Henville & Anor v Walker & Anor

In *Henville & Anor v Walker & Anor*, the High Court of Australia considered an appeal from the Supreme Court of Queensland concerning a dispute over the construction of a residential property. The appellants, Mr Henville and his wife, had engaged the respondents, Mr and Mrs Walker, to carry out building work. A significant disagreement arose regarding the quality of the work and the extent of defects, leading to litigation.

The central legal issues before the High Court were whether the respondents had breached their contractual obligations to perform the building work with due care and skill, and whether the appellants were entitled to damages for the cost of rectifying the defects. The court also had to consider the principles governing the assessment of damages in contract, particularly in relation to building disputes where the cost of rectification may exceed the diminution in value of the property.

The High Court, in a joint judgment, affirmed that a builder's contractual obligation includes performing work with reasonable care and skill, and that this duty extends to ensuring the work is fit for its intended purpose. The court applied the principle that damages for breach of contract are generally awarded to place the innocent party in the position they would have been in had the contract been performed. In this context, the cost of rectification was held to be the appropriate measure of damages, even if it exceeded the diminution in value, provided the rectification was necessary and reasonable. The court found that the respondents had breached their contractual obligations and that the appellants were entitled to recover the cost of rectifying the defects.

The High Court allowed the appeal, setting aside the orders of the Supreme Court of Queensland and remitting the matter to the Supreme Court for determination of the quantum of damages.