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ARTICLE · 07 APRIL 2012

Sharing the blame: Proportional liability in construction contracts

Moray & Agnew
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Parties may be found proportionately liable for losses caused by other parties when they could prevent those losses.

AustraliaCorporate/Commercial Law
Sean O'Sullivan
Sean O'Sullivan
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McGrath Corporation Pty Ltd v Global Construction Management Pty Ltd & Ian Vincent Taylor [2011] QSC 178

The Supreme Court of Queensland recently handed down an important judgment regarding the proportionate liability of parties to construction contracts for losses in circumstances where a third party is directly responsible for the breach.

Background

  • McGrath Corporation ('MCPL') sought to develop and construct a twin tower unit
  • Global Construction ('Global') was engaged as construction manager for the project
  • ITF Formwork ('ITF'), was also engaged by McGrath to install formwork on the project
  • Given their position as construction manager, Global had contractual responsibilities to monitor ITF's work and to notify MCPL of any defects in the event of ITF's failure to perform the form work to the appropriate standard

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