When building work is defective, homeowners may understandably be reluctant to let the original builder or contractor return to carry out repairs.
However, under the Home Building Act 1989 (NSW), rectification by the responsible contractor is the preferred outcome in building disputes.
So, when will the NSW Civil and Administrative Tribunal (NCAT) make a money order for defective building work instead of ordering the contractor to return and fix it?
A recent decision, Spectrum Pools & Spas Pty Ltd v Young [2026] NSWCATAP 284, provides some useful guidance.
What happened in Spectrum Pools & Spas v Young?
The dispute arose from the construction of an in-ground swimming pool at a Sydney home.
The homeowner alleged defective workmanship and commenced proceedings in NCAT. The Tribunal ultimately found that the builder had breached statutory warranties under the Home Building Act 1989 (NSW) and ordered it to pay the homeowner $75,405.27.
Importantly, NCAT made a money order rather than requiring the builder to return to rectify the work.
The builder appealed, arguing, among other things, that NCAT should have ordered rectification rather than compensation.
The Appeal Panel dismissed the appeal.
Isn’t rectification the preferred outcome?
Yes.
Section 48MA of the Home Building Act requires NCAT to have regard to the principle that rectification of defective work by the responsible party is the preferred outcome.
But the Appeal Panel clarified an important point: this does not create a presumption that NCAT must make a work order.
Nor does a homeowner seeking compensation have to overcome a particular evidentiary burden before NCAT can consider making a money order.
Instead, NCAT must consider the circumstances of the particular dispute and exercise its discretion when deciding the appropriate remedy.
When might NCAT make a money order?
In this case, several factors supported NCAT’s decision not to require the homeowner to allow the builder back onto her property.
The Tribunal was concerned about the builder’s reluctance to accept defects it considered validly alleged. It also had concerns, arising from evidence at the hearing, about whether the builder appreciated the standard of work and the skills required to achieve that standard.
There had also been a significant breakdown in the relationship.
NCAT referred to a confrontation between the representatives of the builder and the homeowner at the homeowner’s property which it described as “disturbing”. The homeowner was found to have been upset and intimidated, and the Tribunal concluded that she should not be expected to allow the builder back onto the property.
The Appeal Panel found no error in NCAT taking these circumstances into account.
Does a breakdown in the relationship automatically mean compensation?
No.
A difficult relationship between a homeowner and builder will not necessarily be enough on its own to justify a money order.
The key lesson from Spectrum Pools & Spas v Young is that NCAT has a discretion. It must consider the statutory preference for rectification, but that preference is only one relevant consideration.
Depending on the evidence, factors such as the history between the parties, the contractor’s attitude towards the defects, concerns about their ability to properly rectify the work and circumstances making it unreasonable for them to return to the property may support a money order.
What does this mean for homeowners with defective building work?
If you are seeking the cost of rectification rather than an order requiring the original contractor to return, it is important to explain why a money order is appropriate in your particular circumstances.
Evidence of what has happened between the parties, previous attempts at rectification, communications with the contractor and expert evidence about the defects may all become important.
At The Law Office of Conrad Curry, we assist homeowners with building disputes involving defective and incomplete residential building work. If you are involved in a dispute with a builder or contractor, obtaining legal advice early can help you understand the remedies available and how best to present your case.
Related: Home Building Disputes
DISCLAIMER
This article reflects the current law at the time of publication. Please note that cases may have been the subject to appeal or subsequent judicial consideration since the date of posting. The decisions referred to are summarised for general understanding only. It is intended for informational purposes only and does not constitute legal advice. For specific legal guidance in relation to your situation, please consult with a qualified legal professional.