Kangelaste 47b and Mirstart OÜ: defective works, costs and set-off

Defects justified withholding payment and recovery of repair costs, with the final result determined by set-off.

KÜ Kangelaste 47b (now — Narva linn, Kangelaste prospekt 47b korteriühistu). Mirstart OÜ sought the outstanding price of construction works and late-payment interest from KÜ Kangelaste 47b. The association counterclaimed for the cost of remedying defects. The cases were joined after proceedings on earlier default judgments were reopened. The works included renewal of the plinth and paving and installation of canopies. The court found the defective cladding proved by photographs: tiles had fallen off extensively soon after handover. Acceptance did not prevent reliance on defects. The documents as a whole showed timely knowledge by the contractor, which failed to remedy them within a reasonable time. Third-party repair costs of 5544 euros were found necessary and reasonable. Lawful withholding of the price balance was temporary; the court did not find a price reduction or effective withdrawal from the contract. Once the cost claim was allowed, the basis for withholding ended, so principal of 3039.27 euros* was upheld. Late-payment interest of 683.21 euros was refused because lawful withholding was not late performance. Further late-payment interest was also refused because the mutual claims were set off. The court allowed the counterclaim and applied set-off, awarding the association 2500 euros* against Mirstart OÜ. Each party bears its costs. Payment of that award was not established.

The principal claim was allowed for 3039.27 euros* without late-payment interest; following the counterclaim and set-off, 2500 euros* was awarded to the association against Mirstart OÜ.