, a certifier will not be able to argue that it was not their responsibility to check whether departures from approved plans were agreed upon before allowing a variation to go ahead.

If you need advice or further clarification on the decision, please do not hesitate to contact our Litigation & Dispute Resolution team at BAL.