Builder Negligence (Vic)

It is unfortunately quite common to hear tales of builder negligence in Victoria. Whether it is a builder leaving a construction job incomplete or failing to carry out the agreed standard of work, it usually means that a homeowner is left financially worse off. The question in these circumstances is, what duty of care does a builder owe to homeowners in Victoria? And what recourse does an individual have if they are harmed because of a builder’s negligence? These questions are discussed below.

Builder duty of care in Victoria

A duty of care is an obligation to take steps to avoid causing certain other people harm. For instance, a medical professional has a duty of care to avoid causing their patients foreseeable injury. This duty of care relationship exists because there are elements of control and reliance between the doctor and the patient.

It is established law that a builder in Victoria has a duty of care to their clients. This duty arises because the client relies on the builder, who is in control of the building site. Additionally, a client rarely has the expertise to judge if a builder is completing the work competently. Due to the builder’s special skills and a homeowner’s ignorance of building standards, a homeowner relies on a builder to take reasonable care. This control and reliance give rise to the duty of care.

In Victoria, the builder’s common law duty of care has been codified in the Domestic Building Contracts Act 1995. This Act introduces a series of implied warranties that constitute the standard and scope of the builder’s duty of care.

Under this Act, a builder has a duty to ensure that:

• building work is carried out in accordance with specifications and plans;
• materials supplied are suitable and good for the purpose;
• work is carried out in accordance with all legal requirements;
• work is carried out with reasonable skill and care and by the contractual deadline;
• the home will be suitable for occupation; and
• the work and materials are fit for purpose.

The existence of this duty of care does not mean that a builder must be perfect in all respects. A builder is only required to act as another builder would reasonably act to save others from foreseeable harm. For instance, if a builder fails to make a structurally sound set of steps, it is foreseeable that the homeowner or their guests could suffer an injury as a result. A competent builder would think about the potential for future harm and takes reasonable action to ensure that the steps are safe.

Builder negligence claims Victoria

When a builder in Victoria breaches their duty of care, causing harm, the injured party can make a claim for compensation under common law or the provisions of the Domestic Building Contracts Act 1995. A builder’s breach of duty only constitutes negligence when there is resulting harm, damage or injury. Under the Building Act 1993, there is a ten-year limitation to bring a negligence claim on a building action.

Economic loss

Negligence claims against Victorian builders often involve pure economic loss because of rectification costs and reduction in property values. For example, in the example above, if a homeowner finds that the set of stairs is defectively constructed, they can seek compensation for the cost to repair or replace the stairs, or the loss of value to their property. However, a negligence claim against a builder can be for something other than economic loss. For instance, if the poor work on constructing the stairs leads to someone falling down the stairs, the injured party could claim compensation for the foreseeable consequence of the builder’s negligent actions.

Case study

In Hooper v Metricon Homes Pty Ltd [2014], the Victorian Civil and Administrative Tribunal (VCAT) heard the case of a home that was exhibiting serious movement because of a poorly constructed slab and foundation. The builder, Metricon, was found to have knowingly proceeded with the house construction despite the fact that they received reports that the house’s slab was built on poorly compacted ground. As a result, VCAT found the builder to be in breach of the implied warranties in the Domestic Building Contracts Act 1995.

VCAT ordered damages in the amount required to fix the defects to the properties, which in this case was the amount required to demolish the faulty building and rebuild an equivalent structure, as well as the loss of rental income. This case makes clear that because the builder had the necessary control and expertise, and the homeowner was entirely reliant on them, they had a significant duty to take steps to protect the homeowner from harm. 

Please contact our offices if you think you have a negligence claim against a builder in Victoria. Call 1300 636 846 to find out how we can help with this or any other legal matter.

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