Bond Mayhew Pty Ltd v Spicer highlights why contract administration matters
A recent New South Wales District Court decision is a timely reminder that builders who fail to comply with contractual extension of time (EOT) procedures risk losing valuable contractual rights, even where delays are clearly caused by owner variations or other legitimate events.
In Bond Mayhew Pty Ltd v Spicer [2026] NSWDC 190, the Court confirmed that extension of time provisions in a standard HIA residential building contract must be followed strictly, regardless of whether the contract includes liquidated damages.
For builders, subcontractors and tradies, the lesson is simple: good paperwork can be just as important as good workmanship.
The owner engaged the builder under a cost-plus HIA contract to renovate a property into three short-term accommodation units, with practical completion required within 52 weeks.
During construction, the owner requested numerous variations and there were other delays. Following disputes over payment, delay and alleged defects, the builder terminated the contract. The owner later sued, claiming damages for delayed completion and defective work.
The builder argued that the many owner-requested variations justified additional time to complete the works.
While the Court accepted that these events would ordinarily support an extension of time, it found the builder had not complied with the contract.
Clause 17 required the builder to provide written notice within 10 working days after becoming aware of both the cause and extent of the delay. Instead, the builder issued a series of EOT notices many months after the relevant events.
The Court held the notices were ineffective because they:
Importantly, the Court rejected the builder's argument that the notice requirements only applied where liquidated damages had been agreed. The contractual notice regime applied regardless.
The owner also sought compensation for lost income resulting from the delayed commencement of its short-term accommodation business.
The Court accepted that this type of consequential economic loss was recoverable in principle because both parties knew how the property would be used.
However, the owner was unable to prove the amount of its loss with sufficient evidence. Although the project was delayed by almost a year, the Court considered the evidence too speculative and awarded only $2,227.40.
The decision highlights that while a legal entitlement to damages may exist, success will depend on producing reliable evidence of the actual loss suffered.
The Court also reaffirmed that the usual measure of damages for defective building work is the reasonable cost of rectification.
However, rectification costs will only be awarded where they are reasonable and proportionate.
Several alleged defects were rejected because they were technical in nature, did not affect the building's performance, or because the proposed demolition and rebuilding was disproportionate to the issue. Other defects that genuinely affected functionality were allowed.
The decision reinforces that minor departures from Australian Standards will not necessarily justify extensive or costly remedial works.
Builders and contractors should consider the following:
Construction projects inevitably involve variations, weather delays and changing circumstances. This decision demonstrates that courts will enforce contractual notice requirements according to their terms, even where the underlying cause of delay is undisputed.
For builders, effective contract administration remains one of the best forms of risk management. Failing to issue a compliant extension of time notice when required may ultimately prove more costly than the delay itself.
For further advice on this topic, please contact Tom Jacobs, Partner Construction.
This article was written by Logan Smith, Law Graduate Construction.