Background
Parties involved: Tzaneros Investments Pty Ltd, the owner of a property at the Port Botany Industrial Estate, and Walker Group Constructions Pty Ltd, a builder contracted to construct a pavement on the property.
Building contract details: The contract was a modified AS 2124-1992 contract and included a Performance Specification for the pavement design.
Issues that led to the dispute: The pavement constructed by Walker Group Constructions Pty Ltd was defective, with widespread cracking and displacement. Tzaneros Investments Pty Ltd terminated the contract and engaged another contractor to replace the pavement. Walker Group Constructions Pty Ltd claimed unpaid invoices, and Tzaneros Investments Pty Ltd claimed damages for the cost of replacing the defective pavement.
Legal Issues and Analysis
Application of the Building and Construction Industry Security of Payment Act 1999 (NSW): The court held that Walker Group Constructions Pty Ltd was entitled to progress payments under the Act. However, the Act did not prevent Tzaneros Investments Pty Ltd from pursuing damages for defective work.
The effect of the contract termination on damages claims: The court held that the termination of the contract did not prevent Tzaneros Investments Pty Ltd from pursuing damages for the defective work.
The impact of repudiatory conduct on termination of the contract: The court held that Walker Group Constructions Pty Ltd’s repudiatory conduct, which included a failure to rectify the defects, justified the termination of the contract.
Analysis of CATA Sch 4 para 8 renewal power and money orders: The court held that the renewal power in CATA Sch 4 para 8 did not extend to a payment claim, and that money orders did not preclude a party from pursuing damages.
The significance of the Blessed Sydney Constructions PL v Vasudevan case: The court distinguished this case from Tzaneros Investments Pty Ltd v Walker Group Constructions Pty Ltd (No 2) [2019] NSWSC 1171, as it dealt with an entirely different issue.
Court Decision and Ruling
The court held that Tzaneros Investments Pty Ltd was entitled to damages for the cost of replacing the defective pavement and that Walker Group Constructions Pty Ltd was entitled to progress payments under the Building and Construction Industry Security of Payment Act 1999 (NSW). The court also held that the termination of the contract was justified due to the builder’s repudiatory conduct.
Implications and Takeaways
- Lessons for homeowners and builders: Homeowners and builders should ensure that contracts are properly drafted to include provisions for the rectification of defective work, and seek legal representation to pursue damages or work orders.
- Importance of legal representation for pursuing damages or work order: The case highlights the importance of having legal representation when pursuing damages or work orders for defective work.
Related Content: NCAT Lawyers and Legal Representation for Building Disputes
