Benchmark
A daily Bulletin listing our choice of Decisions of Superior Courts of Australia.
Benchmark

Construction

Thursday, 27 November 2014

Executive Summary (One Minute Read)
DH MB Pty Ltd v Manning Motel Pty Ltd (NSWCA) - leases - breach of collateral contract and covenant to repair - damages - appeal dismissed
Summaries With Link (Five Minute Read)
DH MB Pty Ltd v Manning Motel Pty Ltd [2014] NSWCA 396
Court of Appeal of New South Wales
Meagher, Barrett & Gleeson JJA
Contract - first appellant (DHMB) owned motel - DHMB leased motel to respondent - lease terminated - second appellant (DHBI) owned and operated lodge - third appellant (Mr Duffy) was sole director of and shareholder in DHMB and DHBI - respondent sued appellants for breach of collateral contract and covenant to keep premises in good state of repair - primary judge found Mr Duffy on behalf of DHBI had promised lessee that if it lessee entered lease, DHBI would purchase accommodation from lessee - primary judge awarded damages to lessee for breach of collateral agreement -primary judge also held that there was a breach of covenant in relation to external wooden staircase and awarded damages for the breach - held: collateral contract formed between DHBI and lessee constituted by offer and subsequent acceptance - DHBI bound to terms of its offered promise to purchase accommodation - primary judge did not err in determining the measure of damages to be awarded for breach of the covenant to repair - appeal dismissed.
DH MB Pty Ltd