CPB Contractors Pty Ltd & Ors v Heyday5 Pty Ltd & Ors [2020] NSWSC 1385

Supreme Court New South Wales

Medium Neutral Citation: CPB Contractors Pty Ltd & Ors v Heyday5 Pty Ltd & Ors [2020] NSWSC 1385 Hearing dates: On the papers Date of orders: 12 October 2020 Decision date: 12 October 2020 Jurisdiction: Equity - Technology and Construction List Before: Stevenson J Decision: Plaintiff may deliver into Court an unconditional bank guarantee as substitute for cash Catchwords: CIVIL PROCEDURE – payment into court – party seeks leave to substitute cash with an unconditional bank guarantee Legislation Cited: Building and Construction Industry Security of Payment Act 1999 (NSW) Cases Cited: Simic v New South Wales Land and Housing Corporation (2016) 260 CLR 85; [2016] HCA 47 Category: Procedural and other rulings Parties: CPB Contractors Pty Ltd (First Plaintiff/Applicant) Dragados Australia Pty Ltd (Second Plaintiff/Applicant) Samsung C & T Corporation (Third Plaintiff/Applicant) Heyday5 Pty Ltd (First Defendant/ Respondent) David Francis (Second Defendant) Resolution Institute (Third Defendant) Representation: Counsel: D Hume (Plaintiffs)

Solicitors: MinterEllison (Plaintiffs/Applicants) Kreisson (First Defendant/ Respondent) File Number(s): 2020/260298

Judgment 1. The plaintiffs, CPB Contractors Pty Ltd and others (together, "CPB") , bring these proceedings to challenge a determination made under the Building and Construction Industry Security of Payment Act 1999 (NSW) that it pay the defendant, Heyday5 Pty Ltd ("Heyday"), some $9.6 million. 2. CPB's challenge is listed for hearing on 2 November 2020. 3. On 7 September 2020 the Court granted CPB interlocutory relief in relation to enforcement of the determination and, in the usual way, conditioned that relief on payment into court of the amount of the determination plus interest. 4. On 10 September 2020 CPB paid into court cash in an amount in the order of $9.9 million representing the determination amount plus interest. 5. By notice of motion filed on 29 September 2020 CPB seeks leave to substitute cash for an unconditional bank guarantee in favour of Heyday. 6. Heyday opposes that relief. Instead it proposes a timetable for evidence and submissions to be exchanged on the motion, with a view to an oral hearing on 23 October 2020 (six business days before the hearing). It has also served a notice to produce on CPB seeking various documents including the joint venture agreement between the plaintiffs, the proposed terms and conditions of the bank guarantee and various financial statements. 7. I see no basis to resolve this motion on that basis. 8. An unconditional bank guarantee is as good as cash. [1] Unconditional bank guarantees are commonly provided in this list as security in cases like this. 9. I think Mr Hume, who appeared for CPB, was correct to submit: "There is no proper basis for resisting the motion on the basis that [CPB] has not disclosed joint venture documents, financial statements and other financial information to Heyday. Under a bank guarantee, the promise to pay is given by the bank, and it is given to the favouree, here, Heyday. [CPB] is not a party to the guarantee. [CPB]'s financial position is irrelevant… Heyday says it wants to see the terms of the guarantee. What does it need to see? The orders provide for an unconditional guarantee. That is what makes the guarantee as good as cash. If [CPB] does not deliver an unconditional guarantee, it will not have delivered into court the requisite security, and it will not have a right to delivery out of the cash currently in court." 1. I make orders in accordance with paragraphs 1 and 2 of CPB's notice of motion as follows: 1. The Plaintiffs may, within 4 weeks, deliver into Court an unconditional bank guarantee in the sum of $9,973,998.44, or unconditional bank guarantees in the aggregate sum of $9,973,998.44, naming the First Defendant as the favouree with an expiry date of no less than one year from the date of issue. 2. If the Plaintiffs deliver into court an unconditional bank guarantee or unconditional bank guarantees in accordance with Order 1, the moneys paid into court by the Plaintiffs on 10 September 2020 (in the amount of $9,973,998.44), and any accrued interest, are to be paid out to the Plaintiffs. 1. I order that the defendant pay the plaintiffs' costs of the plaintiffs' notice of motion of 29 September 2020. 2. I accept Mr Hume's submission that such costs should be on an indemnity basis. I agree with Mr Hume that there was no reasonable basis for opposing replacement of cash with an unconditional bank guarantee.