Leeda Projects Pty Ltd v Zeng

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.