Pafburn Pty Limited v The Owners - Strata Plan No 84674

Pafburn Pty Limited (the appellant) appealed to the High Court of Australia against a decision of the Court of Appeal concerning claims for economic loss arising from building defects. The respondent, The Owners - Strata Plan No 84674, had brought proceedings against the appellant, a head building contractor, and others, alleging breaches of a statutory duty imposed by section 37 of the *Design and Building Practitioners Act 2020* (NSW) ("DBPA"). The core of the dispute revolved around whether the proportionate liability provisions of Part 4 of the *Civil Liability Act 2002* (NSW) ("CL Act") could apply to limit the appellant's liability for damages for breach of this statutory duty.

The High Court was required to determine whether the duty imposed by section 37 of the DBPA, which requires a person carrying out construction work to exercise reasonable care to avoid economic loss caused by defects in or related to the building arising from that work, is an "apportionable claim" for the purposes of Part 4 of the CL Act. This involved considering whether the appellant, as a head contractor, was a "concurrent wrongdoer" in relation to the economic loss suffered by the owners corporation, and whether the statutory duty under the DBPA was capable of being subject to proportionate liability.

The Court reasoned that the purpose of the DBPA, including section 37, is to address widespread building defects and promote responsibility in the construction industry. It held that where a head contractor or builder exercises substantive control over construction work, they owe a duty to exercise reasonable care. The Court concluded that the appeal should be allowed in part, setting aside the Court of Appeal's orders that struck out the appellant's reliance on the proportionate liability scheme. However, the Court remitted the matter for determination of whether all alleged wrongdoers could be characterised as persons who carry out construction work under the DBPA, as this was central to whether the proportionate liability scheme could be maintained against them.