Codelfa Construction v State Rail Authority of New South Wales

CODELFA CONSTRUCTION PROPRIETRY LTD V STATE RAIL AUTHORITY OF

NEW SOUTH WALES (1981-1982) 149 CLR 337

High Court of Australia – 11 May 1982

FACTS

Codelfa was contracted to perform excavations for an underground railway within in a fixed period. The parties had contracted under the misapprehension that construction work could proceed on a three shifts per day basis. An injunction obtained by local residents made this impossible.

The Construction Company claimed from the SRA an amount in addition to the contract price in respect of the additional costs incurred and the profit it lost from the resulting from the change in working methods it had been forced to adopt.

ISSUES

1. Was there an implied term that if Codelfa was restrained by injunction from working three shifts it would be indemnified by the SRA for additional costs?
2. Were the contracts between Codelfa and the SRA frustrated by the court Injunction?

FINDING