TABCORP HOLDINGS LTD V

BOWEN INVESTMENTS PTY LTD

[2009] HCA 8 (12 FEBRUARY 2009)

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 Introduction
The case study that we will be discussing here is
the case that majorly deals with the contractual
obligations and how a breach of the contractual
obligations leads to compensation of damages to
the other party.
 Facts of the case
o Tabcorp, had been on lease of a bilding for 10 years, which
could be extended for further 5 years.
o Tabcorb and Bowen Investments had a meeting, on to
discuss about the alteration of the foyer of the building.
o As Mary Bergamin, director of Bowen had come earlier
than the scheduled time for the meeting, she was shocked
to see, that the floor panelling, stones, partition, everything
was removed and the remains were jack hammered.
o Tabcorp had not bothered to wait for the discussions and
had assumed that the meeting would be in their favour,
and had already demolished the foyer, without any prior
written or oral permission of Bowen Investments.
o This was an act, which was against their
agreement clause 2.13, which stated that no
alterations could take place by the tenants in the
building without any written permission (which
the landlord would not withhold
unnecessarily)of the landlord.
o This resulted in the various litigations filed by
the parties in the trial court and the full court as
well as the high court of Australia wherein the
matter was discussed at length.
 Literature review
 Koompahtoo Local Aboriginal Land Council v
Sanpine Pty Limited [2007], it was held that the
essentiality of the contract lies in the intention
of the contract and the promise so made.
 The aim of the damages or compensation
provided is to put the person in the same
situation as if the contract had been performed
as stated in Robinson v Harman [1848].
 Legal Issues
 Whether there was a breach of contract from
the side of Tabcorp when it did not take prior
permission of Bowen Investment?
 Whether quantification of damages for the
breach of contract could be done in this case or
not, and if so, then how?
 Analysis of the applicable laws
1. As explained in the case of Radford v de Froberville [1977], the
defendant was to build a wall, the wall had no value as such
and would not cause any loss. In such a case, there is a
possibility of misuse by the claimant, of the monetary sum so
received, he cannot put that money to use for the purpose for
which it was granted. Therefore it is to be seen that the award
is not unreasonable and also that it does not cause any
hardship to the defendant.
2. In the case of Ruxley Electronics v Forsyth [1966], wherein, the
contractor had made the deeper side of the swimming pool
few inches shallower than what was contracted for, however it
was safe for diving; that only the cost for loss of amenity
would be given and not for any diminuition in value or cure
for loss would be given as it was nil.
 Critical analysis of the judgement
Trial Court:
o The trial court awarded reinstatement costs to Bowen

investments following the case of Joyner v Weeks.

o Further the judge added that the reinstatement costs cannot

be heightened unless there are any other changes that is the

renovations that the tenants have made to the foyer.
o The trial judge made a distinction between the old foyer

and the new foyer and granted the difference in the

amount of the two .
o The judge also took in consideration the time of lease and

stated that till 2015 or 2017, the foyer would have suffered
wear and tear and would require restoration anyways.
 Full Court

o The full court struck down the judgement of

the trial court and stated that the reinstatement
costs were the costs that would be required to
make the foyer to its original condition, which
it was earlier.
o Therefore, the full court awarded damages for
the breach of contract under clause 2.13 for the
reinstatement of the foyer to its original
condition as well as the loss of rent while the
restoration takes place.
 High Court
o On appeal to the high court, the court upheld the decision of
the full court and dismissed the plea of Tabcorp and awarded
damages worth $1,380,000 to Bowen Investments.
o The court discussed two principles upon which it decided the
damaged.
o There were two principles discussed in the case by way of
Bellgrove v Eldrige [1954] and Ruxley Electronics v
Forsyth[1966].
o Thus it was explained that quantification can be done by way
of two principles which were.
o firstly, that the work must be necessary to achieve conformity.
o Secondly it must be reasonable to adopt the course of it.
o That is to say that, the damages awarded must be only to the
value of the necessary standards of the work that needs to be
met and there must be a reasonable way to meet the standards.
 Conclusion
The damages that were awarded in this case were
not only for the purpose of the loss caused to the
foyer and the reconstruction of it but also for the
time wasted in the reconstruction and the
potential loss so incurred because of it.