A/asian Conference Association Ltd v Mainline Constructions Pty Ltd [1978] HCA 45

High Court of Australia Gibbs A.C.J. Stephen, Jacobs, Murphy and Aickin JJ. A/asian Conference Association Ltd v Mainline Constructions Pty Ltd [1978] HCA 45

ORDER Objection to competency overruled. Appeal allowed with costs. Order of the Supreme Court of New South Wales, Court of Appeal Division, set aside and in lieu thereof order that the appeal to that Court be dismissed with costs.

Cur. adv. vult.

The following written judgments were delivered:—

Nov. 24 Gibbs A.C.J.

The question in this appeal is whether the appellant, the proprietor under a building contract made with the first respondent, Mainline Constructions Pty. Ltd. ("Mainline") as builder, is entitled to pay to a number of sub-contractors an amount totalling $116,259.90 out of a fund provided by the third respondent, Australia and New Zealand Banking Group Ltd. ("the Bank").

On the 30th April 1971 a contract was executed between the appellant as proprietor and Mainline as builder for the construction of extensions and alterations to the Sydney Sanitarium and Hospital, Fox Valley Road, Wahroonga, for a price which, as adjusted, amounted to $6,303,805.44. The contract was in a standard form. By sub-cll. (a) and (b) of cl. 22 of the conditions the proprietor was empowered to determine the employment of the builder in certain events. Clause 22 (a) dealt with cases in which the builder made default by suspending the carrying out of the works before practical completion, or failing to proceed with the works with reasonable diligence or in a competent manner, or refusing or persistently neglecting to comply with a written notice from the architect in certain circumstances. None of the events mentioned in cl. 22 (a) occurred in the present case. Clause 22 (b) provided as follows:

In the event of the Builder having an execution levied against him or becoming bankrupt or entering or attempting to enter into any composition or arrangement with his creditors or being a company having an execution levied against it or a winding up order made or (except for the purposes of reconstruction) passing or attempting to pass a Resolution for winding up or being a party to the appointment of or having an Official Manager appointed or on the appointment of a Receiver of the whole or any part of its property or undertaking or being a party to or attempting to enter into any composition or Scheme of Arrangement then the Proprietor may forthwith without prejudice to any other rights or remedies by written notice delivered by certified mail to the Builder determine the employment of the Builder under this Contract. The consequences of a determination of the employment of the builder under the clause were dealt with in sub-cl. (c) of cl. 22 which provided as follows: In the event of the employment of the Builder being determined pursuant to this clause the following shall be the respective rights and liabilities of the Proprietor and the Builder: