Hightrade Construction v Full Sea International [2004] NSWSC 888

Hightrade Construction v Full Sea International [2004] NSWSC 888

The plaintiff had completed the contract works and the agreed defect rectification, and the inability to obtain a final certificate resulted from the first and second defendants' breach in failing to appoint a replacement architect and their practical absence from the jurisdiction. The first and second defendants waived any entitlement to insist on a final certificate, and alternatively the court treated the final certificate as having been issued because it ought to have been issued. The plaintiff was therefore entitled to the retention monies and release and return of the bank guarantee.

Jurisdiction
Australia
Judgment Date
21 September 2004
Procedural Posture
Equity Division Proceedings Concerning a Building Contract, Retention Monies and a Bank Guarantee / Ex Tempore Judgment on the Plaintiff's Application for Orders Releasing Retention Monies and Returning a Bank Guarantee
Outcome
Builder entitled to retention monies and return of bank guarantee; orders made for release of retention monies, delivery of the bank guarantee, and costs against the first and second defendants.
Legal Topics
['building Contract Remuneration' 'retention Monies' 'bank Guarantee' 'final Certificate' 'waiver' 'substituted Service' 'contractual Interest']
['contracts' 'building and Construction' 'equity'] ['building Contract Remuneration' 'retention Monies' 'bank Guarantee' 'final Certificate' 'waiver' 'substituted Service' 'contractual Interest']

Case Brief

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Procedural Posture

Equity Division Proceedings Concerning a Building Contract, Retention Monies and a Bank Guarantee / Ex Tempore Judgment on the Plaintiff's Application for Orders Releasing Retention Monies and Returning a Bank Guarantee

Legal Issues

  1. 1 ['Whether the plaintiff builder was entitled to retention monies held by the third defendant where the contract works had been completed but no final certificate had been issued.' 'Whether the plaintiff builder was entitled to return of the bank guarantee provided as additional security.' "Whether the first and second defendants' failure to appoint a replacement architect prevented or waived the contractual requirement for a final certificate." 'Whether the plaintiff was entitled to contractual interest under cl 11.11 of the building contract.']

Ratio Decidendi

The plaintiff had completed the contract works and the agreed defect rectification, and the inability to obtain a final certificate resulted from the first and second defendants' breach in failing to appoint a replacement architect and their practical absence from the jurisdiction. The first and second defendants waived any entitlement to insist on a final certificate, and alternatively the court treated the final certificate as having been issued because it ought to have been issued. The plaintiff was therefore entitled to the retention monies and release and return of the bank guarantee.

Court Disposition

Builder entitled to retention monies and return of bank guarantee; orders made for release of retention monies, delivery of the bank guarantee, and costs against the first and second defendants.

Orders

  • ['I declare that the plaintiff is entitled to the return of the bank guarantee provided in favour of the first and second defendants in the sum of $242,500 dated 27 March 2003, and that the first and second defendants shall be taken to have released their interests therein.' 'I order that the third defendant release...