Patterson Building Group Pty Ltd v Holroyd City Council [2013] NSWSC 1484

Patterson Building Group Pty Ltd v Holroyd City Council [2013] NSWSC 1484

The plaintiff was not entitled to interlocutory relief because clause 5.2 permitted the defendant to have recourse to security where it claimed to be owed moneys, the defendant had genuine and seriously arguable claims including claims concerning unrectified defects, and recourse to the security would not exclude, modify or restrict the operation of the Building and Construction Industry Security of Payment Act 1999 (NSW). The plaintiff had assumed the risk of hardship or reputational damage by providing security on terms allowing recourse when the defendant claimed to be owed money.

Jurisdiction
Australia
Judgment Date
24 September 2013
Procedural Posture
Interlocutory Application / Application for an Injunction to Restrain the Defendant From Calling On, or Drawing Down On, Two Bank Guarantees
Outcome
Application for interlocutory relief dismissed; defendant discharged from undertaking; plaintiff ordered to pay defendant's costs of the application; matter stood over.
Legal Topics
['performance Security' 'bank Guarantees' 'interlocutory Injunction' 'building and Construction Industry Security of Payment Act 1999 (nsw)' 'adjudication Determinations' 'no Contracting Out']
['contract Law' 'building and Construction' 'equity'] ['performance Security' 'bank Guarantees' 'interlocutory Injunction' 'building and Construction Industry Security of Payment Act 1999 (nsw)' 'adjudication Determinations' 'no Contracting Out']

Case Brief

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Procedural Posture

Interlocutory Application / Application for an Injunction to Restrain the Defendant From Calling On, or Drawing Down On, Two Bank Guarantees

Legal Issues

  1. 1 ['Whether the plaintiff had shown a serious question to be tried that the defendant was not entitled to have recourse to the bank guarantees under clause 5.2 of the contract.' "Whether clause 5.2 permitted recourse to security where the principal claimed to be owed moneys, before final determination of the parties' contractual rights." "Whether recourse to security for amounts paid under, or concerning claims dealt with by, an adjudicator's determination would exclude, modify or restrict the operation of the Building and Construction Industry Security of Payment Act 1999 (NSW)." 'Whether the balance of convenience justified interlocutory relief restraining recourse to the guarantees.']

Ratio Decidendi

The plaintiff was not entitled to interlocutory relief because clause 5.2 permitted the defendant to have recourse to security where it claimed to be owed moneys, the defendant had genuine and seriously arguable claims including claims concerning unrectified defects, and recourse to the security would not exclude, modify or restrict the operation of the Building and Construction Industry Security of Payment Act 1999 (NSW). The plaintiff had assumed the risk of hardship or reputational damage by providing security on terms allowing recourse when the defendant claimed to be owed money.

Court Disposition

Application for interlocutory relief dismissed; defendant discharged from undertaking; plaintiff ordered to pay defendant's costs of the application; matter stood over.

Orders

  • ['Order that paragraph 1 of the amended summons be dismissed.' 'Order that the defendant be discharged to the extent necessary from the undertaking given by it on 5 September 2013 and extended on 18 September 2013.' "Order that the plaintiff pay the defendant's costs of the application for interlocutory relief."...