The decision in Owners Corporation Strata Plan 61288 v Brookfield Multiplex Limited [2012] NSWSC 1219 reiterates that where a builder and developer have contracted for the construction of a commercial property, the builder does not owe a duty of care to avoid economic loss to the developer, subsequent commercial owners corporations or a subsequent purchaser of commercial property.

Owners Corporation was the owner of a strata title development at Chatsworth. The complex of which the development forms part of was constructed by the first defendant (Brookfield) pursuant to a design and construction contract made with the developer, Chelsea Apartments Pty Ltd (Chelsea).

Owners Corporation claimed that Brookfield’s work was defective, and that there were many defects in the common property of the development that require rectification. Based on this, Owners Corporation sued Brookfield, asserting a breach of a common law duty of care.

The Court applied the case of Bryan v Maloney (1995) 182 CLR 609, stating that a builder of commercial property does not owe a duty of care to avoid causing economic loss to commercial owner’s corporations.

This was based on the fact that the duty of care alleged was novel, in the sense that it did not fall with in any established categories of duty of care. The legislature in NSW had put in place a legislative regime for the protection of those who bought defective residential property, but legislative protections did not extend to the protection of purchasers of commercial property.

Justice McDougall explained that the decision to not impose any additional duty on a contractor who undertook work on a commercial property was a NSW policy decision, and any moves to include this duty should be left to legislation or higher level in curial hierarchy.

Justice McDougall outlined that contractors in the position of Brookfield priced their work, and more generally undertook contractual obligation with reference to the contractual and statutory warranties by which they were bound and based on this, there was no reason to impose a separate duty of care.