Three NSW judgments delivered on 8 and 9 September 2026 deal with the same practical problem from different directions. A homeowner has defective building work, and the company that did it has no money, or no longer exists. Who else can be made to pay, and how much is actually recovered at the end of it?
Read together, they set out the two routes owners take, and they are candid about what each one is worth.
Section 37 of the Design and Building Practitioners Act 2020 imposes a duty on any person who carries out construction work to exercise reasonable care to avoid economic loss caused by defects. Section 36 defines construction work to include supervising, coordinating, project managing or otherwise having substantive control over the work. That definition is what allows a claim to reach past the company to the person who ran the site.
In Le Plastrier and Short v Galilee Alpha Pty Ltd and Mowbray [2026] NSWDC 323, owners of a three storey house at Cremorne engaged a builder in 2017 for substantial renovation works. The builder stopped work and left the site in May 2018. The owners sued the company and its director, pleading breach of contract, common law negligence and breach of the section 37 duty. On 9 September 2026 the District Court held the company and the director jointly and severally liable for $1,250,000, with interest running from 13 May 2018 and costs.
One thing about that judgment needs to be stated plainly, because it is easy to read the headline figure as more than it is. The defendants' defence was struck out in July 2025 and default judgment was entered with damages to be assessed. Neither defendant appeared at the assessment hearing. There was no contested finding that the director personally breached section 37. The Court assessed damages on expert evidence that nobody contradicted. The case is a real example of the exposure a director carries, but it is not authority on when that exposure arises.
For that, the better example is Drummond v Karakatsis [2026] NSWDC 322, delivered by the same judge on the same day. There the duty was genuinely in issue, and it was established because the director admitted in his defence that he had supervised, coordinated and project managed the work. The company had been in external administration since 2020 and was not a party. The owners still recovered only $1,736, because they could not prove the defects still existed. We cover that in detail in our article on proving a section 37 claim.
The pairing is the useful part. The duty reaches the individual. Whether it produces anything depends entirely on the evidence.
There is a second lesson in Le Plastrier, and it is one of the most practical things in any of these judgments.
The Court assessed the owners' total damages at $1,571,144.93. That covered $488,937.25 to complete incomplete contract works, $159,713.93 to rectify defective work, construction cost escalation, a remedial builder's margin, contingency, insurance and GST, plus $516,480 for lost rent over 430.4 weeks and $77,538.74 in restitution for an overpayment. After deducting $200,000 the owners had settled with two other defendants for, the figure was $1,371,144.93.
The jurisdictional limit of the District Court, set by section 4 of the District Court Act 1973, is $1,250,000. Section 51 allows the Court to exceed it where a party files a memorandum of consent, or where no party objected before three months out from trial. No memorandum was filed. The excess only became apparent from a supplementary expert report dated 30 July 2026, four days before the hearing, so the defendants never had the opportunity to object in time. The Court declined to award above the limit and entered judgment for $1,250,000.
The owners' assessed loss exceeded their judgment by about $121,000. That is the cost of running a claim in a court whose ceiling sits below your final number, and of the quantum evidence arriving late.
Has your builder stopped work, folded, or stopped responding?
Who else can be made to pay, and whether they can actually pay, are questions worth answering before a claim is filed rather than after judgment. Our Building and Construction team can map the available defendants and the realistic recovery.
Free consultationWhere the builder has already gone into liquidation, the claim moves sideways to the other parties who worked on the building. Liprini v Thirdi William Street Pty Ltd [2026] NSWSC 1078, delivered on 8 September 2026, shows what that looks like in practice.
The proceedings are representative proceedings under Part 10 of the Civil Procedure Act 2005, brought on behalf of owners in a development of 37 Torrens title terraces with a basement carpark at Alexandria. The defendants include the developer, the builder, an air conditioning contractor, a hydraulic contractor, electrical parties, a project manager and the company that employed him. The builder, H&M Constructions (NSW) No 2 Pty Ltd, is in liquidation. So is one of the design consultancies.
The plaintiff settled with the hydraulic contractor, Scott Collis Consulting Pty Ltd, for $600,000 inclusive of costs and interest. The Supreme Court approved that settlement under sections 173 and 183 of the Civil Procedure Act, having considered confidential advice from counsel and a costs assessor's report.
The arithmetic is worth setting out, because it is the part owners rarely see before they start. From the $600,000, $208,000 goes to the plaintiff's solicitors for costs and disbursements referable to the claims against that defendant, and up to $20,000 goes to the settlement administrator. That leaves $372,000. Each current lot owner receives $10,362.06, totalling $300,500, and owners who had signed a funding agreement and paid $28,000 each in legal fees receive a further $6,500, totalling $71,500.
Three features of that settlement are instructive. It is a partial settlement only, with the proceedings continuing against the developer and the remaining defendants. The hydraulic defect claims had to be removed from the proceedings altogether, because otherwise the settling consultant faced the risk of a cross-claim from the developer. And no defendant admitted that the defects existed at all.
Two mediations were needed to get there, and the proceedings were commenced in June 2022. The Court noted the matter still has a two to three week hearing ahead of it.
They are more useful as a set than individually.
The routes are real. The section 37 duty reaches the individual who supervised or project managed, and it survives the company's liquidation. Consultants and subcontractors who worked on the building are separately exposed and are often the only solvent defendants left.
Recovery is slower and smaller than the headline. One set of owners waited from 2018 to 2026 and lost $121,000 to a jurisdictional ceiling. Another group waited from 2022 and, on one head of defect against one defendant, will receive about $10,000 each before the rest of their case is even heard. A third recovered $1,736.
What separates them is evidence and timing. In the Cremorne case the expert quantum evidence was unchallenged, and the damages followed. In the Drummond case it was out of date, and the damages did not. In the class action the defect allegations remain contested and the settlement reflects that risk.
A judgment is not money. All of this assumes a defendant who can actually pay. Establishing that a director is personally liable is a different question from whether the director has assets, and it is worth asking early rather than after judgment.
Section 37 and the class action rules operate identically across the state. What changes by region is which of the two routes is usually available, because that follows the kind of building and the kind of builder.
The Cremorne house in Le Plastrier is a familiar North Shore pattern: a high value renovation or rebuild on an established block, run by a small builder under a contract assembled from quotes, drawings and emails rather than a single formal document. Where that builder is effectively one person and a company, the section 37 route against the individual is often the only one with anything behind it. We advise North Shore owners on defect and abandonment claims.
The Alexandria development in Liprini sits in the medium-density inner city market, where the builder is a company of some size, the consultants are separately insured, and the owners are numerous enough to run a representative proceeding. That combination makes the second route viable in a way it rarely is for a single house. Similar stock runs through the Eastern Suburbs, where older schemes undertaking remedial work produce the same pattern.
Blacktown carries one of the largest new-dwelling pipelines in the state, The Hills sits at the centre of the North West Growth Area, and Campbelltown is absorbing sustained development alongside Camden and Wollondilly. Volume delivery by contractors working on thin margins is where builder insolvency shows up most often, and where owners most frequently find that the company they contracted with no longer trades. We advise owners in Blacktown, The Hills and Campbelltown.
Around Newcastle and the Central Coast, and further out through Bowral and the Southern Highlands, the practical constraint is not the law but the cost of assembling evidence at a distance. Both routes depend on an expert report that is current and properly costed. Where that is expensive to obtain, claims tend to be brought later and with weaker material, which is precisely the difficulty that reduced the recovery in the Drummond case.
If a builder has stopped work, gone into liquidation or simply stopped responding, the questions worth answering early are which individuals had substantive control of the work, which consultants and subcontractors are separately exposed, whether any of them can actually pay, and whether the size of the claim suits the court you are about to start in. Our Building and Construction team advises homeowners and apartment owners and owners corporations on defect and insolvency claims, and our Litigation and Dispute Resolution team runs the court and tribunal side. Get in touch for a free consultation.
This publication is intended as general information only and does not constitute legal advice. Please seek independent legal advice before acting on anything contained in it.
Liability limited by a scheme approved under Professional Standards Legislation.
Often yes. Section 36 of the Design and Building Practitioners Act includes supervising, coordinating, project managing or having substantive control over building work within the definition of construction work, so the section 37 duty can attach to the individual who ran the job. The company's liquidation does not remove that personal duty.
Anyone who carried out construction work on the building may owe the same duty. That can include the developer, design consultants, hydraulic, electrical and air conditioning contractors, and project managers. In the Alexandria class action the hydraulic contractor settled while the builder was in liquidation.
It varies enormously and is usually less than the claim. In three NSW judgments delivered in one week, outcomes ranged from $1,736, to about $10,362 per lot on one head of defect, to a capped judgment of $1,250,000. What separates them is the quality and currency of the evidence.
$1,250,000, under section 4 of the District Court Act 1973. The Court can exceed it if a party files a memorandum of consent, or if nobody objected more than three months before trial. In Le Plastrier neither applied, so damages assessed at over $1.37 million were capped at the limit.
No. Where a defence is struck out, liability is entered without the allegations being tested. The court then assesses damages, often on evidence nobody contradicts. That is what happened in Le Plastrier, so it shows the size of the exposure rather than when the duty is breached.
