Tincknell v Duthy Homes Pty Ltd; Duthy Homes Pty Ltd v Tincknell

The appeal concerned a dispute between the owners of a property, Mr and Mrs Tincknell, and the builder, Duthy Homes Pty Ltd, and its director, Mr Chris Duthy. The core of the dispute revolved around alleged defective waterproofing in a newly constructed three-storey house. The owners sought damages for the cost of remedial work, while the builder contended that the work was not defective and that any minor departures from the design were insignificant. The appeal was heard in the Supreme Court of South Australia.

The primary legal issue before the court was whether the trial judge erred in dismissing the owners' claim for damages related to defective waterproofing. Specifically, the court had to determine if the judge was correct in finding a lack of proportionality between the cost of the proposed remedial work and the benefit it would achieve, thereby refusing to award damages based on the estimated cost of rectification. This required the court to consider the principles established in *Bellgrove v Eldridge* regarding the assessment of damages for defective building work.

The court's reasoning focused on the application of the *Bellgrove v Eldridge* principles. These principles establish that the prima facie measure of damages for defective building work is the cost of remedial work necessary to bring the work into conformity with the contract. However, this cost must also represent a reasonable course to adopt. If the remedial work, while necessary to conform with specifications, would not be a reasonable response to the deficiency, the measure of loss may be the diminution in the building's value. The court noted that whether remedial work is necessary and reasonable is a question of fact and degree, and that in certain circumstances, the nature of the defendant's conduct might be relevant to the assessment of reasonableness. The trial judge had found that the proposed remedial work for the waterproofing was disproportionate to the benefit it would achieve, leading to the dismissal of the owners' claim.

The appeal court upheld the trial judge's decision. It found that the judge had correctly applied the principles from *Bellgrove v Eldridge* and that her Honour's conclusion regarding the lack of proportionality between the cost of remedial work and its benefit was a finding of fact open to her on the evidence. Consequently, the owners' appeal on this ground was dismissed. The court also addressed the builder's appeal against the costs orders, finding them to be reasonable and just in the circumstances.