Cordon Investments Pty Ltd v Lesdor Properties Pty Ltd

The dispute in *Cordon Investments Pty Ltd v Lesdor Properties Pty Ltd* concerned a building contract and the obligations of the parties, particularly regarding the execution of a strata plan and the completion of works. The case was heard in the Court of Appeal of New South Wales, with Bathurst CJ, Macfarlan and Meagher JJA presiding.

The central legal issues before the Court of Appeal included the proper construction of a contractual clause requiring the execution of a strata plan, specifically whether this obligation arose only upon completion of the building works and what constituted "completion" for the purposes of the contract. The court also had to determine whether the doctrine of substantial performance was applicable to an entire contract and if the obligations had been substantially performed. Further issues involved whether the taking of possession of incomplete building works constituted a waiver of the right to completion, the existence and content of an implied obligation of good faith in contract, and whether a breach of such an obligation could alter express contractual terms. The court also considered whether a renunciation of the contract amounted to repudiation, the availability of recovery on a quantum meruit basis by a defaulting party, and the measure of damages in building disputes, including the reasonableness of rectification work and the relevance of the probability that such work would not be carried out.

The Court of Appeal considered the referee's report and the adoption of its findings. The court reasoned that the obligation to execute a strata plan was not contingent solely on "practical completion" but rather on the full completion of the works as defined by the contract. The court affirmed that the doctrine of substantial performance is generally not applicable to entire contracts, and that taking possession of incomplete works did not necessarily amount to a waiver of the right to completion. The court also addressed the implied duty of good faith, clarifying that it cannot override express contractual terms. Regarding repudiation, the court found that the conduct of the parties did not amount to a renunciation of the contract. The court further held that a defaulting party could not recover on a quantum meruit if the innocent party had a valid claim for damages. In relation to damages, the court applied principles concerning the reasonableness of rectification work, considering the decision in *Bellgrove v Eldridge* and *Tabcorp Holdings Ltd v Bowen Investments*.

The appeal and cross-appeal were dismissed, with costs awarded to the respondent.