Strata Plan 92183 v Samdora Pty Ltd [2026] NSWSC 406
Since the Design and Building Practitioners Act 2020 (NSW) (DBP Act) came into force, numerous claims have been brought against the directors of builders and developers. However, so far, there isn’t any clear criterion defining the circumstances under which a director may be liable for such claims, especially a director who is away from the tools. The recent Supreme Court decision in Strata Plan 92183 v Samdora Pty Ltd [2026] NSWSC 406 may provide some guidance on the evidence required to prove or defend such a claim.
Background
In the Samdora case, the owners corporation brought proceedings against the builder, the developer and their respective directors for defective works in some townhouses in Mangerton. The owners corporation claims that both the builder’s director and the developer’s director breached their respective duty of care to the owners corporation under section 37 of the DBP Act in respect of certain defective works.
The DBP Act
Generally, under section 37 of the DBP Act, a person who carries out “construction work” has a duty of care to avoid economic loss caused by defects in a building or arising from the construction work.
Under Section 36 of the DBP Act, construction work is not confined to physically carrying out building work. A person will be regarded as having carried out “construction work” if the person had supervised, coordinated, project-managed, or otherwise had substantive control over the carrying out of the work. This broad definition of “construction works” provides owners with a basis to bring claims under the DBP Act against individuals involved including directors of developers and builders.
The Court’s Decision
Claim against the developer’s director
The Court held that the developer’s director was not liable to the owners corporation under the DBPA. The director only had incidental involvement in the defective work, e.g. occasional presence at inspections. The Court couldn’t find sufficient evidence to demonstrate that consistently over a period of time the director was supervising, coordinating, project managing, or otherwise having substantive control over the construction work, or he was employed by anyone to do the same. Therefore the Court held that the owners corporation did not establish that the developer’s director had carried out construction work under the DBP Act.
Claim against the builder’s director
In contrast, the Court held that builder’s director was liable for some items raised by the Plaintiff under the DBP Act.
As the nominated supervisor of the builder, the parties did not dispute that he carried out construction work (i.e. having supervised the work) and owed a duty of care to the owners corporation.
The Court then considered whether the builder’s director breached this duty of care. The Court considered the evidence on a defect by defect basis. The Court had no difficulty in finding that some of the defects could have been identified had the director carried out regular inspections and checks. The director was found liable for these defects.
However, for other defects, the Court took the view that there was insufficient evidence to say that they could have been observed by the director had he carried out his duty to inspect the work regularly. The owners corporation’s claim against the director failed for these defects.
Key takeaway
Directors of a builder or developer do not necessarily owe a duty of care to owners under the DBP Act. The key is the role of the director or the level of involvement in the defective building work.
A director who is the licence holder (nominated supervisor under the Home Building Act 1989 (NSW) or the building practitioner nominee under the DBP Act) may likely be found to owe a duty of care, given their statutory obligations as the licence holder.
The same cannot be said for those who are away from the tools, for example, a chief financial officer who looks after finances only, or an estimating manager who was only involved in the pre-contract negotiations. Concrete evidence is required to show their actual involvement in the defective work raised.
If you would like to discuss this article with us, please contact Simon Mok, Partner or Rebecca Salib, Senior Associate on (02) 9261 5900.