It has been nearly a year since the High Court delivered its decision in Pafburn Pty Limited v The Owners – Strata Plan No 84674 [2024] HCA 49, dismissing the appeal of The Owners – Strata Plan No 84674 v Pafburn Pty Ltd [2023] NSWCA 301. In a closely split judgment (4:3), the majority found that those who delegate or entrust work to others cannot seek to exclude or limit their liability via the apportionment regime.  

The Supreme Court of NSW has recently provided further guidance, finding that no claims for breach of the statutory duty of care under section 37 of the Design and Building Practitioners Act 2020 (NSW) (DBPA) can be apportioned.   

The High Court held that builders and developers with substantive control over building work cannot rely on Part 4 of the Civil Liability Act 2002 (NSW) (CLA) to apportion liability for breaches of the statutory duty of care under section 37 of the DBPA. While they may pursue cross-claims against other parties to recover damages, they cannot offset those damages at first instance and remain vicariously liable to property owners. 

You can read our full article on the case here.  

As noted in that article, whether or not "downstream parties" who do not delegate work can still rely on a proportionate liability defence was not clarified by the majority.  

In the recent decision of Kapila v Monument Building Group Pty Ltd [2025] NSWSC 1306 Justice Richmond has provided guidance as to how first instance courts may approach the lingering questions regarding the scope of the decisions in Pafburn. Justice Richmond felt that he was obliged to follow those aspects of the Court of Appeal's decision in Pafburn that were not disturbed on appeal to the High Court.  

Accordingly, his Honour determined that claims for breach of the statutory duty of care under the DBPA cannot be apportioned, regardless of whether the defendant subcontracted, delegated or entrusted work to others.  

Cross-claims remain available, but apportionment does not. 

1. The dispute concerned a defective terrace home in Paddington, Sydney. The owner of the home was the Plaintiff, who alleged multiple defects, including waterproofing and electrical issues.  

2. The builder, Monument Building Group Pty Ltd (MBG), was the first defendant, and its director, Miles Brujic, was the second defendant. Claims were brought against both for breach of the statutory duty of care under section 37 of the Design and Building Practitioners Act 2020 (NSW).  

3. Both MBG and Mr Brujic argued that, unlike Pafburn, they had not subcontracted or delegated any work and therefore should be able to apportion liability under Part 4 of the CLA. They named four parties as concurrent wrongdoers:

(a) the certifying authority; 

(b) the structural engineer; 

(c) the architect; and 

(d) another engineer responsible for removing a deep soil planter box.   

4. The Court found in favour of the Plaintiff, holding that the works performed by MBG and Mr Brujic were defective. The key issue was whether the defendants could rely on Part 4 of the CLA to apportion liability in light of Pafburn in respect of the negligence aspect of the claim.   

5. It is unclear what the builder defendant hoped to gain by taking this point on in this case. MBG was also sued under the statutory warranties under section 18B of the Home Building Act 1989 (NSW) which have never been apportionable. 

• The relevant paragraphs of the judgment are 243 to 257. 

• The starting point arose from now settled law that developers and builders with substantive control over a project cannot apportion liability to their subcontractors.  

• MBG and its director, Mr Brujic, argued that their case was distinguishable from Pafburn because they had not subcontracted, delegated or otherwise entrusted any construction work to others.  

• Justice Richmond rejected this argument.  

• In circumstances where MBG and Mr Brujic did not delegate work, his Honour deferred to the original Court of Appeal decision in The Owners – Strata Plan No 84674 v Pafburn Pty Limited [2023] NSWCA 301, to which he was bound.  

• His Honour acknowledged that while the High Court in Pafburn confined its reasoning to cases involving delegation and section 5Q of the CLA, the Court of Appeal’s earlier decision went further. The Court of Appeal held that Part 4 of the CLA does not apply at all to claims under section 37 of the DBPA, regardless of delegation: 

[253] "In my view, the reasoning in Pafburn CA in support of the conclusion that Part 4 does not apply to a claim under s 37 of the DBPA is part of the ratio of that decision and is binding on me..." 

• Additionally, MBG was unable to apportion liability because his Honour found it had breached contractual terms that replicate the statutory warranties under the Home Building Act 1989 (NSW) 

This judgment is the first to clarify how first instance courts will apply that part of the Court of Appeal's decision in Pafburn regarding whether parties who do not delegate work can rely on the apportionment regime. In summary: 

• No apportionment available: Liability for breaches of the statutory duty of care under section 37 of the DBPA cannot be apportioned, even where no delegation or subcontracting occurred.  

• Cross-claims remain critical: While apportionment is not available, parties can still pursue cross-claims to recover contributions from other responsible parties.  

• Heightened risk for sole contractors and designers: Professionals engaged for discrete tasks (such as engineers and architects) should be aware that they may face full liability exposure without the protection of Part 4 of the CLA. 

This may not be the end of apportionment. Further change will require a similar case progressing to the High Court or legislative reform as part of the NSW "Building Bills".  

There is also possibility that other Supreme Court judges may interpret the High Court’s reasoning differently, as they are not bound by Justice Richmond’s findings and may take the view that the issue was addressed in the High Court majority's decision in Pafburn.  

If you have any questions about these developments or would like to discuss their implications further, please contact our Insurance team.