Supreme Court of Western Australia Court of Appeal – 27 July 2005


Ross Stewart Gilmour (“Gilmour”) entered into a building contract with J-Corp Ltd (“J-Corp”), the builder, to construct a house in Chidlow, Western Australia.

The structural engineer inspected the site and on the information from the inspection recommended footing details for thehouse. In his inspection certificate he stated that “if clay is encountered the footing detail will need to be amended appropriately.”  Although clay was encountered, the footing detail was not amended. This resulted in significant cracking of the floor slab and the walls of the house.

Further, although Chidlow is in a seismic zone, the house was not constructed to the necessary standards for earthquake loads.

Due to the defects, Gilmour sued J-Corp in the Local Court for breach of Contract, the Trial Magistrate holding that the damages payable to Gilmour were the cost of the house to be demolished and reconstructed (reinstated).

J-Corp appealed to the District Court, and then to the Supreme Court on the grounds that the house did not require demolition and reinstatement, contending that it was unreasonable to require J-Corp to pay the cost of making the house conform to the building contract and that damages should be assessed on the basis of the cost to carry out the rectification works.


Whether the damages should be assessed on the basis of demolition and reinstatement.


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