Tuta Products Pty Ltd v Hutcherson Bros Pty Ltd

Tuta Products Pty Ltd v Hutcherson Bros Pty Ltd - [1972] HCA 4 - HCA 1972 case summary — Zoe

[57]

It was submitted on behalf of the appellant that it was not correct to regard the respondent as having been bound to enter into the sub-contract which it made with the nominated sub-contractor. It was submitted that the respondent could have refused to do so, unless the sub-contract included a "no rise and fall" clause. Reliance was placed on cl. 13 of the conditions, which includes a provision that "no nominated sub-contractor need be employed who will not enter into a sub-contract binding the sub-contractor by the like obligations to the builder in respect of the subject matter of the sub-contract as the Builder assumes by this contract to the Proprietor". In my opinion it is at least doubtful whether this provision would have entitled the respondent to object to entering into a sub-contract with the nominated sub-contractor unless it contained a "no rise and fall" clause. But if it be assumed that it would have entitled the respondent so to object, it is plain that it did not impose an obligation to object and it did not produce the result that the supplier with whom the respondent entered into the sub-contract was not a nominated sub-contractor for the purposes of cl. 21. Furthermore, it is erroneous, in my opinion, to suggest that a failure by the respondent to object, in reliance upon cl. 13, to entering into the sub-contract could be taken into account in deciding whether the total mount which had to be paid to the sub-contractor was "properly expended", as required by cl. 21 (h). The stated case shows that the arbitrators found that the nominated sub-contractor's tender and its conditions, including a price adjustment provision, were accepted by the respondent on the architect's instruction contained in a letter. The arbitrators found, also, that at the time of the making of the head contract it was well known that lift installation contractors required the inclusion of a rise and fall provision in their installation contracts. In these circumstances it cannot be maintained that the respondent acted unreasonably in entering into the sub-contract or that cl. 21 (h) did not entitle the respondent to add to the contract price the amount by which what became payable to the sub-contractor exceeded the $15,000 mentioned in the specification. I am of opinion that on this question the appeal fails.

[59]

The argument for the appellant against the correctness of that decision took as its first step the proposition that a certificate could not be said to have "become due" until after there had been a written application for a certificate, in accordance with cl. 25 (a). This proposition is, in my opinion, of doubtful validity. It is true that it is provided in cl. 25 (a) that the builder shall be entitled to receive a certificate within seven days of his written application. But it does not seem to be a necessary consequence of that provision that it must be said that a written application is an essential requirement in order that a certificate may "become due". However, I am of opinion that even if the correctness of that first step in the argument be conceded it breaks down in its next step. Clause 20 (2) gives an entitlement to interest of which the conditions are that the architect shall refuse or neglect to issue a certificate for a period of ten days after two events have occurred, namely, that a certificate shall have become due and that it shall have been requested in writing by the builder. The argument is that if a prior request in writing is a necessary element in the occurrence of the event first mentioned, the other event must be the making of a second written request for a certificate. But, in my opinion, this argument can be sustained only by introducing into the provision a requirement not stated in it, that is, by reading it as if after the words "requested in writing" there appeared some such word or phrase as "again" or "for a second time". In my opinion, such a requirement would be so inconvenient and purposeless that it ought not to be regarded as imposed, unless it appears quite clearly that this intention is disclosed by the terms of the provision. It was said that it is necessary so to read cl. 20 (2), because otherwise the reference in it to the certificate having been requested in writing adds nothing. Such a consideration would have much greater weight if in all other respects the terms of the contract were precise and consistent. But this is not so. In my opinion, the introduction by a process of construction of something additional to what is required by the words used in the provision is not warranted. The reference to the request in writing may have been inserted to emphasize the requirement that there should be a written application for a certificate. It ought not to be taken to make it necessary that there should be two such applications in writing.

[64]

In this appeal the respondent has submitted that if the Court should hold that an error of law was made which affected the award so far as it dealt with a particular claim the award should be remitted rather than wholly set aside. The appellant has not presented any argument that there is in the circumstances no power to take that course or that it ought not to be taken. It appears plainly to be the better course. But for some statements made in Gold Coast City Council v. Canterbury Pipe Lines (Aust.) Pty. Ltd. [1] , I should not have been concerned to add anything to the reasons given by Stephen J. for holding that the Court may and should adopt that course. I have done so because the observations in that case may appear to cast doubt upon the Court's power to do so. Kitto J. expressed [2] the opinion that the Court should not take upon itself the jurisdiction, conferred by a provision of a Queensland statute similar to s. 12 of the Arbitration Act N.S.W., to remit the matter to the arbitrator for reconsideration. The reason his Honour gave was that no application under that provision was before the Supreme Court of Queensland in the proceedings out of which the appeal arose. I do not think that his Honour intended to state as a general proposition that that statutory power could never be exercised by this Court on appeal unless an application for its exercise had been made to the Supreme Court. What he said should be read, I think, as being directed to the circumstances of the matter which was then before the Court. I think that the same view ought to be taken of what Barwick C.J. said [3] , at the end of his judgment. Menzies J. said [4] that if the Court allowed an objection to be taken belatedly to a part of the award and upheld that objection the only course open would be to quash the whole award. If that statement was based upon the view that the award was not severable into two provisions but was an award for a single sum which could not be severed, it presents no obstacle to the taking in the present appeal of the course which Stephen J. has proposed. The formal award in that case was for a single sum and costs. It contained no reference to the elements of which that sum was made up. This is a feature of the award to which attention was directed by the Chief Justice [5] and by Kitto J. [2] . It is a feature which is not, in my opinion, present in this case, in which in the formal award the arbitrators have dealt separately with distinct claims and have awarded specified money sums in respect of each of the claims. I am of opinion, therefore, that the reasons of their Honours in that case do not stand in the way of a conclusion that in the present appeal the award should not be quashed, but should be remitted for the further consideration of the matters specified in the judgment of Stephen J.

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Decision date

Before

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Judgment (150 paragraphs)

Parties

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