1. Glenrich Builders Pty Ltd v 1-5 Grantham Street Pty Ltd & 415 Brunswick Road Pty Ltd This County Court decision suggests that the Domestic Building Contracts Act 1995 (Vic) (and therefore the statutory warranties implied under that Act and which run with the property) do not apply to a building contract between a builder and an owner/developer.
  2. Environmental Systems Pty Ltd v Peerless Holdings Pty Ltd [2008] VSCA 26 Nettle JA held that it was not necessary for losses to be capable of being described by the second limb of the test in Hadley and Baxendale for them to be characterised as 'consequential'. He decided that an "ordinary reasonable business person" would naturally conceive of consequential loss in a contract as everything beyond the normal measure of damages. The Court found that lost labour costs and additional energy costs could be characterised as 'consequential losses' and therefore were not recoverable because of the contracts exclusion clause.
  3. David Hurst Constructions Pty Ltd v Shorten [2008] NSWSC 164 It was decided that the Home Building Act 1989 (NSW) will apply to contracts where some of the residential building work fits the description under section 7(2)(b), and some of the residential building work does not. This decision is worth noting as it potentially widens those classes of contract to which the NSW Security of Payment legislation does not apply.
  4. Gunston v Lawley [2008] VSC 97 In this case, the court rejected the proposition that a subcontractor can never owe a duty of care to a subsequent home owner with whom he has no direct contractual relationship. Instead, finding that whether a duty is owed depends upon the relationship of the parties and the vulnerability of the original owner. The court found that a duty of care to the subsequent owner did not exist in this case as the necessary degree of vulnerability of the original owner was absent, primarily because the original owner failed to take steps to protect itself from the loss.
  5. Katherine Pty Ltd v The CCD Group Pty [2008] NSWSC 131 This case is authority for the proposition that a high rate of interest prescribed in a construction contract may amount to a penalty in some circumstances and therefore be unenforceable.
  6. Koompahtoo Local Aboriginal Land Council v Sanpine Pty Ltd [2007] HCA 61 This decision stands for the proposition that a sufficiently serious breach of an "intermediate term" of a contract (rather than an essential term), may give rise to a right for the innocent party to terminate the contract where the breach is so significant as "to go to the root of the contract".
  7. Lumbers v W Cook Builders (in liq) (2008) 247 ALR 412 In an important decision for the construction industry, the High Court upheld the sanctity of the bargain by deciding that the respondent, W Cook Builders Pty Ltd, had no right to claim payment from the owner (Lumbers) for any work done (on an unjust enrichment basis) in the absence of a contract between them. The owner had an oral contract with a builder but unbeknownst to the owner the works had been performed by Cook, a related but separate entity to the builder. The decision highlights the importance of contract to obtaining relief.
  8. Oil Basins Limited v BHP Billiton Limited & Ors [2007] VSCA 255 The decision of Oil Basins Limited v BHP Billiton Limited & Ors saw the Victorian Supreme Court of Appeal uphold the decision of Hargraves J to set aside an arbitral award on the basis of inadequate reasoning. The decision demonstrates the importance of nominating appropriate arbitrators.

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.