Morrison v Moss & Anor [2019] NSWDC 746

Morrison v Moss & Anor [2019] NSWDC 746

The contract was validly terminated by the Builders upon the Owner's failure to pay the practical completion milestone invoice, after the Owner took possession and practical completion was thereby deemed under the contract. Builders' right to terminate arose despite their delay, as contractual provisions permitted such termination irrespective of readiness or willingness to perform. The Owner is nonetheless entitled to damages for breach of implied statutory warranties as to defects, to be assessed, with Builder's unpaid invoices subject to set-off against such damages. Discretion under s 48MA of the Home Building Act is not exercised due to loss of confidence and protracted dispute.

Jurisdiction
Australia
Judgment Date
12 December 2019
Procedural Posture
Civil / Principal Judgment After Trial on Liability and Entitlement to Damages; Referral of Rectification Costs to Referee
Outcome
Contract validly terminated by Builders; Owner entitled to damages for proven defects and some incomplete works; rectification costs to be assessed by referee; Builders entitled to unpaid invoices subject to set-off for Owner’s damages; final orders pending referral outcome.
Legal Topics
['implied Statutory Warranties' 'practical Completion' 'contract Termination' 'defective Work' 'rectification' 'set Off' 'damages']
['building and Construction' 'contract'] ['implied Statutory Warranties' 'practical Completion' 'contract Termination' 'defective Work' 'rectification' 'set Off' 'damages']

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Procedural Posture

Civil / Principal Judgment After Trial on Liability and Entitlement to Damages; Referral of Rectification Costs to Referee

Legal Issues

  1. 1 ["Whether practical completion arose through owner's entry into possession" 'Whether Builders breached implied statutory warranties under Home Building Act 1989 (NSW)' 'Whether works were defective or incomplete' 'Whether contract validly terminated by Builders or Owner' 'Consequences of contract termination for compensatory rights and set-off']

Ratio Decidendi

The contract was validly terminated by the Builders upon the Owner's failure to pay the practical completion milestone invoice, after the Owner took possession and practical completion was thereby deemed under the contract. Builders' right to terminate arose despite their delay, as contractual provisions permitted such termination irrespective of readiness or willingness to perform. The Owner is nonetheless entitled to damages for breach of implied statutory warranties as to defects, to be assessed, with Builder's unpaid invoices subject to set-off against such damages. Discretion under s 48MA of the Home Building Act is not exercised due to loss of confidence and protracted dispute.

Court Disposition

Contract validly terminated by Builders; Owner entitled to damages for proven defects and some incomplete works; rectification costs to be assessed by referee; Builders entitled to unpaid invoices subject to set-off for Owner’s damages; final orders pending referral outcome.

Orders

  • ["Parties to bring in short minutes of order; referral of quantification of rectification costs to referee per specified directions; Builders' entitlement to $52,470.56 plus interest subject to set-off; costs reserved; liberty to apply."]