Active TREE Services Pty Ltd v Electrical Resource Providers Pty Ltd

A party alleging that a liquidated damages clause is a penalty must positively demonstrate that the stipulated amount is extravagant and unconscionable compared to the greatest conceivable loss from the breach. It is insufficient to merely show that the clause was calculated by reference to lost revenue without deducting costs, where the party has not established that the relevant costs were variable and avoidable, or that the innocent party could immediately redeploy its resources.