McPhee v Zarb (No 2)

The case of McPhee v Zarb (No 2) was heard by the Supreme Court of Queensland, specifically the District Court at Southport, and involved a dispute between the plaintiff, McPhee, and the defendants, Zarb and others, concerning a contract for the sale of land. The dispute arose when the purchasers, the defendants, breached the contract for sale. McPhee sought damages for the breach, and the defendants sought to have the claim and counterclaim dismissed via applications for summary judgment.

The primary legal issue before the court was the measure of damages recoverable by McPhee for the breach of contract, particularly in the absence of evidence regarding the market value of the property at the time of the breach. The court had to determine how to assess the vendor's entitlement to damages when there was no direct evidence of the market value of the property available. Additionally, the court needed to decide whether the defendants' applications for summary judgment on the claim and counterclaim should be granted.

In its reasoning, the court found that the measure of damages for breach of contract is to compensate the innocent party for the loss directly caused by the breach. Given that there was no evidence of the market value of the property, the court considered alternative methods to assess the damages. The court also addressed the defendants' applications for summary judgment, finding that the issues raised were not suitable for summary dismissal and required a full trial to determine the appropriate measure of damages. Consequently, the court dismissed the defendants' applications for summary judgment on both the claim and counterclaim.

The court's final orders included dismissing the defendants' applications for summary judgment, remitting the proceeding to the District Court at Southport for further assessment of damages, and directing the defendants to pay McPhee's costs associated with the applications for summary judgment, to be assessed on the Supreme Court scale on the standard basis.