The Preferred Outcome Principle for defective building work
THE PREFERRED OUTCOME PRINCIPLE
Section 49MA Home Building Act 1989
Section 48MA of the Home Building Act 1989 says that rectification of defective residential work by the original builder is the ‘preferred outcome’ of the proceedings.
In Clements v Murphy [2018] NSWCATAP 152 NCAT’s Appeal Panel considered whether this principle extended to incomplete work as well as defective work, and after the contract had been terminated.
At first instance Senior Member Goldstein determined that s48MA related only to defective work. He considered that there was no good reason not to implement the preferred outcome principle and ordered the builder to rectify 15 items of work. The Builder was also ordered to pay the owners $45,054.79 for incomplete work.
The Builder appealed. The Appeal Panel determined that s48MA is ‘not intended to apply to work which is incomplete and cannot be characterised as defective work.’
Practically speaking, the line between incomplete work and defective work can be very fine, leading to complications in this area.
More information in our July Newsletter »
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Clare Peacock is an experienced construction lawyer working on Sydney’s Northern Beaches. Clare provides practical, cost-effective building approval advice to property owners, builders and strata managers. Services include residential building disputes, body corporate issues and strata building problems.