Dierikx v Merrick

The applicants, Dierikx, brought an action against the respondents, Merrick and another, in relation to a contract for the construction of a residential building. The applicants sought damages for breach of contract, failure to comply with statutory warranties, and repudiation. The dispute was heard in the Supreme Court of New South Wales. The central issues before the court were whether the applicants were entitled to damages for the respondents' failure to complete the construction of the house, and if so, what amount was appropriate. Additionally, the court had to determine whether the applicants had mitigated their losses and if the respondents had a valid defence to the claim.

The court found that the respondents had repudiated the contract by failing to complete the construction of the house. The applicants were entitled to damages for the breach of contract. The court also found that the respondents had failed to comply with the statutory warranties under the Home Building Act. However, the applicants had not mitigated their losses as they had not taken reasonable steps to find another contractor to complete the work. The court held that the applicants were entitled to damages, but the amount was reduced by the amount that could have been saved by mitigating their losses. The court assessed the damages based on the cost of completion and other losses suffered by the applicants.

The court ordered that the first respondent pay the applicants $198,451.38 immediately. The court also ordered that any application for costs be made by written submissions, with responses to be filed and served within specified timeframes. The court further ordered that any submissions made in compliance with these orders address the question of whether costs could be considered on the papers, without the need for a further hearing. This decision provides guidance on the assessment of damages in cases where a contractor repudiates a building contract and fails to comply with statutory warranties.