23 It seems that when the temporary holding yards were constructed they were inadequate for the purpose and probably in hindsight should not have been constructed in that way. It seems clear that there was a need for a substantially higher rail. The permanent yards occupied a greater area than the temporary yards and there is no evidence to suggest that this was not necessary for the purpose of the yards. It would seem to me inappropriate that the defendant should be charged for the mistake by the plaintiffs and, accordingly, I propose to disallow the charge of $1,836.70 for the temporary cattle yards and instead allow the charges for the permanent yards reduced by the sum of $1,000 in respect of labour.
24 With regard to betterment reference was made to the fact that the new permanent yards were better than the yards that existed on the easement. True it is they were slightly higher but it is to be observed that the fencing for most of the easement yards was a solid wooden fencing having four wooden rails between each post. Being slightly higher, the new permanent yards on the plaintiffs' property would seem to have slightly better practical advantages than the yards on the easement. The evidence of the valuers suggested the new permanent yards were superior to the yards on the easement which were described as basic.
25 Similar considerations apply where the property other than personal property is destroyed or injured. The principles were discussed by the Court of Appeal in Hyder Consulting (Australia) Pty Ltd v Wilh Wilhelmsen Agency Pty Limited & Anor [2001] NSWCA 313. When discussing Harbutt's 'Plasticine' Unlimited v Wayne Tank & Pump Co Limited (1971) QB 447 His Honour Mr Justice Sheller referred to a number of statements in that case with approval in these terms:
34. In the case of a chattel, such as a car, destroyed or damaged by the defendant's fault, but of which the plaintiff has had the benefit of some use, a choice of the type referred to in Badham v Williams is more likely to be available than in the case of a building so destroyed or damaged. In Harbutt's the defendant, while installing equipment under contract in an old mill which the plaintiff used as its factory, destroyed the building by its negligence. The plaintiff was not permitted to rebuild the old mill which was five storeys high. It had to put up a new factory two storeys high though with no more accommodation. The question as posed by Lord Denning MR at 467 was whether the plaintiff was entitled to the actual cost of replacement or was limited to the difference in value of the old mill before and after the fire. At 468 his Lordship said:
"The destruction of a building is different from the destruction of a chattel. If a second-hand car is destroyed, the owner only gets its value; because he can go into the market and get another second-hand car to replace it. He cannot charge the other party with the cost of replacing it with a new car. But when this mill was destroyed, the plasticine company had no choice. They were bound to replace it as soon as they could, not only to keep their business going, but also to mitigate the loss of profit (for which they would be able to charge the defendants). They replaced it in the only possible way, without adding any extras. I think they should be allowed the cost of replacement. True it is that they got new for old; but I do not think the wrongdoer can diminish the claim on that account. If they had added extra accommodation or made extra improvements, they would have to give credit. But that is not this case."
35 At 472-3 Widgery LJ said:
"The distinction between those cases in which the measure of damage is the cost of repair of the damaged article, and those in which it is the diminution in value of the article, is not clearly defined. In my opinion each case depends on its own facts, it being remembered, first, that the purpose of the award of damages is to restore the plaintiff to his position before the loss occurred, and secondly, that the plaintiff must act reasonably to mitigate his loss. If the article damaged is a motor car of popular make, the plaintiff cannot charge the defendant with the cost of repair when it is cheaper to buy a similar car on the market. On the other hand, if no substitute for the damaged article is available and no reasonable alternative can be provided, the plaintiff should be entitled to the cost of repair. It was clear in the present case that it was reasonable for the plaintiffs to rebuild their factory, because there was no other way in which they could carry on their business and retain their labour force. The plaintiffs rebuilt their factory to a substantially different design, and if this had involved expenditure beyond the cost of replacing the old, the difference might not have been recoverable, but there is no suggestion of this here. Nor do I accept that the plaintiffs must give credit under the heading of 'betterment' for the fact that their new factory is modern in design and materials. To do so would be the equivalent of forcing the plaintiffs to invest their money in the modernising of their plant which might be highly inconvenient for them."
36 At 475-6 Cross LJ said:
"….but in my judgment the value of the building and of the plant and machinery before the fire throws no light on the true measure of damage in a case like this where it was obviously right for the plaintiffs to rebuild and re-equip their factory and start business again as soon as possible. Further, I do not think that the defendants are entitled to claim any deduction from the actual cost of rebuilding and re-equipping simply on the ground that the plaintiffs have got new for old. It is not in practice possible to rebuild and re-equip a factory with old and worn materials and plant corresponding to what was there before, and such benefit as the plaintiffs may get by having a new building and new plant in place of an old building and old plant is something in respect of which the defendants are not, as I see it, entitled to any allowance. I can well understand that if the plaintiffs in rebuilding the factory with a different and more convenient lay-out had spent more money than they would have spent had they rebuilt it according to the old plan, the defendants would have been entitled to claim that the excess should be deducted in calculating the damages. But the defendants did not call any evidence to make out a case of betterment on these lines and we were told that in fact the planning authorities would not have allowed the factory to be rebuilt on the old lines."
37 The approach is no different whether the destruction of or damage to property results from breach of contract or negligence. In Harbutt's the plaintiff sued for both breach of contract and negligence.
26 His Honour went on to discuss British Westinghouse Electric and Manufacturing Co Ltd v Underground Electric Railways Co of London Ltd [1912] AC 673 and concluded in these terms:
54 In a sense the British Westinghouse case may represent the middle ground. However, the context was that the railway company had replaced the defective turbines with superior turbines. In my opinion, if a defendant negligently damages or destroys the plaintiff's property and there is no evidence that the plaintiff had any reasonable choice other than to replace or repair what had been damaged or destroyed, the cost of replacement or repair, provided it is not extravagant, is recoverable as damages. In each case it is a question of fact.