The Tribunal recently considered a claim by owners against a builder for a breach of statutory warranties under the Home Building Act 1989 (NSW) (the Act). The builder claimed that the owners failed to mitigate their loss and as such, should be entitled to a smaller sum of damages.

The facts

The owners had contracted with the builder for the purpose of carrying out bathroom renovation work. Part of this work involved the supply and installation of frameless glass screens and a sliding glass door. However, the sliding door which was supplied and installed by the builder was damaged as part of glass was missing from the bottom of the door.

The owners and the builder agreed that the glass required rectification, however, the relationship soon broke down and the owners barred the builder from accessing the premises for the purpose of conducting the repairs.

Three months later, the sliding glass door shattered causing damage to the bathroom.

Duty to mitigate?

The Tribunal noted that the failure of the builder to install a shower door that was fit for purpose constituted a breach of the statutory warranty under section 18(B)(1)(c) of the Act.

Having found this, the Tribunal was then required to consider the extent of the builder’s liability in circumstances where the owners had terminated the contract by denying the builder reasonable access to rectify the defective door.

The owners contended that the builder was liable to pay for not only the supply and installation of a replacement sliding door, but also for the damage caused to the bathroom as a result of the glass shattering. Conversely, the builder argued that the further damage suffered as a result of the shattering arose as a result of the owner’s failure to mitigate their loss by replacing the door themselves (after refusing the builder’s offer).

On this issue, the Tribunal held that on the facts, the owners knew that the door was defective and required replacement. The owners also knew that the builder had agreed to undertake the repair works by a certain date. Then, having barred the builder from access, the owners did not attend to the repair work themselves despite retaining $1,652 from the contract price for this purpose.

It is for these reasons that the Tribunal Member stated at [46]:

I find that the consequential damages which have occurred by reason of the shattering of the glass shower sliding door arose because of the owners’ failure or neglect to take reasonable care to replace the glass door within a reasonable time and because of that, their failure debars them from recovering the costs they claim.

This finding did not prevent the Tribunal from instituting a work order on the builder to supply and install a replacement glass door and an additional $10.00 (on top of retaining the $1,652) as nominal damages.