Liquidated damages in construction contracts: Is there a schism between the Australian and English courts?

It is very common for construction contracts to include a clause which provides for compensation to be paid in the event of a breach. Where a breach of contract involves a delay in finishing a construction project the usual mechanism used for compensation is liquidated damages (LD). Although LD clauses have been used in construction contracts for over 150 years they have often been controversial and formed the basis of some bitterly contested cases in the Commonwealth. One of the most contested issues concerns where an employer wishes to dispense with LD and claim against the contactor for losses actually incurred, ie unliquidated damages (ULD). Following the well known English case of Temloc v Errill Properties Ltd (1987), it has been established for a period of nearly a quarter of a century that the insertion of NIL against the LD clause excludes the recovery of LD and ULD in these cases. Two recent Australian cases, Silent Vector t/a Sizer Builders v Squarcini (2008) and J-Corp v Mladenis (2009), have further widened a split in this respect that first occurred in the case of Baese Pty Ltd v RA Bracken Building Pty Ltd (1990) between the English approach and the Australian approach. The English approach is exhaustive and promotes inconsistency in contrast to the Australian approach which was found to be practical and pragmatic. Ironically the Australian approach relies in part on an English case of the highest authority.