WINROBE PTY LTD v SUNDIN'S BUILDING COMPANY PTY LTD [1992] NSWCA 277

WINROBE PTY LTD v SUNDIN'S BUILDING COMPANY PTY LTD [1992] NSWCA 277

The contractor was in breach of its obligation to exercise due care and skill in the design of the works by failing to adequately notify the principal that the proposed design encroached upon a right of carriageway, thus exposing the principal to potential liability and loss. However, the principal's purported notice of termination was ineffective as it did not specify with sufficient clarity the requisite conduct or correction necessary, and thus did not entitle the principal to terminate under the contract. The contractor did not repudiate the contract. Damages should be assessed in accordance with the loss resulting from breach of design obligations, subject to proper quantification...

Parties
Appellant/principal: Winrobe Pty Ltd and Simpost Pty Ltd; Respondent/contractor: Sundin's Building Company Pty Ltd
Jurisdiction
Australia
Judgment Date
15 June 1992
Procedural Posture
Civil Appeal (contract/building) / Appeal and Cross Appeal From Decision of Giles J in Supreme Court of NSW
Outcome
Appeal allowed; cross-appeal dismissed; judgment and orders of first instance (Giles J) set aside in part; remitter for potential further assessment of damages; otherwise confirmation of prior judgment regarding quantum of assessed damages.
Legal Topics
Design and Construct Contracts, Termination of Contract, Breach of Warranty, Obligation to Exercise Due Care and Skill, Damages Assessment
Contract Law Building and Construction Law Design and Construct Contracts Termination of Contract Breach of Warranty Obligation to Exercise Due Care and Skill Damages Assessment

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Parties

Winrobe Pty Ltd and Simpost Pty Ltd

Appellant/principal

Sundin's Building Company Pty Ltd

Respondent/contractor

Procedural Posture

Civil Appeal (contract/building) / Appeal and Cross Appeal From Decision of Giles J in Supreme Court of NSW

Legal Issues

  1. 1 Whether the contractor breached its contractual obligation to exercise due care and skill in design by failing to notify the principal that the design encroached upon a right of carriageway.
  2. 2 Whether the principal validly terminated the contract under the relevant contract clause (CL31).
  3. 3 Whether the contractor repudiated the contract or was in fundamental breach.

Ratio Decidendi

The contractor was in breach of its obligation to exercise due care and skill in the design of the works by failing to adequately notify the principal that the proposed design encroached upon a right of carriageway, thus exposing the principal to potential liability and loss. However, the principal's purported notice of termination was ineffective as it did not specify with sufficient clarity the requisite conduct or correction necessary, and thus did not entitle the principal to terminate under the contract. The contractor did not repudiate the contract. Damages should be assessed in accordance with the loss resulting from breach of design obligations, subject to proper quantification...

Court Disposition

Appeal allowed; cross-appeal dismissed; judgment and orders of first instance (Giles J) set aside in part; remitter for potential further assessment of damages; otherwise confirmation of prior judgment regarding quantum of assessed damages.

Orders

  • Appeal allowed.
  • Cross-appeal dismissed.