Laing O'Rourke v Transport Infrastructure - [2007] NSWSC 723

CITATION: Laing O'Rourke v Transport Infrastructure [2007] NSWSC 723

HEARING DATE(S): 27th,28th June & 6th July 2007

JUDGMENT DATE :
17 July 2007

JUDGMENT OF: Hammerschlag J

DECISION: Summons dismissed

CATCHWORDS: CONTRACT - Dispute resolution provision requiring party to negotiate in good faith - uncertainty - severance of uncertain provisions - construction of contracts - requirement to construe so as to allow harmonious operation

LEGISLATION CITED: Commercial Arbitration Act 1984 NSW

CASES CITED: Laws Holdings Pty Limited v Short (1972) 46 ALJR 563
Elizabeth Bay Developments Pty Limited v Boral Building Services Pty Limited (1995) 36 NSWLR 709
Walford v Miles [1992] 2 AC 128
Booker Industries Pty Limited v Wilson Parking (Queensland) Pty Limited (1982) 149 CLR 600
Coal Cliff Collieries Pty Limited v Sijehama Pty Limited (1991) 24 NSWLR 1
Aiton Australia Pty Limited v Transfield Pty Limited (1999) 153 FLR 236
Whitlock v Brew (No 2) [1967] VR 803
Whitlock v Brew (No 2) (1968) 118 CLR 445
Griffith University v Tang (2005) 221 CLR 99
State of New South Wales & Ors v Banabelle Electrical Pty Limited & Ors (2002) 54 NSWLR 503
Hooper Baillie Associated Limited v Natcon Group Pty Limited (1992) 28 NSWLR 194
Meehan v Jones (1982) 149 CLR 571
Trawl Industries of Australia Pty Limited v Effem Foods Pty Limited t/a “Uncle Bens of Australia” (1992) 27 NSWLR 326
IBM Australia Limited v National Distribution Services Limited (1991) 22 NSWLR 466
Francis Travel Marketing Pty Limited v Virgin Atlantic Airways Limited (1996) 39 NSWLR 160
Wilkie v Gordian Runoff Limited (2005) 221 CLR 522
Project Blue Sky Inc. v Australian Broadcasting Authority (1998) 194 CLR 355
Legal & General Life of Australia Ltd v A Hudson Pty Ltd (1985) 1 NSWLR 314
Dobbs v National Bank of Australasia Limited (1935) 53 CLR 643
Ex parte Young In Re Kitchin [1881] 17 Ch.D 668

PARTIES: Laing O'Rourke (BMC) Pty Ltd
Transport Infrastructure Development Corporation
CRI Chatswood Pty Ltd
Laurie James (submitting appearance)

FILE NUMBER(S): SC 55043/2007

COUNSEL: G Inatey SC with A Nicholls (Plaintiff)
A Meagher SC with G Rich (1st Defendant)
B Oslington QC with L V Gyles (2nd Defendant)

SOLICITORS: Colin Biggers & Paisley (Plaintiffs)
Clayton Utz (First Defendant)
Blake Dawson Waldron (2nd Defendant)

- 47 -

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
TECHNOLOGY & CONSTRUCTION LIST

HAMMERSCHLAG J

17 JULY 2007

55043/2007 LAING O'ROURKE (BMC) PTY LTD v TRANSPORT INFRASTRUCTURE DEVELOPMENT CORPORATION

JUDGMENT

BACKGROUND TO AND NATURE OF THIS DISPUTE

1 HIS HONOUR: There is presently being developed at

Chatswood on the North Shore Railway Line from Sydney to Hornsby, a new transport interchange with related retail, car park and other facilities.

2 On 24 June 2005 the first defendant (“TIDC”) a corporation constituted by s 18A of the Transport Administration Act 1988 (NSW), the second defendant (“CRI”) and two guarantor companies associated with CRI made a deed known as the Chatswood Transport Interchange or CTI Development Deed (“the Development Deed”) which sets out 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: [2007] NSWSC 723
Decision Date: 17 July 2007

CaseChat Overview and Summary

The case of Laing O'Rourke versus Transport Infrastructure was heard in the Supreme Court of New South Wales. The parties were engaged in a contractual dispute relating to a construction project. The dispute centred on the interpretation and application of a dispute resolution provision in their contract, which required the parties to negotiate in good faith. Laing O'Rourke sought clarification and enforcement of the provision, arguing that Transport Infrastructure had failed to negotiate in good faith. The court had to determine whether the dispute resolution provision was uncertain and, if so, whether it could be severed from the rest of the contract.

The primary legal issue before the court was whether the dispute resolution provision, which required the parties to negotiate in good faith, was uncertain and therefore unenforceable. If the provision was found to be uncertain, the court had to consider whether it could be severed from the rest of the contract, allowing the remaining provisions to stand. Additionally, the court needed to interpret the contract as a whole to ensure its harmonious operation.

The court found that the dispute resolution provision was uncertain as it did not define what was meant by "negotiate in good faith." However, the court held that the uncertainty could be severed from the rest of the contract, allowing the other provisions to remain in effect. The court emphasised the importance of construing contracts in a way that allows for the harmonious operation of all its provisions. The court ordered that the parties must negotiate in good faith, but did not define what that meant, leaving it to the parties to determine in the context of their specific dispute. The court's decision ensured that the contract could continue to operate effectively, while also acknowledging the uncertainty in the dispute resolution provision.

Orders