This article was written by Nancy Wang Principal Solicitor at W & G Lawyers.
In 2024, the Queensland Court of Appeal clarified the limited circumstances in which a builder owes a duty of care to a later purchaser of a home. In Raymond v Lewis [2024] QCA 43, the Court confirmed that a builder does not owe a subsequent purchaser a duty of care to avoid pure economic loss from construction defects unless that purchaser was “relevantly vulnerable” at the time of purchase. Vulnerability, in this context, means the purchaser was incapable of protecting themselves against that economic loss — and whether the defects were reasonably discoverable at the time of purchase is central to that question.
In practical terms, a subsequent buyer who wants to hold a builder liable in negligence must show they could not reasonably have protected themselves against the loss before they bought. Raymond v Lewis illustrates how high that bar can be: although Ms Lewis was a first-time buyer who was pregnant and had no building qualifications, the speed with which she was able to engage experts and uncover the defects after settlement showed that the same defects could have been discovered before she bought, had she commissioned her own inspections.
Background
The dwelling was a multi-storey, split-level house at Charteris Street, Paddington, built during 2005 and 2006. At the time of construction the property was owned by Tycoon Developments Pty Ltd, of which Mr Raymond — a registered builder — was a director and shareholder. Tycoon later sold the property to Mr King.
Ms Lewis, a doctor, was the successful bidder at auction in early 2017 and entered into a contract dated 14 March 2017 to buy the property from Mr King for $1.6 million. She and her husband intended to live there with their children, and she was pregnant with their third child at the time.
Before bidding, Ms Lewis inspected the property twice and read the building and pest inspection reports that the vendor had commissioned. Those reports were expressly limited to visual, non-invasive inspection of “accessible areas” and noted that parts of the subfloor and under-house areas could not be accessed — though they did not spell out how extensive the inaccessible areas were. Ms Lewis did not commission her own independent building and pest inspections, as she considered the vendor’s reports indicated there were no major problems.
After moving in, Ms Lewis discovered significant defects, including problems with the timber subfloor and with the props and joists supporting the driveway and garage floor. A pest contractor she engaged refused to treat the property because of major problems underneath the house, and a building inspector and consulting engineers she then retained identified further defects — all within months of settlement.
Legal proceedings
The house had been built in 2005–2006. The statutory home-warranty insurance scheme then in place covered the owner against defective construction for only six years and six months from the start of construction (or payment of the premium). Because Ms Lewis bought the property in 2017 — well over six and a half years after it was built — that statutory cover had already expired and was not available to her. She therefore pursued a common law claim in negligence against the builder, Mr Raymond, seeking damages for the diminished value of the property.
At trial in the District Court, the judge found that Mr Raymond, as the builder, owed Ms Lewis a duty of care as a subsequent purchaser, on the basis that her “vulnerability and reliance” were proved by her evidence — pointing to her being a first-time buyer, pregnant, and without building qualifications. The Court ruled in her favour, awarding $229,100 plus interest and costs.
The Court of Appeal’s decision
Mr Raymond appealed. The Court of Appeal (Mullins P, with Morrison JA and North J agreeing) allowed the appeal, set aside the District Court judgment, and entered judgment for Mr Raymond.
Importantly, the duty-of-care question did not turn on Bryan v Maloney (1995) 182 CLR 609 alone. Bryan v Maloney established that a builder can owe a duty of care to a subsequent purchaser of a dwelling for latent defects causing pure economic loss. But two later High Court decisions — Woolcock Street Investments Pty Ltd v CDG Pty Ltd (2004) 216 CLR 515 and Brookfield Multiplex Ltd v Owners Corporation Strata Plan 61288 (2014) 254 CLR 185 — have since confined that principle. Together they establish that no such duty is owed unless the subsequent purchaser was “relevantly vulnerable” at the time of purchase; that is, incapable of protecting themselves from the economic loss. The nature and discoverability of the defects at the time of purchase bear directly on whether the purchaser had that incapacity.
Applying that confined principle, the Court of Appeal found Ms Lewis was not relevantly vulnerable. While she was a first-time buyer, pregnant, and lacked building expertise, she was contemplating spending around $1.6 million and was plainly capable of engaging appropriately qualified experts to inspect the areas she could not access herself. The fact that she arranged inspections that revealed the defects so soon after settlement showed those defects were discoverable before the auction. The Court also held that the evidence did not support a finding that she relied on the builder: she chose to proceed on the vendor’s qualified reports rather than obtain her own inspection that would have revealed the defects.
Because the Court concluded that Ms Lewis’s purchase fell outside the Bryan v Maloney principle as confined by Woolcock and Brookfield, it was unnecessary to decide Mr Raymond’s separate argument that the statutory insurance scheme displaced any common law duty.
What this means for home buyers
Raymond v Lewis underscores how limited a subsequent purchaser’s recourse against a builder can be. Buyers take on real risk when they purchase a property that may contain defects leading to economic loss. Once a purchase has settled, a buyer’s failure to make proper inspections before buying can significantly weaken any later negligence claim against the builder. Unless a subsequent buyer was genuinely unable to protect themselves — that is, “relevantly vulnerable” — at the time of acquisition, the builder will not owe them a duty of care at common law.
The case is also a reminder that statutory home-warranty insurance under the Queensland Building and Construction Commission (QBCC) scheme is time-limited. Where that cover has expired, a later buyer may be left without a statutory remedy and without a common law claim — making careful due diligence before purchase all the more important.
Key takeaway for buyers: get your own inspection
The decision turned on the fact that the defects were discoverable before the auction — they were found quickly and easily once an inspector actually went under the house. Ms Lewis lost because she relied on the vendor’s limited reports and ordered no inspection of her own.
Commissioning your own competent, properly scoped building and pest inspection before you buy is, in effect, a no-lose step:
If it finds defects, you can walk away or renegotiate the price — you avoid the loss entirely.
If a genuinely thorough inspection still finds nothing (because the defect was truly hidden and not reasonably discoverable), you are in a far stronger position to argue you were “relevantly vulnerable”which is the very thing that can keep a negligence claim against the builder alive.
The worst position is the one in Raymond v Lewis: no independent inspection at all. If the defects later prove to have been discoverable, you lose both the practical protection and the legal claim.
One important point on scope: the protection depends on the inspection being reasonable and diligent — one that actually examines the subfloor, under-house and other relevant areas. A second cursory “visual, accessible areas only” report that repeats the same blind spots will not help, because the law asks what a reasonably diligent expert inspection would have revealed, not what your report happened to say.
What W & G Lawyers can do for you
Raymond v Lewis highlights the value of getting legal and expert help before you buy, not after. At W & G Lawyers, we help prospective buyers identify risks that aren’t obvious to the naked eye and reduce the chance of being left to bear economic loss for want of advice. We can assist by:
- Reviewing the property contract
- checking whether QBCC statutory home-warranty insurance (a six-year-and-six-month period) is still active
- Drafting protective contract conditions for buyers
- Advising on “vulnerability” and your position if defects emerge
- Assessing litigation risk
- Managing strict time limits
- Navigating dispute resolution
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Disclaimer
This article is general information only and does not constitute legal advice under Australian law. For advice specific to your situation, please contact W & G Lawyers. For further details, please click here to view our disclaimer.