Leighton Contractors Pty Ltd v Hossco Marble and Granite Manufacturing Pty Ltd

Leighton Contractors Pty Ltd (the appellant) appealed to the New South Wales Court of Appeal against a decision of the Supreme Court of New South Wales. The dispute concerned a contract for the supply and installation of marble and granite by Hossco Marble and Granite Manufacturing Pty Ltd (the respondent) for a construction project undertaken by Leighton Contractors. Leighton Contractors had alleged that the work performed by Hossco was defective and sought to recover damages.

The primary legal issue before the Court of Appeal was whether Leighton Contractors had validly terminated the contract with Hossco. This involved determining whether Hossco had committed a repudiatory breach of contract, thereby entitling Leighton Contractors to accept the repudiation and terminate the agreement. A secondary issue concerned the assessment of damages, should the termination be found to be wrongful.

The Court of Appeal, in its reasoning, considered the nature of the alleged defects and whether they amounted to a breach of an essential term of the contract or a breach that deprived Leighton Contractors of substantially the whole benefit of the contract. The court applied established principles of contract law regarding repudiation, including the test of whether the conduct of the party evinced an intention no longer to be bound by the contract or to be bound only in a way that was inconsistent with the contract. The court also considered the principles governing the award of damages for breach of contract.

The Court of Appeal found that Leighton Contractors had not established that Hossco had committed a repudiatory breach. Consequently, the termination of the contract by Leighton Contractors was deemed wrongful. The appeal was dismissed, and the orders of the Supreme Court were upheld.