Design and Building Practitioners Bill 2019

The Government seeks to impose a number of new obligations on design and building practitioners to improve documentation and compliance with building standards in the built environment in New South Wales.  The DBP Bill reflects only the first tranche of reforms as part of the biggest overhaul of the New South Wales building sector. The Building Commissioner has started to develop a strategy and implementation plan for 2019 to 2025 to regain public confidence and create a new customer focused facing construction industry.

The major reforms proposed by the bill are:

• to introduce compulsory “compliance declarations” that must be given by designers and builders to ensure compliance with the Building Code of Australia;
• to establish a duty of care owed by builders to owners and subsequent owners (including Owners Corporations);
• to establish a register of design practitioners (possibly, including most engineers) and to create registration requirements; and
• to create insurance requirements for registered design practitioners.

Background to the DBP Bill

NSW Government published “Building Stronger Foundations” discussion paper in June 2019 which recommended legislative reform in the build environment in NSW.  The discussion paper is implemented the Shergold Weir Building Confidence Report dated February 2018.

The Building Confidence report found that the accountabilities of different parties were unclear and there were insufficient controls on the accuracy of documentation. It identified that, particularly for design practitioners, there was a systemic failure to expressly require documentation to demonstrate compliance with the National Construction Code.

The DBP Bill was introduced by the Berejiklian Government on 23 October 2019.  The Labour party introduced the Professional Engineers Registration Bill 2019 (PER Bill) on 24 October 2019.

The DBP Bill passed through the Legislative Assembly (lower house) and was introduced in the Legislative Council (upper house) on 14 November 2019.  Members of the Legislative Council have proposed amendments to the DBP Bill.  Labour’s proposed amendments to the DBP Bill involve incorporation of the PER Bill.

The next sitting date of the Legislative Council will be on 25 February 2020.  It is possible that the DBP Bill may pass through the upper house around that time.

Compliance declarations

What are “compliance declarations”?

A “compliance declaration” is a written declaration that the relevant work or design complies with the applicable requirements.  The DBP Bill proposes to create three types of “compliance declarations“, those are:

• Building Compliance Declarations – where the person who carried out the building work makes statements about the building work which (in summary) states whether the work complies with all relevant standards guides and tolerances.
• Design Compliance Declarations – where each person who carries out certain design works makes statements about the relevant design and in particular, whether the design complies with the Building Code of Australia.
• Principal Compliance Declarations – where the person who coordinates all design consultants states whether Design Compliance Declarations have been given by registered design practitioners for all relevant designs.

Who will have to give “compliance declarations”?

Under the DBP Bill, compliance directions will need to be given by:

• head contractors will give building compliance declarations;
• engineers, architects and other design consultants will give design compliance declarations and principal compliance declarations.

Registration requirements

What “design practitioners” must register?

The amendments to the DBP Bill in the Legislative Council by Labour vastly increase the types of engineers that will be required to register on the design practitioner register.  The requirement to be registered may extend widely across the construction industry, including the following:

• civil, structural, mechanical, electrical, geotechnical and fire safety engineers; and
• people who prepare designs for:
  • fire safety systems;
  • waterproofing;
  • essential load-bearing components of a building; and
  • anything that forms part of the “building enclosure” (e.g. roof, windows, doors).

The list of stakeholders that will need to be registered will potentially include architects, draftsman, most types of engineers and fire safety consultants.

Disciplinary action

NSW Fair Trading will be afforded extensive powers to impose disciplinary action against registered design practitioners who do not comply with the DBP Bill. This is proposed to include fines and limitation, conditions, suspension or cancellation of registration.  There may also be a “board” established that will have a role to play in the supervision of registered design practitioners.

Statutory duty of care

What is the “statutory duty”?

Any person who carries out construction work will, under the provisions of the bill and for the first time, have an automatic duty to exercise reasonable care to avoid economic loss caused by defects in or related to a building for which the construction work is done or arising out of that work.

The DBP Bill expressly provides that people who carry out construction work owe a duty of care to certain categories of owner. These owners are prescribed by s. 29 of the DBP Bill and include individual titleholders and subsequent owners of a building, owners corporations and a community, precinct or neighbourhood scheme association.

Importantly, the duty does not extend to owners who are developers or large commercial entities, as those entities were deemed by Parliament to be sufficiently sophisticated and able to contractually protect their commercial interests.

Types of buildings

The statutory duty will apply to construction work in a building that is a class 1, 2, 3 and 10 under the Building Code of Australia.  Therefore, houses, multi-unit residential buildings and other buildings such as boarding houses, hostels, backpackers’ accommodation, residential parts of hotels, motels or schools will all be entitled to the statutory duty.

For builders, the newly created statutory duty is designed to work alongside the principles under the common law and the Civil Liability Act 2002 and will not operate to extend any limitation periods under these or other current laws.

Will the bill apply retrospectively?

The DBP Bill is proposed to have limited retrospective application.

If the first application for the issue of a complying development certificate or construction certificate for the building is made on the date prescribed by the regulations:

• Compliance Declarations will need to be given in respect of all designs and building work, even if under an existing arrangement.
• Design practitioners will need to be registered in respect of relevant design work done, even if under an existing arrangement.

The statutory duty of care will apply retrospectively, except if:

• the owner commenced a claim for breach of a common law duty of care before the commencement of s. 31 of the DBP Bill, or
• the loss first became apparent before the commencement of the period of 6 years immediately before the commencement of s. 31 of the DBP Bill, or
• in the case of work other than the manufacture or supply of a building product, the date for completion of the work was more than 10 years before the commencement of s. 31 of the DBP Bill.

Enquiries

If you have any questions about this article, please contact Mark Yum or Nelson Arias-Alvarez on (02) 9324 5322 or on construction@eralegal.com.au.