Walton v Illawarra

Walton was a contractor engaged by Illawarra to perform building work. A dispute arose over the interpretation of their contract, particularly concerning the superintendent's role in determining the contractor's entitlement to extensions of time and payments, and whether the principal was liable for the superintendent's failure to adequately perform these tasks. The case was heard by the Supreme Court of New South Wales.

The court had to decide whether the contractor's entitlement to extensions of time and payments were limited to those determined by the superintendent. It also needed to assess whether the principal could be held liable for the superintendent's failure to adequately perform their tasks, and whether the contractor's damages for the shortfall between the entitlement and the superintendent's valuation were constrained by the contract. Additionally, the court examined whether the damages for delay in practical completion were too remote, and the entitlement to interest on the damages.

The court found that the superintendent's role was to determine the contractor's entitlement to extensions of time and payments, but the principal could still be liable for the superintendent's failure to adequately perform these tasks. The court held that the damages for the shortfall between the entitlement and the superintendent's valuation were not constrained by the contract, as the damages were intended to compensate the contractor for the loss suffered. The court also found that the damages for delay in practical completion were not too remote, as the delay was a direct consequence of the superintendent's failure to perform their tasks adequately. Finally, the court held that the contractor was entitled to interest on the damages.

The court ordered Illawarra to pay Walton the damages for the shortfall between the entitlement and the superintendent's valuation, damages for delay in practical completion, and interest on the damages.