Placer (Granny Smith) Pty Ltd v Thiess Corporation Pty Ltd P47/2000

Placer (Granny Smith) Pty Ltd (Placer) and Thiess Corporation Pty Ltd (Thiess) were parties to a dispute concerning a contract for the construction of a tailings dam. The High Court of Australia was required to determine the appeal from the Supreme Court of New South Wales.

The central legal issues before the High Court involved the interpretation of a clause in the contract that provided for an adjustment to the contract price if the actual quantities of certain work performed by Thiess differed from the estimated quantities. Specifically, the court had to determine whether this clause applied to variations to the contract that were ordered by Placer after the contract had been entered into.

The High Court held that the clause in question did not apply to variations. Their Honours reasoned that the clause was intended to operate only in relation to the original scope of the work as defined by the contract. Variations, by their nature, altered that original scope and were therefore outside the ambit of the adjustment clause. The court applied principles of contractual interpretation, focusing on the plain meaning of the words used in the contract and the overall intention of the parties as evidenced by the contract as a whole.

The appeal was dismissed.