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When is it unreasonable to refuse to allow a Builder back on site to rectify defects? ||| MTECC News edition 19.10

by admin admin

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When is it unreasonable to refuse to allow a Builder back on site to rectify defects?

This question arises often, but what are the relevant legal principles which need to be applied to answer the question? A useful summary of those principles was recently provided by Stevenson J in The Owners – Strata Plan 89041 v Galyan Pty Ltd and ACH Clifford Pty Ltd[2019] NSWSC 619.[21] as follows:

“(a) [T]he overarching principle is that a plaintiff is not entitled to recover losses attributable to its own unreasonable conduct: The Owners – Strata Plan No 76674 v Di Blasio Constructions Pty Ltd [2014] NSSC 1067 (Di Blasio) at [42], citing Hasell v Bagot, Shakes & Lewis Ltd (1911) 13 CLR 374 at 388; [1911] HCA 62;

(b) in cases involving building contracts, the owner is required to give the builder an opportunity to minimise the damages it must pay by rectifying the defects, except where its refusal to give the builder that opportunity is reasonable or where the builder has repudiated the contract by refusing to conduct any repairs: Di Blasio at [44];

(c) the question of what is reasonable depends on all the circumstances of the particular case – one relevant factor is what attempts the builder has made to repair the defects in the past and whether, in the light of the builder’s conduct, the owner has reasonably lost confidence in the willingness and ability of the builder to do the work: Di Blasio at [45];

(d) it is for the defendant to prove that the plaintiff has acted unreasonably – it is not for the plaintiff to prove that it acted reasonably: Di Blasio at [46]; and

(e) once a defendant puts in issue the reasonableness of the plaintiff’s conduct, all circumstances relevant to an objective assessment of the plaintiff’s position become examinable – the plaintiff is not limited to reliance on facts or circumstances actually known at the time, but may rely on facts which come to its attention afterwards, but which pertain to the defendant’s conduct at the relevant time: Owners Strata Plan 78465 v MD Constructions Pty Ltd [2016] NSWSC 162 … at [30].”

Dr Richard J Manly QC

 

Society of Construction Law Australia Conference in Perth 1 to 3 August 2019

MTECC is once again sponsoring the SoCLA national conference held in Perth at the Westin from 1-3 August 2019. The conference theme is “Doing it Overseas – the legal tips and tricks for taking Construction Smarts to foreign jurisdictions”. The details are here.

 

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