High Court of Australia Menzies, Windeyer and Walsh JJ. MR Hornibrook (Pty) Ltd v Eric Newham (Wallerawang) Pty Ltd ORDER Appeal allowed with costs. Cross-appeal dismissed with costs. Agreement between the appellant and the respondent dated 23rd January, 1963 rectified by including therein, as cl. 3A, the following clause: The total amount of this contract, calculated in accordance with the schedule of rates hereto, shall be adjusted by the same percentage as the total amount of the head contract, calculated in accordance with the schedule of rates thereto, is adjusted in accordance with cl. 4 thereof. Judgment of the Supreme Court of Queensland set aside and in lieu thereof judgment for the plaintiff for $46,190 with costs. Judgment reserved. THE COURT dealt with matters not here reported and continued: Sept. 2. Menzies, Windeyer and Walsh JJ. It remains to consider whether there was any obstacle in law to the rectification of the agreement to make it accord with what the parties intended but had failed to express through mistake. The mistake which was made was obviously mutual because, as we have said, the defendant made to the plaintiff progress payments as though the sub-contract contained the clause necessary to give effect to the agreement of the parties. We agree, therefore, entirely with the learned trial judge that a clause was omitted from the agreement by mutual mistake. Furthermore, we feel satisfied that the clause omitted was one to carry on to the plaintiff any adjustment made in payments to the defendant by virtue of cl. 4 of the head contract in respect of work done by the plaintiff under the sub-contract. This, subject to one reservation, is enough, not only to warrant, but to require an order for rectification along the lines which we have indicated. Rectification in this form would deprive of any significance a point taken by the respondent to oppose rectification, i.e. that the contract and the sub-contract did not cover precisely the same period. The reservation which we have mentioned now requires consideration. It arises by virtue of cl. 8 of the sub-contract which is in these terms: "8. This Agreement is subject to the approval in writing of the Toowoomba City Council." After the execution of the sub-contract the plaintiff's solicitors wrote to the town clerk of the Toowoomba City Council as follows: We wish to advise that we are solicitors for M. R. Hornibrook (Pty.) Ltd. and that we have been instructed to submit to you for the council's approval, an agreement in writing dated 23rd January, 1963. The Agreement is accordingly enclosed herewith, in duplicate, and you will note that by virtue of the terms of cl. 8 it is subject to the approval, in writing, of your council. It would be appreciated if it could be considered by your council at your earliest convenience and both copies returned to us with the letter of approval. To this a reply dated 21st May, 1963, was received, as follows: I have by direction of the council to advise that such agreement has now been consented to by the council, subject to the following:—That the council is not to be deemed to have notice of or to accept any responsibility for the differences in unit prices between those in the head contract and the sub-contract, and such differences are to have no bearing on the council's obligations or rights. The first question now is whether the agreement, as so approved, can now be rectified. It seems to us that cl. 8 does not prevent rectification. It is, however, a more difficult question whether the contract as rectified can be enforced without the approval of the council to the rectified contract, for it it is not possible we think to regard the earlier approval as extending to the rectified contract. With some hesitation we have come to the conclusion that it is possible for us to conclude the matter in these proceedings and to make an order for the payment to the plaintiff of the outstanding balance. The position is that the contract has been fully executed by the plaintiff and even if contrary to all reason the council were to withhold its approval to the rectified contract that would not mean that the plaintiff could not enforce its claim for payment of an amount calculated in accordance with the terms upon which the parties agreed, for the work done by it and accepted by the defendant. We think that the preferred basis upon which such a claim should be sustained is that in the circumstances the suspensory condition may be regarded as having ceased to have significance. Although that condition was not fully satisfied, the parties may be found, by reason of their conduct in performing and accepting the services upon the terms of the rectified contract, to have waived the condition and to have treated themselves as bound unconditionally by the terms of that contract. Alternatively, if the suspensory condition remained operative and if the defendant is entitled in the circumstances to rely upon it in order to assert that the agreement as rectified has never come into force as an express contract binding upon the parties, we are of opinion that the plaintiff is entitled nevertheless to recover payment for the work done by it, of which the defendant has taken the benefit. On that basis there was no operative express contract and it is not necessary to consider the question discussed in James v. Thomas H. Kent & Co. Ltd [(1)] and Turner v. Bladin [(2)] whether such a claim should be based in legal theory upon implied contract or upon quasi-contract. According to the principles stated in Way v. Latilla [(3)] and in other cases, the bargain of the parties, including the rise and fall clause which was part of that bargain, may be taken as providing the evidence by which the value of the work may be measured and by which the amount that the plaintiff should recover is ascertained. We are of opinion, therefore, that we should now make an order for payment in accordance with the terms of the contract as rectified. 1. [1951] 1 K.B. 551. 2. (1951) 82 C.L.R. 463, at p. 474. 3. [1937] 3 All E.R. 759. [The Court dealt shortly with the matter of a cross-appeal and dismissed it.]