What Is Considered ‘Defective Works’ And The Importance Of Expert Witness Independence

On 4 March 2026, the Supreme Court of NSW handed down a decision which discussed the distinction between works defects and incomplete works, explored whether mere dissatisfaction of works is deemed defective, and provided a reminder of the importance of an expert witness’ independence when preparing a report (lest their opinion be given less weight as a consequence).

In issue

The Supreme Court of NSW considered:

1. whether geothermal heating and cooling systems, design and construction of internal access roads and general works were defective, or failed to meet the contractual and design requirements
2. the distinction between defects and incomplete works, and
3. the admissibility of expert evidence, and whether any weight should be given to the evidence where the experts’ independence is in question.

The background

The plaintiff, Cadence (90) investments Pty Ltd (Cadence), engaged Aspire Constructions Pty Ltd (Aspire) to construct three residential dwellings in Kangaroo Valley. Cadence alleged a range of defects in the works, including geothermal heating systems and the design and construction of an internal access road.

Cadence prevented Aspire from returning to the work site to complete certain works, citing loss of confidence regarding Aspire’s ability to remedy the alleged defects.

Cadence sued Aspire and a subcontractor for breach of contract, breach of statutory warranties under the Home Building Act 1989 (NSW), negligence and breach of duty of care under s 37 of the Design and Building Practitioners Act 2020 (NSW).

The decision at trial

The Court rejected most of Cadence’s claims:

• The geothermal system claims failed – as the systems were held to have met the performance criteria specified in the design documents and achieved the required heating and cooling loads, the Court found there was no relevant defect.
• As to the internal access roads, the Court found that the roads were not shown to be defective. Nevertheless, Aspire acknowledged that the cost of work to remove the landslide debris and remediate the area was in the order of $5,000 to $10,000.
• In regard to general building defects, the Court found Aspire liable in relation to a limited number of defects and ordered for the cost of rectifying these defects.

Ultimately, the Court distinguished between incomplete works (due to Aspire being denied access to complete said works) and genuine defects. Griffiths AJ considered that works are not necessarily ‘defective’ merely because they remain unfinished at the time of litigation, noting that Cadence did not afford Aspire reasonable opportunity to complete the works it was required to perform, despite Aspire having offered to do so.

Griffiths AJ also provided extensive commentary regarding the independence of experts. The geothermal expert retained by Cadence was noted to have prepared at least 12 separate drafts of his initial report and accepted comments from Cadence’s sole director, Mr Cronin, including in relation to matters of technical significance in his final report. Further, the expert confirmed in cross-examination that he had provided consulting services to Cadence after having completed his first expert report, services which related to rectification works of the subject matter, which further compromised his independence.

As a result, Griffiths AJ held that Cadence’s expert’s adoption of Mr Cronin’s many comments 'went well beyond merely clarifying' the expert’s own opinion. As such, the expert’s opinion was given little weight, and where opinions differed with the defendant’s expert, preference was given to the latter.

Implications for you

This decision illustrates that a system is not necessarily defective merely due to dissatisfaction with the finished product. Consideration needs to be given to the contractual and design requirements as they are often the benchmark, and such claims must be established by independent experts.

This case also serves as a reminder of the importance of ensuring that experts maintain their independence when preparing an expert report, without undue influence from an instructing client in reaching his / her conclusion.

Cadence (90) Investments Pty Ltd v Aspire Constructions Pty Ltd; Aspire Constructions Pty Ltd v Cadence (90) Investments Pty Ltd [2026] NSWSC 136

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.