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.
Environmental Systems Pty Ltd v Peerless Holdings
Pty Ltd  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.
David Hurst Constructions Pty Ltd v Shorten
 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
Gunston v Lawley  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.
Katherine Pty Ltd v The CCD Group Pty 
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
Koompahtoo Local Aboriginal Land Council v Sanpine
Pty Ltd  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".
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.
Oil Basins Limited v BHP Billiton Limited &
Ors  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
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Many retail leases include a covenant to trade, requiring the tenant to open the premises for trade during certain hours.
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