Re Singh & Anor v Ozzie Homes Building & Construction Pty Ltd [2026] VSCA 25

The Victorian Court of Appeal decision in Re Singh & Anor v Builder Homes Building & Construction Pty Ltd [2026] VSCA 25 is a reminder that whether building stages have been completed is a question of degree with reference to the contractual agreement, and that a party electing to accept a wrongful repudiation must communicate its election to the repudiating party.

Background

Sukhvinder Singh and Rupinder Kaur (the Owners) entered into a domestic building contract with Builder Homes Building & Construction Pty Ltd (the Builder) for the construction of a new dwelling at 41 Andaman Drive, Craigieburn. The contract prescribed that progress payments were to be made for each stage. When the Builder issued an invoice for the completion of the lock-up stage, the Owners refused to pay on grounds that those works were not complete. Rather than using external doors as per the contract, the Builder had installed plywood sheeting.

The Builder alleged that the Owners had repudiated the contract as they did not pay for the completed lock-up stage and later engaged a new builder. The Owners argued that the stage had not been completed and the Builder’s subsequent suspension of works amounted to repudiation. The Builder served a notice terminating the contract on the ground that the Owners were in substantial breach, having failed to pay the invoice.

The Builder subsequently issued proceedings in the County Court seeking payment of the sum of the lock-up stage invoice, or alternatively payment on a quantum meruit. The Owners denied that lock-up stage was complete and said that the Builder was not entitled to terminate the contract. By counterclaim, the Owners alleged that the Builder had repudiated the contract, which they said they had accepted, and claimed delay and other damages.

The judge gave judgement for the Builder in the County Court and dismissed the Owners’ counterclaim.

Issue

The Court of Appeal considered whether the building works were completed for the lock-up stage and whether the Builder was entitled to receive payment.

Key Findings

In reaching its decision, the Court relied on Cardona v Brown’s test of whether the defects amounted to something ‘borne of impracticality’ or whether it was so significant that the lock-up stage had not been satisfactorily completed.

The Court emphasised the importance of determining whether a stage was completed with reference to the building contract. As the contract had explicitly mentioned that the lock-up stage required external door installations, the Builder’s works did not amount to completion of the lock-up stage. Therefore, the Builder was not entitled to payment for the lock-up stage and the issuance of the invoice, despite incompletion, was deemed repudiatory.

As the Owners later entered into another building contract without notifying the Builder, the Court found that such conduct suggested an intent to be discharged from the existing contract, but not an election to terminate the contract. As a result, despite repudiation by the Builder, the Owners could not make a claim for any damages.

Implications

Where a party has wrongfully repudiated, it is up to the other party to decide whether they wish to continue with the agreement. However, if they wish to accept a wrongful repudiation and terminate the contract, they must communicate its election to the repudiating party.