New South Wales v Coya Constructions Pty Ltd

The Court of Appeal of New South Wales considered a dispute between the State of New South Wales and Coya Constructions Pty Ltd concerning a contract for the construction of a school. The State sought to recover damages for alleged breaches of the building contract by Coya Constructions.

The primary legal issue before the Court was whether the State had validly exercised its right to terminate the contract and, consequently, whether it was entitled to recover damages for the alleged breaches. This involved an examination of the contractual provisions relating to termination and the conduct of the parties in the lead-up to the termination.

The Court analysed the terms of the building contract, particularly those concerning the architect's role and the procedures for issuing certificates and notices. It was held that the architect's certificate, which was a prerequisite for the State to terminate the contract, was not validly issued. This was because the architect had not properly considered the information available to them and had not acted impartially. Accordingly, the termination of the contract by the State was wrongful. The Court further found that the State had failed to establish that Coya Constructions had breached the contract in a manner that would have entitled the State to terminate, even if the termination had been validly effected.

Consequently, the Court of Appeal dismissed the State's appeal and affirmed the decision of the primary judge, finding in favour of Coya Constructions.