CPB Contractors Pty Limited v Transport for NSW

The plaintiff is a construction company. The defendant is Transport for New South Wales, a New South Wales government agency. They are embroiled in a substantial building dispute about an upgrade to the Pacific Highway between Woolgoolga and Ballina on the NSW North Coast.

By written instrument styled Deed of Contract Agreement made on 25 October 2017 (the Contract), the defendant as Principal retained the plaintiff as Contractor to do the upgrade. The Contract incorporates General Conditions and a schedule entitled Contract Information.

References below to clauses are references to clauses in the General Conditions and references to Items are references to Items in the Contract Information.

The principal proceedings were initiated on 28 July 2022 by the plaintiff filing a Summons and Technology and Construction List Statement (the List Statement). The List Statement runs to over 200 pages. The List Statement spawned a List Response and Cross-Claim Statement, running with annexures to some 1000 pages. There is also a List Reply running to some 70 pages and a brief Cross-Claim List Response.

The plaintiff’s claims total $188 million.

One of its claims is for further allowances for delay costs from wet weather or its consequential effects, which are said to have delayed the Contractual Completion Date. There is no dispute that if the facts support it, such a claim can be brought under the Contract.

Another claim (the Claim) – the subject of the immediate controversy –introduced by an amendment to the List Statement on 29 November 2024, is for “delay costs for disruption” amounting to $63.4 million (of the total).

For its part, the defendant cross-claims for liquidated damages for delay. The defendant’s claim is of the order of $36 million.

By Notice of Motion filed 8 July 2025, the defendant moves for the Claim to be struck out because the Contract, on its proper construction, cannot support it.

The question first to arise was whether the Court should entertain the application.

Practice Note [1] SC Eq 3 (the Practice Note) applies to proceedings in the Commercial List and Technology and Construction List (the Lists) of the Equity Division. It contains the following paragraph 65:

This provision is one of a number in the Practice Note calculated towards ensuring speedy resolution of the real issues in commercial causes [2] by avoiding time consuming and possibly fruitless applications and the corresponding waste of judicial resources.

Commonly, the assessment of whether an application should be entertained or not can (and should) be made summarily (in particular where the Court has received written submissions in advance which is usually the position). This is the same approach to be taken with respect to forum non conveniens applications Voth v Manildra Flour Mills Pty Ltd (1990) 171 CLR 538 at 565; [1990] HCA 55 and class action carriage applications David William Pallas & Julie Ann Pallas as trustees for the Pallas Family Superannuation Fund v Lendlease Corporation Limited; Martin John Fletcher v Lendlease Corporation Limited [2019] NSWSC 1631 at [37].

The object of the provision will be defeated if a significant amount of time, that is more than a few minutes, is taken up in oral argument on whether the application should be entertained (especially when the Court then decides not to entertain it).

In this case written submissions had been received from both sides. On reading them, my initial impression was that the application had some force, whereas the plaintiff’s position was correspondingly lacking in force, although not necessarily hopeless. However, the ostensible complexity of the argument made it inappropriate, without more, to make an abbreviated upfront determination that the application should or should not be entertained. Rather, I took the course of hearing substantive argument on the footing that a determination that the application should not be entertained remained an option.

In a well-known and oft-cited passage in General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125 at 130; [1964] HCA 69 Barwick CJ said of the jurisdiction to terminate an application summarily for want of a cause of action in the plaintiff is to be sparingly employed and ought not to be used save where the lack of the cause of action is clearly demonstrated. Yet the jurisdiction should not be reserved for those cases where argument is unnecessary to evoke the futility of the plaintiff’s claim. Argument, even of an extensive kind, may be necessary to demonstrate that the plaintiff’s case is so clearly untenable that it cannot possibly succeed.

In the context of an application like the present one, founded on the proper construction of a contract, the Court of Appeal in Lepcanfin Pty Ltd v Lepfin Pty Ltd (2020) 102 NSWLR 627; [2020] NSWCA 155 at [97] observed that the issue was essentially a question of construction and referred to the statement of Isaacs J in Harrington v Browne (1917) 23 CLR 297 at 307; [1917] HCA 36 that “there can only be one construction given to a contract”.

Although the Practice Note adds an additional barrier to applications for summary judgment and striking out, there are cases where they are warranted: see HNOE Limited v Angus & Julia Stone Pty Ltd [2024] NSWCA 271 at [58]-[59].

As it turned out, this is such a case.

Because of the apparent complexity of the application, I took the course of hearing substantive argument without initially deciding separately whether the application should not be entertained.

When close attention is paid to the words of cl 51 of the Contract – around which the immediate controversy is centred – the futility of the Claim is evoked. It is demonstrated to be so clearly untenable that it cannot possibly succeed.

The Contract defines Contractual Completion Date to mean, relevantly, the last date by which the Contractor must achieve Completion of the Works. [3] It defines Completion, relevantly, to mean the state of the Works being complete (cl 79).

Clause 50, headed Changes to Contractual Completion Dates, provides, relevantly, that the Contractor is entitled to an extension of time to any Contractual Completion Date for the number of days assessed by the Principal if the Contractor satisfies the Principal that the Contractor is or will be delayed in achieving Completion by a cause beyond the control of the Contractor which occurs on or before the Contractual Completion Date.

It is appropriate to set out the whole of cl 51 even though doing so contributes to the prolixity of this judgment:

Clause 8.8 makes provision for the Principal to instruct the Contractor to use a particular work method or change a specified work method and that if the Principal does so without the Contractor first agreeing in writing the effects of the instruction, the Contractor may claim an extension of time in accordance with cl 50 and consequent delay costs under cl 51. Clause 48 entitles the Principal to instruct a Variation before Completion of the whole of the Works.

The Contract includes as Item 49A Table 2 which sets out the monetary rates which apply for delay costs per working day for any “delay to Completion of the whole of the Works”. A working day is defined in Item 18 as Monday to Friday and Saturdays but excluding proclaimed public holidays and the Contractor’s rostered days off.

Paragraph 7 of the List Statement pleads express terms of the Contract. Paragraph 7(wA)(i) and (ii) plead:

Paragraph 7(wB) pleads:

Paragraph 329 (read with paras 324 to 328) pleads that the plaintiff was delayed in achieving Completion because of instructions amounting to Variations given by the defendant. In the particulars to the paragraph, it is said that achieving Completion was delayed by 159 working days. Paragraphs 331 and 332 plead that the plaintiff is entitled to an extension of time to the Contractual Completion Date of at least 159 working days. Paragraph 334 pleads that by reason of these matters the plaintiff is entitled to delay costs for delay or disruption calculated in accordance with the Contract Information for at least 159 working days which yields a figure of $11.9 million. This number of working days is particularised as comprising four different periods of working days, each said to be due to a particular instruction. The periods in working days are 17, 62, 32 and 48, respectively.

It will be readily appreciated that this claim squares with the uncontroversial elements of cll 50 and 51 namely:

But then, the plaintiff goes on to plead (para 334(b)) that, because of the defendant’s instructions, it is also entitled to delay costs for delay or disruption calculated at the applicable rate in the Contract for “the number of working days of disruption within the meaning of cl 51.1 of the Contract that occurred during the period of the delays to Completion” referred to. In the particulars it says that the instructions caused 839 days of disruption valued at $63.4 million.

The plaintiff identifies that during each period of working days forming part of the delay claim a significantly greater number of working days of disruption “occurred across the Project” for which it is entitled to delay costs for disruption. In relation to the 17 working days component of the delay claim it says that 109 working days of disruption occurred during that period.

The underlying thesis of the Claim is that cl 51 permits two kinds of claims for delay costs for delay or disruption. The first (and uncontroversial for present purposes) is for those working days by which the Contractual Completion Date has blown out for a cause specified in cl 51.1. The second (and highly controversial) is for working days of disruption which played no part in the blowout of the Contractual Completion Date but which were lost due to disruption during the period of working days by which the Contractual Completion Date must be extended (and claimed for in the first claim).

Paragraphs 381(b) and 383(b) refer to paras 7(wA), 7(wB), 335-6 and 376-9. They plead the Claim slightly differently, based on a failure by the defendant to be satisfied of the plaintiff’s entitlement to delay costs for “the number of working days of disruption that occurred during the period of the delays to Completion specified in paragraph 334(a) above because of the instructions”. The difference in pleading is immaterial for present purposes. It was not suggested that the outcome of the application is affected by the difference.

The defendant argues that:

The plaintiff argues that:

The Contract is a commercial contract which is to be given a business-like interpretation. Interpreting it requires attention to the language used by the parties, the commercial circumstances which it addresses, and the objects which it is intended to secure. The meaning of the words chosen is determined objectively by reference to its text, context, and purpose, the question being what a reasonable businessperson would have understood them to mean. Preference is given to a construction supplying a congruent operation to the various components of the whole, so as to avoid commercial inconvenience. Where language is open to more than one construction, the Court will prefer a construction which avoids consequences which are capricious, unreasonable, inconvenient or unjust (see Australian Broadcasting Commission v Australasian Performing Right Association Ltd (1973) 129 CLR 99 at 109; [1973] HCA 36; McCann v Switzerland Insurance Australia Ltd (2000) 203 CLR 579; [2000] HCA 65 at [22]; Pacific Carriers Ltd v BNP Paribas (2004) 218 CLR 451; [2004] HCA 35 at [22]; Zhu v Treasurer of the State of New South Wales (2004) 218 CLR 530; [2004] HCA 56 at [82]; Wilkie v Gordian Runoff Ltd (2005) 221 CLR 522; [2005] HCA 17 at [15]; Electricity Generation Corporation Ltd v Woodside Energy Ltd (2014) 251 CLR 640; [2014] HCA 7 at [35]; Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104; [2015] HCA 37 at [47]-[51]). See too Lepcanfin (supra).

The plaintiff’s construction cannot be right because:

Paragraphs 7(wB)(ii), 334(b), 337(b), 381(b) and 383(b) of the Second Further Amended Technology and Construction List Statement are struck out.

I provisionally order that the plaintiff is to pay the defendant’s costs of the motion. This order will solidify seven days after delivery of this judgment unless any party notifies the other party and my Associate, in writing, that some other order is sought, specifies the order and provides brief grounds. If notice is given, the order will not take effect and I will determine any costs issues.

The proceedings are stood over into the Technology and Construction List on 19 September 2025 with liberty to apply on three days’ notice.