The recent case of Patel v Redmyre Group Limited [2021] NSWCATAP 132 considered whether the owners of a property could terminate a building contract due to the Builders failure to progress works with due diligence. The Owners led evidence that the builders had not completed works by the time stipulation in the contract. However, the evidence was not sufficient and the owners relied on the builders failure to reach practical completion in their case which was detrimental to their case because the Owners ended up excluding the builder from the site after issuing a show cause and termination notice purporting to terminate the contract. 

On appeal, the Court confirmed that the onus was on the Owners to prove that the builder had not proceeded with due diligence. It was not sufficient to prove that the Builder had not reached practical completion by the date specified in the building contract. 

This case is a reminder that owners wishing to terminate building contracts must ensure that contractual notices attempting to terminate the contract are in accordance with the terms of the contract, and secondly, that owners ought to consider whether they can validly terminate a building contract, in circumstances where delay in completing building works may not be sufficient to constitute a breach warranting termination of the contract. 

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