The High Court in Brookfield Multiplex v SP61288 has ruled that the builder of an apartment building owes no duty of care to the subsequent purchasers, in this case the Owners in the Strata Plan, in respect of latent defects.

This reverses the earlier decision of the NSW Court of Appeal which had found that the builder did owe a duty of care to the Owners in respect of sufficiently serious defects.

This decision has serious implications for both builders, Owners and insolvency practitioners  involved in the liquidation of construction companies as it narrows the grounds on which Owners may seek to set off claims by builders or pursue builders for the costs of rectifying defects in common property.

For more information contact Simon Gallant.