Wheeler v Ecroplot Pty Ltd

In *Wheeler v Ecroplot Pty Ltd*, the New South Wales Court of Appeal considered a dispute arising from a building contract for the construction of a dwelling. The appellants, the owners of the dwelling, alleged that the respondent builder had breached its contractual obligation to execute the work in a proper and workmanlike manner. Specifically, the appellants contended that the builder had allowed compacted land fill to dry out before pouring a concrete slab on top of it, leading to stability issues.

The Court of Appeal was required to determine whether the builder had breached the contract by failing to construct the dwelling in a proper and workmanlike manner, and if so, what damages were recoverable. A key issue was whether the proposed underpinning work to rectify the stability-related breach was reasonable, having regard to the principles established in cases such as *Bellgrove v Eldridge* and *Tabcorp Holdings Ltd v Bowen Investments Pty Ltd*.

The Court found that the builder had indeed breached the contract. Applying the principles of remoteness and reasonableness in assessing damages for breach of a building contract, the Court determined that the cost of rectifying the defects, including underpinning, was a reasonable measure of the loss suffered by the appellants. The Court reasoned that the builder's failure to properly prepare the foundation had directly caused the instability, and the proposed rectification work was necessary to restore the dwelling to the condition it would have been in had the contract been performed properly.

The Court of Appeal allowed the appeal, setting aside the orders made at first instance. It entered judgment for the appellants in the sum of $107,224.64, plus interest. The respondent was ordered to pay the appellants’ costs of the appeal and of the proceedings at first instance, with a provision for a certificate under the Suitors’ Fund Act 1951.