Case Reports

Repudiation - When is a notice of default adequate?

In Diploma Construction Pty Ltd v Marula Pty Ltd [2009] WASCA 229 (18 December 2009), the Western Australian Court of Appeal reviewed the requirements for repudiation arising from a subcontract for plastering work that had been terminated by the Appellant before the plastering work had been completed by the Respondent.  Held: (dismissing the appeal):

(1) A notice of default must bring sufficiently to the attention of the recipient what the default is alleged to be. The notice must "direct the contractor's mind to what is said to be amiss".

(2) In order to be a valid notice under the present contract, all that was required was for the Appellant to inform the respondent subcontractor "of the details of the default" alleged.   The appellant had to clearly direct the Respondent's attention to the alleged default with sufficient specificity that the default was capable of being readily identified by the Respondent.