Nu-West Homes v. Thunderbird [1975] Alberta CA Facts: Nu-West was contracted to build a house for Thunderbird. The work began but was never finished. Nu-West complained that the customer relationship had deteriorated to the point that no further work should be done on the house until all disputes were resolved. This never happened. Thunderbird took possession of the incomplete house and arranged for a third party to finish construction. Nu-West sued $16000. Thunderbird counterclaimed for the cost of rectifying Nu-West’s deficiencies in their construction.
Issue: Is Thunderbird entitled to damages covering the cost of rectifying Nu-West’s deficiencies in their construction?
Holding: Yes Thunderbird is entitled to damages covering the cost of rectifying Nu-West’s construction deficiencies.
Reasons: Court held that Thunderbird’s conduct in response to Nu-West’s construction deficiencies / defects was reasonable – and thus “Thunderbird must be allowed the $16000 paid to Larwill to tear out and reconstruct the basement”.
Rules: Where the cost of rectification is great in comparison to the nature of the defect, the court will not force a ‘slavish’ following of the precise specifications of the contract. Wrongdoer is entitled to expect the aggrieved party to act reasonably – but he is not entitled to have him act perfectly
Nu-Westaffirms Jacobs & Young Inc. v Kent, which held “the owner is entitled to the money which will permit him to complete, unless the cost of completion is grossly and unfairly out of proportion to the good to be attained. When that is true, the measure is the difference in value (think difference in value between BC redwood and California Cedar).”
