Dan Morris, 2 July 2026
Bryan v Maloney – Latent Defects and the Six-Year Mark
Where home building works are more than six years past the date of practical completion, the rights of an owner affected by defects in those works change. Within six years, there exists rights under special legislation that protects people affected by defecting building work; and under most construction contracts; and under what is known as the general law (law made by judges in precedent cases). At the six year mark, all rights under legislation and rights under virtually all construction contracts disappear. At that point, owners are left with their rights under the general law only.
Exercising those rights is more difficult but it is not impossible, nor is it unprecedented. There is a case where the High Court of Australia, the highest Court in the country, recognised a homeowner’s general law right to take legal action for defective workmanship that is latent (hidden) until more than six years after the date of practical completion. That case is Bryan v Maloney [1995] HCA 17. Many cases came after it that have progressively narrowed its application, but Bryan v Maloney has never been overruled.
Key Takeaways on Bryan v Maloney from Case Authorities:
- Purely Economic Losses: The losses caused by latent defects are treated as “purely economic”. This means that the Courts treat latent defects as diminishing the value of the structures that are affected by them. This is relevant because, where only financial interests are at stake, the law is concerned to protect builders from exposure to liability that exceeds what parliament has imposed on them by legislation or what they have voluntarily assumed, under free market conditions, by their contract with the owner that engaged their services.
- Special Liability Test: Whether the owner making the claim is the original owner or that procured the defective building services or a subsequent purchaser of the completed structures, the claim is subject to a special test which has never been precisely defined. The test basically asks: is there any justification, in all the circumstances, for the law to impose on the builder, an additional liability for building defects, that exceeds the liability that parliament has imposed on it by legislation, and that the builder voluntarily assumed by its contract with the original owner?
- The Prevailing Factor: Vulnerability: In theory, the Court has to take into account a broad range of circumstances in deciding this question, but in practice, one factor prevails over all others: the question of “vulnerability”.
- Defining Vulnerability: “Vulnerability” means reliance on the builder in the sense that no inspection, no insurance policy, no due diligence – nothing that the original owner could practically have done – would have changed the present situation. The original owner simply could not have looked after themselves better than they did.
- Limitation Period Deferral: The law does not extend the standard, six-year limitation period. Instead, the law will sometimes defer the time when those six years start running. The rule is that the six years start to run from when the defects were first noticed or, on a reasonable inspection, could first have been noticed, meaning it starts running from when the latent defects first became manifest.
- Distractions to Ignore: Some defence lawyers will throw spanners in the works by pointing to earlier cases when the Courts were still testing the boundaries of Bryan v Maloney and playing with other tests such as whether the defects were “structural”, “substantial”, etc.. These are not real “tests” – merely experiments that were dismissed in later decisions.
Practically, the first step in building a claim for latent defects will be to instruct the engineering or other technical expert to consider whether the reported defects could reasonably have been detected and dealt with by the original owner arranging a pre-handover inspection and/or adequate building insurance, or by a subsequent buyer arranging a pre-settlement inspection. If the answer is no and if there is nothing in the building contract that otherwise relevantly excludes liability, then Bryan v Maloney, which, despite frequent attack, has stood the test of time, may well support a claim.
To understand more about your legal rights as a homeowner, or your potential exposure to liability as a builder or building consultant, in relation to latent defects, contact the team at Dan Morris Legal.