Champion Homes Sales Pty Ltd v Biggs; Biggs v Champion Homes Sales Pty Ltd

Champion Homes Sales Pty Ltd (CHS) and Biggs were involved in a dispute before the Supreme Court of Queensland, which arose from a contract for the construction of a home. CHS was the builder and Biggs was the homeowner. The dispute primarily revolved around the termination of the contract and the calculation of damages. Specifically, CHS argued that Biggs repudiated the contract, allowing CHS to terminate and claim damages. Conversely, Biggs contended that the contract was not properly terminated and sought to have the contract price reduced.

The court was tasked with determining whether Biggs had indeed repudiated the contract, thereby justifying CHS’s termination and claim for damages. Additionally, the court had to assess whether the agreed damages clause in the contract constituted a penalty, which would render it unenforceable. This latter issue hinged on whether the clause was a genuine pre-estimate of loss or a punishment for breach.

The court concluded that Biggs did not repudiate the contract, and therefore CHS's termination was unjustified. However, the court did find that the agreed damages clause was valid and enforceable as it represented a genuine pre-estimate of loss, not a penalty. As a result, CHS was entitled to the damages stipulated in the contract. The court ordered Biggs to pay CHS the sum of $61,595.60 within 28 days. The dismissal of the application regarding costs and the subsequent steps for any party seeking costs were also outlined in the orders.