NuStone v McInerney [2022] NSWCATCD 23

NuStone v McInerney [2022] NSWCATCD 23

The builder falsified invoices and thereby breached an implied obligation of good faith requiring honesty in issuing invoices; in any event the admitted falsification amounted to fraud. That conduct was repudiatory, and the owners validly accepted the repudiation and terminated the contract on 18 March 2020. The owners were therefore entitled to damages for defective work and reasonable completion costs, subject to deductions including PC cost adjustments and set-off for the amount owed to the builder under the contract. The builder failed to establish entitlement to further variation payments or interest beyond the contract amount awarded.

Jurisdiction
Australia
Judgment Date
19 January 2022
Procedural Posture
Applications Under the Home Building Act 1989 (nsw) Concerning a Fixed Price Residential Building Contract / Principal Judgment After Hearing
Outcome
The owners succeeded in both applications. The builder was ordered to pay the net sum of $114,557.17 to the owners immediately, and the builder's application was otherwise dismissed.
Legal Topics
['defects Claim' 'repudiation' 'termination' 'damages for Breach of Contract' 'implied Term of Good Faith' 'variations' 'quantum Meruit' 'costs']
['building and Construction' 'home Building' 'contract Law' 'consumer and Commercial Disputes'] ['defects Claim' 'repudiation' 'termination' 'damages for Breach of Contract' 'implied Term of Good Faith' 'variations' 'quantum Meruit' 'costs']

Case Brief

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Procedural Posture

Applications Under the Home Building Act 1989 (nsw) Concerning a Fixed Price Residential Building Contract / Principal Judgment After Hearing

Legal Issues

  1. 1 ['Whether the owners lawfully terminated the contract, entitling them to the cost of completion' 'What were the reasonable and necessary rectification costs' 'If the owners lawfully terminated the contract, what were the reasonable and necessary completion costs' 'What was the fair and reasonable value of the contract works carried out by the builder' 'Whether the builder was entitled to payment for variations' 'Whether the builder was entitled to moneys owed under the contract at the time of termination' 'Whether the builder was entitled to interest' "What weight should be given to Mr Redfern's evidence in light of the owners' invoices not being tendered"]

Ratio Decidendi

The builder falsified invoices and thereby breached an implied obligation of good faith requiring honesty in issuing invoices; in any event the admitted falsification amounted to fraud. That conduct was repudiatory, and the owners validly accepted the repudiation and terminated the contract on 18 March 2020. The owners were therefore entitled to damages for defective work and reasonable completion costs, subject to deductions including PC cost adjustments and set-off for the amount owed to the builder under the contract. The builder failed to establish entitlement to further variation payments or interest beyond the contract amount awarded.

Court Disposition

The owners succeeded in both applications. The builder was ordered to pay the net sum of $114,557.17 to the owners immediately, and the builder's application was otherwise dismissed.

Orders

  • ['In HB 20/36393 Nu-Stone Building Pty Ltd is to pay $114,557.17 to Garry and Gladys McInerney immediately.' 'HB 20/15757 is otherwise dismissed.' "I order the builder to pay the owners' costs of the applications on the ordinary basis as agreed or assessed." 'In the event either party applies for different costs...