Bellgrove v Eldridge: 1954

High Court of Australia. The builder built a house with defective foundations, as a result of which the house was unstable. The building owner brought an action against the builder claiming the cost of reinstatement.
Held: His claim succeeded on the facts.
The court approved the rule as stated in Hudson on Building Contracts that: ‘The measure of the damages recoverable by the building owner for the breach of a building contract is . . the difference between the contract price of the work or building contracted for and the cost of making the work or building conform to the contract’ as to the case law: ‘In none of these cases is anything more done than that work which is required to achieve conformity and the cost of the work, whether it be necessary to replace only a small part, or a substantial part, or, indeed, the whole of the building is, subject to the qualification which we have already mentioned and to which we shall refer, together with any appropriate consequential damages, the extent of the building owner’s loss. The qualification, however, to which this rule is subject is that, not only must the work undertaken be necessary to produce conformity, but that also, it must be a reasonable course to adopt.’
The cost of reinstatement work subject to the qualification of reasonableness was the extent of the loss. Reasonableness was a factor to be considered in determining what was that loss rather than, as had been argued, merely a factor in determining which of two alternative remedies were appropriate for a loss once established.
The land owner, having contracted for a building, is, as a general rule, entitled to have a building which conforms with the contract plans, the High Court continued: ‘The qualification, however, to which this rule is subject is that, not only must the work undertaken be necessary to produce conformity, but that also, it must be a reasonable course to adopt. No one would doubt that where pursuant to a building contract calling for the erection of a house with cement rendered external walls of second-hand bricks, the builder has constructed the walls of new bricks of first quality the owner would not be entitled to the cost of demolishing the walls and re-erecting them in second-hand bricks. In such circumstances the work of demolition and re-erection would be quite unreasonable or it would, to use a term current in the United States, constitute ‘economic waste’ . . We prefer, however, to think that the building owner’s right to undertake remedial works at the expense of a builder is not subject to any limit other than is to be found in the expressions ‘necessary’ and ‘reasonable’, for the expression ‘economic waste’ appears to us to go too far and would deny to a building owner the right to demolish a structure which, though satisfactory as a structure of a particular type, is quite different in character from that called for by the contract. Many examples may, of course, be given of remedial work, which though necessary to produce conformity would not constitute a reasonable method of dealing with the situation and in such cases the true measure of the building owner’s loss will be the diminution in value, if any, produced by the departure from the plans and specifications or by the defective workmanship or materials. As to what remedial work is both ‘necessary’ and ‘reasonable’ in any particular case is a question of fact.’


(1954) 90 CLR 613

Cited by:

CitedRuxley Electronics and Construction Ltd v Forsyth HL 29-Jun-1995
Damages on Construction not as Agreed
The appellant had contracted to build a swimming pool for the respondent, but, after agreeing to alter the specification to construct it to a certain depth, in fact built it to the original lesser depth, Damages had been awarded to the house owner . .
Lists of cited by and citing cases may be incomplete.

Damages, Commonwealth, Construction

Updated: 04 May 2022; Ref: scu.526101