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Tan Hung Nguyen & ANOR v Luxury Design Homes - Doyles Arbitration Lawyers

TAN HUNG NGUYEN & ANOR V LUXURY DESIGN HOMES PTY LTD & 2 ORS [2004] NSWCA 178

Supreme Court of New South Wales – 11 June 2004

FACTS

Tan Hung Nguyen (‘Tan’), a registered proprietor of land in Burraneer, and Luxury Design Homes Pty Ltd (‘Luxury’), a licensed builder, entered into a building contract for the design and construction of a house. The building contract was a standard form Department of Fair Trading home building agreement which provided for payment by progress instalments at the completion of specified stages of work. At the expected date for practical completion the work was only 45% completed.

A dispute arose as to defective and unfinished work and Tan refused to pay a progress claim. The building contract contained two relevant clauses. Clause 11 of the building contract provided for the payment of a progress claim to be “…merely a payment on account”. Clause 24 of the building contract expressly dealt with the circumstances in which the contract might be ended by the owner due to identified default of the contractor.

Tan submitted that the building contract was an “entire contract” notwithstanding the fact that the contract provides for progress payments. An “entire contract” is one in which the consideration for the payment of money or for the rendering of some other counter-performance is entire and indivisible. The result being, that Luxury would not be able to recover anything because the work was not completed according to its terms.

ISSUE

Was the building contract an “entire contract”?

FINDING

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