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Australian Development Corporation v White Construction - Doyles Arbitration Lawyers
Australian Development Corporation v White Construction

Australian Development Corporation v White Construction

AUSTRALIAN DEVELOPMENT CORPORATION PTY LTD V WHITE CONSTRUCTIONS LIMITED & ANOR [2001] NSWCA 9

Court of Appeal – 9 February 2001

FACTS

ADC entered into a building contract in 1987 with White Constructions Pty Ltd (ACT), for the construction of an office block and a residential tower known as the Quadrant project in Canberra. ACT was a wholly owned subsidiary of White Constructions Limited (WCL), which was then a wholly owned subsidiary of White Industries Ltd (WIL). In November 1986 WIL was privatised and in October 1987 WCL became a listed company whilst ACT remained a wholly owned subsidiary of WCL. The contract was expressly between ADC and ACT even though negotiations were initially with WIL.

Work by ACT fell seriously behind schedule following labour unrest partly caused by the actions of employees of WCL and the site was closed for 6 months by industrial action.

ADC terminated the contract and sued ACT for breach of contract, WIL on basis of being the undisclosed principal of ACT, breach s52 Trade Practices Act and negligent misrepresentations during pre-contract negotiations, and WCL also for breach of contract.

ISSUES

Whether ACT was acting as an agent for WIL (undisclosed principal).

Whether WIL had mislead ADC as to the viability of the contract price which ADC relied upon in entering into the contract and whether that negligent misrepresentation under s52 TP Act was the causation of damages.

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