WEHBE V ROLANDO [1999] NSWSC 384

WEHBE V ROLANDO [1999] NSWSC 384

The failure by Rolando and Corbel to release the bank guarantees on the dates agreed in the May 1995 settlement agreement constituted a breach of an essential contractual term, entitling Mars Constructions and Raymond Wehbe to terminate the contract and recover the amounts drawn down on the guarantees as damages, with no entitlement for defendants to damages for delay or defects except as quantified by the referees’ report, further limited by lack of mitigation.

Jurisdiction
Australia
Judgment Date
29 April 1999
Procedural Posture
Civil / Final Judgment
Outcome
Plaintiffs' claims for release of guarantees and damages succeeded against Rolando and Corbel; defendants' claims for defects and delay limited to referable amounts; claims for aggravated or exemplary damages dismissed; judgment for third defendant Papallo.
Legal Topics
['breach of Contract' 'liquidated Damages' 'aggravated and Exemplary Damages' 'building Disputes' 'release of Bank Guarantees' 'defects Liability' 'novation/settlement']
['contract Law' 'construction Law'] ['breach of Contract' 'liquidated Damages' 'aggravated and Exemplary Damages' 'building Disputes' 'release of Bank Guarantees' 'defects Liability' 'novation/settlement']

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Procedural Posture

Civil / Final Judgment

Legal Issues

  1. 1 ['Whether the agreement of 18 May 1995 was lawfully terminated and its consequences' 'Entitlement to damages and return of bank guarantees' 'Whether plaintiffs or defendants are entitled to damages for defects, delay, or loss of value' 'Whether aggravated or exemplary damages are payable for breach of contract' 'Effect of refusal to mitigate damages']

Ratio Decidendi

The failure by Rolando and Corbel to release the bank guarantees on the dates agreed in the May 1995 settlement agreement constituted a breach of an essential contractual term, entitling Mars Constructions and Raymond Wehbe to terminate the contract and recover the amounts drawn down on the guarantees as damages, with no entitlement for defendants to damages for delay or defects except as quantified by the referees’ report, further limited by lack of mitigation.

Court Disposition

Plaintiffs' claims for release of guarantees and damages succeeded against Rolando and Corbel; defendants' claims for defects and delay limited to referable amounts; claims for aggravated or exemplary damages dismissed; judgment for third defendant Papallo.

Orders

  • ['Plaintiffs entitled to recover $69,631 (plus interest) from Rolando and $69,330 (plus interest) from Corbel for wrongful drawdown of bank guarantees.' 'Rolando entitled to recover $60,221.32 (plus interest) from plaintiffs for defects/acoustic/fire-related works.' 'Corbel entitled to recover $130,364.59 (plus...