FLENDER (AUST) PTY LTD v WARMAN INTERNATIONAL LTD [1998] NSWCA 81

FLENDER (AUST) PTY LTD v WARMAN INTERNATIONAL LTD [1998] NSWCA 81

The trial judge materially erred by failing to address the appellant’s challenge to the referee’s finding on causation, constituting a breach of procedural fairness. The referees' reliance on the FEM rules (non-contractual standard) to determine causation was not justified where the contract specified ASME as the governing standard. Without evidence that compliance with the contractual standard would have prevented the loss, causation for compensable damage is not established.

Parties
Appellant: FLENDER (AUST) PTY LTD; Respondent: WARMAN INTERNATIONAL LTD
Jurisdiction
Australia
Judgment Date
18 June 1998
Procedural Posture
Appeal / Court of Appeal Review of Judgment Adopting Referee's Report Under Pt72 Supreme Court Rules
Outcome
Appeal allowed
Legal Topics
Breach of Contract, Causation, Procedural Fairness, Review of Referees' Report
Contract Law Civil Procedure Breach of Contract Causation Procedural Fairness Review of Referees' Report

Case Brief

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Parties

FLENDER (AUST) PTY LTD

Appellant

WARMAN INTERNATIONAL LTD

Respondent

Procedural Posture

Appeal / Court of Appeal Review of Judgment Adopting Referee's Report Under Pt72 Supreme Court Rules

Legal Issues

  1. 1 Whether the trial judge erred in adopting the referees’ finding that breach of contract caused the respondent’s loss
  2. 2 Whether the referee’s reliance on the FEM rules (a non-contractual standard) was legally improper for both breach and causation
  3. 3 Whether the trial judge failed to afford procedural fairness in respect to the causation issue

Ratio Decidendi

The trial judge materially erred by failing to address the appellant’s challenge to the referee’s finding on causation, constituting a breach of procedural fairness. The referees' reliance on the FEM rules (non-contractual standard) to determine causation was not justified where the contract specified ASME as the governing standard. Without evidence that compliance with the contractual standard would have prevented the loss, causation for compensable damage is not established.

Court Disposition

Appeal allowed

Orders

  • Judgment of primary judge set aside in so far as Flender found liable for shaft failures
  • Matter remitted to the Construction List in the Common Law Division for determination whether the referee’s findings concerning shaft failures should be adopted or rejected