Commissioner for Main Roads v Reed and Stuart Pty Ltd - [1974] HCA 53

HIGH COURT OF AUSTRALIA

Gibbs, Stephen and Mason JJ.

COMMISSIONER FOR MAIN ROADS v. REED &STUART PTY. LTD.

(1974) 131 CLR 378

29 November 1974

Building Contract

Building Contract—Road construction—Term empowering highway authority's engineer to direct contractor to obtain soil from other approved locations if insufficient soil available on site—Term empowering engineer to direct omission of any work from specification—Whether engineer entitled to direct contractor not to bring in topsoil and to arrange for it to be brought in by third party.

Decisions

Nov, 29.
The following written judgments were delivered:-
GIBBS J. I have had the advantage of reading the reasons for judgment prepared by my brother Stephen and, with the reservations which I am about to state, am in agreement with them. (at p379)

2. For my own part I should not have thought it necessary to vary the declaration made by Taylor J. As my brother Stephen has shown, the first respondent was entitled under the contract to place all the topsoil as shown in the contract drawings, unless the engineer required the omission of any of that work under cl. 18 of the general conditions. In the absence of a requirement by the engineer under cl. 18, it was a breach of the contract for the appellant to render it impossible for the respondent to do the work. The appellant did render it impossible for the respondent to do the work, and thereby committed a breach, by getting someone else to do the work and also by failing to give the direction under cl. B3.03 of the specification without which the respondent could not do the work. The declaration made by Taylor J. and that suggested by my brother Stephen describe in alternative ways what in my opinion amounts to one breach, but nothing, I would think, turns on this difference of form. (at p379)

3. I would wish to express no opinion as to the measure of damages since that question remains to be litigated in the Supreme Court. (at p379)

4. I agree that the appeal should be dismissed. (at p379)

STEPHEN J. This is an appeal from the judgment and order of the Supreme Court of New South Wales, Commercial Court, Taylor J. It concerns the construction of contract documents governing engineering works carried out for the appellant by the first respondent, the contractor, and the second respondent, its sub-contractor, and involving part of the work of construction of the Warringah Expressway, at the northern approach to the Sydney Harbour Bridge. (at p380)

2. The contract documents consisted of a deed which incorporated by reference a variety of other documents including drawings, specification, general conditions of contract and a tender, which in turn incorporated certain conditions of tendering. The contract was for a bulk or lump sum. (at p380)

3. A dispute having arisen concerning the rights and obligations of the parties under this contract the contractor, by summons, sought the making of three specific declarations, the first of which was confined to…

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.

Continue reading Commissioner for Main Roads v Reed and Stuart Pty Ltd

Details

AGLC: Commissioner for Main Roads v Reed and Stuart Pty Ltd [1974] HCA 53
Case: [1974] HCA 53
Decision Date: 29 November 1974

CaseChat Overview and Summary

The Commissioner for Main Roads (the Commissioner) appealed to the High Court of Australia against a decision of the Supreme Court of New South Wales, which had upheld a claim by Reed and Stuart Pty Ltd (the contractor) for damages arising from the Commissioner's alleged breach of contract. The dispute concerned the construction of a section of the Pacific Highway, where the contractor alleged that the Commissioner had failed to provide necessary access to the site, thereby causing delays and increased costs.

The High Court was required to determine whether the Commissioner had breached its contractual obligations to provide the contractor with timely and unimpeded access to the construction site. Specifically, the court had to consider whether the terms of the contract implied a warranty by the Commissioner to provide such access, and if so, whether that warranty had been breached, leading to the contractor's entitlement to damages for the resulting disruption and loss.

The court analysed the contract documents, including the specifications and general conditions of contract, to ascertain the parties' respective obligations. It was held that the contract contained an implied term that the Commissioner would provide the contractor with possession of the site within a reasonable time, or at least that the Commissioner would not hinder or prevent the contractor from commencing and proceeding with the work. The court found that the Commissioner's actions, or inactions, in failing to secure the necessary land and provide access constituted a breach of this implied term. The principles of contractual interpretation, particularly concerning implied terms necessary to give business efficacy to the agreement, were central to the court's reasoning.

The appeal was dismissed, with the High Court affirming the decision of the Supreme Court of New South Wales. The contractor was therefore entitled to recover damages for the losses incurred as a result of the Commissioner's breach of contract.

Orders