Blackley Investments Pty Ltd v Burnie City Council (No 3)

The appeal concerned an assessment of damages arising from a failed property transaction. Blackley Investments Pty Ltd (the appellant) sought damages from Burnie City Council (the respondent) after the Council allegedly failed to fulfil its obligations under a contract for the sale of land. The appeal was heard by the Full Court of the Supreme Court of Tasmania, comprising Blow CJ, Wood and Estcourt JJ.

The central legal issues before the court were the appropriate measure of damages for breach of contract in this context, specifically whether the appellant was entitled to expectation damages (loss of bargain) or reliance damages, and how the market value of the land should be assessed. The court was required to determine the value of the land at the time of the breach, considering its characteristics, development potential, and any constraints or negative factors that a prudent purchaser would take into account. This involved evaluating conflicting expert evidence regarding the developable area of the land and the feasibility of various development proposals.

The Court allowed the appeal, finding that the appellant was entitled to expectation damages. The reasoning focused on the correct assessment of the land's market value. The Court accepted that the measure of damages should be the difference between the purchase price and the land's value at the date of assessment. However, it disagreed with the associate judge's valuation, finding that the evidence did not support the limited developable area or the associated low valuation. The Court considered that the associate judge had erred in discounting the potential for development, particularly industrial development, and in accepting certain expert evidence that was considered speculative or unsupported. The Court ultimately determined that the land had a higher market value than that found by the associate judge.

Consequently, the Court set aside the previous judgment and ordered that judgment be entered for the appellant against the respondent for $1,556,000, plus interest. The cross-appeal by the respondent was dismissed.