Toga Building Co Pty Ltd v Karhugh Pty Ltd

Toga Building Co Pty Ltd (the appellant) 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 building contract and the appellant's entitlement to payment for work performed.

The primary legal issue before the Court of Appeal was whether the appellant was entitled to payment for work done in excess of the contract sum, notwithstanding that the contract contained a "rise and fall" clause. The court was also required to consider the proper interpretation of the architect's certificate in relation to the progress payments claimed by the appellant.

The Court of Appeal held that the "rise and fall" clause in the contract did not operate to permit recovery for work done in excess of the contract sum, as it was intended to adjust the contract price for fluctuations in the cost of labour and materials, not to allow for variations or additional work. The court further found that the architect's certificate, while prima facie evidence of the amount due, was not conclusive and could be challenged if it was issued in error or contrary to the terms of the contract. The appeal was dismissed.