Leeda Projects Pty Ltd v Zeng

Case [2020] VSCA 192


SUPREME COURT OF VICTORIA

COURT OF APPEAL

S APCI 2019 0043

LEEDA PROJECTS PTY LTD (ACN 072 077 171) Applicant
v
YUN ZENG Respondent

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JUDGES: TATE, KAYE and McLEISH JJA
WHERE HELD: MELBOURNE
DATE OF HEARING: 3 June 2020
DATE OF JUDGMENT: 31 July 2020
MEDIUM NEUTRAL CITATION: [2020] VSCA 192
JUDGMENT APPEALED FROM: [2019] VSC 106 (McDonald J)

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CONTRACT –Breach – Damages – Fit-out of private art gallery and residence – Builder failed to complete works in reasonable time – Owner did not intend to reside at or rent property during delay period – Whether owner entitled to damages for loss of use and enjoyment – Commonwealth v Amann Aviation Pty Ltd (1991) 174 CLR 64, Robinson v Harman (1848) 1 Exch 850, Hadley v Baxendale (1854) 9 Exch 341, applied – Calabar Properties Ltd v Stitcher [1984] 1 WLR 287, Sweeney v R & D Coffey Pty Ltd [1999] NSWCA 38, GEC Marconi Systems Pty Ltd v BHP Information Technology Pty Ltd (2003) 128 FCR 1, Yates v Mobile Marine Repairs Pty Ltd [2007] NSWSC 1463, Vautin v BY Winddown, Inc [No 4] (2018) 362 ALR 702, Wyzenbeek v Australasian Marine Imports Pty Ltd [No 2] [2018] FCA 1517, Bella Casa Ltd v Vinestone Ltd [2005] EWHC 2807, considered – Loss of use and enjoyment of land compensable – Whether property owner entitled to damages measured as commercial rental value of property for delay period – Rental value not default measure – Appropriate measure dictated by facts of case – Rental value inappropriate measure where no intention to reside at or rent property – Appeal allowed.

CONTRACT – Breach – Damages for loss of use and enjoyment of property – Whether property owner entitled to damages measured as wasted expenditure on property during delay period – Availability of damages for wasted expenditure governed by general principles of contractual damages – Payments made in respect of property during delay without benefit to owner appropriate measure of damages for loss of use – The Owners of the Steamship ‘Mediana’ v The Owners, Master and Crew of the Lightship ‘Comet’ [1900] AC 113, Pix v Suncoast Marine Pty Ltd [2019] QSC 45, considered – Notice of contention upheld.

PRACTICE AND PROCEDURE – Appeal from Victorian Civil and Administrative Tribunal on question of law – Judge decided issues of mitigation and costs – Whether issues suitable to decide or required remittal – Osland v Secretary, Department of Justice (2010) 241 CLR 320, applied – Hoser v Department of Sustainability and Environment (2014) 203 LGERA 96, considered – Considerations of convenience may permit Court to decide issue on uncontested facts found by Tribunal – Issue of mitigation appropriately decided on basis of uncontested findings and written submissions, avoiding further delay – Issue of costs complex and evaluative and required consideration by the Tribunal – Victorian Civil and Administrative Tribunal Act 1998 s 148(1).

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APPEARANCES:

Counsel

Solicitors

For the Applicant Mr…

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AGLC
Leeda Projects Pty Ltd (ACN 072 077 171) v Yun Zeng [2020] VSCA 192
Case
[2020] VSCA 192
Decision Date

CaseChat Overview and Summary

Leeda Projects Pty Ltd (the builder) brought an appeal against Zeng (the owner) from a decision of the Victorian Civil and Administrative Tribunal, which found that the builder had breached its contractual obligations to complete the works in a reasonable time. The primary dispute related to the amount of damages awarded to the owner for loss of use and enjoyment of the property due to the delay in completion. The Court of Appeal was tasked with determining whether the owner was entitled to damages measured as the commercial rental value of the property during the delay period and whether the owner was entitled to damages for wasted expenditure on the property during the delay period.

The Court of Appeal considered whether the owner was entitled to damages measured as the commercial rental value of the property for the delay period. The Court held that the loss of use and enjoyment of land was compensable, and the measure of damages was dictated by the facts of the case. The Court found that the rental value was not the default measure and was not appropriate in this case, as the owner did not intend to reside at or rent the property during the delay period. The Court of Appeal allowed the appeal on this issue.

The Court of Appeal also considered whether the owner was entitled to damages measured as wasted expenditure on the property during the delay period. The Court found that the availability of damages for wasted expenditure was governed by the general principles of contractual damages. The Court held that payments made in respect of the property during the delay period without benefit to the owner were an appropriate measure of damages for loss of use. The Court upheld the notice of contention on this issue.

The Court of Appeal made orders allowing the appeal in part, setting aside the decision of the Tribunal on the issue of damages for loss of use and enjoyment of the property and remitting the matter to the Tribunal to determine the appropriate measure of damages for that loss. The Court did not make any orders on the issue of mitigation and costs, finding that the issue of costs was complex and evaluative and required consideration by the Tribunal.

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Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

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Ratio Decidendi

Legal Principle Established

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