Kapila v Monument Building Group Pty Ltd [2025] NSWSC 1306

Key Takeaways

• Directors who act as nominated supervisors and exercise substantive control over building works can be personally liable for defects under the Design and Building Practitioners Act 2020 (NSW) (DBPA).
• The statutory duty of care in section 37 applies directly to individuals who “carry out construction work” and corporate structures will not shield directors from exposure.
• No piercing of the corporate veil is required and liability arises from the plain operation of the DBPA.
• Claims for breach of section 37 are not apportionable under Part 4 of the Civil Liability Act 2002 (NSW) (CLA).

Background

The plaintiff homeowner engaged Monument Building Group Pty Ltd to renovate a terrace in Paddington. The second defendant, Mr Brujic, was the Builder’s sole director and nominated supervisor.

Defects emerged, including significant waterproofing failures that caused water ingress and economic loss. The plaintiff sued the Builder for breach of contract and both defendants for breach of the statutory duty of care under section 37 of the DBPA.

Decision

Richmond J found that the works were defective and that Mr Brujic was directly involved in supervising and making decisions about the construction work. As nominated supervisor, he had substantive control over the works and therefore “carried out construction work” within the meaning of section 36.

Accordingly, he personally owed and breached the statutory duty of care under section 37.

His Honour emphasised that liability did not depend on piercing the corporate veil and it flowed from the plain wording of the DBPA, which imposes liability on individuals who carry out construction work.

Apportionment

The defendants argued that liability should be apportioned to other consultants under Part 4 of the CLA. The Court rejected this, holding that claims under section 37 are not apportionable, following the reasoning of the New South Wales Court of Appeal in The Owners – Strata Plan No 84674 v Pafburn Pty Ltd [2023] NSWCA 301.

Defendants facing section 37 claims must instead pursue cross-claims against any concurrent wrongdoers.

Practical Implications

The decision reinforces the growing personal exposure of directors and nominated supervisors under the DBPA. Those actively supervising works should ensure robust quality control systems, strict compliance with plans and standards, and thorough documentation of inspections and rectification efforts to mitigate risk.