NSW Design & Building Practitioners Act Part 1 – A Recap

Jennifer Crawford , 13 May 2021

NSW/ACT committee member Jennifer Crawford provides a comprehensive recap of a recent ACA event about NSW building reform, where legal counsel Christopher Larcos took us through the legal implications of the D&BP Act.

It was with a slight air of trepidation that the room filled at Club Rose Bay on Thursday 29 April 2021 to hear Christopher Larcos make a presentation on the new Design and Building Practitioners Act 2020. What followed was a two-hour presentation that set out the key issues as they apply to architects, a summary of which is set out below.

Mr Larcos was keen to point out that this legislation is brand new and as a result has no existing case law to test it. Thus, his presentation was based on his assessment of it as a lawyer.

This new legislation has a profound effect on the common law of negligence.

Background

As a bit of background, Mr Larcos cited two past legal cases (2004 Woolcock Street Investments v CDG, and 2014 Brookfield Multiplex v OC SP 61288) that had shown that there was no duty of care required by either the developer or builder respectively to the owners of the properties once latent defects were discovered.

There was also reference made to specific contractual structures such as Developer Special Purpose Vehicles, which are companies that are established to deliver a project and then wound up on its completion – meaning that there is no one to sue if things go badly.

How big a problem do we have in the industry? Mr Larcos quoted figures of 85% of apartment buildings in Australia having at least one defect in multiple locations. While structural defects are rare, they are problematic when they do occur.

It is against this background of events and the highly publicised building failures at Opal tower in Homebush and Mascot towers in Mascot that has led to the establishment of the Office of the NSW Building commissioner and the Class 2 building industry reforms, including the Design and Building Practitioners Act.

Key Changes in the Act

The key changes that this act seeks to introduce include the following:

• A new duty of care
• A publicly available register of practitioners
• Compliance declarations completed by those practitioners
• Compulsory insurance
• Disciplinary oversight
• Information gathering and enforcement powers

Duty of Care

This Act allows any owner in a Class 2 building suffering a loss due to faulty building work to have an action analogous to negligence with no need to establish vulnerability. There must be proven a failure to exercise reasonable care. Currently the Act has a 10-year retrospective operation applying to the 10 years leading up to 10 June 2020.

Mr Larcos believes that the impact on insurers will be significant and it may be the insurers that end up informing more of the future direction of the act.

(The ACA – NSW/ACT will be hosting an event on 16 June with speakers Simon Gray and Carina Bogaard to discuss the insurance implications of the Act. Also see a brief discussion of the insurance implications of the D&BP Act in our Five Question interview with Planned Cover’s Cos Cirocco)

Registration as a Design Practitioner

Under the Act, both individuals and companies can be registered for a period of one, three or five years and will be included on a publicly available register of practitioners.

Registration requirements for architects include:

• Five years experience
• Registration as an architect
• Knowledge of EP&A Act

There are two classes of Design Practitioner that apply to architects:

• Registered Design Practitioner
• Registered Principal Design Practitioner

Registered practitioners will have a new registration number independent of their architectural registration, must maintain additional levels of CPD, abide by a Code of Practice and be insured with an “adequate” level of indemnity.

Exactly how this adequate level of indemnity is determined depends on the:

• Nature of the work
• Volume of the work
• Length of time that the practitioner has been registered
• Estimate of claims that could be brought
• Financial capacity of architect.

Work Covered by the Act

The Act focuses on the construction of Class 2 buildings, also applying to alterations and additions to Class 2 buildings as well as repair, renovation or protective treatment. It focuses on the key building elements as follows:

• Fire Safety Systems
• Waterproofing
• Internal or external load-bearing components
• Components of a building that are part of the building enclosure
• Those aspects of the mechanical, plumbing and electrical services for a building that are required to achieve compliance with the Building Code of Australia.

Statutory compliance remains for other items not included in these five building elements such as accessibility.

A Regulated Design is a new term referring to:

(a) a design that is prepared for a building element for building work, or

(b) a design that is prepared for a performance solution for building work (including a building element), or

(c) any other design of a class prescribed by the regulations that is prepared for building work, a design prepared for a building element for building work or a design prepared for performance-based solution for a building element.

Compliance Declarations

It is anticipated that there will be an online portal for submission of Compliance Declarations.

Registered Design Practitioners are to provide compliance declarations that the regulated design complies with the BCA. Compliance declarations are to be provided before commencement of construction. In the case of variations to the work during construction, a new declaration must be provided no later than one day after the commencement of the work.

Registered Building Practitioners certify that building work has been carried out in accordance with the documentation.

Registered Principal Design Practitioners compile the compliance declarations from all the other practitioners.

Compliance Declarations are required to be submitted in order to have the Occupation Certificate issued. It is noted that while under the Act it is required that compliance declarations be provided, there is no requirement for them to be coordinated.

Final Thoughts

Mr Larcos also presented some thoughts that may be due for consideration, interpretation and possible testing via the courts once the Act is in full swing:

Unlimited liability v adequate insurance – Will the insurers have significant feedback that may determine the future direction of the Act? Currently, under the Civil Liability Act 2002, proportional liability exists. How will this play out with the new Act?

Currently under the Act, the compliance declarations do have limited scope, with only these limited items required to comply with the BCA. Other items are required to comply with the BCA under other Statutory requirements. It is the Building Practitioner that is responsible for building in accordance with the Design Practitioner’s documents.

Mr Larcos is looking at revisiting the standard ACA Client Architect agreement with some potential clauses around relief for delays by others in providing declarations.

Due to the recent history of the construction industry in NSW, it is understood why such legislation may have come about to establish lines of authority and responsibility in construction projects. At the same time, there still remain questions regarding some of the finer details of the Act and their ramifications that may be tested in the courts. It is hoped that this Act delivers the desired result in improvement in building quality rather than becoming a paper shuffling exercise.