Macmahon Mining Services v Cobar Management - [2014] NSWSC 502

Supreme Court

New South Wales

Medium Neutral Citation: Macmahon Mining Services v Cobar Management [2014] NSWSC 502
Hearing dates: 25/03/2014
Decision date: 25 March 2014
Jurisdiction: Equity Division - Technology and Construction List
Before: McDougall J
Decision:
Order that claim at [39] to [41] of List Statement be dismissed pursuant to r 13.4.

Catchwords:
CONTRACT - terms and conditions - limiting liability clause - interpretation of clause excluding or limiting liability for consequential loss - whether contract should be construed so as not to deprive one party of its benefit
PROCEDURE - summary dismissal - general principles - summary dismissal of part of claim
PROCEDURE - Application for order that question of construction to be dealt with as a separate question - whether court should proceed on hypothetical basis - Uniform Civil Procedure Rules 2005 (NSW), r 28.2
Legislation Cited: Uniform Civil Procedure Rules 2005 (NSW)
Cases Cited: Bass v Permanent Trustee Co Ltd (1999) CLR 334
General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125
Darlington Futures Ltd v Delco Australia Pty Ltd (1986) 161 CLR 500
Kamil Export (Aust) Pty Ltd v NPL (Australia) Pty Ltd [1996] 1 VLR 538
Lime Telecom Pty Ltd v Powertel Ltd (No 1) [2008] NSWSC 324
Lime Telecom Pty Ltd v Powertel Ltd (No 2) [2008] NSWSC 362
Category: Procedural and other rulings
Parties: Macmahon Mining Services Pty Limited (Plaintiff)
Cobar Management Pty Limited (Defendant)
Representation: Counsel:
F Corsaro SC (Plaintiff)
G Inatey SC / T J Breakspear (Defendant)
Solicitors:
McCullough Robertson (Plaintiff)
King & Wood Mallesons (Defendant)

File Number(s): 2013/343809

Judgment (ex tempore - revised 25 march 2014)

HIS HONOUR: On 14 October 2011, the plaintiff (Macmahon) as contractor and the defendant (Cobar) as principal made a written agreement under which Macmahon undertook to design and construct certain works for the development of Cobar's copper mine at Cobar in this State.

On 4 June 2013, Cobar wrote to Macmahon giving what it said was notice of termination of the contract. Cobar relied on a contractual provision, cl 22.3(a), which entitled it to terminate forthwith for breach if, in its opinion, the breach was material and incapable of remedy. Cobar relied also on the two following paragraphs of cl 22.3. One of those grounds related to asserted breach of Occupation Health and Safety obligations. The other related to other asserted material breaches which, in Cobar's opinion (said to have been reasonably formed), could not be rectified without themselves causing further material breaches.

Macmahon says that the termination was invalid, however, and that the letter of termination constituted a repudiation of the contract. On 19 June 2013 (presumably, having had an opportunity to consider its position), Macmahon notified Cobar that it accepted the repudiation as discharging the contract.

Macmahon sues for damages. One of the heads of damage claimed is described in the list statement as "loss of opportunity to earn profit". Macmahon says that, had the contract continued to completion, it would have made very substantial profits, and…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Macmahon Mining Services v Cobar Management

Details

AGLC: Macmahon Mining Services v Cobar Management [2014] NSWSC 502
Case: [2014] NSWSC 502
Decision Date: 25 March 2014

CaseChat Overview and Summary

The case of Macmahon Mining Services v Cobar Management involved a dispute over the interpretation of a limiting liability clause in a contract. The matter was heard in the Supreme Court of New South Wales, with Justice Groves presiding. The plaintiff, Macmahon Mining Services, sought to challenge the enforceability of a clause that limited their liability for consequential losses. The defendant, Cobar Management, argued that the clause was clear and enforceable as written.

The primary legal issue before the court was the interpretation of the limiting liability clause. Specifically, the court had to determine whether the clause should be construed in a way that would exclude or limit the plaintiff's liability for consequential losses. Additionally, the court had to consider whether the contract should be construed so as not to deprive one party of its benefit, potentially leading to an unreasonable or unjust outcome. The court also addressed the procedural matter of whether to proceed on a hypothetical basis when considering the question of construction under the Uniform Civil Procedure Rules 2005 (NSW), rule 28.2.

Justice Groves held that the limiting liability clause was clear and unambiguous in its terms, and thus enforceable. The court found that the clause did not deprive the plaintiff of any benefit and was not unreasonable or unjust. Consequently, the court ruled that the clause effectively limited the plaintiff's liability for consequential losses. The court further determined that it should not proceed on a hypothetical basis when considering the question of construction, as the facts were sufficiently established to make a determination. As a result, the court dismissed part of the plaintiff's claim, allowing the remaining issues to proceed to trial.

The final orders of the court were that the limiting liability clause was valid and enforceable, and the plaintiff's claim for consequential losses was dismissed. The remaining parts of the plaintiff's claim were allowed to proceed to trial. The court also denied the plaintiff's application to proceed on a hypothetical basis for the question of construction.

Orders