Kell & Rigby Holdings Pty Limited v Lindsay Bennelong Developments Pty Ltd [2010] NSWSC 777

Kell & Rigby Holdings Pty Limited v Lindsay Bennelong Developments Pty Ltd [2010] NSWSC 777

The Contract contained an implied negative stipulation binding the defendant not to call on the Guarantees to effect repayment of the Advance Payment at a time when it was not repayable. Clause 40.1.13 did not authorise a variation deleting work so profoundly that the Works could no longer be reasonably capable of being used for their stated purpose as multi-storey commercial and residential buildings. The Notice of Variation to Works was therefore unauthorised and of no force or effect, Practical Completion had not been reached, and the Certificate of Practical Completion was ineffective. In any event, the Superintendent failed to act fairly and impartially in issuing the Notice and...

Jurisdiction
Australia
Judgment Date
16 July 2010
Procedural Posture
Contract Dispute Concerning Construction Contract, Advance Payment Bonds and Injunctive/declaratory Relief / Principal Judgment After Urgent Final Hearing
Outcome
Plaintiff entitled to declaration and injunction restraining the defendant from calling on the Guarantees in the circumstances that had occurred.
Legal Topics
['construction of Construction Contract' 'variations to Works' 'certificate of Practical Completion' 'advance Payment Bonds' 'unconditional Bank Guarantees' "superintendent's Duty to Act Honestly and Fairly" 'injunction Restraining Call on Guarantees']
['contract' 'building and Construction' 'equity'] ['construction of Construction Contract' 'variations to Works' 'certificate of Practical Completion' 'advance Payment Bonds' 'unconditional Bank Guarantees' "superintendent's Duty to Act Honestly and Fairly" 'injunction Restraining Call on Guarantees']

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Procedural Posture

Contract Dispute Concerning Construction Contract, Advance Payment Bonds and Injunctive/declaratory Relief / Principal Judgment After Urgent Final Hearing

Legal Issues

  1. 1 ['Whether the Contract contained an implied negative stipulation that the defendant would not call on the Guarantees to effect repayment of an Advance Payment if repayment was not due.' 'Whether the Notice of Variation to Works deleting remaining work was authorised by cl 40.1.13 of the Contract.' 'Whether the Certificate of Practical Completion issued on 21 June 2010 was valid and effective.' 'Whether the Superintendent acted honestly and fairly in issuing the Notice of Variation to Works and the Certificate of Practical Completion.' 'Whether relief should be granted restraining the defendant from calling on the Guarantees.']

Ratio Decidendi

The Contract contained an implied negative stipulation binding the defendant not to call on the Guarantees to effect repayment of the Advance Payment at a time when it was not repayable. Clause 40.1.13 did not authorise a variation deleting work so profoundly that the Works could no longer be reasonably capable of being used for their stated purpose as multi-storey commercial and residential buildings. The Notice of Variation to Works was therefore unauthorised and of no force or effect, Practical Completion had not been reached, and the Certificate of Practical Completion was ineffective. In any event, the Superintendent failed to act fairly and impartially in issuing the Notice and...

Court Disposition

Plaintiff entitled to declaration and injunction restraining the defendant from calling on the Guarantees in the circumstances that had occurred.

Orders

  • ['The plaintiff is entitled to a declaration that, in the circumstances that have thus far occurred, the defendant is not entitled to call on the Guarantees.' 'The plaintiff is entitled to an injunction, in appropriate terms, in aid of the declaration.' 'The parties are to bring in short minutes reflecting this...