Thiess Contractors Pty Ltd v Placer (Granny Smith) Pty Ltd

[2000] WASCA 102

Western Australia Court of Appeal

Built by Barristers,
For Australian Law.

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Interrogate

Catchwords

1. Contract
2. › Express terms
3. › Duty of good faith
4. › Partnering contract for mine exploitation
5. › Open book system for derivation of rates
6. › Whether contractor breached duty of good faith by misrepresenting plant costs as genuine estimates when they contained hidden profit
1. Contract
2. › Termination
3. › Termination for convenience clause
4. › Estoppel
5. › Whether principal estopped from relying on termination clause by pre-contractual representations
6. › Whether representations inconsistent with contractual right to terminate
1. Damages
2. › Breach of contract
3. › Assessment of damages
4. › Method of calculation
5. › Whether trial judge's method of assessing damages was permissible
6. › Whether method adequately accounted for all sources of profit
7. › Whether party proved its damages
1. Appeal
2. › Retrial
3. › Damages
4. › Whether retrial should be ordered where damages not proved
5. › Whether trial miscarried by error of law or injustice

Quick Take

An express contractual duty of good faith in the derivation of rates under an open-book partnering contract requires a party to provide genuine estimates of its costs and to disclose all facts relevant to the establishment of rates based on actual costs. Deliberately inflating cost estimates by distributing hidden profit across rate components constitutes a breach of such a duty. However, a party that establishes breach but fails to prove damages by an appropriate method will recover only nominal damages, even where the breach is serious. A trial judge should not adopt a method of assessing damages that was not advanced by either party and on which no evidence was led.