By Julian & Renee (Australia) – with writing support from Alberto Aldana (Colombia)
In a game-changing decision for the building and construction industry, the High Court case Pafburn Pty Ltd & Anor v The Owners – Strata Plan No 84674 has effectively ended the long-standing “blame game,” where homeowners and strata owners were often left to bear the cost of building defects. For many years, developers and builders could shift responsibility onto subcontractors, limiting their own liability. This position has now changed significantly in New South Wales (NSW).
The High Court confirmed that the duty of care under the Design and Building Practitioners Act 2020 (NSW) is non-delegable. Previously, builders and developers relied on “proportionate liability” to argue that defects were the fault of subcontractors. For example, after settlement, if defects were identified, a builder could claim it was not their responsibility because the issue arose from the work of a plumber, tiler, or another subcontractor.
The High Court rejected this approach. It held that builders and developers can be held fully liable for defects, regardless of whether subcontractors were involved. In practical terms, they can no longer “slice the pie” and reduce their responsibility. This ruling represents a major shift for strata owners and homeowners in NSW. Previously, owners’ corporations often faced significant challenges when trying to recover the cost of building defects, particularly where subcontractors were insolvent or no longer operating.
Now, builders and developers effectively become the primary point of responsibility. This is especially important in strata developments, where smaller subcontractors (such as plumbers or electricians) may no longer exist or be financially viable.
Even if a subcontractor becomes insolvent, builders and developers may still be required to cover the full cost of rectification. This provides stronger protection for homeowners and strata owners.
Developers are also directly impacted by this decision. The Court made it clear that developers who exercise substantive control over a project—such as through supervision, coordination, or project management—can be held liable for defects. In Pafburn, the developer was found to be equally responsible due to its level of control during construction. Developers can no longer avoid liability by claiming they were merely financiers or had limited involvement in the building process.
The Pafburn ruling is a positive development for homeowners, particularly those purchasing off-the-plan. However, it also highlights the importance of continuing to undertake proper inspections and due diligence before settlement. Although builders and developers now bear greater responsibility, defect disputes can still arise and may require formal resolution through bodies such as the NSW Civil and Administrative Tribunal (NCAT). For strata owners, the process is now more straightforward. Rather than pursuing multiple parties, claims can generally be directed to the builder or developer for the full cost of repairs.
Julian and Renee of Flash Conveyancing are experienced in property transactions across New South Wales. With extensive knowledge of local council requirements—including Blacktown, Hawkesbury, Blue Mountains, The Hills, Hornsby, and Parramatta—they provide tailored support for each settlement. Whether you are purchasing your first home or managing a strata scheme, their team can help ensure you are properly positioned to address and pursue building defect claims where necessary.
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