Parbhu v PlasterTech Systems Ltd [2017] NZDC 29873

Published 24 January 2019

Breach of contract — cancellation of contract — leaky home. The plaintiffs were trustees of a Trust that owned a residential property. The home turned out to be a "leaky home" and was the subject of proceedings in the Weather Tight Homes Tribunal in 2011. That matter was eventually settled following mediation in which the defendants, the plastering company PlasterTech Systems Ltd (PSL) and PSL's director, accepted some responsibility and agreed to pay compensation. A condition of the settlement contract was the formation of a construction contract between the Trust and PSL, in which PSL would fix the property's weather tight issues for a price of $395,082.00 (including a provision for PSL/PSL's Director to contribute $59,000 of labour and materials). However, the work provided by PSL was unsatisfactory, it failed council inspections and took too long to complete. The Trust terminated the construction contract, engaged alternative contractors to finish the remaining work and sought to recover the attendant costs from PSL/PSL's Director. The defendants never paid the $59,000 and the plaintiffs incurred a further cost of $207,156.44 to remedy the property. As per the settlement contract these costs were "a debt due and owing". The judge found that the plaintiffs were entitled to cancel the contract, employ a new builder to complete the work, and have the defendants pay for shortfalls in contributions. Judgment was entered for the plaintiff in the sum of $265,156.44. The defendants were jointly and severally liable for the total sum. Judgment Date: 27 September 2017.

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