The NSW Court of Appeal has reshaped how damages are assessed in construction disputes involving misleading or deceptive conduct. In Larsen as trustee for the Larsen Superannuation Fund v Tastec Pty Ltd (formerly Wonders Building Company Pty Ltd) [2025] NSWCA 145, the Court held that damages are not restricted to assessing the “diminution in value” of a home or other project, but can include consideration of the position the victim would be in had the misleading or deceptive conduct not occurred.
This case regarded a prefabricated home contract in which the builder persuaded the Larsens to accept a contract variation that substituted their preferred Maxline 340 sheeting with Bondor 580 panels. This change, achieved through misleading representations by the builder, led to structural problems in the house. The District Court initially dismissed the Larsens’ claim because they had not demonstrated their home would have been worth more if the Maxline 340 cladding had been used. However, the Court of Appeal held that this approach was too narrow.
The Court found that the Larsens were entitled to damages in the form of the “cost of rectification to return them to the position they would have been in, but for [the builder’s] contravening conduct”. In particular, the damages awarded included the cost of the Maxline 340 sheeting and the price of its installation in their home.
This decision significantly broadens the potential scope of damages in construction disputes, emphasising the enforceability of contractual rights and the impact of misleading or deceptive conduct.