Bruton Pty Ltd, M. v NSW Land & Housing Corp & Anor [2009] NSWSC 1431

New South Wales Supreme Court

CITATION : Bruton Pty Ltd, M. v NSW Land & Housing Corp & Anor [2009] NSWSC 1431

HEARING DATE(S) : 11 December 2009

JUDGMENT DATE : 11 December 2009

JURISDICTION : Equity Division

JUDGMENT OF : Palmer J

EX TEMPORE JUDGMENT DATE : 11 December 2009

DECISION : Interlocutory injunction granted.

CATCHWORDS : INTERLOCUTORY INJUNCTION – BUILDING CONTRACT – BANK GUARANTEE – Defendant entitled to call on guarantee if it becomes entitled to exercise rights to security – serious question to be tried on construction of contract and whether Defendant entitled to exercise rights – balance of convenience favours grant of interlocutory injunction.

CATEGORY : Procedural and other rulings

M. Bruton Pty Ltd (Plaintiff) PARTIES : New South Wales Land and Housing Corporation (First Defendant) St George Bank Limited (Second Defendant)

FILE NUMBER(S) : SC 5478/09

COUNSEL : F. Austin (Plaintiff) J. Darvall (First Defendant)

SOLICITORS : Malouf Solicitors (Plaintiff) NSW Land & Housing Corp (First Defendant)

5478/09 M. Bruton Pty Ltd v NSW Land & Housing Corporation & Anor

JUDGMENT – Ex tempore

11 December, 2009

1 The Plaintiff carries on a business as a building company. On about 13 June 2007 the Plaintiff entered into a building contract with the First Defendant for the construction of a substantial development at Caves Beach. The contract provided a period of some 36 weeks for completion of the building. If no extensions of time were granted, the building ought to have been completed by around 24 June 2008. In fact practical completion of the building was achieved on 30 October 2008. 2 The First Defendant says that there were considerable defects in the building work which were not rectified by the Plaintiff in accordance with the Plaintiff's contractual obligations. The First Defendant also says that the Plaintiff was in breach of the clause requiring completion of construction by a specified time and that it is entitled to liquidated damages for the period between the date of practical completion actually achieved and the date when practical completion ought to have been achieved. 3 The Plaintiff was required by the building contract to provide a bank guarantee as security for its performance of the contract. The bank guarantee was in the sum of $80,000. Clause 5.5 of the contract provided as follows: "If the principal (i.e. the First Defendant) becomes entitled to exercise all or any of his rights under the contract in respect of the security, the principal may convert into money the security that does not consist of money. The principal shall not be liable for any loss occasioned by such a conversion."