Decision
85I start with what I said in Star of the Sea. A key feature of my reasoning in that case was that the owners corporation had the benefit of the statutory implied warranties, and what I have called above statutory privity of contract, against the developer and the builder. I said in substance that it was not appropriate for the court to impose some further or more onerous duty of care.
86In this case, however, it is clear, as the parties acknowledge, that the Owners Corporation does not have (nor did it ever have) the benefit of that statutory regime.
87Next, I note that the parties accept that the duty of care alleged is one to avoid causing economic loss. In my view, they are correct to do so.
88Thirdly, I note that although Mr Corsaro did not accept that the duty of care for which he contended was novel, he has not been able to point to any case establishing a duty of care of the kind alleged. In my view, the duty is novel. For the reasons that I gave in Star of the Sea (the essence of which is summarised in Mr McHugh's submission recorded at [80(4)] above), Bryan is no authority for the imposition of the duty alleged in the circumstances of this case.
89Mr Corsaro relied on the decision in Astley for the proposition that contractual and common law duties could coexist between parties to a contract. Mr McHugh accepted that in some cases this could be so. However, in my view, it is not so as a matter of absolute or general application. There is neither reason nor room for the imposition of a duty of care in the case of a contract negotiated at arm's length between parties of equal standing, who are able to bargain for and obtain the benefits that they seek, and to pay the price that they think appropriate. As the majority said in Astley at [47]:
... Unlike the duty of care arising under the law of tort, the promisee in contract always gives consideration for the implied term. And it is a term that the parties can, and often do, bargain away or limit as they choose. Rather than ask why the law should imply such a term in a contract for professional services, it might be more appropriate to ask why should the law of negligence have any say at all in regulating the relationship of the parties to the contract? The contract defines the relationship of the parties. Statute, criminal law and public policy apart, there is no reason why the contract should not declare completely and exclusively what are the legal rights and obligations of the parties in relation to their contractual dealings.
90In my view, their Honours' observations apply equally to a contract for the provision of specialist services, of the kind which Brookfield agreed to supply under the design and construct contract. Where the parties have negotiated in full their rights and obligations, there is no reason for the law to intervene by imposing some general law duty of care.
91Further, and contrary to Mr Corsaro's submission, I do not think that it is appropriate for a judge of first instance to identify and impose a novel duty of care. If that is within the province of the courts, it is in my view a matter to be dealt with at a higher (or the highest) appellate level.
92In this context, I think that the courts must pay particular attention to the views of Brennan J in Bryan at 644:
It would be anomalous to have claims relating to the condition of the building by an original owner against the builder determined by the law of contract if the relief claimed by the remote purchaser against the builder would be determined by the law of tort. Such a situation would expose the builder to a liability for pure economic loss different from that which he undertook in constructing the building and would confer a corresponding right on the remote purchaser which the purchaser had not sought to acquire from the vendor (45). It would be tantamount to the imposition on the builder of a transmissible warranty of quality. In some jurisdictions, Parliament has provided such a remedy by statute. The social question whether building costs should be inflated to cover the builder's obligation under such a transmissible warranty in an appropriate question for parliaments to consider but, in the absence of compelling legal principle or considerations of justice reflecting the enduring values of the community, the courts should not decide to extend remedies not hitherto available to remote purchasers of buildings without considering the cost to builders and the economic effect of such an extension. Those are questions which the courts are not suited to consider. The extension of remedies in that direction is properly a matter for Parliament.
93As I said in Star of the Sea at [145], accepting that his Honour dissented in that case, nonetheless:
... what his Honour said focuses attention on the critical questions to be considered in deciding whether, as a matter of policy, the law should impose, on a builder in the position of Brookfield, a duty of care (over and above the statutory warranties) in favour of a successor in titled to the developer, such as the Owners Corporation."
94The reference to the "statutory warranties" is perhaps of less significance in this case, but it is not entirely insignificant. The legislature has put in place a regime for the protection of those who buy defective residential property. It crafted that regime to exclude developments such as that with which I am concerned, where the development was always intended to be used for commercial purposes. Thus, in this case, the Owners Corporation is inviting the courts to go where the legislature did not.
95The last point requires some elaboration, by reference to the provisions of the Home Building Act and the Home Building Regulation 1997 (the Regulation).
96Section 18B of the Home Building Act implies into "every contract to do residential building work" certain warranties. The statutory implied warranties include:
(1) a warranty that the work will be performed in a proper and workmanlike manner, in accordance with the plans and specifications;
(2) a warranty that materials will be good and suitable for their purpose and (unless otherwise stated) new;
(3) a warranty that the work will be done with due diligence and within the stipulated or a reasonable time; and
(4) a warranty of fitness for purpose where that purpose is made known to the contractor beforehand.
97The expression "residential building work" is defined in s 3 of the Home Building Act as follows:
"residential building work" means any work involved in, or involved in co-ordinating or supervising any work involved in:
(a) the construction of a dwelling, or
(b) the making of alterations or additions to a dwelling, or
(c) the repairing, renovation, decoration or protective treatment of a dwelling.
It includes work declared by the regulations to be roof plumbing work or specialist work done in connection with a dwelling and work concerned in installing a prescribed fixture or apparatus in a dwelling (or in adding to, altering or repairing any such installation).
It does not include work that is declared by the regulations to be excluded from this definition.
98That definition directs attention to the definition of "dwelling", which is defined as follows in s 3:
"dwelling" means a building or portion of a building that is designed, constructed or adapted for use as a dwelling (such as a detached or semi-detached house, transportable house, terrace or town house, duplex, villa-home, strata or company title home unit or residential flat).
It includes any swimming pool or spa constructed for use in conjunction with a dwelling and such additional structures and improvements as are declared by the regulations to form part of a dwelling.
It does not include buildings or portions of buildings declared by the regulations to be excluded from this definition.
99The definition of "dwelling" directs attention to the Regulation. Clause 5 of the Regulation declares certain "structures and improvements... to form part of a dwelling when constructed for use in conjunction with a dwelling". It is intended to deal, among other things, with a structure that includes both residential and non-residential elements. Nothing of present moment turns on cl 5.
100However, cl 6 of the Regulation is of some significance. It declares "to be excluded from the definition of dwelling for the purposes of the Act" a number of commercial uses. The excluded uses include, by para (f), "a house or unit designed, constructed or adapted for commercial use as tourist, holiday or overnight accommodation".
101I should note that the relevant provisions of the Act have been amended from time to time; and, more so, of the Regulation. However, despite the changes in wording, the essential structure of the Act and Regulation has been the same since at least 1990 (although the name of each has changed); and I have sought to quote from the Regulation as it stood in 1997.
102It will be seen that the legislature has decided, as a matter of policy, to exclude, from the regime of protection given to dwellings under the Home Building Act, a number of categories of dwelling, including in effect dwellings used for the purposes of overnight accommodation. That could be seen to represent a considered decision by the legislature that the benefits of the regime established by the Home Building Act should not be extended to those who construct, for commercial rather than purely residential purposes, developments such as that with which I am presently concerned (of course, to the extent that it is used as a residential apartment hotel).
103Thus, a decision to impose a common law duty of care on a builder such as Brookfield that undertakes to construct such a development involves a conscious decision to extend, through the imposition of a common law duty of care, a benefit that the legislature appears to have withheld as a matter of deliberate policy choice.
104It must be clear, I think, that contractors in the position of Brookfield price their work, and more generally undertake contractual obligations, with reference, among other things, to the contractual and statutory warranties by which they are bound. A decision to impose additional duties on such a contractor is, as Brennan J pointed out in Bryan, a serious matter. It requires attention to a range of factors, including the additional costs that would be imposed on contractors and the corresponding benefits to those in whose favour the duty of care might extend. That, in my view, is something to be undertaken by the legislature.
105Even if the matter were not one to be dealt with only by the legislature, nonetheless the factors to which Brennan J referred, which focus attention on key policy considerations, show why it is appropriate that any principled extension of the law of negligence, of the kind that the Owners Corporation says it seeks in this case, is something to be undertaken a higher level in the curial hierarchy.
106Numerous other matters were debated in submissions, including as to the "vulnerability" of the Owners Corporation, and as to the related question of the supposed alignment between its interests and those of Stockland and Chelsea. The relevant facts have been set out above, and in any event are documentary and non-contentious. The submissions of the parties have been put both in writing and orally (recorded in the transcript). I do not think that there is any purpose to be served by my offering an opinion on the question of, for example, vulnerability in circumstances where I have concluded that it is not appropriate, at the trial level, to undertake the imposition of a novel duty of care.
107Likewise, I do not think that any useful purpose would be served if I were to consider and express some moot conclusion on the numerous other issues debated by the parties.
108I add only, and by way of reinforcement, that nothing that was put in submissions indicated any possible basis for a finding that Multiplex CA owed any duty of care to the Owners Corporation.