AGC Industries Pty Ltd v Karara Mining Ltd

AGC Industries Pty Ltd brought proceedings against Karara Mining Ltd, alleging a range of contract and tortious claims arising from a construction project at Karara Mining’s mine. The claims related to alleged misleading or deceptive conduct, failure to cooperate, breach of contract, and the operation and construction of an exclusion clause. AGC contended that Karara’s conduct had caused it to miss contractual milestones, preventing it from earning a higher rate of corporate overhead and profit (COP), and had led to additional costs due to delayed payments and refinancing. Karara defended the claims, arguing that AGC had failed to prove the necessary elements of its claims and that any losses were excluded by the contract.

The court was required to determine whether Karara engaged in misleading or deceptive conduct, whether the prevention principle could be used to found a cause of action for lost opportunity to earn a higher rate of COP, the content of the implied duty of cooperation, and the enforceability of the exclusion clause in the contract. The court also needed to consider whether the contract had been varied, whether Karara was entitled to deduct disputed amounts from subsequent payments, and whether Karara was liable for costs incurred by AGC in refinancing due to delayed payment.

The court found that AGC had not proved that Karara made misleading or deceptive representations that induced AGC to enter into the contract. The court held that the prevention principle did not provide a basis for damages for lost opportunity to earn a higher rate of COP. The court also determined that the implied duty of cooperation did not extend to preventing delay and that AGC had not proved Karara’s conduct caused it to miss milestone dates. The exclusion clause was held to exclude liability for consequential loss, and the court found that the contract had not been varied by the payment of an allowance. Karara was held to be entitled to deduct disputed amounts from subsequent payments and was not liable for costs incurred by AGC in refinancing due to delayed payment. The court found that the claims were subject to a contractual time bar.

The court dismissed all of AGC’s claims.