Liebe v Molloy [1906] HCA 67

Liebe v Molloy [1906] HCA 67 - HCA 1906 case summary — Zoe

[33]

The present case does not fall within that class ; the arbitrator in that case only asked questions, and found no facts. The respondent cannot be held liable upon a general inference of knowledge of a great number of items, sume of which were obviously extras and others were not. Works necessary to com- plete a contract are not extras even though not included in the specifications: Williams v. Fitzmaurice (2). The whole of the conditions in the contract safeguarding the owner against extras were ignored by the builder, who never obtained or demanded any order in writing from the architect for these extra works, nor demanded progress payments upon them, but at the comple- tion of the contract put in a claim for £17,000 for extras. The owner should be protected by the express terms of the contract ; and not be made liable to pay for extra works merely because he has seen them being done: Jones v. Woodbury (3); Wallis v. Robinson (4). Extras should be paid for only where the employer waives the condition that a written order should be obtained, or prevented the giving of the written order, or where the contractor alleges and proves fraud in the employer, or where the architect's certificate is conclusive as to liability to pay, or where the extras are independent works quite outside the written contract. The umpire found every fact that it was possible for him to find; and if upon those facts there is no liability on respondent, judgment must be given for him. There is no known instance of a remission back to the arbitrator for the reason that the award would justify a judgment for one side or the other. And the Court should not remit the case to the arbitrators with directions as to what facts should be found and in what manner : North and South Western Junction Railway Co. v. Assessment Committee of the Brentford Union (1). Whatever the state of the respondent's knowledge, he would not be liable unless on the ground of fraud, which was not found: Willmott v. Burber (5).

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by architect or proprietor such order must be in writing, stating the nature of the same together with the fixed amount, and to be signed by the architect and indorsed by the proprietor; other- wise no extra of any kind shall be recognized or paid for." In the general conditions of the contract it was specified by clause 6, "No works beyond those included in the contract shall be allowed or paid for without an order in writing from the employer and architect." Then followed a stipulation that if the contractor should be called upon to do work that he considered did not come within his contract and the architect refused to give an order, by which I understand an order in writing indorsed by the pro- prietor, he should nevertheless perform the work and give notice that he claimed to have the matter decided by arbitration. The works in question, amounting in value to over £5000, were, in one sense at any rate, extras. Whether works of that kind were contemplated in the specifications or drawings or not is a matter which it is not necessary to determine. The umpire found that no orders in writing indorsed by the owner were given in respect of any of them, but he also found that the employer, Molloy, had such knowledge of those extras as might be fairly inferred from the fact that he was constantly on the works and taking an active interest therein. Before McMillan J., and before the Full Court, it was contended that upon these facts it ought to be inferred that the owner, Molloy, entered into an implied contract to pay the fair value of these works as extra works, and so McMillan J. held. On the other hand it was contended that no such inference could be drawn, and that view was accepted by the Full Court. 'The law on the subject may be very briefly stated. There was a written contract between the parties, and these items cannot be brought within its terms in face of the express stipulation that "no extra shall be paid for unless ordered by an order in writing by the architect indorsed by the employer;" but that stipulation does not exclude altogether the implied doctrine of law that, when one man does work for another at his request, an implied obligation arises to pay the fair value of it. The question therefore is whether, notwithstanding the absence of written orders,

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whether under the cireumstances of the case an implied contract to pay for them is to be inferred. That is an inference of fact to be drawn by the tribunal which is ealled upon to determine the matter, that is, the umpire. Now, the only fact found is that the employer had such knowledge as to these works as may be fairly inferred from the fact that he was constantly on the work, and taking an active interest therein. But a further inference must be drawn before a liability to pay arises, namely, that there was an implied contract to pay. It might be inferred, on the one hand, that, having regard to the nature of the works, the fact of the owner's presence, and the nature of the interest he took, he knew that they were outside the contract, and knew that the contractor expected to be paid for them as extras. On the other hand, it might be inferred as to all or some of them that he did not know that they were extras, or did not know or believe that the contractor expected to be paid for them. But that as I have said is a question of fact, and the umpire, not the Court, is the judge of the facts. It is impossible, we think, for this Court, or for the Supreme Court to draw the necessary infer- ence of fact. It must be drawn by the umpire himself, and upon his finding on the question of fact depends the right of the appel- lant to recover the amount claimed or any part of it. An implied contract may be proved in various ways. When a man does work for another without any express contract relating to the matter, an implied contract arises to pay for it at its fair value. Such an implication of course arises from an express request to do work made under such circumstances as to exclude the idea that the work was covered by a written contract. So it would arise from the owner standing by and seeing the work done by the other party, knowing that the other party, in this case the contractor, was doing the work in the belief that he would be paid for it as extra work. If the umpire was of opinion that any of this work was done under such circumstances that the owner knew or understood that the contractor was doing the work in the belief that he would be paid for it as extra work, then the umpire might, and probably would, infer that there was an implied promise to pay for it. That is one instance. Again, the architect might have been expressly authorized by the owner to order extra

At a glance

Court

Decision date

Before

Source

Judgment (48 paragraphs)