Baker and Provan Defence Pty Limited v Supacat Pty Ltd

Baker and Provan Defence Pty Limited sued Supacat Pty Ltd over an agreement for the supply of vehicles. The dispute centred on the allocation of responsibility for costs exceeding the agreed budget due to assembly issues. The case was heard in the Supreme Court of Victoria. The central legal issues were the interpretation of the contract's terms regarding the apportionment of assembly costs and the determination of damages. The court had to determine what constitutes "acting reasonably" when a party must make a decision about cost overruns and the principles governing the proof of damages.

The court found that the contract required the party responsible for determining the apportionment of costs to do so reasonably, taking into account the specific circumstances of the case. The court emphasised that acting reasonably would involve a fair and balanced approach, considering all relevant factors. The court concluded that Supacat Pty Ltd did not act reasonably in determining the apportionment of costs, thereby breaching the contract. Regarding damages, the court held that the plaintiff had sufficiently proved the extent of the losses incurred due to the defendant's actions, as the defendant did not rebut the evidence presented by the plaintiff. The court awarded damages to the plaintiff for the costs that were reasonably attributable to the breach.

The final orders included a determination that Supacat Pty Ltd was liable for a significant portion of the assembly costs overrun and an award of damages to Baker and Provan Defence Pty Limited. The specific amount of damages was to be quantified based on the evidence presented during the trial.