Last Updated on 13/05/2026 by Damin Murdock
When an owner issues legal proceedings against a builder, the owner can seek the remedy of a work order or money order. In this article, we discuss the different remedies and when to make an election of what remedy to seek.
What is a Work Order?
Pursuant to s 48MA of the Home Building Act 1989 (NSW) (the Act), a court or tribunal determining a building claim involving an allegation of defective residential building work or specialist work by a party to the proceedings is to have regard to the principle that rectification of the defective work by the responsible party is the preferred outcome.
Notwithstanding that a work order is the ‘preferred outcome’, it is not mandatory for NCAT to make a work order, and under the Act, a court or tribunal has flexibility in making a work order and may make a money order instead pursuant to s 48O of the Act.
In light of the above, the question then becomes in what situations is a ‘work order’ not the ‘preferred outcome’, and when will a money order be made. Before looking into money orders, the first step is to look at when a work order will not be made.
When will a work order be made?
Firstly, the ‘preferred outcome’ to issue a work order relates to defective works, not incomplete works, and although it is the ‘preferred outcome’, it is not a mandatory order as held in Culina v Timilty Constructions PL [2022] NSWCATCD 109.
Generally speaking, ‘defective works’ occur where the builder has breached the statutory warranties set out in section 18B of the Act, such as where the works are not in accordance with the plans and specification set out in the building contract, or where the building works do not comply with the National Construction Code, with a common occurrence being water ingress into the dwelling.
Why is a work order the preferred outcome in defective works?
Generally speaking, a work order results in a fairer outcome. Firstly, the builder can return to the property to complete the defective works, which often are not proven to be defective until a final hearing is held, meaning it is fair to give the builder an opportunity to return to fix the defect after it has been held to be a defect. Secondly, the time for the responsible party, i.e., the builder, to rectify a defect is often a much shorter timeframe than if a third party is engaged. Thirdly, it gives more certainty that the defect will be rectified, rather than an owner simply claiming money and not having the defect remedied, reducing the chance of a ‘money grab’.
Further, there are jurisdictional limitations to a money order in NCAT. Pursuant to section 48K of the Act, NCAT’s jurisdictional limit to hear disputes regarding a money order is $500,000.00; however, this jurisdictional limit does not apply to work orders. This means that an owner can elect to make a claim exceeding $500,000.00 in NCAT, so long as they are confident that NCAT will make a work order, as opposed to a money order.
When will a money order be issued?
It is commonplace that an owner will seek a money order where the builder did not obtain home warranty insurance, or where the builder was unlicensed to perform the works. Whilst this is a factor that the courts and tribunals will consider, does not automatically result in a money order, as a court or tribunal has the power to still issue a work order, however, the form of that work order will be that the builder is required to obtain a license or insurance, or is responsible to engage a licensed and insured building contractor to perform the rectification works. In Todd v SD Portfolio Holdings Pty Ltd [2025] NSWCATCD 54, it was held that not having the appropriate license to undertake the works will be a significant factor in determining whether a money order would be the more appropriate remedy.
Other factors that a court or tribunal will consider when making a money order, as opposed to a work order, are:
- whether there has been a breakdown of the relationship between the builder and owner, for instance, where the owner has lost confidence in the builder’s ability to undertake the rectification works. This normally occurs where there is a history of the builder promising to rectify the defects but fails to follow through with its promises, as held in TNT Building Trades Pty Ltd v Baker [2023] NSWCATAP 178
- whether the builder’s conduct or attitude has evidenced the builder’s unwillingness or inability to complete the rectification works, for instance, where a builder’s work is proven to be of a poor standard, or where the builder has previously not complied with earlier orders or directions, such as from the NSW Building Commission. For instance, in Vasan v Georges Construction & Building Services Pty Ltd [2023] NSWCATCD 84, it was held that the builder “has acted in disregard of its obligations under the HBA, and even at the hearing did not accept that it was bound to operate within those requirements. The respondent still does not hold an appropriate license and did not express a willingness to return to complete any work.”
A more in depth analysis of when a money order will be made is discussed in Brooks v Gannon Constructions PL [2017] NSWCATCD 12 at [70] and Brennan Constructions Pty Ltd v Davison [2018] NSWCATAP 210 at [21] that make it clear that, even though the test to make a money order is a subjective test in that the actual circumstances are to be considered, the test is objective in that NCAT is required to make an assessment be based on what is reasonable in those circumstances. When determining what is reasonable, a court or tribunal will have consideration to the following circumstances (with many of them already listed in this article), outlined as follows:
- relational breakdown between the involved parties
- builders conduct in unrelated projects
- builders’ capacity to complete the works (in terms of contractual issues or location)
- builders’ skill level
- builders’ attitude to the standard of work required
- history of attempted rectification work done by the builder in the past
- builders’ willingness to return
- the likelihood of a further dispute if a work order was made
What is a work order that has not been complied with?
Oftentimes, when a court or tribunal makes a work order, it gives the builder a certain period of time to remedy the defects in accordance with the proposed rectification methods set out in the expert evidence filed in the proceedings. However, sometimes, the work order is not complied with, or the builder is unable to complete the rectification works within the period of time prescribed in a decision or judgment. In these circumstances, a builder can make an application to effectively ‘re-open’ or reinstate the case to vary the previous orders, possibly to extend the time for completion or similar. For instance, in Sharkawi v AK Building Design and Construction PL [2025] NSWCATCD 33, the owner applied to have the case reinstated to vary the original orders as the builder had not complied with the work order. Rather than granting the builder an indulgence and extending the time to complete the works, NCAT converted the work order into a money order.
Key takeaways
There are various factors that a court or tribunal will consider when determining whether a work order or money order should be ordered. This will oftentimes come down to the testimony of the witnesses based on the witness statements, affidavits and expert evidence filed in the proceedings. If you are a builder and have the desired outcome of a work order, or an owner seeking a money order, it is imperative that you submit sufficient evidence to support your desired outcome.
At Leo Lawyers, we understand how complicated this seemingly simple process is and possess the required skill and knowledge to properly navigate the complexities of the law regarding these remedies.
If you have any questions or require legal representation, feel free to contact Damin Murdock at Leo Lawyers via our website, on (02) 8201 0051 or at office@leolawyers.com.au. Further, if you liked this article, please subscribe to our newsletter via our Website, and subscribe to our YouTube, LinkedIn, Facebook and Instagram. If you liked this article or video, please also give us a favourable Google review.
DISCLAIMER: This is not legal advice and is general information only. You should not rely upon the information contained in this article, and if you require specific legal advice, please contact us.
Damin Murdock (J.D | LL.M | BACS - Finance) has over 17 years of experience as a commercial lawyer. He helps businesses navigate construction and technology law. Damin has held several big leadership roles, including serving as a director of a national law firm and the Chief Legal Officer for Lawpath.
He has personally helped more than 2,000 startups and small businesses. With over 300 five-star reviews, his clients clearly value his practical advice and simple way of explaining things. Damin has also hosted over 100 webinars that thousands of people have watched to get reliable legal help.
