Building Dispute Cases - Order for Specific Performance is Rare and an Exception

Introduction

In the recent case of Grech v Biltar Pty Ltd [2025] VSC 636, an owner made an application to the Supreme Court for an order for specific performance against the builder to rectify the defective works. This is notwithstanding the fact that in building dispute cases, orders for specific performance against a builder are rare and an exception.

Remedy of Specific Performance

Specific performance is a legal remedy in contract law pursuant to which a court orders a party to perform a contractual obligation, instead of paying monetary damages for breach of contract. It is generally ordered when monetary damages are inadequate.

Supreme Court Case of Grech v Biltar

Facts

In this case, a dispute arose between the owner and the builder before the completion of the works. The owner claimed that there were several defects in the works carried out by the builder.  The builder counterclaimed that it was owed money for unpaid invoices and that it was prevented from accessing the site by the owner.

The parties entered a Deed of Settlement which provided, inter alia, that the parties would jointly engage an expert to prepare a report outlining the defects in the works which the builder would rectify within 60 days.

However, the builder did not rectify the defects within 60 days. Instead, the builder requested the owner’s consent to an extension of time to rectify the defects which was rejected by the owner.

Following this, the owner made an application to the Supreme Court for an order for specific performance against the builder, pursuant to which the builder would be required to rectify all the defects in the defects report.

Decision

The Court dismissed the owner’s application for an order for specific performance against the builder as it determined that:

(a)   monetary damages would be a sufficient remedy for the owner; and

(b)   extraordinary circumstances, necessitating an order for specific performance, did not apply to a domestic building dispute such as this one; and

(c)   the risk that the builder may become insolvent was alleviated by the fact that the warranty insurance would cover the costs to rectify the defects.

Summary

In summary, the Court will only grant an order for specific performance in limited circumstances, having regard to the following matters:

(a)   Firstly, the scope of the work is clearly outlined and set out;

(b)   Damages will not be a sufficient remedy for the owner; and

(c)   The builder is in possession of the land on which the work is to be completed.

Even if the above criteria are satisfied, the courts have discretion not to order specific performance.

Conclusion

Accordingly, the remedy of specific performance in building disputes cases will only be ordered exceptional cases.

To learn more about any of the matters discussed here, or if you require legal assistance, please contact Chris Moshidis, Director and Principal Lawyer on +61 3 9521 7956 or chris@urbanlawyers.com.au.