Introduction

On Tuesday, 27 July 2010 his Honour Einstein J in the NSW Supreme Court delivered his judgment confirming that the principle of proportionate liability as set out in Part IV of the Civil Liability Act 2002 (NSW) (the Civil Liability Act) applies to the statutory warranties implied by s18B of the Home Building Act 1989 (NSW) (the Home Building Act).

Facts

The proceedings were commenced by the Owners Corporation against the first defendant builder for defective building work relying on the extension of statutory warranties by s18D of the Home Building Act.

The builder's List Response relied on the proportionate liability provisions of the Civil Liability Act. The plaintiff brought a Notice of Motion to have those parts of the builder's List Response struck out on the basis that proportionate liability is not available to a party defending claims of breach of the implied warranties under the Home Building Act.

Decision

The plaintiff's Notice of Motion was dismissed.

His Honour found that the "ordinary and natural meaning of s34 (of the Civil Liability Act) means that proportionate liability applies."

His Honour did not have the benefit of a direct authority on point but took some not insignificant solace from McDougall J's decision in The Owners of Strata Plan v Brookfield Multiplex Limited [2010] NSWSC 360. In that case, in almost identical factual circumstances, McDougall J allowed the defendant to amend its List Response to identify its subcontractors as concurrent wrongdoers, and in so doing "found the amendments were not hopeless or doomed to fail".

Consideration was given to the timing of a decision on whether or not a claim is apportionable. The plaintiff contended that the Court should determine the issue at the interlocutory stage "as it was likely to affect the course of the litigation in a number of ways". The decision of Barrett J in Reinhold v New South Wales Lotteries Corporation (No 2) [2008] NSWSC 187 supports the proposition that a decision ought not be made until after the substantive causes of action in question have been determined. His Honour was content to decide the matter at the interlocutory stage.

Implications

Subject to an appeal by the plaintiff or the Parliament taking legislative steps to exclude s18B warranties from the proportionate liability provisions of the Civil Liability Act, a plaintiff or prospective plaintiff ought to very carefully identify all tortfeasors prior to commencement of its proceedings.

For defendants, the decision emphasises the significance of thorough investigation and a timely (pleaded) identification of all concurrent tortfeasors.

Owners Corporation SP 72357 v Dasco Constructions Pty Limited & Ors [2010] NSWSC 819

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