Mitsui Construction v. Hong Kong, (1986) 71 N.R. 285 (PC)

• Case Date: February 10, 1986
• Jurisdiction: Canada (Federal)
• Citations: (1986), 71 N.R. 285 (PC)

Mitsui Constr. v. Hong Kong (1986), 71 N.R. 285 (PC)

MLB headnote and full text

Mitsui Construction Company Limited (appellant) v. The Attorney General of Hong Kong (respondent)

(Privy Council Appeal No. 57 of 1984)

Indexed As: Mitsui Construction v. Hong Kong

Judicial Committee of the Privy Council

London, England

Lord Bridge of Harwich, Lord Roskill, Lord Griffiths, Lord Ackner and Sir John Stephenson

February 10, 1986.

Summary:

Mitsui agreed to construct a water line for the Government of Hong Kong (the owner). The owner grossly underestimated the quantities involved which resulted in the construction of the line taking in excess of four years rather than the original estimate of two years. Mitsui claimed additional compensation. The engineer exercised his authority under the contract and allowed the claim. The dispute was referred to arbitration. The arbitrator made an interim award (in favour of Mitsui) which was referred to the High Court.

The High Court generally affirmed the arbitrator, see paragraph 5. The owner appealed.

The Hong Kong Court of Appeal allowed the appeal. Mitsui appealed.

The Judicial Committee of the Privy Council allowed the appeal and generally restored the order of the High Court, see paragraph 27.

Building Contracts - Topic 748

The contract - Interpretation - Inference of businesslike intention - The Judicial Committee of the Privy Council stated that where possible a court should attribute to the parties a businesslike intention (see paragraphs 15 to 17).

Building Contracts - Topic 2632

Payment - Compensation to builder - Extras - Approval of - By engineer - Mitsui agreed to construct a water line for the Government of Hong Kong (the owner) - The owner grossly underestimated the quantities involved and the construction of the line took in excess of four years rather than the original estimate of two years - Mitsui claimed additional compensation - The engineer exercised his authority under the contract and allowed the claim - The Judicial Committee of the Privy Council interpreted the contract and affirmed the authority of the engineer to award additional compensation.

Contracts - Topic 7435

Interpretation - Ambiguity - Inference of businesslike intention [see Building Contracts - Topic 748 above].

Cases Noticed:

Grinaker Construction (TVL)(PTY) Limited v. Transvaal Provincial Administration, [1982] 1 S.A.L.R. 78, refd to. [para. 25].

Counsel:

[None disclosed].

This appeal was heard by Lord Bridge of Harwich, Lord Roskill, Lord Griffiths, Lord Ackner and Sir John Stephenson of the Judicial Committee of the Privy Council. The decision of the Judicial Committee of the Privy Council was delivered by Lord Bridge of Harwich on February 10, 1986.