Failure to allow a contractor to fix defects could reduce the damages allowed

Bedrock Construction and Development Pty Ltd v Crea [2021] SASCA 66 illustrates the risk to owners of not allowing a contractor the opportunity to fix defects before seeking to recover the cost of doing so from a third party.

The Court of Appeal considered whether an owner (Crea) unreasonably refused the contractor (Bedrock) access to the site to fix defects. At first instance, the judge found it was reasonable for the owner to refuse to allow Bedrock to fix the defects. You can find our previous discussion of the first instance decision here. However, the Court of Appeal’s judgment focuses on ensuring that the parties are kept to the terms of their bargain, allowing the contractor to fix defects as required under the contract. In this instance, the contract provided Bedrock with a contractual opportunity of at least 10 working days to rectify any defects. But, Crea failed to afford Bedrock with access to the site to fix the defects.

Justice Doyle (with whom Justices Livesey and Bleby agreed) observed that, on a strict view, Crea might not recover any amount from Bedrock since Crea did not afford Bedrock the 10 working days opportunity to fix defects. However, on the evidence, the Court of Appeal found it appropriate to reduce the damages award. Nonetheless, the decision is a stark warning for the need for principals to ensure that they follow the contract provisions dealing with the rectification of defects unless there is a good reason to depart from them, lest they find themselves unable to recover the full, or any, amount from the contractor.

Original Source: The Major Projects & Construction Team

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The post Failure to allow a contractor to fix defects could reduce the damages allowed appeared first on Australian Owner Builders.

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