Codelfa Construction Pty Ltd v State Rail Authority (NSW) [1982] HCA 24

Codelfa Construction Pty Ltd v State Rail Authority (NSW) [1982] HCA 24

The High Court concluded that no term could be implied into the contract to protect Codelfa from the consequences of an injunction restricting work: the requirements for implication of a term were not met. Instead, relief (if any) must rest on frustration. Whether frustration occurred should be determined by the arbitrator according to the doctrine that frustration arises when the supervening event makes performance fundamentally different from that originally contemplated. The rise and fall clause did not entitle Codelfa to the inclusion of shift allowance, sick pay, or accident pay in the calculation of 'average weekly wage' under cl. G.28, except to the limited extent that such...

Jurisdiction
Australia
Procedural Posture
Appeal and Cross Appeal From Arbitration and From Decisions of the NSW Supreme Court and Court of Appeal / Judgment After Hearing Before the High Court of Australia
Outcome
Appeal allowed in part; cross-appeal allowed in part; orders of Ash J. and the Court of Appeal set aside in part; action for frustration struck out for want of jurisdiction; matter of frustration and calculations remitted to the arbitrator.
Legal Topics
['implied Terms' 'frustration of Contract' 'interpretation of Contract' "arbitrator's Jurisdiction" 'rise and Fall Clauses' 'interest on Arbitral Awards']
['contract Law' 'arbitration'] ['implied Terms' 'frustration of Contract' 'interpretation of Contract' "arbitrator's Jurisdiction" 'rise and Fall Clauses' 'interest on Arbitral Awards']

Case Brief

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Procedural Posture

Appeal and Cross Appeal From Arbitration and From Decisions of the NSW Supreme Court and Court of Appeal / Judgment After Hearing Before the High Court of Australia

Legal Issues

  1. 1 ['Whether a term can be implied into the contract regarding extensions of time or compensation if an injunction restrains works due to nuisance.' 'Whether the contract was frustrated by the injunction restricting working hours and thereby preventing performance as contemplated.' 'The proper construction and operation of the rise and fall (cost escalation) clause in the contract (cl. G.28).' 'Whether the arbitrator had jurisdiction to decide frustration and award interest, including compound interest.' "Whether shift allowances, sick pay, accident pay and similar items are included in the calculation of the 'average weekly wage' for the purposes of cl. G.28."]

Ratio Decidendi

The High Court concluded that no term could be implied into the contract to protect Codelfa from the consequences of an injunction restricting work: the requirements for implication of a term were not met. Instead, relief (if any) must rest on frustration. Whether frustration occurred should be determined by the arbitrator according to the doctrine that frustration arises when the supervening event makes performance fundamentally different from that originally contemplated. The rise and fall clause did not entitle Codelfa to the inclusion of shift allowance, sick pay, or accident pay in the calculation of 'average weekly wage' under cl. G.28, except to the limited extent that such...

Court Disposition

Appeal allowed in part; cross-appeal allowed in part; orders of Ash J. and the Court of Appeal set aside in part; action for frustration struck out for want of jurisdiction; matter of frustration and calculations remitted to the arbitrator.

Orders

  • ['The questions in the case stated by the arbitrator answered as per the majority judgment and formal orders.' "Remit the award to the arbitrator to determine the frustration claim and recalculate claims in accordance with the High Court's answers." "Respondent to pay 70% of appellant's costs before Ash J. and on...