Conduct and decision In the saga that unfolded after the Builder was excluded from the site, the Builder’s lawyers took an aggressive approach when writing to the Owners’ lawyers. In their letters they used phrases such as “blatant and false assertion as to the schedule of defective works” and described the claims as “appear to be a bogus claim”. The Judge accepted the Owners had lost confidence in the Builder. The Judge said that Builder had not, since their exclusion from the site, proposed a “workable scope of works”. The Judge criticised the hyperbolic language used by the Builder’s lawyers describing it as “unnecessarily aggressive”. The Judge noted the eventual proposal by the builder fell well short of work found by the expert to be required. Ultimately, the Judge found that the Owners had not acted unreasonably in deciding to have the rectification works performed by another party. On that basis, the Owners were awarded their costs. Conclusion The overarching principle that the builder has the right to rectify its own defective work remains unchallenged, even though in this instance the builder lost that right. The owner must be shown by the builder to have acted unreasonably in making the decision to engage a new builder. The builder’s efforts to rectify are a relevant consideration as is whether the owner has reasonably lost confidence in the willingness and ability of the builder. Courts continue to frown upon lawyers who adopt an unnecessarily aggressive approach. All letters written by lawyers should be viewed through the prism of the judge eventually presiding over a trial, even though all parties fervently hope to avoid the possibility. An early letter describing an ultimately successful claim as “bogus” or “frivolous” would no doubt be cause for regret.
[1] The Owners – Strata Plan 89041 v Galyan Pty Ltd [2019] NSWSC 619
About the author tom grace partner construction & engineering, commercial dispute resolution, environment and planning, administration law fenwick elliott grace construction and engineering lawyers