Winky Pop Pty Ltd v Mobil Refining Australia Pty Ltd

Winky Pop Pty Ltd brought an action against Mobil Refining Australia Pty Ltd for the contamination of groundwater beneath its undeveloped land by petroleum hydrocarbons resulting from Mobil’s admitted negligence. The case was heard in the Federal Court of Australia. The primary dispute was over the appropriate measure of damages for the plaintiffs' loss, specifically whether it should be the diminution in value of the land or the lost opportunity to develop the land for residential purposes.

The court had to determine if the plaintiffs had a viable opportunity to develop the land residentially that was lost due to the contamination. It needed to assess whether the diminution in value of the land was an appropriate measure of damages and, if so, to what extent. The court considered relevant precedents, particularly Sellars v Adelaide Petroleum NL, to guide its assessment of the lost opportunity.

The court held that the appropriate measure of damages was the diminution in value of the land caused by the contamination. It found that the plaintiffs did not have a viable opportunity to develop the land residentially at the time of the contamination. Consequently, the court awarded damages based on the diminution in value of the land, rejecting the claim for lost opportunity. The court's decision emphasised the importance of a clear opportunity to develop land at the time of the contamination for a claim of lost opportunity to be valid.