Last Updated on 16/09/2025 by Damin Murdock
The Kazzi v KR Properties Global Pty Ltd t/as AK Properties Group [2024] NSWCA 143, outlines a nominated supervisor’s personal liability where his choices played a formative part in building defects and loss.
The Background: Delays, Defects, and a Broken Build
The case concerned a six-unit residential development in Gerringong, New South Wales. The builder, Oxford (NSW) Pty Ltd (Oxford), was supposed to finish the work by July 2017, however, the project was plagued by problems and delays. The owners terminated Oxford in April 2019, and Oxford sued for payment. The owners also filed a crossclaim, not only against Oxford but also against Mr Pierre Kazzi, Oxford’s sole director and nominated supervisor, pursuant to section 37 of the Design and Building Practitioners Act 2020 (NSW) (the DBP Act).
The Court had to decide whether Mr Kazzi himself could be liable in tort in respect of this new statutory duty of care under the DBP Act, and if so, what losses could be recovered.
What Is Section 37 and Why Does It Matter?
Section 37 of the DBP Act imposes a statutory duty of care on anyone who carries out “construction work” to avoid causing economic loss caused by defects. Importantly, it does not require a contractual relationship, meaning it protects current owners, and also future owners, called successors in title. This is important because prior to the DBP Act, a duty of care could only be established in limited circumstances, and often times regarded proving the plaintiff was vulnerable and further expands the duty of care that had previously been limited by the High Court decision of Brookfield Multiplex v Owners Corporation SP 61288.
Further, although the DBP Act commenced operation on 10 June 2020, certain parts of the DBP Act did not commence until 1 July 2021, such as the DBP regulations which commenced on 1 July 2021. Nevertheless, in Roberts v Goodwin Street Developments Pty Ltd [2023] NSWCA 5, it was held that section 37 of the DBP Act has a retrospective operation, going back 10 years immediately before 10 June 2020.Personal Accountability Confirmed
The Court held that Mr Kazzi, in his role as nominated supervisor, made or authorised key decisions that resulted in major defects. These included:
- Approving the use of unsuitable materials (e.g., Rediwall instead of blockwork)
- Overseeing defective waterproofing
- Failing to ensure proper boundary surveys
- Mismanaging stair and lift shaft construction that triggered consent modification delays
If was further held that Mr Kazzi had a substantial degree of control over the project as the nominated supervisor and was plainly engaged in “construction works” within the meaning of the DBP Act, and in performing those construction works, his lack of exercising reasonable care rendered him personally liable pursuant to s 37 of the DBP Act.
Proving Loss: Precision Not Required
The owners had given evidence of their losses at trial, through their project manager, Mr Mahedy. Mr Mahedy explained that there had been completion and rectification costs, however, the trial judge excluded this evidence as being too vague.
On appeal, the Court of Appeal disagreed with the trial judge and emphasised that:
- Courts must take a robust and practical approach where there are evidentiary gaps.
- Where a knowledgeable professional gives a reasonable allocation, courts can rely on that evidence even if it is not mathematically perfect.
Hungerfords Interest: Expanding Recoverable Losses
The owners also claimed for additional interest charged to the owners by its mortgagor during the period the project was delayed, and relied upon the principles established in the High Court decision of Hungerfords v Walker [1989] HCA 8 171 CLR 125. The trial judge allowed it from March 2019. On appeal, the Court of Appeal held the full length of the delay was recoverable and even though there were multiple causes contributed to the delay, Mr Kazzi’s breach of his statutory duty of care was a substantial cause of the delay.
Conclusion
If you are a nominated supervisor or a director of a building company, there is a risk that you have substantive control over the construction works being carried out, meaning you can potentially be personally liable for the building defects at your next project.
If you are a builder who has been joined into proceedings, or an owner looking to join the directors or nominated supervisors because the works were uninsured or unlicenced, feel free to contact Damin Murdock at Leo Lawyers via our website, on (02) 8201 0051 or at office@leolawyers.com.au. Further, if you liked this article, please subscribe to our newsletter via our Website, and subscribe to our YouTube , LinkedIn, Facebook and Instagram. If you liked this article or video, please also give us a favourable Google Review.
DISCLAIMER: This is not legal advice and is general information only. You should not rely upon the information contained in this article and if you require specific legal advice, please contact us.
Damin Murdock (J.D | LL.M | BACS - Finance) is a seasoned commercial lawyer with over 17 years of experience, recognised as a trusted legal advisor and courtroom advocate who has built a formidable reputation for delivering strategic legal solutions across corporate, commercial, construction, and technology law. He has held senior leadership positions, including director of a national Australian law firm, principal lawyer of MurdockCheng Legal Practice, and Chief Legal Officer of Lawpath, Australia's largest legal technology platform. Throughout his career, Damin has personally advised more than 2,000 startups and SMEs, earning over 300 five-star reviews from satisfied clients who value his clear communication, commercial pragmatism, and in-depth legal knowledge. As an established legal thought leader, he has hosted over 100 webinars and legal videos that have attracted tens of thousands of views, reinforcing his trusted authority in both legal and business communities."
