FLETCHER CONSTRUCTION v SAVDAY [1999] NSWSC 2

FLETCHER CONSTRUCTION v SAVDAY [1999] NSWSC 2

The plaintiff established a strong prima facie case that the defects liability period expired in December 1996, that no second defects liability period was fixed, and that the defendant therefore had no entitlement on 23 and 24 December 1998 to call up and retain the item Q1B security. The defendant's immediate collection and disposition of the bond proceeds, without effective notice or clear identification of the claims said to justify the call, supported interlocutory relief requiring an equivalent sum to be deposited in a joint account pending determination of the proceedings.

Jurisdiction
Australia
Judgment Date
07 January 1999
Procedural Posture
Building Construction Dispute Concerning a Performance Bond/security Deposit / Interlocutory Application for an Order Pending Resolution of the Proceedings
Outcome
Interlocutory relief granted.
Legal Topics
['performance Bond' 'security Deposit' 'defects Liability Period' 'interlocutory Injunction' 'release of Security']
['building and Construction' 'contract Law' 'equity'] ['performance Bond' 'security Deposit' 'defects Liability Period' 'interlocutory Injunction' 'release of Security']

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Procedural Posture

Building Construction Dispute Concerning a Performance Bond/security Deposit / Interlocutory Application for an Order Pending Resolution of the Proceedings

Legal Issues

  1. 1 ['Whether the defendant was contractually entitled to call up and collect the proceeds of the performance bond after expiry of the defects liability period.' 'Whether any second defects liability period had been fixed under cl 6.11.06.' "Whether interlocutory protection should be granted by requiring the defendant to deposit an equivalent sum pending determination of the parties' entitlements."]

Ratio Decidendi

The plaintiff established a strong prima facie case that the defects liability period expired in December 1996, that no second defects liability period was fixed, and that the defendant therefore had no entitlement on 23 and 24 December 1998 to call up and retain the item Q1B security. The defendant's immediate collection and disposition of the bond proceeds, without effective notice or clear identification of the claims said to justify the call, supported interlocutory relief requiring an equivalent sum to be deposited in a joint account pending determination of the proceedings.

Court Disposition

Interlocutory relief granted.

Orders

  • ['Upon the plaintiff by counsel giving to the Court the usual undertaking as to damages, the defendant forthwith deposit the sum of $196,000 in a joint account with Citibank Limited in the names of Pamela Margaret Jack and Ann Marie Bowen.' "The costs of the application for an interlocutory order are plaintiff's...