Baulderstone Hornibrook Pty Ltd v Don

Baulderstone Hornibrook Pty Ltd appealed to the New South Wales Court of Appeal against a decision of the Supreme Court of New South Wales. The dispute concerned the interpretation of a clause within a building contract, specifically regarding the calculation of the final payment due to the respondent, Mr. Don, a subcontractor. The appellant, the head contractor, argued that the clause limited its liability for certain variations to the contract price.

The primary legal issue before the Court of Appeal was whether the clause in question, which stipulated that the subcontractor was not entitled to payment for variations unless they were "ordered in writing" by the head contractor, operated to exclude Mr. Don's claim for payment for work done in relation to variations that were not formally ordered in writing. The court also considered whether the conduct of the parties, particularly the appellant's acceptance and use of the varied work, could amount to a waiver of the written order requirement or give rise to an implied contractual term or an equitable claim for payment.

The Court of Appeal, in allowing the appeal, held that the clause requiring written orders for variations was a condition precedent to the subcontractor's entitlement to payment for such variations. The court reasoned that the plain language of the contract did not permit an interpretation that would allow for payment for unwritten variations, even if the work was requested and accepted by the head contractor. The court rejected arguments based on waiver or implied terms, finding that the express contractual provision was clear and unambiguous. The court emphasised the importance of adhering to the express terms of a written contract, particularly in the context of construction agreements where clarity regarding variations is crucial for managing cost and risk.

The Court of Appeal set aside the Supreme Court's judgment and ordered that the appeal be allowed.