Cordon Investments Pty Ltd v Lesdor Properties Pty Ltd PDF

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discharge by performance - important aspect of contract law...

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Cordon Investments Pty Ltd v Lesdor Properties Pty Ltd Discharge by Performance: Substantial Performance and Discharge of Contractual Obligations Name of Case Citation and Court Material Facts

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Cordon Investments Pty Ltd v Lesdor Properties Pty Ltd Cordon Investments Pty Ltd v Lesdor Properties Pty Ltd [2012] NSWCA 184 New South Wales Court of Appeal Construction dispute. Cordon was a property developer and commercial builder. The second and third appellants (the guarantors) were directors of Cordon. At the relevant time Lesdor Properties was the registered proprietor of premises at Miranda (the property). By deed (the Agreement), Cordon and Lesdor entered into a joint venture agreement to develop the property. Pursuant to a clause of the Agreement, the guarantors agreed to indemnify Lesdor against any loss suffered by it as a result of default (a failure to meet the legal obligations of a loan) by Cordon under the terms of the Agreement. Disputes arose between the parties resulting in Lesdor terminating the agreement. Cordon asserted that this amounted to repudiation by Lesdor and brought the proceedings seeking damages for the losses that is claimed to have suffered as a result. Lesdor denied that it had wrongfully repudiated the Agreement, saying it was entitled to terminate by virtue of Cordon’s default. Lesdor cross-claimed against Cordon and the guarantors, seeking damages it claimed to have suffered as a result of such default. The trial judge found against Cordon and the appeal was dismissed. Whether the doctrine of substantial performance had operation in circumstances where the contract appeared to be an entire contract. In the context of the case, the question arose whether entire performance was a condition precedent to payment. Substantial performance - Has the innocent party has been denied the essential benefit of the contract? Unless a contract clearly and expressly makes exact performance of the obligation a condition precedent to the payment of the contractual price, if the plaintiff has substantially performed his or her obligation he or she is entitled to recover the contract price subject to a reduction for the cost of any remedial work that has to be done. Tan Hung Nguyen v Luxury Design Homes Pty Ltd: Doctrine of substantial performance could have application to an ‘entire contract’ where full and complete performance by one party of its obligations is necessary before that party is entitled to receive the agreed consideration. Cordon’s performance of its obligation to bring the works to completion was not a condition of its entitlement to receive the contractual consideration. It was a condition precedent to the obligation of Lesdor to sign and deliver the Strata Plan. To apply the doctrine of substantial performance to with would effectively involve rewriting the contract. For whether this is an entire contract: where there has been substantial performance, they have treated a failure to complete as a breach of a nonessential term. The obligation to hand over the Strata Plan only arose on completion of work and so there was no room for the operation of the doctrine of substantial performance in the circumstances....