Plaintiff v Defendant

1. The plaintiff is the owner of Lot 6, 8268 Murray Valley Highway, Bathumi, which is located on the Murray River, near the border of Victoria and New South Wales. He purchased the property with the intention of building a new dwelling that would eventually be the home where the plaintiff and his wife would retire.
2. On 13 April 2022, the plaintiff entered into a contract with the defendant, for the construction of a double storey dwelling at the property for a price of $1,833,174.02. The completion date under the contract was 17 October 2023 (Clause 8.4) but by 17 October 2023, the works at the property had not been completed.
3. On 2 June 2023, the defendant terminated the employment of a carpenter, Cameron Boyle, because the defendant was struggling with 'cash flow' issues. One of the main reasons for defendant's 'cash flow' issues at that time, was the plaintiff's late payment of the April Claim and the resulting impact this had on the business.[1]
4. On 9 June 2023, Benjamin Lindsay Carr, the defendant's director, received a telephone call from Brendan Elliott, the defendant's foreman. Mr Elliot advised Mr Carr that the plaintiff was at the land and verbally abused him. He also told Mr Carr that he was distressed, felt like breaking down and did not want to work at the land again.[2]
5. On 15 August 2023, Mr Carr had another conversation with Brendan Elliott. Mr Elliott told Mr Carr that Mr Elliott had a telephone conversation with the plaintiff in which the plaintiff was, again, very aggressive and threatening towards him. Mr Elliott told Mr Carr that the plaintiff said that he wanted to bash him, and he was going to 'snatch my kids'. Mr Elliott told Mr Carr that he could not continue to put up with the plaintiff's constant monitoring and aggressive behaviour, and asked to be removed from the project.[3]
6. On 16 November 2023, in his last encounter with the plaintiff, the plaintiff approached Mr Carr and mentioned that he was unhappy about one of the defendant's workers who was too young to be working on a luxury project. The plaintiff then made a telephone call to his lawyer 'Stuart' on loudspeaker in Mr Carr's presence. The plaintiff told the person on the phone words to the effect that 'I do not care what you have to do, I want you to bury Biltar and I do not care how much this will cost or what you have to do'.[4]
7. On 17 November 2023, Stuart Walter, the plaintiff's solicitor, sent a letter to the defendant's solicitor Callum Ernikiolis which stated:

...

We put you on notice that the Property is fully alarmed and any unauthorised attendance at the Property by you (or any third parties at your direction), will be immediately reported to the Police.

1. On 20 November 2023, a notice of suspension under clause 16.2 of the contract was sent to the plaintiff. One of the alleged grounds in the suspension notice was that the plaintiff had revoked the defendant's permission to attend the land, being an alleged breach of the contract by the plaintiff.
2. On 23 November 2023, Mr Walter, the plaintiff's solicitor sent a letter to the defendant's solicitor, Mr Ernikiolis, stating that the plaintiff was not preventing the defendant from attending the land to carry out the works.
3. On 21 December 2023, the defendant terminated the employment of a carpenter, Brodie Kendray, because the defendant was again struggling with 'cash flow' issues. One of the main reasons for the defendant's 'cash flow' issues at that time, was the plaintiff's failure to pay the November Claim and the resulting impact this had on the business.[5]
4. On 21 May 2024, the plaintiff and the defendant settled their dispute by entering into the Deed.
5. Clause 1.1 of the Deed sets out the following definitions:

Contract means the New Homes Contract entered into between the Owner and the Builder for the construction of a home at the Site dated 13 April 2022.

...

Defects Report means the report prepared by the Expert identifying any defective building works.

...

Execution Date means the date on which this Deed is executed and exchanged between the Parties.

Expert means an independent expert building consultant.

Expert Confirmation means that the Expert must inspect the Rectification Works and, if the Expert considers that the Rectification Works satisfactorily remedy the defects identified in the Defects Report (as amended following any Objection), the Expert must provide the Builder and the Owner with written confirmation of this.

1. The defendant's main obligations under the Deed are set out in clause 5 which basically provides for the defendant to complete the works, the parties to jointly engage an independent expert to determine defects in the works and for the defendant to rectify any defects identified with the expert to the satisfaction of the independent expert.
2. Clause 5.1 provides:

5.1 In full and final settlement of the Dispute, the Parties agree that:

. . .

(b) the Completion Date is extended to 30 July 2024 and the Builder must bring the Works to Completion by this time (including causing an occupancy permit to be issued);

. . .

(d) once the Works reach Completion, the Builder and the Owner must jointly engage the Expert to inspect the Works and prepare the Defects Report;

. . .

(f) if the Builder and/or the Owner consider that any defects identified in the Defects Report are not defective building works or certain defects have been omitted from the Defects Report, the Builder and/or the Owner may write to the Expert with an Objection;

(g) if an Objection is received by the Expert, the Expert must consider the Objection and determine whether the Defects Report be revised to omit or include the subject matter of the Objection;

(h) the Builder must carry out and complete the Rectification Work within 60 days of receipt of the Defects Report (as amended following any Objection(s));

(i) if the Builder reasonably considers that it requires more time under cl 5.1(h) to promptly carry out and complete the Rectification Work, the Builder must provide the Owner with a written notice requesting a reasonable extension to the time to promptly carry out and complete the Rectification, such consent not to be unreasonably withheld by the Owner;

(j) the Expert must inspect the Rectification Works and, once the Expert considers that the Rectification Works have been satisfactorily completed, provide the Expert Confirmation;

(k) the Builder and the Owner must share in equal proportions all costs in relation to the engagement of the Expert;

(l) the Owner must pay to the Builder, by way of direct deposit to the Builder's Bank Account, the following:

(i) subject to clause 5.1(n), the First Payment within three business days of the Owner being provided with relevant plumbing certifications pursuant to Stage 13 of the Contract;

(ii) the Second Payment within three business days of the Builder providing to the Owner written confirmation that:

(a) an occupancy permit has been issued by the relevant building surveyor for the Project; and

(b) Completion under the Contract has been achieved; and

(iii) the Final Payment immediately upon the Owner being provided with the Expert Confirmation;

. . .

1. Clause 7 provides what is to occur if there has been a default under the Deed. Clause 7.4 provides:

7.4 Subject to clause 7.2, if the Builder materially defaults in any of its obligations in clause 5 of this Deed and that default does not arise from or is not related to any failure by the Owner to comply with cl 5.1(c) of this Deed, the Owner may elect to either:

(a) terminate this Deed and the Contract; or

(b) commence proceedings in a court of competent jurisdiction against the Builder seeking specific performance of the terms of this Deed plus interest and costs.

1. On 19 November 2024, Ken Ryan, a building consultant who the parties engaged as an Expert under the Deed issued a defects report. The parties then wrote to Mr Ryan with their objections as required by the Deed.
2. On 5 March 2025, Mr Ryan provided the parties with his written responses to the objections. The defendant did not comply with the obligations under clause 5.1(h) of the Deed to complete rectification works by 4 May 2025 (60 days after Mr Ryan's response to the objections in the defects report was received).
3. On 2 May 2025, Mr Ernikiolis sent a letter Mr Walter requesting an extension to the time for the defendant to carry out rectification works pursuant to clause 5.1(1) of the Deed until 15 August 2025.
4. Later on, Mr Walter replied and stated:

The conduct of your client (both before and after the entering of the deed) provides no confidence that our client will not be in the same position come 15 August 2025. It is not unreasonable for our client to withhold its agreement to the extension, as currently proposed.

Our client's position is that your client is plainly in default. Clause 7.4(b) of the Deed provides our client with the right to elect, in the event of default, to apply to a Court for urgent orders that your client specifically perform the Deed (plus interest and costs).

Orders for specific performance would provide a level of accountability on your client to perform its obligations under the Deed. A breach of the orders likely being deemed a contempt of court by your client (and potentially Mr Carr).

1. On 14 May 2025, Mr Walter forwarded a letter to Mr Ernikiolis stating that the plaintiff had little option than to apply to the Court for orders but was prepared to reconsider the requested extension if the defendant provided a construction program with a schedule of works setting out the planned sequence of works and the dates of performance and completion of the various works by no later than 4:00pm on Monday 19 May 2025.
2. On 16 May 2025 Mr Ernikiolis sent a letter to Mr Walter which stated that the defendant did not agree to provide a construction program because there was no requirement for it to do so under the building contract or the Deed. It was difficult for the defendant to reliably outline the sequence of specific parts of the rectification work and when each of those parts would be commenced and then completed as the defendant was coordinating various trades to rectify the defective works.
3. On 20 May 2025, Mr Walter sent a detailed letter to Mr Ernikiolis outlining the plaintiff's concerns in relation to the progress of the rectification works and explained why, in the plaintiff's opinion, it was a reasonable position for the plaintiff to seek comfort by applying to the Court for specific performance against the defendant.
4. On 29 May 2025, the plaintiff commenced this proceeding against the defendant.

1. Specific performance is an equitable remedy, requiring a contractual party to carry out one or more contractual obligations resting on that party.[6]
2. In Lamare v Dixon,[7] Lord Chelmsford said:

...the exercise of the jurisdiction of equity as to enforcing specific performance of agreements, is not a matter of right in the party seeking relief, but of discretion in the Court - not an arbitrary or capricious discretion, but one to be governed as far as possible by fixed rules and principles.[8]

1. As a general rule, specific performance is available only when damages are inadequate. In Ryan v Mutual Tontine Westminster Chambers Association,[9] Kay LJ stated:

This remedy by specific performance was invented, and has been cautiously applied, in order to meet cases where the ordinary remedy by an action for damages is not an adequate compensation for breach of contract. The jurisdiction to compel specific performance has always been treated as discretionary, and confined within well-known rules.[10]

1. However, specific performance may be awarded instead of damages only when it can, by that means, do more perfect and complete justice.[11]
2. Also, as a general rule, the courts will not order specific performance of a building contract. In Hewett v Court,[12] Wilson and Dawson JJ stated:

The contract between the appellants and the company was not a type which equity would specifically enforce. It was a contract for the construction of a house and erection. As Mellish LJ remarked in Wilkinson v Clements (1872) 8 Ch App, at p 112:

Now it is settled that, as a general rule, the court will not compel the building of houses.[13]

1. In Forrest v Australian Securities and Investments Commission,[14] Heydon J said 'it is only exceptionally that the courts will decree specific performance of building contracts'.
2. In Crouch Developments Pty Ltd v D & M (Australia) Pty Ltd,[15] Martin CJ said:

In relation to building contracts, it is not the case that specific performance will never be granted in respect of such contracts: Meagher RP, Heydon JD and Leeming MJ, Equity Doctrines and Remedies (4th ed 2002) at [20-080]. However, as the authors of that text observe (at 21-215), generally speaking, neither specific performance nor interlocutory injunctions having the effect of specific performance will be granted in respect of building contracts in other than exceptional circumstances.[16]

1. The plaintiff's referred to Downer Construction (New Zealand) Ltd v Silverfield Developments Ltd[17] where Harrison J surveyed the authorities relating to specific performance in relation to building contracts and said:

In my judgment all these cases illustrate the obvious. Specific performance is an equitable and thus fact specific and discretionary remedy. Its exercise is governed by well settled principles which are flexible and adaptable to achieve the ends of equity; that is, to 'do more perfect and complete justice' between the parties than leaving them to their common law remedies (Argyll Stores at 9F-G). Building contracts present special features "of a practical nature" (Argyll Stores at 11H) in the areas of sufficient particularity and superintendence of work. But provided the Court is satisfied they can be accommodated by the imposition of appropriate terms within the order, as the arbitrator was here, there is no principled reason why such contracts should not be the subject of awards for specific performance.[18]

1. The position put by Harrison J is not the position that is followed in Australia, however, in Mayor, Aldermen and Burgesses of Wolverhampton v Emmons,[19] Romer LJ identified an exception to the general rule and stated:

The question, which is not free from difficulty, is whether, under the circumstances of this case, an order for specific performance should be made in favour of the plaintiffs. There is no doubt that as a general rule the Court will not enforce specific performance of a building contract, but an exception from the rule has been recognised. It has, I think, for some time been held that, in order to bring himself within that exception, a plaintiff must establish three things. The first is that the building work, of which he seeks to enforce the performance, is defined by the contract; that is to say, that the particulars of the work are so far definitely ascertained that the Court can sufficiently see what is the exact nature of the work of which it is asked to order the performance. The second is that the plaintiff has a substantial interest in having the contract performed, which is of such a nature that he cannot adequately be compensated for breach of the contract by damages. The third is that the defendant has by the contract obtained possession of land on which the work is contracted to be done.[20]

1. To be granted a remedy for specific performance, the plaintiff will need to demonstrate:
   • − the building work the plaintiff seeks to enforce performance of is defined by the contract;
   • − the plaintiff has a substantial interest in having the contract performed which is of such a nature that it cannot be adequately compensated for breach of contract by damages; and
   • − the defendant is in possession of the land on which the building work is contracted to be done.

1. The plaintiff accepts that the work must be defined with clarity. Here, the plaintiff says that the process put into place with the expert clarifies the scope of the works that needs to rectified. The work is to be completed to the satisfaction of the independent expert appointed under the Deed.
2. The defendant submits that the work is not specified with any clarity. The defendant says that the report of Mr Ryan qualified as it is by his second report, responding to parties objections, is quite inadequate to serve as the specification of building work the subject of an order for specific performance.
3. The defendant has referred to parts of the second report in order to demonstrate how the remedy of specific performance is inadequate.
4. In his second report Mr Ryan rejected an objection for the plaintiff in relation to brickwork. He stated:

Any marks on the lower level of the external brickwork which is agreed was attributed to the owner's work is not the builder's responsibility.

However, other mortar smear marks or caulking smears will require spot cleaning by the builder as part of the completion of works.[21]

1. The defendant asks how the parties are supposed to resolve this. It is not a scope of the work and is not something that the defendant can do or be ordered to do.
2. The defendant then refers to the objection relating to 'hole in glass shower screen'. In relation to this objection, Mr Ryan has written:

Item 67 in the builder's objection letter states that the owner requested that the holes be provided in the glass shower screen panels.

The scope of works does not mention the holes in the shower recess glass panels.

If the owner's instructions to the builder are proved or correct, then items 373, 384 & 385 should be deleted from the defects report.[22]

1. The defendant asserts that the scope of works does not mention the holes in the shower recess glass panels. If the plaintiff's instructions to the builder are all proved correct, then the items 373, 384 & 385 should be deleted. The defendants asks who is going to make that determination, a judge of this Court or a member of VCAT.
2. In relation to the plaintiff's objection related to window and door drainage, Mr Ryan states:

The issue of who supplied the first-floor balcony tiles is not the issue. The issue is that there are defective works with the installation of the tiles due to the lack of adequate design, stepdown height which has restricted the builder's ability to provide a compliant stepdown.

...

This cannot be rectified unless the balcony was stripped and possibly a hob installed under the sliding door frames.

The items should be discussed if compliance is required.[23]

1. The plaintiff wants the balcony rectified. The defendant submits that this is a large balcony and the defendant's objection is that the defendant has done the balcony in accordance with the architect's design, which was provided by the plaintiff and this is a build only. It is not a design and construct contract, it is just a home building contract in accordance with the owner-architect's design. The defendant notes that, in any event, a building surveyor has issued an occupancy permit and would not have issued that if it was noncompliant.
2. The defendant submits that the Court is asked to order the parties to discuss if compliance is required. It states how can this be the subject of an order. The defendant also states that the Court is asked to order the defendant, the building company, to do work to the satisfaction of Mr Ryan. Work can be done by the defendant but if Mr Ryan comes up with more issues like this Mr Carr may be in the Court.
3. The plaintiff submits that where Mr Ryan has identified a defect, and if there is an issue as to what the defect is, the defendant can ask. The plaintiff points out that the defendant has never asked for clarification of any of these defects. If the builder has fixed a defect, then the builder would go to Mr Ryan and say 'I fixed all of the defects and would you please confirm them'. This is how the Deed works.
4. Some of the issues raised by the defendant may lead to problems but the parties have put in a mechanism which is meant to solve these issues. On the evidence before the Court, it is difficult to ascertain whether this mechanism would work. I believe that there would be issues outstanding which cannot be resolved without the Court's intervention. This would tend to lead to an order not being made for specific performance.

1. The defendant has summarised and properly answered the plaintiff's arguments and its responses to whether damages is an adequate remedy as follows:

The defendant has statutory obligations under the DBC Act.

These are not obligations, they are warranties which apply to every domestic building contract.

There is the possibility for dispute about scope if a new builder is engaged.

This applies to every building contract. And scope is in dispute now.

Engaging a replacement builder is notoriously difficult.

This applies to every building contract. There is no evidence that the regional location is an extraordinary impracticality.

Engaging a replacement builder is notoriously costly.

Engaging a replacement builder would expose the plaintiff to delay.

Engaging a replacement builder would expose the plaintiff to planning, building or insurance risk.

Biltar may not have the financial means to meet an award of damages.

This is pure speculation. Further, it ignores the builder's warranty insurance provided by the Defendant.

1. During the course of submissions, Senior Counsel for the plaintiff indicated that the reason why the plaintiff was seeking specific performance was because the defendant was struggling with cash issues.[24]
2. I note that the defendant provided to the Court with a certificate of insurance with the Victorian Managed Insurance Authority. The cover of insurance was up to $300,000. The plaintiff submits that the defects could cost more than $300,000, however there is no evidence before the Court as to what the costs of the defects are. I accept that on the evidence the insurance is adequate. I note that the defendant states that approximately $60,000 is outstanding under the building contract.
3. In my view, damages are an adequate remedy here, even though the parties entered into a settlement which called for specific performance.

1. If the plaintiff seeks specific performance, there should be no issue to access being provided to the premises. I note, however, that there has been animosity between the parties in the past but that was before the Deed was signed. It would be possible that the situation may flare up again and this is a factor, whilst not a determining factor, would weigh against an order for specific performance.
2. There is uncontroverted evidence filed on behalf of the defendant alleging improper behaviour by the plaintiff. If specific performance was ordered there is a possibility that there could be more issues arising.

1. The plaintiff's application for specific performance will be dismissed primarily because damages are a more adequate remedy than specific performance in the circumstances of this case.

[1] Paragraph 26 of the affidavit of Benjamin Lindsay Carr, sworn 15 August 2025, which has not been contradicted by the plaintiff

[2] Paragraph 23 of the affidavit of Benjamin Lindsay Carr, sworn 15 August 2025, which has not been contradicted by the plaintiff.

[6] See Rossi Recycling Pty Ltd v Buckland Valley Pty Ltd [2022] 165 ACSR 332.

[7] [1873] UKLawRpHL 20; (1873) LR 6 HL 414.

[9] [1892] UKLawRpCh 163; (1893) 1 CH. 116.

[11] See Primewest (Mandurah) Pty Ltd v Ryom Pty Ltd [2012] WASC 443 and Hawkesdale Asset Pty Ltd v Bennett [2023] VSC 409.

[12] (1983) 149 CLR 639.

[14] [2012] HCA 39 at [105].

[15] [2008] WASC 151.

[17] [2006] NZHC 486; [2007] NZLR 785.

[19] [1901] UKLawRpKQB 22; [1901] 1 QB 515.

[21] Second report of Mr Ryan, at p 21.

[23] Second report of Mr Ryan, at p 25.