Contract; lease; remedies for breach; claim for damages; objective of damages.
Facts: Bowen Investments Ltd (Bowen) leased a building to Tabcorp Holdings Pty Ltd (Tabcorp) for 10 years. It was a term of the lease that the tenant would not make any substantial alteration or addition to the building without first obtaining the landlord's written consent. Six months into the lease, and without first obtaining the landlord's consent, the tenant demolished the foyer of the building and rebuilt it in a way they preferred. The landlord sued for the cost of restoring the foyer to its previous state, which amounted to just over $1.3 million. The trial judge held the tenant in breach of contract but only awarded damages of $34,820, being the difference between the value of the building with the old foyer and the value of the building with the new foyer. On appeal Bowen claimed that they were entitled to the higher amount.
Issue: Was the landlord entitled, on grounds of the tenant's breach of contract, to claim the full cost of restoring the foyer to its previous state?
Decision: The appropriate measure of damages was the cost of restoring the foyer to its previous state.
Reason: The relevant principle is that, when a party suffers a loss because of a breach of contract, damages may be claimed to put that party in the same position as if the contract had been performed, so far as money can do it. This does not mean simply in the same 'financial' position, but in the same actual position, so that the party has or can acquire what was actually contracted for. In this case, that meant the cost of actually restoring the foyer to its original state, because this is the position the landlord would have been in if the contract had not been breached. There may be exceptional cases where to award such damages becomes unreasonable, but that was not so in the present case.