Invictus Development Group Pty Ltd v Versatile Fitout Pty Ltd [2022] NSWDC 477

Invictus Development Group Pty Ltd v Versatile Fitout Pty Ltd [2022] NSWDC 477

Versatile was not entitled to terminate the subcontract for Invictus’ breach because the failure to comply with the direction to rectify the bowing was not a sufficiently serious breach of an intermediate term to justify termination. The termination was unlawful and amounted to repudiation by Versatile, which Invictus accepted, ending the contract. However, Invictus did not establish substantial loss or damage from this repudiation but was entitled to payment for the unpaid invoice (stage 4 works), subject to set-off for Versatile’s rectification costs. Versatile was awarded rectification costs for Invictus’ non-compliance with the valid direction.

Jurisdiction
Australia
Judgment Date
17 October 2022
Procedural Posture
Civil / Principal Judgment
Outcome
Claim for unpaid invoice allowed; claim for substantial damages dismissed; Versatile awarded damages for rectification costs, set-off against unpaid invoice. Retention sum not permanently withheld by Versatile.
Legal Topics
['termination of Contract' 'defective Work' 'repudiation' 'damages' 'security of Payment' 'rectification of Defects' 'retention Monies' 'variation of Works']
['building and Construction Law' 'contract Law'] ['termination of Contract' 'defective Work' 'repudiation' 'damages' 'security of Payment' 'rectification of Defects' 'retention Monies' 'variation of Works']

Case Brief

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Procedural Posture

Civil / Principal Judgment

Legal Issues

  1. 1 ['Whether the bowing of stairs constituted a defect under the contract' 'Whether Invictus failed to comply with a valid direction to fix the defect' 'Whether Versatile was entitled to terminate the subcontract under contract or common law' "Whether Invictus' conduct amounted to repudiation" 'Assessment of damages for rectification of defective work' 'Whether Invictus is entitled to payment for unpaid invoice, retention sums, and damages following termination']

Ratio Decidendi

Versatile was not entitled to terminate the subcontract for Invictus’ breach because the failure to comply with the direction to rectify the bowing was not a sufficiently serious breach of an intermediate term to justify termination. The termination was unlawful and amounted to repudiation by Versatile, which Invictus accepted, ending the contract. However, Invictus did not establish substantial loss or damage from this repudiation but was entitled to payment for the unpaid invoice (stage 4 works), subject to set-off for Versatile’s rectification costs. Versatile was awarded rectification costs for Invictus’ non-compliance with the valid direction.

Court Disposition

Claim for unpaid invoice allowed; claim for substantial damages dismissed; Versatile awarded damages for rectification costs, set-off against unpaid invoice. Retention sum not permanently withheld by Versatile.

Orders

  • ['Invictus to receive payment for unpaid invoice: $17,116, subject to set-off for rectification costs ($57,548) due to Versatile.' 'Versatile not permitted to permanently withhold retention sums.' 'No order for substantial damages for Invictus’ claim for repudiation.' 'Further orders to be determined after parties...