Murvin,
Sounds like a case for a contract lawyer or arbitrator, to negotiate a compromise. I would say it depends on what the work is, and why the contractor is refusing. “Taking Over Certificate” sounds like owner accepted what they got. Demobilised sounds like lots of equipment and/or personnel moved out.
Also I don’t believe refusing to conduct work during the liability period would be considered a breach of contract. I assume the principal objective of the contract has been fulfilled. It would be more a situation of compensation to be negotiated in arbitration or the courts. For example the owners could get someone else to fix the defects and then make a claim against the original contractor. (A breach is more along the lines of I paid, and I didn’t get anything. If received a substantial portion of the objects {“consideration”} of the contract, then gets complicated hence the lawyers.)
Regards
B.Tech (mfg & mech), MIIE, gradTIEAust
mailto:sch.tectonic@bigpond.com