Aintree Holdings Pty Ltd v Ground and Foundation Supports Pty Ltd
[2008] WASCA 225
•5 NOVEMBER 2008
AINTREE HOLDINGS PTY LTD -v- GROUND & FOUNDATION SUPPORTS PTY LTD [2008] WASCA 225
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2008] WASCA 225 | |
| THE COURT OF APPEAL (WA) | |||
| Case No: | CACV:69/2007 | 6 AUGUST 2008 | |
| Coram: | MARTIN CJ BUSS JA LE MIERE AJA | 4/11/08 | |
| 16 | Judgment Part: | 1 of 1 | |
| Result: | Appeal dismissed | ||
| B | |||
| PDF Version |
| Parties: | AINTREE HOLDINGS PTY LTD GROUND & FOUNDATION SUPPORTS PTY LTD |
Catchwords: | Contract Construction of written contract Where contract formed in the course of an exchange of correspondence Where sketches provided by respondent to appellant at appellant's request Whether sketches formed part of contract or whether provision of sketches was merely a contractual condition Whether implied term of contract that the contractual work would conform to sketches |
Legislation: | Nil |
Case References: | Australian Broadcasting Commission v Australasian Performing Right Association Ltd (1973) 129 CLR 99 Byrne v Australian Airlines Ltd (1995) 185 CLR 410 Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337 International Air Transport Association v Ansett Australia Holdings Ltd [2008] HCA 3; (2008) 82 ALJR 419 Jumbo King Ltd v Faithful Properties Ltd [1999] 3 HKLRD 757 Maggbury Pty Ltd v Hafele Australia Pty Ltd [2001] HCA 70; (2001) 210 CLR 181 Pacific Carriers Ltd v BNP Paribas [2004] HCA 35; (2004) 218 CLR 451 Poseidon Ltd v Adelaide Petroleum NL (1991) 105 ALR 25 Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52; (2004) 219 CLR 165 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA TITLE OF COURT : THE COURT OF APPEAL (WA) CITATION : AINTREE HOLDINGS PTY LTD -v- GROUND & FOUNDATION SUPPORTS PTY LTD [2008] WASCA 225 CORAM : MARTIN CJ
- BUSS JA
LE MIERE AJA
- Appellant
AND
GROUND & FOUNDATION SUPPORTS PTY LTD
Respondent
ON APPEAL FROM:
Jurisdiction : DISTRICT COURT OF WESTERN AUSTRALIA
Coram : COMMISSIONER SCHOOMBEE
Citation : GROUND & FOUNDATION SUPPORTS PTY LTD -v- AINTREE HOLDINGS PTY LTD t/as BEAUMONDE HOMES [2007] WADC 36
File No : CIV 2483 of 2003
(Page 2)
Catchwords:
Contract - Construction of written contract - Where contract formed in the course of an exchange of correspondence - Where sketches provided by respondent to appellant at appellant's request - Whether sketches formed part of contract or whether provision of sketches was merely a contractual condition - Whether implied term of contract that the contractual work would conform to sketches
Legislation:
Nil
Result:
Appeal dismissed
Category: B
Representation:
Counsel:
Appellant : Mr M D Cuerden
Respondent : Mr P Mendelow
Solicitors:
Appellant : Griffiths & Godecke
Respondent : Taylor Smart
Case(s) referred to in judgment(s):
Australian Broadcasting Commission v Australasian Performing Right Association Ltd (1973) 129 CLR 99
Byrne v Australian Airlines Ltd (1995) 185 CLR 410
Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337
International Air Transport Association v Ansett Australia Holdings Ltd [2008] HCA 3; (2008) 82 ALJR 419
Jumbo King Ltd v Faithful Properties Ltd [1999] 3 HKLRD 757
(Page 3)
Maggbury Pty Ltd v Hafele Australia Pty Ltd [2001] HCA 70; (2001) 210 CLR 181
Pacific Carriers Ltd v BNP Paribas [2004] HCA 35; (2004) 218 CLR 451
Poseidon Ltd v Adelaide Petroleum NL (1991) 105 ALR 25
Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52; (2004) 219 CLR 165
(Page 4)
1 MARTIN CJ: I agree with Buss JA that this appeal should be dismissed for the reasons which he gives.
2 BUSS JA: At all material times, the appellant has carried on business as a builder of, amongst other things, residential premises.
3 At all material times, the respondent has carried on business as a provider of geotechnical engineering services, including the construction of retaining works and the installation of lightweight sheet piling.
4 In March or April 2003, pursuant to a tender submitted by the respondent and accepted by the appellant, the parties entered into a contract under which the respondent agreed, relevantly, to supply and erect lightweight sheet piling on the western and northern boundaries of a property at 45 The Esplanade, Mount Pleasant. The appellant had agreed with the owner of the property to construct a multi-level residence on it. It was necessary for retaining works to be constructed on three levels. The purpose of the lightweight sheet piling, which was to be a temporary measure, was to retain the earth on the adjoining lots so that the land at 45 The Esplanade could be excavated to the required ground level for the construction of the residence and a permanent retaining wall on the western and northern boundaries.
5 Between about April and June 2003, the respondent installed lightweight sheet piling, with ground anchors and ultrafine cement grout, at 45 The Esplanade. According to the respondent, in about June 2003, it completed the work it was required to perform under the contract.
6 The respondent rendered accounts to the appellant as follows:
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- The appellant paid the respondent, in total, $110,373.31, but refused to make any further payment.
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7 The respondent commenced proceedings in the District Court as plaintiff against the appellant as defendant. It claimed $21,069 (being the difference between $131,442.31 and $110,373.31) together with interest on that amount pursuant to s 32 of the Supreme Court Act 1935 (WA).
8 The appellant defended the respondent's claim. It asserted, amongst other things, that the work carried out by the respondent was defective. Further, it pleaded that the works in question were 'worthless or worth no more than the sum of $110,373.31' it had already paid. The appellant counterclaimed for alleged loss and damage it suffered in remedying the respondent's allegedly defective work. It also pleaded an entitlement to set off against the respondent's claim so much of the counterclaim as would wholly extinguish that claim.
9 The District Court proceedings were tried before Commissioner Schoombee. Her Honour concluded that the respondent had performed the contract between the parties and that its claim for $21,069 should succeed and the appellant's counterclaim should be dismissed.
10 The appellant appeals to this court against the learned commissioner's judgment.
Outline of the learned commissioner's decision
11 The appellant provided architectural drawings to assist the respondent in tendering for the supply and erection of the lightweight sheet piling.
12 The learned commissioner held that the drawings, on the basis of which the respondent prepared its tender, showed, relevantly, that it was an express term of the contract between the parties that the 'finished ground level' at the upper level was to be Australian Height Datum (AHD) 7.70 [45]. AHD is a standard measurement to determine a particular height above sea level [2]. The 'finished ground level', in the present case, was the level to be achieved by the appellant after the construction of a proposed permanent retaining wall and the laying of paving.
13 The respondent understood that the proposed permanent retaining wall would be approximately 5.5 metres in height [3]. The parties agreed at trial that this was a substantial retaining wall.
14 The respondent installed the lightweight sheet piling to accommodate excavation to AHD 7.60; that is, 100 millimetres lower than the required 'finished ground level'. The parties agreed at trial that the 100 millimetres
(Page 6)
- was a nominal allowance for paving, and there was never any basis on which footings for the proposed permanent retaining wall could be installed in an allowance of 100 millimetres (ts 153, 154).
15 The respondent's case, as run at trial, was that a permanent retaining wall could be constructed, notwithstanding that the lightweight sheet piling had been installed to accommodate excavation only to AHD 7.60, if the permanent retaining wall was constructed inside the boundaries of 45 The Esplanade. This case was put on the basis that the further one moves into the property, away from the temporary sheet piling, the deeper one can excavate [11].
16 Subject to that issue in relation to the placement of the proposed permanent retaining wall relative to the location of the lightweight sheet piling, the installation of the sheet piling to accommodate excavation only to AHD 7.60 made no allowance for the construction of footings for the permanent retaining wall [11].
17 The appellant contended at trial that the contract between the parties contained an implied term to the effect that the installation of the lightweight sheet piling would allow for adequate footings to be installed by the respondent below the 'finished ground level' of AHD 7.70 to permit the construction of the proposed permanent retaining wall [60]. The learned commissioner rejected the alleged implied term [65] - [78].
18 The learned commissioner decided the proceedings on this basis:
(a) having regard to the correspondence between the parties, it was an express term of the contract that the excavation for the relevant boundaries was AHD 7.60, so there was no room for an implied term as contended [83];
(b) alternatively, although the proposed implied term had been clearly formulated, it was 'too vague to be applied', as it required one indeterminate concept, the 'adequate footings', to be assessed on the basis of another indeterminant concept, the 'sufficient permanent retaining wall' [66].
Relevant correspondence, drawings and sketches
19 On or about 18 November 2002, the appellant sent the respondent a document (in the form of a 'with compliments' slip) requesting it to tender for the installation of the lightweight sheet piling. The document bore the name of 'John Nici', the appellant's construction manager, and was marked
(Page 7)
- for the attention of 'Brent Black', a director of the respondent. The 'with compliments' slip stated, relevantly:
Please quote piling ASAP:
(1) Lot 255 (45) The Esplanade Mt Pleasant
(2) …
21 One of the drawings sent to the respondent with the 'with compliments' slip shows, relevantly, the north elevation of the proposed residence at 45 The Esplanade. On the right-hand side of the north elevation, next to the western boundary, a gazebo or cabana is depicted, and within the depiction are the words 'finished ground level AHD 7.700'. When the plan was sent to the respondent it included a hand-drawn line marked 'NGL'. The parties were agreed that this was an acronym for 'natural ground level'.
22 By letter dated 11 March 2003, the respondent sent the appellant its tender. The letter reads, relevantly:
We are pleased to submit our tender price for the installation of sacrificial steel sheetpiling with ground anchors as necessary and ultrafine cement grout for the above project, based on information contained in drawings #1.E and #5.E.
• West Elevation: Approx 21.000 lineal metres, retaining 4.000m to 4.800m
• North Elevation: Approx 13.000 lineal metres, retaining up to 5.500m
• Wall on northern neighbouring site: Approx 10.000 lineal metres retaining up to 8.000m
• Internal wall: Approx 23.000 lineal metres, retaining approx 2.950m
• Mid level grout installation: Approx 6.500m retaining up to 3.000m
• Lower level grout installation: Approx 6.000m retaining up to 3.000m
Including engineer's design, supply and installation of materials as detailed, supply of labour and supervision, mobilisation and demobilisation.
Lump Sum Price $119,493.00
GST $11,949.30
23 The letter dated 11 March 2003 contained various clauses described as 'terms and conditions'. Clause 13 provides:
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- Except where it is specifically stated, no allowance has been made for the provision of any services or materials other than those reasonably required to carry out the works as defined herein under normal working conditions.
24 Another drawing which accompanied the appellant's 'with compliments' slip shows, relevantly, the east, north, west and south elevations of the proposed residence. The drawing in question is described as issue C, job number 3193, sheet 5 of 10. It was common ground between the parties that this plan was the drawing #5.E referred to in the letter dated 11 March 2003. The west elevation, which, like the other elevations, is drawn to scale, shows the 'west boundary existing ground level' at a height of about 4 metres above the 'west boundary finished ground level' on the right-hand side of the elevation (that is, southwards on the property boundary) and the 'west boundary existing ground level' at a height of 4.8 metres above the 'west boundary finished ground level' on the left-hand side (northwards on the property boundary). The length of the western boundary, as shown in the west elevation, is about 20 metres.
25 The parties were agreed that the plan referred to in the letter dated 11 March 2003 as drawing #1.E should have been a reference to drawing #2.E. Nothing turns on this error.
26 By a memorandum dated 17 March 2003, sent by facsimile transmission, Mr Nici of the appellant wrote to Mr Black of the respondent in these terms:
Following on from my previous fax dated 13th February 03, we accept your tender for the above site being $119,493.00, subject to clarification of methods to be used as described in your tender.
Please call me as soon as possible to confirm methods indic[a]ted to what was discussed on site.
NOTE: All details to be sent to Ron Thorpe (Engineer) to enable him to complete structural plans.
27 Mr Thorpe, being the person referred to in the note to the memorandum dated 17 March 2003, was an independent contractor engaged by the appellant to advise in relation to the structural adequacy of the permanent retaining wall to be constructed at 45 The Esplanade.
28 By a further memorandum dated 26 March 2003, also sent by facsimile transmission, Mr Nici of the appellant informed Mr Black of the respondent:
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- As discussed, we accept your tender for the above site, being $119,493.00.
T & G Earthmoving will commence excavation on the site this afternoon, please lia[i]se with Tom to discuss work schedule.
Please ensure all efforts are made not to have any delays between completion of earthworks and you starting Grouting/Sheet piling.
29 Between about 11 March 2003 and 3 April 2003, Mr Black delivered to Mr Thorpe three sketches, prepared by the respondent, which depicted elevations of the lightweight sheet piling as the respondent intended to install it. These were the 'details' sent in response to the 'note' in the appellant's memorandum dated 17 March 2003. On 3 April 2003, Mr Thorpe sent the sketches, by facsimile transmission, to Mr Nici. Mr Nici then requested Mr Thorpe to explain the sketches to him. Mr Thorpe gave Mr Nici an explanation, by telephone, of the sketches 'in terms of their layout'.
30 One of the sketches shows the western elevation of the lightweight sheet piling as intended to be installed. The salient features of the sketch are these:
(a) The natural ground level is drawn on the sketch.
(b) The lightweight sheets are shown as being of various lengths, namely 6 metres, 6.5 metres and 7 metres. It was common ground between the parties, however, that all of the sheets, as actually installed, were 7 metres in length.
(c) The excavation level was shown as 'RL 7.60'. It was common ground between the parties that 'RL' is equivalent to 'AHD'.
(d) The lower level of the lightweight sheets, as installed, was shown to be significantly lower than RL 7.6 (that is, significantly lower than the excavation level).
(e) The location of various anchors (the anchors being attached, in the course of construction, to the lightweight sheets) was shown.
Some other facts and circumstances
31 The lightweight sheet piling comprises thin sheets of corrugated iron which are driven into the ground by a piece of equipment attached to an excavator. The anchors are used for the purpose of stabilising the sheets.
32 The appellant constructed a permanent retaining wall at 45 The Esplanade. The actual cost was $88,961.71. If the respondent had allowed for the construction of adequate footings for the proposed
(Page 10)
- retaining wall, then the cost incurred by the appellant would have been $64,114.38. The appellant counterclaimed the difference between these amounts, being $24,847.33.
33 The respondent adduced evidence that if it had allowed for the construction of adequate footings for the proposed permanent retaining wall, its tender price would have increased significantly.
Grounds of appeal
34 There are three grounds of appeal, as follows:
1. The learned Commissioner erred in fact and in law in finding that:
(a) no concluded contract was reached between the parties upon the appellant's acceptance of the respondent's offer on 26 March 2003; and that
(b) it was an express term of the contract that the excavation level for the relevant boundaries was AHD 7.60.
2. Further, the learned Commissioner erred in fact and in law in finding that it was not an implied term of the contract that the installation of the sheet piling would allow for an adequate footing to be installed by the respondent below the finished ground level of AHD 7.70 to allow for the construction of a sufficient permanent retaining wall, and in failing to find that such a term was an implied term of the contract.
3. Further and in the alternative, the learned Commissioner erred in fact in finding that counsel for the appellant did not provide any examples of circumstances in which Mr Black (a witness called by the respondent) did not present his evidence in a straightforward manner, whereas in fact counsel did in fact give specific examples of such matters, and the learned Commissioner thereby made a finding as to credibility without having had any or any proper regard to the submissions made in that respect.
The proper approach to the construction of the contract
35 The general principles to be applied in the construction of written contracts are set out in the judgment of Gibbs J in Australian Broadcasting Commission v Australasian Performing Right Association Ltd (1973) 129 CLR 99:
It is trite law that the primary duty of a court in construing a written contract is to endeavour to discover the intention of the parties from the words of the instrument in which the contract is embodied. Of course the whole of the instrument has to be considered, since the meaning of any one
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- part of it may be revealed by other parts, and the words of every clause must if possible be construed so as to render them all harmonious one with another. If the words used are unambiguous the court must give effect to them, notwithstanding that the result may appear capricious or unreasonable, and notwithstanding that it may be guessed or suspected that the parties intended something different. The court has no power to remake or amend a contract for the purpose of avoiding a result which is considered to be inconvenient or unjust. On the other hand, if the language is open to two constructions, that will be preferred which will avoid consequences which appear to be capricious, unreasonable, inconvenient or unjust, 'even though the construction adopted is not the most obvious, or the most grammatically accurate', to use the words from earlier authority cited in Locke v. Dunlop ((1888) 39 Ch. D. 387, at p.393), which, although spoken in relation to a will, are applicable to the construction of written instruments generally; see also Bottomley'sCase ((1880) 16 Ch. D. 681, at p. 686). Further, it will be permissible to depart from the ordinary meaning of the words of one provision so far as is necessary to avoid an inconsistency between that provision and the rest of the instrument. Finally, the statement of Lord Wright in Hillas & Co. Ltd. v. Arcos Ltd ((1932) 147 L.T. 503, at p. 514), that the court should construe commercial contracts 'fairly and broadly, without being too astute or subtle in finding defects', should not, in my opinion, be understood as limited to documents drawn by businessmen for themselves and without legal assistance (cf. Upper Hunter County District Council v. Australian Chilling and Freezing Co. Ltd((1968) 118 C.L.R. 429, at p. 437)) (109) - (110).
36 The construction of a written contract is concerned with ascertaining what a reasonable person would have understood the parties to mean. Consideration should ordinarily be given not only to the language of the document, but also to the surrounding circumstances known to the parties, and the apparent purpose and object of the transaction. See Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52; (2004) 219 CLR 165, where Gleeson CJ, Gummow, Hayne, Callinan and Heydon JJ said:
This Court, in Pacific Carriers Ltd v BNP Paribas ((2004) 218 CLR 451), has recently reaffirmed the principle of objectivity by which the rights and liabilities of the parties to a contract are determined. It is not the subjective beliefs or understandings of the parties about their rights and liabilities that govern their contractual relations. What matters is what each party by words and conduct would have led a reasonable person in the position of the other party to believe. References to the common intention of the parties to a contract are to be understood as referring to what a reasonable person would understand by the language in which the parties have expressed their agreement. The meaning of the terms of a contractual document is to be determined by what a reasonable person would have understood them to mean. That, normally, requires consideration not only of the text, but also of the surrounding circumstances known to the parties,
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- and the purpose and object of the transaction (Pacific Carriers Ltd v BNP Paribas (2004) 218 CLR 451 at 461 - 462 [22]) [40].
- Also see Maggbury Pty Ltd v Hafele Australia Pty Ltd [2001] HCA 70; (2001) 210 CLR 181 [11]; Pacific Carriers Ltd v BNP Paribas [2004] HCA 35; (2004) 218 CLR 451 [22]; International Air Transport Association v Ansett Australia Holdings Ltd [2008] HCA 3; (2008) 82 ALJR 419 [8], [53]; Jumbo King Ltd v Faithful Properties Ltd [1999] 3 HKLRD 757, 773 - 774.
37 Relevantly, for present purposes, a term will be implied in a contract only if it is apparent that the parties have not enunciated all of the terms of their agreement and the alleged implied term meets all of the requirements stipulated in Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337, 346 - 347 (Mason J, Stephen and Wilson JJ agreeing), 401 - 404 (Brennan J). Also see Byrne v Australian Airlines Ltd (1995) 185 CLR 410, 422 - 423 (Brennan CJ, Dawson and Toohey JJ). An implied term gives effect to the presumed intention of the parties and is not supplied to add what some may perceive as a desirable improvement to their agreement. See Poseidon Ltd v Adelaide Petroleum NL (1991) 105 ALR 25, 44 (Lee J).
Grounds 1 and 2 of the appeal
38 It is convenient to consider grounds 1 and 2 of the appeal together.
39 As I have mentioned, the learned commissioner held that the architectural drawings provided by the appellant to the respondent as part of the request for the tender showed it was an express term of the contract between the parties that the 'finished ground level' was to be AHD 7.70 [45].
40 By its memorandum dated 17 March 2003, the appellant informed the respondent that it accepted the tender 'subject to clarification of methods to be used as described in your tender'. The memorandum also stated, 'Note: All details to be sent to Ron Thorpe (Engineer) to enable him to complete structural plans'.
41 The learned commissioner held that the appellant's acceptance in its memorandum dated 17 March 2003 was conditional upon clarification of the respondent's methods [47]. The appellant does not challenge that finding on appeal. Mr Black gave evidence that Mr Nici required clarification as to the grouting to be used by the respondent (ts 134). Her Honour found that this condition was satisfied by 26 March 2003, when the appellant sent the memorandum to the respondent stating, 'As
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- discussed, we accept your tender for the above site, being $119,493.00' [48].
42 The learned commissioner also held that the requirement in the memorandum dated 17 March 2003 that 'all details' be sent to the appellant's structural engineer, Mr Thorpe, was an additional condition of the acceptance [47]. Her Honour found that the relevant details comprised the sketches, and that the additional condition was satisfied when Mr Black delivered the sketches to Mr Thorpe some time between 11 March 2003 and 3 April 2003 [52].
43 The learned commissioner concluded that the contract between the parties became unconditional some time between 17 March 2003 and 14 April 2003.
44 Further, the learned commissioner held that the sketches formed 'part of the terms of the contract' [54], [55]. The sketches indicated an excavation level of AHD 7.60 [58]. Consequently, her Honour decided that the excavation level of AHD 7.60 was an express term of the contract, and that this term precluded the implication of a term that the lightweight sheet piling would allow for an adequate footing, for the purposes of the proposed permanent retaining wall, below the finished ground level of AHD 7.70 [59].
45 Counsel for the appellant submitted to this court:
(a) the only condition of the appellant's acceptance in its memorandum dated 17 March 2003 was clarification of the methods to be used; and
(b) the 'note' requiring the details to be sent to Mr Thorpe was merely for the purpose of facilitating Mr Thorpe's completion of the structural plans for the permanent retaining wall.
46 In the alternative, counsel for the appellant submitted that if the 'note' in the appellant's memorandum dated 17 March 2003 was a condition of its acceptance, then the condition merely required the respondent to send the details (that is, the sketches) to Mr Thorpe. Nothing in the correspondence between the parties or their conduct had the effect of incorporating the sketches themselves as part of the contract.
47 The present case did not involve a conventional tender process whereby a builder or proprietor calls for tenders, and the builder or proprietor, in a tender document, sets out with some particularity the work to be done. Here, the appellant called for a tender in a general way by
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- sending the respondent a 'with compliments' slip with a brief handwritten note on it, together with some architectural drawings, and left it to the respondent to describe the work it would perform, by reference to those drawings, and to set the amount it would charge for performing the work. That is the context in which the respondent's letter dated 11 March 2003 must be construed.
48 It is apparent that the dimensions set out in the letter dated 11 March 2003, on which the respondent's tender price was based, were taken from the elevations on plan issue C, job number 3193, sheet 5 of 10. As I have mentioned, that architectural drawing (which is described in the letter dated 11 March 2003 as drawing #5.E) was sent by the appellant to the respondent with the 'with compliments' slip.
49 The critical issue, as regards the letter dated 11 March 2003, is the proper construction of the words:
West Elevation: Approx 21.000 lineal metres, retaining 4.000m to 4.800m.
- In particular, whether:
(a) those words require lightweight sheet piling to be installed so as to enable a permanent retaining wall to be built by the appellant which will retain 4 metres to 4.8 metres; or
(b) those words merely require the installation of lightweight sheet piling which will itself retain 4 metres to 4.8 metres.
50 In my opinion, the ordinary and natural meaning of the words:
West Elevation: Approx 21.000 lineal metres, retaining 4.000m to 4.800m,
- in the context of the tendering process adopted by the parties (that is, the appellant having left it to the respondent to describe the work it would perform, by reference to the architectural drawings, and to set the amount it would charge for performing the work) is that the respondent would merely install lightweight sheet piling which would itself retain 4 metres to 4.8 metres. The respondent offered to carry out that work, and the other work described in the letter dated 11 March 2003, for $119,493 plus GST of $11,949.30. The letter refers to the lightweight sheet piling, but makes no mention of the proposed permanent retaining wall. It was the appellant's responsibility to determine whether the work which the respondent had offered to carry out, for the price it had specified, would enable the appellant to construct the proposed permanent retaining wall.
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51 In my opinion, the appellant, by its memorandum dated 17 March 2003, accepted the offer contained in the letter dated 11 March 2003, subject to two conditions. The first condition related to clarification of the methods to be used by the respondent as described in its letter. The evidence at trial revealed that the only clarification which the appellant sought concerned the grouting to be used, and the appellant was satisfied with the respondent's explanation by 26 March 2003, when it sent the memorandum of that date (ts 65, 134). The second condition required the respondent to send 'details' of its proposed work to Mr Thorpe to enable him to complete structural plans for the proposed permanent retaining wall. The respondent satisfied this condition by delivering the sketches to Mr Thorpe some time between about 11 March 2003 and 3 April 2003. The learned commissioner held, correctly, that the contract became unconditional some time between 17 March 2003 and 14 April 2003.
52 The respondent gave the sketches to Mr Thorpe pursuant to a condition of the contract between the parties, and the appellant accepted that the delivery of the sketches fulfilled that condition. The fulfilment of the condition is evidenced by the appellant's memorandum dated 26 March 2003 in which it expressed its acceptance of the respondent's tender for $119,493, without any condition or reservation. In my opinion, it was an implied term of the contract that upon the respondent sending 'details' of its proposed work to Mr Thorpe (pursuant to the 'note' in the memorandum dated 17 March 2003) and the appellant accepting that the details sent (that is, the sketches) fulfilled the condition, the respondent would carry out the work described in its letter dated 11 March 2003 in accordance with the sketches. The implied term is necessary to give business efficacy to the contract and otherwise meets the requirements stipulated in Codelfa Construction and Byrne for the implication of a term on an ad hoc basis. By this means, the sketches acquired the status of a contractual document.
53 In my opinion, a reasonable person who received the sketches would construe them to mean that the appellant had offered to install lightweight sheet piling that would, relevantly, itself retain 4 metres to 4.8 metres. It is apparent from the sketches that the respondent was not proposing to install lightweight sheet piling so as to enable a permanent retaining wall to be built by the appellant which would retain 4 metres to 4.8 metres. The sketches are consistent with my construction of the respondent's letter dated 11 March 2003.
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54 Grounds 1 and 2 of the appeal fail.
Ground 3 of the appeal
55 Before this court, counsel for the appellant conceded (correctly, in my opinion) that if grounds 1 and 2 of the appeal failed, then the appellant's position would not be advanced by ground 3.
56 The issues in the appeal turn upon the proper construction, on an objective basis, of the contract between the parties and whether a term is objectively to be implied. Mr Black's credit at the trial (and, indeed, the credit of the other witnesses) was not relevant to the issues of construction (including, whether the implied term contended for by the appellant had been made out).
57 Ground 3 of the appeal fails.
Conclusion
58 I would dismiss the appeal.
59 LE MIERE AJA: I agree with Buss JA.
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