Codelfa Construction Pty Ltd v State Rail Authority of NSW
Codelfa Construction Pty Ltd v State Rail Authority of New South Wales, ("Codelfa") is a widely cited Australian contract law case, which serves as authority for the modern approach to contractual construction. The case greatly influenced the development of the Eastern Suburbs railway line. In terms of contract law, the case addresses questions of frustration, construction and the parol evidence rule. The case diverged from the well established English approach regarding the use of extrinsic evidence in contractual interpretation. Background The State Rail Authority engaged Codelfa Construction under a contract for services to excavate tunnels in the Eastern Suburbs allowing for the development of the Eastern Suburbs railway line. The works were to include "the excavation of two single track tunnels commencing at Edgecliff and running through Woollahra to Bondi Junction, an open cut excavation at the site of the Woollahra station, and an underground excavation at the site of the Bondi Junction station." The State Rail Authority issued Codelfa Construction with a notice to proceed on 7 March 1972. From this date, Codelfa was bound to complete all works within 130 weeks. On the basis of legal advice the contracting parties were led to believe that the work would