WINROBE PTY LTD v SUNDIN'S BUILDING CO PTY LTD [No 3] [1993] NSWCA 290

WINROBE PTY LTD v SUNDIN'S BUILDING CO PTY LTD [No 3] SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL

KIRBY P, SHELLER and Cripps JJA 24 December 1992, 4 May 1993

[1993] NSWCA 290

CONTRACT — building contract — construction of warehouse includes contractor's obligation to design and construct works and obtain necessary consents — contractor's warranty of due care and skill — correspondence with principal concerning rights of carriageway and drainage easements on adjoining land — late discovery that warehouse, as built, encroached upon such rights — principal by notice terminates agreement — contractor subsequently purports to terminate agreement — which termination valid — trial judge (Giles J) finds no failure of contractor to complete project with due diligence and competence and no duty to re-design or re-construct works — on appeal Court of Appeal holds contractor in breach of design obligations but principal's purported notice was not effective to terminate agreement — on further motion to Court of Appeal that effectiveness of notice was not in issue at trial, judgment withdrawn for reconsideration of further arguments — upon reargument of appeal

held: (Sheller JA; Kirby P and Cripps JA concurring):

(1) The contractor had failed to perform its obligation of design and re-design as originally found;

(2) As the contractor did not argue at the trial that the notice given by the principal was not a notice validly based on the breach, and as the contractor did not comply with such notice, the principal validly terminated the employment of the contractor by its notice;

(3) In light of such termination pursuant to the contract it was unnecessary to consider the exercise of the common law power of accepting a repudiation by the contractor of its obligations under the contract.

DTR Nominees Pty Ltd v Mona Homes Pty Ltd (1978) 138 CLR 423 considered;