Latent defects and builder’s responsibility to the OC

In Brookfield Multiplex Ltd v Owners Corporation Strata Plan 61288 & anor [2014] HCA 36, the High Court rejected the notion that a builder owes a duty of care to an owners corporation for pure economic loss arising from latent defects in common property.  The case turned on whether the owners corporation was “vulnerable” in the relevant sense.  The commercial nature of the development and the detailed contractual framework between the developer and the builder, and the developer and the purchasers of the lots that provided for how defects would be dealt with, were factors weighing against vulnerability.

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