Riggall & Anor v Thompson

[2010] QCA 144

Queensland Court of Appeal

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For Australian Law.

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Interrogate

Catchwords

1. Contract
2. › Construction and interpretation of contracts
3. › Penalties and liquidated damages
4. › Whether liquidated damages clause allowing recovery of expenses of both original contract and resale was a penalty
5. › Whether amount recoverable out of all proportion to actual loss
6. › REIQ/QLS standard contract clause 9.4(1)(b)
1. Contract
2. › Construction and interpretation of contracts
3. › Penalties and liquidated damages
4. › Consequences of finding clause is penalty
5. › Whether actual damages still recoverable
6. › Recovery of lesser amount reflecting actual loss
1. Contract
2. › Sale of land
3. › Damages for purchaser's default
4. › Measure of damages
5. › Whether expenses of original contract or expenses of resale recoverable
6. › Distinction between expenses caused by breach and expenses incurred in any event
1. Contract
2. › Sale of land
3. › Damages for purchaser's default
4. › Election
5. › Whether seller required to elect between contractual liquidated damages and general law damages
6. › Whether conduct constituted unequivocal election

Quick Take

Clause 9.4(1)(b) of the REIQ/QLS standard contract (First Edition) is an unenforceable penalty to the extent it allows recovery of expenses connected with both the original contract and the resale, because the buyer's breach can only cause the seller to incur one additional set of expenses (the resale expenses). The correct measure of damages for a purchaser's default includes the deficiency on resale, the expenses of the resale, holding costs, and additional legal costs directly attributable to the breach, but not the agent's commission and ordinary legal costs of the original contract which would have been incurred regardless of the breach. Clause 9.3 of the standard contract authorises cumulative claims under clauses 9.4 and 9.5 and does not require the seller to elect between them.