Australia, Aug. 16 -- New South Wales Land and Environment Court issued text of the following judgement on July 15:

1. Outcome of proceedings

2. We have decided to refuse leave to appeal (to the extent that leave is required) and to dismiss the appeal for the reasons below.

3. When we reserved the decision we made orders for extra notes. As the parties wished, we have deferred issues of costs of the appeal until after delivery of this substantive decision. We have made directions for any further submissions and evidence on costs including any application for a further hearing on costs.

4. Background, jurisdiction, issues, procedure

5. The appellant owners and the respondent builder entered into a written contract dated 30 September 2022 in the standard HIA form (April 2021 version) for the builder to demolish the existing house and to construct a new residential dwelling in Sans Souci, an eastern suburb in Sydney, NSW. The owners obtained development consent in about mid-2022. Among a number of quotes from various builders, the builder's quotation dated 25 July 2022 for a construction price of $670,000 based on a set of approved development consent (DC) plans obtained by the owners was accepted. Contract price with four written and agreed variations between 10 October and 21 December 2022 totalled $682,780 including GST. A construction certificate (CC) was issued by the private certifier on about 21 November 2022 which the builder said was not provided to it and its existence was not made known to the builder. The owners said that they did not receive a CC until July 2023, after they received an owner-builder permit in about June 2023.

6. On 6 February 2023 the owners emailed the builder to place a temporary hold while they resolved a copyright issue with another builder, which was done by early March 2023.

7. On 21 April 2023 the owners' solicitor sent a letter to the builder stating that the relationship between the parties had broken down and the owners were not obliged to continue with the contract for reasons set out in the letter.

8. A letter from the owners' solicitors dated 9 May 2023 about the contract being unconscionable and not obliged to be performed was alleged, and found by the primary member, to constitute repudiation of the contract by the owners. It was also found, as alleged, that the builder by its solicitor accepted the repudiation by letter dated 19 May 2023. Construction did not begin under the contract.

9. In 2023/00376807 (formerly HB 23/41218) filed 7 September 2023 the builder claimed loss of profits as its damages for loss of bargain in respect of the owners' repudiation of the contract, in the amount of $153,343. This was calculated as the difference between $609,345 (contract price less GST) and the builder's project-specific costs of $456,002. Interest at the contract rate of 12%pa (cl 33 with item 12 in Sch 1) was claimed from 13 February 2024 (the contract date for completion of works) to date.

*Rest of the document can be viewed at: (https://www.caselaw.nsw.gov.au/decision/19806929fa024183fe78a6e6)

Disclaimer: Curated by HT Syndication.