Prolongation and delay costs in Australia

No Australian court has adopted a formula

This is the finding that should reframe how a claim is quantified before a single dollar is calculated. In England, Hudson and Emden are pleaded routinely. In the United States, Eichleay is the exclusive federal method for unabsorbed home-office overhead. A contractor either satisfies its elements or recovers nothing on that head. Canada has its own first-instance authority, Shore & Horwitz, built on actual audited cost rather than a formula. Australia has none of this. No decision has adopted Hudson, Emden or Eichleay, and none has rejected them either. There is simply no line of authority to cite either way.

That is a negative finding, not a preference. It would be wrong to describe Australian law as having "chosen" actual cost over formula methods, in the way Shore & Horwitz chose actual cost in Canada. Nobody has been asked the question and answered it. A practitioner who pleads an Eichleay-style calculation in an Australian forum is not applying settled law with a domestic gloss. They are importing a method with no Australian judicial pedigree at all, and should expect to be asked to justify every step of it as a fact, not to point to a line of cases that already did that work.

The practical consequence is that an Australian prolongation claim is built the way any other claim for unliquidated damages is built: prove the loss actually happened, and prove its amount, on the ordinary civil standard, tolerating the imprecision that always attends quantifying a continuing loss, but without a formula to fall back on when the primary evidence runs out.

The heads of prolongation cost, and how each is proved

Every row above with a negative finding attached should be read as an instruction, not a dead end: build the number from the underlying records. Plant registers, hire invoices, payroll, priced programmes. Because there is no published rate or accepted formula standing ready to do that work in an Australian forum.

Off-site overhead: actual cost, proved, or nothing

Off-site (head office) overhead is the head where the absence of formula jurisprudence bites hardest, because it is precisely the head that Hudson, Emden and Eichleay exist to solve. Those formulae were developed because head-office overhead is genuinely difficult to attribute to an individual delayed contract. It is incurred centrally, continuously, and largely independently of any one job. Formula methods are a proxy for that difficulty. Australia has no such proxy.

That leaves one route. Off-site overhead recovery in Australia is actual cost, proved, or nothing. A claimant has to show what head-office overhead actually cost during the delay period, and that the delay actually caused a measurable under-recovery of that overhead against other work. Not simply that the contract ran longer than planned. A claim that starts from a contract-value percentage and a number of delay days, in the Eichleay style, has no Australian authority behind the arithmetic and invites exactly the cross-examination that authority would otherwise deflect: why this percentage, why this method, and where is the Australian case that says a court should accept it.

Hungerfords: the compound finance cost claim most contractors leave out

If off-site overhead is the head with the least authority, finance cost is the head with the most under-used authority, and it deserves real prominence in how a prolongation claim is built.

Hungerfords v Walker (1989) 171 CLR 125 holds that finance costs incurred as a result of a defendant's wrong are recoverable as substantive damages: not as statutory interest running from the date of judgment, but as a head of loss like any other, proved on the ordinary principles of causation and remoteness. And because it is damages rather than judgment interest, it can be recovered at compound rates, reflecting what the money actually cost the claimant to borrow or what it actually lost by not having it.

On a multi-year prolongation claim, compound finance cost is frequently the largest single line in the recovery, and it is also the line most often left out, because it is pleaded, if at all, as an interest claim rather than as a head of loss in its own right.

The reason it goes missing is structural. Interest on judgment is a familiar, largely automatic add-on that lawyers reach for late in a case, calculated simply and at simple rates. Hungerfords damages are a different animal: they need to be pleaded as a distinct head of loss, proved with evidence of the claimant's actual cost of funds over the relevant period, and compounded rather than calculated on a simple basis. On a claim running several years, the difference between simple statutory interest tacked on at judgment and a properly pleaded, proved, compound Hungerfords claim can be the difference between a marginal recovery and a genuinely material one. Plead it as damages, prove the actual cost of funds, and compound it.

Cessnock: the answer when the principal says your records are inadequate

The other counterweight advantage sits in a 2024 High Court decision that has nothing to do with construction on its facts but everything to do with how a delay claimant answers the most common defence quantum ever faces.

Cessnock City Council v 123 259 932 Pty Ltd [2024] HCA 17, decided unanimously on 12 May 2024, confirms that wasted expenditure is recoverable, and. More importantly for a prolongation claim built on imperfect records. Articulates a principle of "facilitation of proof": where the defendant's own breach caused or increased the evidential uncertainty surrounding the claimant's loss, a rebuttable presumption of recoupment arises, and the onus shifts to the defendant to displace it. The Court's own description of the principle is that it gives a claimant "a fair wind, not a free ride". It eases the evidential burden where the defendant is responsible for the gap in the evidence, but it does not relieve the claimant of proving loss altogether.

This is the modern Australian analogue to the reasonable-approximation and burden-shifting doctrines available in other jurisdictions in this corpus, and it is the strongest available answer to a principal who defends a quantum claim by attacking the contractor's records as inadequate. Particularly where the principal itself controlled the record-generating machinery: the Superintendent's directions, the approval process, and the programme review cycle that determined what got recorded and when. Where a Superintendent's own conduct is in question. The pattern examined on the acceleration page. Cessnock is the doctrine that turns an evidential weakness back on the party that caused it.

The important caveat: Cessnock does not appear to have been run on delay facts yet. It is a live opportunity, not a settled line of delay authority, and a claimant relying on it should expect to be the party establishing how the principle applies to a construction records dispute rather than following an already-charted path.

Is a lost opportunity still compensable below 50% probability?

Yes, and this is where Australian law is comparatively generous rather than comparatively strict. Sellars v Adelaide Petroleum NL holds that a lost commercial opportunity is a compensable head of loss even where the probability that it would have been realised is below 50%. The claimant does not have to prove on the balance of probabilities that the opportunity would have paid off, only that a substantial and valuable opportunity existed and was lost, with the probability going to the size of the award rather than to whether there is a claim at all.

For a delayed contractor, that principle supports recovery for lost opportunities caused by the delay. The tender not pursued because resources were tied up on the overrunning project, the follow-on work not secured. Even where the chance of winning that other work was less than even. It is one of two levers, alongside Cessnock, that lighten what is otherwise a heavy evidential burden on Australian quantum.

Loss of productivity: does a measured mile have to be run?

No, and that answer is worth stating plainly because the thinness of the Australian field on disruption might suggest otherwise. Australia does have measured-mile authority. Santos Ltd v Fluor Australia Pty Ltd [2017] QSC 153 applied an impacted-versus-unimpacted period comparison, and SMEC Australia Pty Ltd v McConnell Dowell Constructors (Aust) Pty Ltd (No 3) [2012] VSC 557 sits alongside it as a further first-instance authority on the method.

The more recent and more significant decision goes further. Santos Ltd v Fluor Australia Pty Ltd [2025] QSC 184. Freeburn J, 8 August 2025, with roughly A$692 million in issue. Held that a measured mile is permitted but not required. Factual cause and effect is enough: whether a speed-up increased cost "is … a matter of fact, which is to be proved in each particular case." That is a materially more permissive position than a jurisdiction that treats the measured mile as close to mandatory wherever comparator data exists, and it means a disruption claim built on direct evidence of cause and effect. Priced labour and plant records tied to identified disrupting events. Does not fail simply because no clean unimpacted period was available to compare against.

Two cautions attach to this decision, and both matter for anyone citing it. First, Fluor's appeal was filed in October 2025 and heard in July 2026. As at the source research date of 10 August 2026, judgment on the appeal had not been delivered. The point should be checked for an appellate outcome before it is relied on. Second, a 2026 newsletter has loosely attributed this litigation to the "Queensland Court of Appeal". That is wrong. The actual Queensland Court of Appeal decision bearing on this litigation is the separate [2021] QCA 204 decision, a different judgment entirely, and the two should not be conflated in a pleading or a submission.

How Australia compares on quantum

The comparative headline is worth sitting with. Australia is the hardest jurisdiction in this corpus in which to prove delay quantum by formula, because there is no formula to reach for, and it is one of the more generous jurisdictions once the fact of loss is actually proved, on the strength of Sellars, Cessnock and Hungerfords working together. See global claims and total cost in Australia for what happens when a claim cannot be broken down head by head. The safety net that softens this same evidential burden in England is expressly unavailable there too.

What this means for how you plead the claim

None of this substitutes for records. Without a formula and without the apportionment safety net available in a global claim, the evidential burden on an Australian quantum claim is heavier than in any other jurisdiction in this corpus, but the two levers that lighten it, Sellars on lost opportunity and Cessnock on facilitation of proof, are exactly the ones most claims fail to plead. See records and expert evidence in Australia for what the underlying evidence needs to look like to carry a claim built this way.

Sobre este material El contenido de la biblioteca es información general sobre la práctica de las reclamaciones de construcción, no asesoramiento jurídico. El derecho a reclamar, los plazos y el procedimiento se rigen por su propio contrato y por el derecho del lugar donde se ejecuta la obra. Revisado el 1 de septiembre de 2026 · Informar de una corrección