Stone v Chappel

The case of *Stone v Chappel* involved an appeal and cross-appeal heard by Kourakis CJ, Doyle and Hinton JJ. The dispute concerned a contract, likely for building works, where the plaintiffs sought damages for alleged defects and misleading conduct, while the defendants sought to set off interest on late payments.

The court was required to determine several legal issues. These included whether the trial judge erred in refusing to award the plaintiffs damages for the cost of rectifying a ceiling height deficiency and for misleading conduct. Additionally, the court had to consider the defendants' challenge to the trial judge's awards of damages for loss of amenity related to the ceiling height and for defective door frames. Finally, the court needed to assess the defendants' challenge to awards made for premature instalment payments and their refusal to permit a set-off for interest on a late payment.

The court's reasoning, particularly as articulated by Doyle J and agreed with by Hinton J, involved a careful application of contractual principles and the rule in *Bellgrove v Eldridge*. While disagreeing with some of the trial judge's reasoning, the court ultimately dismissed the plaintiffs' appeal regarding damages for rectification of the ceiling height and misleading conduct. On the defendants' cross-appeal, the court upheld challenges to awards for loss of use of monies due to premature payments. Crucially, the court allowed the defendants' set-off for interest on the late payment of the second instalment, calculating this at $33,486.90. The court also affirmed the principle from *Bellgrove v Eldridge* that rectification costs are recoverable only if they are necessary and a reasonable course to adopt, otherwise, the measure of loss is the diminution in value.

Consequently, the plaintiffs' appeal was dismissed, and the defendants' cross-appeal was allowed in part. The original judgment for the plaintiffs in the sum of $81,046.98 was set aside and substituted with a judgment for the plaintiffs in the reduced sum of $11,347.54, reflecting the various adjustments including the set-off for interest.