Construction Law Review

Construction Law Review – July

Please refer below to our Construction Law Review, selected from AR Conolly’s Daily Bulletins covering Insurance, Banking, Construction & Government.

Rushcutters Bay Developments Pty Ltd v Dragon Asset Investment Pty Ltd (No 2) [2017] NSWSC 866
Supreme Court of New South Wales
Darke J
Contract – plaintiff (vendor) and first defendant (purchaser) entered contract of sale of lots in strata plan – second defendant was first defendant’s director and manager – second defendant guaranteed first defendant’s obligations – plaintiff terminated contract on basis of defendants’ failure to pay instalments of deposit – plaintiff sought to recover amount of instalments from defendants – defendants contended that, on true construction of the contract, plaintiff not entitled to recover amount, but rather was restricted to recovery of 10% of sale price, less amount paid to plaintiff – defendants also opposed claim on basis of s55(2A) Conveyancing Act 1919 (NSW) – variations to standard form contract – held: on proper construction of contract, a vendor was entitled, on seeking to recover deposit after purchaser’s breach, to recover a maximum of 10% of price – in events of present case, plaintiff entitled to judgment of $937,500 plus interest.
Rushcutters Bay
Imerva Corporation Pty Ltd v Kuna [2017] VSCA 168
Court of Appeal of Victoria
Tate, Kyrou & McLeish JJA
Building and construction – The Domestic Building Contracts Act 1995 (Vic) contained statutory schedule of progress payments applicable to domestic building contract – schedule could be displaced ‘in the manner set out the Regulations’ – Regulations provided a form warning owners ‘that they understand the change to their legal rights’ – Regulations required that the warning be signed – question was whether initials at foot of page containing warning sufficiently complied with Regulations to displace statutory schedule – primary judge found insufficient compliance and that owners were entitled to rely on progress payments – held: Regulations required warning to be signed in a way clearly demonstrating that owners understood that Act’s protection did not apply to building contract – estoppel unavailable to preclude owners’ reliance on appellant’s breach of Act – appeal dismissed. Imerva

CPB Contractors Pty Ltd v JKC Australia LNG Pty Ltd [No 2] [2017] WASCA 123
Court of Appeal of Western Australia
Buss P; Murphy & Beech JJA
Building and construction – performance bonds – appellant subcontractor entered subcontract with respondent contractor to perform work on project – subcontractor obliged to procure performance bonds in contractor’s favour in amount of 10% of subcontract price – contractor sought that subcontractor pay liquidated damages and gave notice that it intended to have recourse to performance bonds – primary judge dismissed subcontractor’s application to restrain contractor from demanding payment under performance bonds – whether primary judge misconstrued provision of subcontract entitling contractor to have recourse to performance bonds – held: on proper construction of subcontract, contractor had a right of recourse to performance bonds where it had bona fide claim to immediate payment under subcontract – appeal failed.
Woolworths Limited v Randwick City Council [2017] NSWCA 179
Court of Appeal of New South Wales
Leeming & Payne JJA; Preston CJ of LEC
Planning and development – separate questions – appellant proposed to convert club premises into retail liquor outlet – Council contended development consent could not be granted on basis development did not relate to building ‘designed or constructed for the purpose of commercial premises’ pursuant to cl 6.13(3)(a) of Randwick Local Environmental Plan 2012 (RLEP) – Council sought separate determination of its contention – two separate questions: ‘(a) Does the development application seek consent for development which does not relate to a building that was designed or constructed for the purpose of commercial premises pursuant to cl 6.13(3)(a) of Randwick Local Environmental Plan 2012? (b) Having regard to the answer to question A, is it open to the consent authority to grant approval to the development application?’ – primary judge upheld Council’s contention – held – cl 6.13(3)(a) of RLEP did not preclude grant of consent – answers to separate questions set aside – first question answered ‘no’ – second question answered ‘yes’ – appeal upheld – proceedings remitted to Land and Environment Court.