Gagner Pty Ltd v Canturi Corporation Pty Ltd

In Gagner Pty Ltd v Canturi Corporation Pty Ltd, the New South Wales Court of Appeal considered an appeal concerning damages awarded for tortious damage to property. The dispute arose from damage caused by the appellant to the respondent's premises, and the subsequent rectification works undertaken by the respondent.

The primary legal issues before the Court of Appeal were whether the damages awarded were excessive because the rectification work undertaken by the respondent was more extensive than strictly necessary to repair the damage, and whether the award should include the Goods and Services Tax (GST) component of the rectification costs, given the respondent's registration for GST.

The Court of Appeal applied the principles established in *Bellgrove v Eldridge* (1954) 90 CLR 613, which dictates that damages for tortious damage to property should be the cost of work reasonably necessary to restore the property to its pre-damaged condition. The Court found that the primary judge had erred in awarding damages for rectification work that was not shown to be reasonably necessary. Regarding the GST component, the Court held that where a plaintiff is registered for GST and can claim an input tax credit, the compensatory principle of damages is not served by including the GST amount in the award, as the plaintiff is not out of pocket for that amount.

The Court of Appeal allowed the appeal, set aside the judgment of the court below, and directed the parties to provide submissions on the necessary orders to give effect to the Court's reasons, including further consideration of costs.