By Andrew Bailey -
Snapshot
- The NSWCA has confirmed, in relation to contracts for construction of residential premises, that damages under the Australian Consumer Law can restore a claimant to the position they would have been in but for the misleading conduct and, similar to damages in contract, this can include expectation-based measures.
- A diminution in value of property, an alternative measure of damages, may not be appropriate in some circumstances and its relevance depends upon the pleaded case.
- The case again confirms a longstanding principle that a builder has an evidentiary onus of displacing the cost of reinstatement by proving the costs are unreasonable.
Following two hearings in the District Court and a previous appeal, in Larsen as trustee for the Larsen Superannuation Fund v Tastec Pty Ltd (formerly Wonders Building Company Pty Ltd) [2025] NSWCA 145 (‘Larsen’), the Court of Appeal revisited the principles applying to loss suffered in an action for damages or a claim for compensation under the Australian Consumer Law (‘ACL’).
The second decision in Larsen does not so much change the law, but it posits that a party in the position of a homeowner need not prove a diminution in the value of property resulting from misleading and deceptive conduct. Rather, they are entitled to recover what they otherwise might have received but for the conduct occurring.
