Building and construction contracts
Decisions on termination, variations, delay and payment under construction contracts.
Other decisions
- Kaloriziko Pty Ltd v Calibre Construction Group Pty Ltd (No 2) [2025] NSWCA 259
In December 2025 the New South Wales Court of Appeal held that a developer's approval of a builder's claim for work within the contract scope did not make that work a variation, or displace a clause providing that payments other than the final payment were payments on account only. The developer obtained a credit for an approved claim for consultants' fees, but not for five paid claims, which were for excluded items that the builder was entitled to be paid for separately. The court also held that the date for practical completion had not been varied, so that liquidated damages of $210,000 were due. Where the builder had released parties whose liability was coordinate with the developer's in return for a sale of property to a company related to the builder at an undervalue, the developer's liability was reduced by the whole of the undervalue, because the builder had not proved that any part of the benefit related to something else. The appeal was allowed and judgment entered for the developer.
- State of Victoria (Department of Transport and Planning) v L.U. Simon Builders Pty Ltd [2025] VSCA 52
The Court of Appeal of Victoria, answering questions in a special case referred by the County Court, held that section 137F(1) of the Building Act 1993 (Vic) requires a payment to a lot owner for the State to be subrogated to that lot owner's rights, and that a November 2020 payment of cladding rectification assistance to an owners corporation acting both for itself and for the lot owners is such a payment. On the agreed and assumed facts, the State was subrogated to the rights of the owners corporation and the individual lot owners.
- Australian Competition and Consumer Commission v J Hutchinson Pty Ltd [2025] HCA 10
The High Court, by four Justices to one, dismissed appeals by the Australian Competition and Consumer Commission (the ACCC) in a secondary boycott case under the Competition and Consumer Act 2010 (Cth). Gageler CJ, Gleeson and Beech-Jones JJ held that a person who gives in to a threat of industrial action by doing what is demanded, without communicating to the person making the threat, expressly or tacitly, a commitment to do so, has not thereby arrived at an understanding with the person making the threat for the purposes of sections 45E(3) and 45EA. Edelman J agreed in the result because the head contractor, J Hutchinson Pty Ltd (Hutchinson), communicated no assent to the union and the ACCC ran no case that the union had dispensed with the need for it. Steward J dissented.
- Victorian Building Authority v May21 Pty Ltd [2024] VSCA 150
Where a contract price for the whole of the building work is specified in an application for a staged building permit, the relevant building surveyor must give weight to that price as a fundamental element in estimating the cost on which the building permit levy is calculated, but may have regard to other relevant information and is not required to adopt the price as the estimate.
- Tanah Merah Vic Pty Ltd v Owners Corporation No 1 of PS613436T [2021] VSCA 72
Refusing leave to appeal from VCAT on the apportionment grounds, the Victorian Court of Appeal held that owners' claims against the builder of the Lacrosse tower for breach of the warranties implied by the Domestic Building Contracts Act 1995 (Vic) were not apportionable claims under the Wrongs Act 1958 (Vic), because they did not arise from a failure to take reasonable care.
- Mann v Paterson Constructions Pty Ltd [2019] HCA 32
A builder that terminated a domestic building contract on accepting the owners' repudiation could not claim a quantum meruit for completed stages, for which its right to payment had accrued. By four to three, it could claim restitution for work done towards an uncompleted stage, as an alternative to damages. The majority limited that amount by reference to the contract price or the part of it attributable to the work, as an absolute cap for Gageler J and a prima facie one for Nettle, Gordon and Edelman JJ. Any amount for variations the owners requested had to be determined in accordance with sections 38 and 39 of the Domestic Building Contracts Act 1995 (Vic).
- Walker Group Constructions Pty Ltd v Tzaneros Investments Pty Ltd [2017] NSWCA 27
In March 2017 the New South Wales Court of Appeal dismissed a builder's appeal from a judgment for $11,612,013.53 for defective concrete pavements at a container terminal at Port Botany. Bathurst CJ, with whom Beazley P and Gleeson JA agreed, held that a deed assigning to a later lessee all the benefit of the builder's warranties passed the right to sue for breaches that had already occurred. The assignee's knowledge of cracking when it acquired the terminal did not mean it suffered no loss. It could recover the cost of replacing the pavement, apart from areas under the warehouse awnings, without any allowance for betterment. The order for indemnity costs at trial was also upheld.
- Enwerd Pty Ltd v Metier 3 Pty Ltd [2016] VSCA 234
Where a deed of settlement made an architect's final instalment payable on "Practical Completion", defined as the issue of a certificate under the contractual arrangements for the works, a superintendent's certificate that had not been set aside in arbitration or litigation satisfied that condition, and the owners' unpursued objections to its validity did not prevent payment falling due once the required documents were provided; leave to appeal was refused.
- Sugar Australia Pty Ltd v Lend Lease Services Pty Ltd [2015] VSCA 98
Where a building contract made bank guarantees available whenever the principal "may claim (acting reasonably) to be entitled to" payment, the judge hearing the contractor's application for an interlocutory injunction to restrain recourse should have construed that clause; as construed on the appeal, it required the principal to be acting reasonably in an objective sense when it made its claim, and the injunction was set aside.
- Brirek Industries Pty Ltd v McKenzie Group Consulting (Vic) Pty Ltd [2014] VSCA 165
In joint reasons on an appeal from the County Court, the Court of Appeal of the Supreme Court of Victoria held that the 10-year period in section 134 of the Building Act 1993 (Vic) governs an owner's contract claim against a building surveyor as well as claims in negligence and, in the alternative, that the amendment adding that claim related back to the original pleading. It held that section 17(a) of the Act did not create a contract between the owner and a surveyor engaged by the builder, and that the surveyor owed this owner no duty of care for its delay losses. Further disposition, including the surveyor's contention that no loss was proved, awaited submissions.
- Dura (Australia) Constructions Pty Ltd v Hue Boutique Living Pty Ltd [2013] VSCA 179
Under clause 44.6 of the building contract in this case, a Superintendent's certificate of the cost to complete work taken out of the builder's hands, which rested on a quantity surveyor's judgment, bound the parties because "ascertain" there permitted judgment where necessary; the builder's appeals were dismissed.
- A J Lucas Drilling Pty Ltd v McConnell Dowell Constructors (Aust) Pty Ltd [2009] VSCA 310
Where a sub-contract required work done before its determination, without fault by the sub-contractor, to be valued "according to clause 14", and there was neither a pricing schedule nor an agreed valuation, the Victorian Court of Appeal held that the trial judge was entitled to value the original scope work as a pro rata share of the lump sum price, adjusted for variations, rather than on a basis akin to quantum meruit. The Court also held that a letter which referred to the obligation to pay and proposed a discussion of claims was not a demand of payment for interest under section 58 of the Supreme Court Act 1986 (Vic) (the Act), so the award of interest was to be confined, under section 60, to the period after the proceeding began.
- John Holland Pty Ltd v Roads and Traffic Authority of New South Wales [2007] NSWCA 140
In 2007 the New South Wales Court of Appeal, deciding the appeal on a basis favourable to the contractor, held that, under the contract before it, the principal could properly retain the contractor's performance security as security for its claim to recover adjudicated amounts it had paid under the Building and Construction Industry Security of Payment Act 1999 (NSW). Giles JA, with whom Tobias and McColl JJA agreed, also held that retaining the security in that way did not offend the Act's prohibition on contracting out.
- Kellogg Brown & Root v Australian Aerospace [2007] VSC 200
In the Commercial and Equity Division of the Supreme Court of Victoria, Hansen J granted an interlocutory injunction restraining a head contractor from relying on its notice terminating a defence procurement subcontract for convenience, finding that the lower risk of injustice favoured an injunction on undertakings as to damages where a serious question was conceded as to whether an implied term of good faith and fair dealing qualified the power and was breached [49], [72], [101].
- Buxton Construction v Golf Australia Holdings [2007] VSC 10
In the Supreme Court of Victoria, Hargrave J held that a mediated term of settlement requiring an owner to pay unpaid amounts due under payment certificates obliged it to pay the sum it had deducted from a certificate for liquidated damages, because the settlement released that claim and payments under the certificates were on account [24], [25], [27], [29], [30].
- 620 Collins Street v Abigroup (No 1) [2006] VSC 490
In the Supreme Court of Victoria, Osborn J held on an application under section 42 of the Commercial Arbitration Act 1984 that an arbitrator committed technical misconduct by resolving a liquidated damages claim through an extension of time that had not been pleaded or claimed, without giving the principal a proper opportunity to contest that course, rejected the other grounds and reserved the question of orders [1], [68], [111], [129], [143], [144], [148], [149], [150].
- 620 Collins Street v Abigroup (No 2) [2006] VSC 491
In the Supreme Court of Victoria, Osborn J refused the plaintiffs leave to appeal from an arbitrator's award, holding that the arbitrator was correct to follow Peninsula Balmain in treating the superintendent's reserve power to extend time as exercisable in the contractor's favour, and that the contractor was entitled to interest on an uncertified progress claim although part of it was disallowed [26], [34], [83], [92], [93].
- Siemens v Vaughan Constructions [2006] VSC 452
Hearing an injunction application as the trial of the action, Kaye J in the Practice Court of the Supreme Court of Victoria held that a notice referring a dispute to a contractual Dispute Committee of the parties' own representatives, whose role was to reach agreement, did not commence the kind of proceedings the Victorian Building and Construction Industry Security of Payment Act requires before a respondent may give security instead of paying an adjudicated amount, so Vaughan, the payment claimant, could enforce the guarantee [1], [2], [26], [28], [29].
- Barton v Stiff [2006] VSC 307
In the Supreme Court of Victoria, Hargrave J allowed a builders' appeal from the Victorian Civil and Administrative Tribunal, holding that the warranties of fitness for purpose in their house building contract, which the builders accepted were absolute, required materials and a completed house proof against any groundwater conditions likely to be encountered at the land, so that bricks failing because of highly unusual salty groundwater did not breach those warranties [33], [37], [39], [40], [43].
- Civoken v Madden Grove Developments [2006] VSC 283
After a trial on liability only, Whelan J in the Commercial List of the Supreme Court of Victoria held that purchasers of land on which a retirement village was to be built, whose stated grounds of termination failed, validly terminated because the vendor had repudiated the contract and, further, had committed serious and irremediable breaches of intermediate terms, so that no notice under condition 5 of Table A was needed [15], [465], [605].
- Presser v Ocean View Properties [2006] VSC 143
In the Supreme Court of Victoria, Habersberger J stayed, under the Domestic Building Contracts Act, a multi-party proceeding against a developer that had itself agreed to rectify defects, holding that the purchasers' claim was a domestic building dispute and that the whole action, including later claims against added parties, arose predominantly from such a dispute [38], [39], [40], [45].
- Pan Urban Watergate v Graham [2005] VSC 505
In the Supreme Court of Victoria, Whelan J held that the Domestic Building Contracts (Amendment) Act took outside the Domestic Building Contracts Act an off the plan apartment contract whose home was being built under a separate major domestic building contract and which, by making settlement conditional on completion of construction, contemplated completion before settlement, so the purchaser's deposit counterclaim failed and, his other counterclaims also failing, the vendor was entitled to specific performance [120], [131], [134], [139], [140].
- Dona Homes v Stevens [2005] VSC 499
In the Supreme Court of Victoria, Habersberger J allowed a builder's appeal from an order made in the Domestic Building List of the Victorian Civil and Administrative Tribunal, holding that the builder was not allowed a reasonable opportunity to call evidence or to examine and cross-examine witnesses in respect of a rectification quotation, contrary to section 102(1)(a) and (b) of the Victorian Civil and Administrative Tribunal Act 1998, and that there was a breach of the rules of natural justice contrary to section 98(1)(a), where the quotation raised new claims and was expert evidence (or at least evidence requiring an outline) not filed and served as directed [13], [16], [18], [20], [21].
- Main Roads Construction v Samary Enterprises [2005] VSC 388
In the Supreme Court of Victoria, Habersberger J gave a contractor summary judgment on unpaid progress certificates under a Standards Australia general conditions contract, holding that the contract allowed the principal no set-off against progress certificates except by its own certification procedure, so its cross-claims could not be raised in answer and there was no real question to be tried [4], [42], [45], [48].
- Beech v Building Appeals Board [2005] VSC 231
In the Supreme Court of Victoria, Hargrave J discharged an order for review under the Administrative Law Act of a Building Appeals Board determination, holding that a building order requiring an owner to install restraint beams along a party wall did not deprive her of vested property rights and, alternatively, that the Building Act authorised such orders even if they affect property rights, at least where the building surveyor considers there is a danger to safety [1], [35], [62], [63].
- Kane Constructions v Sopov [2005] VSC 237
In the Supreme Court of Victoria, Warren CJ held that building owners repudiated their contract by deducting liquidated damages from a certified progress payment and by calling up the builder's bank guarantees without the contractual entitlement or notice, so that the builder validly terminated by accepting the repudiation and was entitled, subject to deductions and with orders to follow, to recover on a quantum meruit [776], [791], [802], [806], [808], [809], [906], [907].
- Pong Property Development v Strangio [2005] VSC 217
In the Supreme Court of Victoria, Ashley J allowed a developer's appeal on a question of law from the Victorian Civil and Administrative Tribunal, set aside orders summarily striking out its application for payment into the Domestic Building Fund and compensating Mr Strangio (the third respondent) and remitted the matter, because the Tribunal's reasons did not support treating the application as liable to be struck out from its inception and did not reveal which statutory ground was relied on [2], [6], [59], [62], [63], [68], [76].
- City West Water v Simon Engineering [2005] VSC 248
In the Practice Court of the Supreme Court of Victoria, Cummins J granted an interlocutory mandatory injunction compelling a contractor in administration and its administrators to deliver a short list of project information, holding on an interlocutory and not final view that the principal had a right to it under a contractual remedy clause or at least an implied term, and that the purported repudiation was not efficacious [3], [7], [21], [25], [26].
- Australian International Insurance v Graham [2005] VSC 183
In the Supreme Court of Victoria, Balmford J held, dismissing an appeal from a Master's refusal of leave to appeal from the Victorian Civil and Administrative Tribunal, that the Tribunal had no jurisdiction to extend an insurer's time to determine a domestic building insurance claim once the period for determination had expired, whether under the Ministerial Order, the insurance dispute provision of the Domestic Building Contracts Act (there being no relevant dispute) or any inherent power [23], [26], [28], [29].
- Shaw v Yarranova [2005] VSC 94
In the Supreme Court of Victoria, Hollingworth J held that an order removing a caveat under the Transfer of Land Act is a final order that cannot be sought by summons alone in an existing proceeding and, treating the vendor's summons as a summary judgment application, proposed to dismiss it because there was a serious question under the Domestic Building Contracts Act and the balance of convenience did not clearly favour removal [32], [33], [38], [65], [72], [73].
- Woolcock Street Investments Pty Ltd v CDG Pty Ltd [2004] HCA 16
The High Court, by six Justices to one, dismissed an appeal from the answer "No" given by the Court of Appeal of the Supreme Court of Queensland to the question in a case stated. The question was whether, on the agreed facts, a subsequent owner's pleading disclosed a cause of action in negligence against the engineers who designed its commercial building's foundations. The joint reasons of Gleeson CJ, Gummow, Hayne and Heydon JJ held that, on the facts agreed and pleaded, neither respondent owed the subsequent owner a duty of care to avoid its pure economic loss. Kirby J dissented.
- Peninsula Balmain Pty Ltd v Abigroup Contractors Pty Ltd [2002] NSWCA 211
In 2002 the New South Wales Court of Appeal, preferring what it called the better view of the authorities, held that a superintendent under a contract on AS2124-1992 was not acting as the principal's agent, in the strict legal sense, when exercising certifying functions. On that basis it set aside a finding that the principal's non-disclosure of its project management agreement with the superintendent was misleading conduct. It also held that the superintendent's power to extend time for practical completion, even without a claim made in time, had to be exercised honestly and impartially and did not automatically end when the contract was terminated for the contractor's breach.