When "remedy defects" means "pay damages": lessons from Grech v Biltar Pty Ltd [2025] VSC 636

A recent Supreme Court decision illustrates the risks of settling a building dispute by requiring a builder to "remedy defects" rather than paying money. Even where the obligation to remedy defects is contained in a formal settlement deed, the Court will rarely compel specific performance of building works.

In Grech v Biltar Pty Ltd [2025] VSC 636, the owner sought orders compelling the builder to specifically perform its obligations under a settlement deed to carry out rectification works. The deed required the builder to fix defects identified by an independent expert and to complete those works to that expert's satisfaction. When the builder delayed and sought an extension, the owner refused, citing concerns about the builder's cash-flow position and reliability, and applied to compel specific performance of the deed.