Cable (1956) Ltd v Hutcherson Bros Pty Ltd - [1969] HCA 37

HIGH COURT OF AUSTRALIA

Barwick C.J., McTiernan, Kitto, Menzies and Windeyer JJ.

CABLE (1956) LTD. v. HUTCHERSON BROS. PTY. LTD.

(1969) 123 CLR 143

8 August 1969

Contract

Contract—Building and engineering contracts—Construction and interpretation—Builder's tender to design supply and install bulk storage and handling plant—To be done according to specification prepared by building owner's consulting engineer—Builder's drawings approved by building owner's consulting engineer—Promise to execute and complete in a workmanlike manner works shown on drawing and described in specification—Drawings show particular design of foundation—Subsoil subsided when foundations loaded—Whether promise to produce result or execute work described in drawings and specification.

Decisions

August 8.
The following written judgments were delivered : -
BARWICK C.J. This is an appeal against a judgment of the Supreme Court of New South Wales (Court of Appeal Division) answering questions asked in a case stated to it by an arbitrator pursuant to s. 9 of the Arbitration Act, 1902, of that State. The Court, by majority, answered the questions favourably to the respondent. The arbitration was in a dispute arising out of a building contract between the parties, the appellant being the building owner and the respondent the builder. The arbitrator who carefully and clearly made his findings of fact made his award in various alternatives according to the answers which the Court might give upon the matters of law submitted to it in the case stated. Appended to the case and forming part of it is a large number of documents, including a document called "Articles of Agreement and Specifications". (at p145)

2. From the findings of the arbitrator and the documents in his award the following relevant facts emerge. The appellant is the lessee from the Bunbury Harbour Board of land at Bunbury Harbour in the State of Western Australia. That land had been reclaimed from the harbour by a process of hydraulic filling. Both parties accepted the results of certain load bearing tests which showed "a settlement of approximately one inch at a load of 4 tons per square foot" and a statement which said that "it is anticipated that the ground will remain solid after the initial settlement". At no time did either of the parties by itself or by consultants make any investigation of the character of the subsoil beneath the site on which the appellant desired certain works to be erected. In 1964 the appellant, a producer of ilmenite and associated minerals derived from beach sands in Western Australia, proposed to have a bulk storage and handling plant erected on the said site which is in the vicinity of a land-backed wharf where storages for other producers of such minerals were then under construction. The scheme or project of the appellant consisted of two storage bins, each capable of holding 8,000 tons of ilmenite recoverable by gravity flow, a bucket elevator to transfer the material from a hopper to a conveyor to convey it to the bins whence it would discharge through bottom chutes to an under bin conveyor. The…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [1969] HCA 37
Decision Date: 8 August 1969

CaseChat Overview and Summary

Cable (1956) Ltd and Hutcherson Bros Pty Ltd were parties to a dispute concerning a contract for the construction of a bridge. The case was heard by the High Court of Australia.

The central legal issues before the court involved the interpretation of a building contract, specifically concerning the allocation of risk for unforeseen ground conditions and the consequences of a contractor's failure to comply with contractual requirements regarding the submission of progress claims. The court was required to determine whether the contractor was entitled to additional payment for work performed due to encountering unexpected subsurface conditions, and whether the owner's actions in withholding payment constituted a breach of contract.

The High Court's reasoning focused on the principles of contractual interpretation, particularly in relation to clauses dealing with variations and unforeseen circumstances. The court examined the express terms of the contract to ascertain the parties' intentions regarding the contractor's entitlement to extra payment for work necessitated by conditions not contemplated at the time of contracting. Furthermore, the court considered the contractual provisions governing the submission and processing of progress claims, and the implications of any non-compliance by the contractor on the owner's obligation to pay. The court applied established principles of contract law concerning the duty to perform work with due diligence and the consequences of a party's failure to adhere to agreed procedures.

The court ultimately found in favour of Hutcherson Bros Pty Ltd, holding that they were entitled to recover additional costs incurred due to the unforeseen ground conditions. The court also determined that Cable (1956) Ltd had breached the contract by wrongfully withholding payment.

Orders