The duty to mitigate in contract arises on breach, not when damage is first suffered, but where the innocent party is unaware of the breach, the question is whether they ought reasonably to have been aware of it. The Court was divided on whether causation of loss from breach of a building contract must be proved on the balance of probabilities (Handley JA, applying Sellars) or may be assessed as a loss of chance under Malec principles (Hodgson JA, McColl JA agreeing). The question of whether the Malec or Sellars approach governs causation in contract cases of this kind was left unresolved at the appellate level, with the majority favouring Malec.
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