This case is about a dispute between a company, Mirvac Projects Pty Ltd, and a contractor, K.H.C. Building Pty Ltd, over delays and costs on a building project in Sydney. Mirvac was the developer and K.H.C. was the builder. K.H.C. claimed they were owed more money for extra work and for time lost due to Mirvac’s actions or inactions. Mirvac, however, argued that K.H.C. was responsible for the delays and that they had already paid what was due. The court had to decide who was right and how much K.H.C. was entitled to.
Background of the case
- Case Name: Mirvac Projects Pty Ltd v K.H.C. Building Pty Ltd
- Case Number: NSWSC 1188
- Court: Supreme Court of New South Wales
- Date of Judgment: October 10, 2025
- Parties Involved:
- Applicant/Developer: Mirvac Projects Pty Ltd
- Respondent/Builder: K.H.C. Building Pty Ltd
- Project: Construction of a residential building at 100 Bay Street, Glebe, Sydney.
- Dispute: K.H.C. Building Pty Ltd claimed it was owed additional payment and extensions of time due to alleged breaches by Mirvac Projects Pty Ltd, including delays in providing site access and information, and variations to the work. Mirvac disputed these claims, arguing that K.H.C. was responsible for the delays and had not performed its work diligently.
Summary of the judgement
The Supreme Court of New South Wales found in favour of K.H.C. Building Pty Ltd on several key issues, awarding them a significant sum for work done and delays experienced. The court examined detailed evidence regarding the project’s timeline, communications between the parties, and the nature of the alleged variations and delays. A major point of contention was whether Mirvac had properly managed the site and provided necessary information in a timely manner, allowing K.H.C. to proceed without interruption. The judgment highlighted instances where Mirvac’s actions or omissions contributed to delays, such as issues with authority approvals and coordination with other trades. The court also considered the expert evidence presented by both sides regarding construction practices and contractual obligations. Ultimately, the judge determined that K.H.C. had substantiated its claims for extensions of time and additional costs, and that Mirvac had not adequately proven its counterarguments. The judgment detailed the calculations for the amount awarded, which covered various claims including those for variations, disruption, and provisional sums.
One of the main reasons for the court’s decision was the interpretation of the building contract, particularly clauses relating to extensions of time and the process for claiming variations. The court found that Mirvac had not followed the contractual procedures correctly when dealing with K.H.C.’s claims, which weakened their position. For example, Mirvac failed to provide timely decisions on variations, which is a common cause of disputes in construction projects. The court looked closely at the evidence of site conditions and K.H.C.’s work progress, concluding that the delays were not solely attributable to K.H.C. The judgment detailed specific delays, such as delays in receiving architectural instructions and issues with underground services, which were found to be outside K.H.C.’s control. The court effectively allocated responsibility for different periods of delay based on the evidence presented, finding Mirvac liable for a substantial portion of the project’s overall delay.
Q&A
- Q: Is it legal to claim for extra work not in the original contract?
- A: Yes, it is legal to claim for extra work if it is formally agreed upon as a variation to the original contract, and the process outlined in the contract for variations is followed.
- Q: What happens if a builder claims a delay was caused by the developer?
- A: If a builder claims a delay was caused by the developer, they typically need to provide evidence to support their claim, and they may be entitled to an extension of time and compensation for associated costs, as seen in this case.
- Q: Can a developer refuse to pay for work done by a builder?
- A: A developer can refuse to pay if the work is not done according to the contract, or if there are legitimate grounds for dispute, such as defective work or a failure to meet project milestones. However, if the work is approved and falls within the contract terms, payment is generally due.
- Q: What is an extension of time in construction?
- A: An extension of time is an adjustment to the project completion date granted to the builder, usually due to delays caused by factors outside their control, such as variations, adverse weather, or actions by the principal.
- Q: What are variations in a construction contract?
- A: Variations are changes to the scope, quality, or quantity of the works described in the original contract. They typically require a formal instruction and agreement on cost and time implications.
- Q: How important is following the contract procedure for claims?
- A: Following the contract procedure for claims, especially for extensions of time and variations, is crucial. Failure to do so can result in the claim being rejected, as the court looks closely at whether contractual steps were followed.
- Q: What is provisional sum in a construction contract?
- A: A provisional sum is an amount included in a contract for work that has not yet been fully detailed or priced. The final cost is determined once the work is carried out and the actual costs are known.
- Q: Can a court award damages for delays caused by a developer?
- A: Yes, a court can award damages or compensation to a builder for proven losses incurred due to delays caused by a developer’s actions or omissions, as demonstrated in this judgment.
- Q: What kind of evidence is needed to support a delay claim?
- A: Evidence can include site diaries, progress reports, correspondence between parties, photographs, expert reports, and records of resources used.
- Q: What is the role of an expert witness in construction cases?
- A: Expert witnesses, often construction professionals, provide opinions on technical matters, such as the cause of delays, the cost of variations, or the standard of work, to help the court make informed decisions.
- Q: If a developer doesn’t respond to a variation claim promptly, what can a builder do?
- A: The builder should ensure they have followed the contractual notification procedures. If the contract allows, they may be able to proceed with the work and claim the costs later, or seek directions from the contract administrator or adjudicator if the dispute escalates.
- Q: What is the difference between a claim for an extension of time and a claim for costs?
- A: An extension of time relates to moving the project completion date, while a claim for costs relates to financial compensation for additional expenses incurred due to delays or variations. Both can often arise from the same events.
- Q: How can a builder protect themselves from delays caused by other trades on site?
- A: A builder should ensure good site management, clear communication with the principal and other contractors, and include appropriate clauses in their contract to address coordination and responsibility for site-wide issues.
- Q: What is the implication of the court scrutinising contractual procedures in this case?
- A: It implies that strict adherence to contractual procedures for notifications, claims, and variations is vital for all parties in a construction project to protect their rights and avoid disputes.
- Q: Can a builder claim for loss of profit due to delays?
- A: Claims for loss of profit due to delays can be complex and depend heavily on the specific contract terms and the nature of the delay. It’s not always straightforward and often requires strong evidence of lost opportunity.
You can find more simplified NSW Supreme Court cases here: [https://medigosa.com/category/nsw-supreme-court-cases/](https://medigosa.com/category/nsw-supreme-court-cases/) The full judgment can be viewed at: [http://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/nsw/NSWSC/2025/1188.html](http://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/nsw/NSWSC/2025/1188.html)