Written by Providing a builder with the opportunity to address defects is often a practical way for owners and contractors to minimise loss. Crucially, the recent case of Ceerose Pty Ltd v The Owners – Strata Plan No 89074 (‘The Owners‘) [2025] NSWCA 235 reveals that this is not an absolute obligation.
This case concerned disputes over alleged defects following the completion of a residential apartment building in Sydney. The NSW Court of Appeal held that there is no positive duty on an owner to provide the builder with an opportunity to rectify defects. Rather, it is the builders’ responsibility to show that the owner’s choice to engage a replacement contractor was unreasonable. The Owners had raised concerns over several years about the builder’s ability and willingness to repair the defects. Since prolonged negotiations had stalled, the Court found no basis to conclude that appointing a new builder was unreasonable.
This case shows that if an owner can prove the builder was given an opportunity to fix defects but failed to do so, it can strengthen the owner’s claim to recover the cost of rectification. Conversely, the failure to do so can significantly reduce damages if unnecessary additional expense is incurred by engaging a replacement builder.