The recent Supreme Court case of Dyjecinska v Step-Up Renovations (NSW) Pty Ltd [2024] NSWSC 159 addressed the question as to whether a Home Building Contract is enforceable if it is unsigned and undated.
The homeowner (“the Plaintiff”) negotiated a contract with the builder (“the Defendant”) to undertake renovations on her home to the value of $145,120 plus GST (“the Contract”). The work required access to the property via the nearby school, which had to occur during the Christmas school holiday period. The builder reissued several versions of the Contract to accommodate the homeowners changing scope, with the available construction window rapidly approaching.
The builder asked the homeowner to sign the contract multiple times without success. Due to the urgency, the builder commenced work on 28 December 2020. In February 2021 the homeowner suspended work and refused to let the builder onsite to complete the work or repair defects. The homeowner refused to pay any invoices and later terminated the contract on the basis the builder failed to rectify defects.
The builder made an application to NCAT to recover the invoiced amounts for works completed, totaling in excess of $107,000. The homeowner claimed that since the contract was not signed and dated, it was not a contract “in writing” in accordance with s10(1)(b) of the Home Building Act 2014 (“HBA”) and was therefore unenforceable by the builder. The homeowner claimed the builder had no right under contract and instead had a claim for the fair value of the work undertaken (“quantum meruit”) of no more than $12,000. NCAT ruled in favour of the builder. The homeowner appealed the decision, and the Appeal Panel dismissed the appeal.
The homeowner then sought leave to appeal to the Supreme Court. In dismissing the leave application, the court affirmed the earlier decisions that under the HBA a contract is “in writing” and enforceable by a builder without being signed and dated.
Although the builder ultimately succeeded, it took 4 years and a hefty legal bill to enforce the contract and obtain payment of invoices.
A cautionary tale for builders: that while a home building contract may be enforceable in the absence of a signature and date, it is prudent to refuse to commence work until a contract is signed, to avoid what is often a lengthy and costly court battle.r family law solicitors.
