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ARTICLE · 28 MARCH 2022

Liability for defects when new builder takes over: Lichaa v Boutros [2021] NSWCA 322

Piper Alderman
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Builder A should not assume that he will be excused from liability for defects when a subsequent builder B takes over.

AustraliaReal Estate and Construction
Robert Riddell
Robert Riddell
Gareth Gillespie
Gareth Gillespie
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If a subsequent builder completes a building project started by an earlier builder, to what extent, if any, will the first builder be excused from liability for defects existing in the first builder's work?

The NSW Court of Appeal considered this issue recently in Lichaa v Boutros,1 an appeal from a decision of the District Court.  In short, the first builder should not assume that it can escape liability for the defects, particularly where the first builder's work can be differentiated from that of its successor.

Facts

Mr Boutros (Builder 1) was engaged by Ms Lichaa (Home Owner) to construct a second storey on her existing residence.  Following a dispute, the Home Owner barred Builder 1 from entering the site (which was found to be a repudiation of the contract).  The Home Owner subsequently engaged a replacement builder (Builder 2) to finish the job.

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