CH2M Hill v State of NSW

The case of CH2M Hill v State of NSW involved the plaintiff, CH2M Hill, a construction company, suing the defendant, the State of New South Wales, over alleged breaches of contract and equity, as well as tortious duty of care. The dispute centred on a project where the State engaged CH2M Hill to provide design and construction services. CH2M Hill claimed that the State breached the contractual duty of care, did not adhere to specific design criteria, and engaged in misleading and deceptive conduct by purporting to provide design services correctly. Furthermore, CH2M Hill argued that the State's design of the works did not conform to best engineering practices and that the required rectification works were unreasonable.

The court was tasked with determining several key legal issues. Firstly, whether the State breached its contractual duty of care and specific design criteria. Secondly, whether the State's design adhered to best engineering practices. Thirdly, whether the State complied with its contractual duty of care and whether it engaged in misleading and deceptive conduct. The court also had to assess the validity of the assignment of the contract to CH2M Hill and whether there was a genuine commercial interest. Additionally, the court needed to decide on the appropriate calculation of damages, particularly whether CH2M Hill was entitled to recover indirect costs, including corporate overheads, and whether the assessment of loss should include the rectification works.

The court found that the State did breach its contractual duty of care and specific design criteria. The design provided by the State did not meet best engineering practices, and the rectification works were deemed unreasonable. The assignment to CH2M Hill was valid, and there was a genuine commercial interest. Regarding damages, the court held that CH2M Hill was entitled to recover indirect costs, including corporate overheads, and the assessment of loss did include the rectification works. The court found that the amendment to the pleadings was not so deficient as to be embarrassing and was not likely to cause significant prejudice.

In conclusion, the court ordered the State to compensate CH2M Hill for the breach of contract, including indirect costs and the cost of rectification works. The court also dismissed the State's application for leave to amend the pleadings as unnecessary and potentially prejudicial.