Scott-Irving v Oakeshott

Scott-Irving (the plaintiff) brought proceedings against Oakeshott (the defendant) in the Supreme Court of New South Wales, seeking to recover damages for alleged breaches of contract and negligence. The dispute concerned the plaintiff's purchase of a property from the defendant, which the plaintiff alleged was not of the quality represented. The matter was subsequently removed to the High Court of Australia.

The High Court was required to determine whether the defendant had breached the contract for sale by failing to deliver the property in a condition that complied with the implied warranty that it would be fit for its intended purpose and of merchantable quality. Further, the court had to consider whether the defendant had acted negligently in relation to the sale, and if so, whether such negligence caused loss to the plaintiff.

Gummow J found that the contract for sale contained an implied condition that the property would be delivered in a state of repair consistent with its condition at the time of the agreement. His Honour held that the defendant had breached this condition by failing to rectify defects that arose between the signing of the contract and settlement. The court applied the principles of contract law regarding implied terms and the measure of damages for breach, considering the difference in value between the property as contracted and as delivered.

The court ordered that the plaintiff was entitled to damages representing the cost of rectifying the defects in the property.