Brookfield Multiplex Ltd v Owners Corporation Strata Plan 61288

The High Court of Australia considered an appeal by Brookfield Multiplex Ltd (the builder) against the Owners Corporation of Strata Plan 61288. The dispute concerned whether the builder owed a duty of care to the Owners Corporation for pure economic loss arising from latent defects in the common property of a strata-titled apartment complex. The Owners Corporation, which had no direct contractual relationship with the builder, claimed damages for these defects.

The central legal issue before the High Court was whether the builder owed a duty of care to the Owners Corporation in circumstances where the building was constructed under a design and construct contract with a developer, and the apartments were subsequently sold to individual proprietors, leading to the creation of the Owners Corporation. The Court was required to determine if the builder's contractual obligations to the developer extended to a concurrent duty of care to the Owners Corporation for pure economic loss, considering the principles of proximity, reliance, and vulnerability in the context of latent defects in common property.

The High Court reasoned that the builder's responsibility to the developer was exhaustively defined by the design and construct contract. The Court found that the builder assumed no responsibility for pure economic loss beyond the contractual limits, and the developer did not rely on any such extended responsibility. The statutory relationship between the Owners Corporation and the developer, as the initial owner of the lots, did not create an anterior duty of care owed by the builder to the Owners Corporation as a proxy for the developer. The Court concluded that the builder did not owe a duty of care to the Owners Corporation in this scenario.

Consequently, the High Court allowed the builder's appeal, setting aside the orders of the Court of Appeal and dismissing the appeal to that Court with costs. The Owners Corporation's cross-appeal was also dismissed with costs.