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WMC Resources Ltd v Leighton Contractors Pty Ltd

WMC Resources Ltd v Leighton Contractors Pty Ltd

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Case Copied 7 May 1999 52 min read

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WMC RESOURCES LIMITED -v- LEIGHTON CONTRACTORS PTY LTD [1999] WASCA 10

Reported Decision:	(1999) 20 WAR 489
Jurisdiction:	SUPREME COURT OF WESTERN AUSTRALIA	Citation No:	[1999] WASCA 10
Court:	THE FULL COURT (WA)
Case No:	FUL:149/1998	Heard:	8 APRIL 1999
Coram:	KENNEDY J IPP J WHITE J	Delivered:	7/05/99
No of pages:	31	Judgment Part:	1 of 1
Result:	Appeal allowed
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Parties:	WMC RESOURCES LTD LEIGHTON CONTRACTORS PTY LTD
Catchwords:	Contracts Building and engineering contracts Construction and interpretation Valuation of variations to works In absence of agreement proprietor entitled to determine value in its sole discretion To what extent arbitrator could interfere with proprietor's valuation and substitute his own valuation
Case References:	Atlantic Civil Pty Ltd v Water Administration Ministerial Corporation (1992) 39 NSWLR 468. Beaufort Developments (NI) Ltd v Gilbert-Ash (NI) Ltd [1998] 2 WLR 860. Brodie v Cardiff Corporation (1919) AC 337. Campbell v Edwards [1976] 1 WLR 403. Commissioner of Succession Duties (SA) v Executor Trustee & Agency Co of South Australia Ltd (1947) 74 CLR 358. Email Ltd v Robert Bray (Langwarrin) Pty Ltd [1984] VR 16. Emerald Quarry Industries Pty Ltd v Commissioner of Highways (SA) (1979) 142 CLR 351. Federal Commissioner of Taxation v St Helens Farm (ACT) Pty Ltd (1981) 146 CLR 336. Hawker Noyes Pty Ltd v New South Wales Egg Corporation, unreported; SCt of NSW; (Brownie J); Library No 14077 of 1988; 11 November 1988. Jones v Sherwood's Computer Services Plc [1992] 1 WLR 277. Karenlee Nominees Pty Ltd v Gollin [1983] 1 VR 657. Legal & General Life of Australia Ltd v A Hudson Pty Ltd (1985) 1 NSWLR 314. Minster Trust Ltd v Traps Tractors Ltd [1954] 1 WLR 963. Modern Engineering v Gilbert-Ash Ltd (1974) AC 689. National Coal Board v William Neill & Son (St Helens) Ltd [1985] 1 QB 300. Neale v Richardson (1938) 1 All ER 753. Perini Corporation v Commonwealth [1969] 2 NSWR 530. Prestige & Co Ltd v Brettell [1938] 4 All ER 346. Ranger v Great Western Railway Company (1854) 5 HLC 72; 10 ER 824. Sandhu v Ferizis, unreported; SCt of NSW (Young J); 4630 of 1990; 11 March 1994. The Commonwealth v Reeve (1949) 78 CLR 410. . Turama Forest Industries Pty Ltd v Eng, unreported; FCt SCt of WA; Library No 980190; 15 April 1998. Turama Forest Industries Pty Ltd v Eng, unreported; SCt of WA; Library No 960238; 7 May 1996. Austotel Pty Ltd v Franklins Selfserve Pty Ltd (1989) 16 NSWLR 582 Balfour Beatty Civil Engineering v Docklands Light Railway (1996) 78 BLR 42 Bond Corporation Pty Ltd v Thiess Contractors Pty Ltd (1988)17 FCR 487 Byrne v Australian Airlines Ltd (1995) 185 CLR 410 East Ham Corporation v Bernard Sunley & Sons Ltd [1966] AC 406 Greenberg v Meffert (1985) 18 DLR (4th) 548 Greenberg v Meffert (1987) 30 DLR (4th) 768 KBH Constructions v PSD Development Corporation…

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: [1999] WASCA 10
Decision Date: 7 MAY 1999

CaseChat Overview and Summary

In WMC Resources Ltd v Leighton Contractors Pty Ltd, the dispute arose from a building and engineering contract between the parties, specifically relating to the valuation of variations to the works. The case was heard in the Australian courts. The primary issue was the extent to which an arbitrator could interfere with the proprietor's valuation of variations when determining the value of those variations in the absence of an agreement between the parties. The central legal question was whether the arbitrator had the authority to substitute their own valuation for that of the proprietor, who had determined the value of the variations in its sole discretion.

The court considered the terms of the contract and the principles of construction and interpretation applicable to building and engineering contracts. It was established that where a contract provides for the proprietor to determine the value of variations in its sole discretion, the proprietor's valuation is conclusive unless there is evidence of fraud, dishonesty, or bad faith. The court examined the circumstances in which the proprietor made the valuation and whether there were any grounds to question the propriety of the valuation. The court held that in the absence of such grounds, the proprietor's valuation should be respected and the arbitrator had no authority to substitute their own valuation.

Consequently, the court found that the arbitrator had overstepped their authority by substituting their own valuation for that of the proprietor. The appeal was allowed, and the decision of the arbitrator was set aside. The matter was remitted back to the arbitrator with directions to adhere to the proprietor's valuation of the variations as the conclusive determination of their value under the contract.

Orders

Orders of the court

Appeal allowed

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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