The New South Wales Supreme Court has recently confirmed that injunctions sought to stop calls on bank guarantees may be granted in certain circumstances.
In GMW Urban v Alexandria Landfill [2012] NSWSC 237 Alexandria Landfill threatened to call upon bank guarantees on the basis that there were liquidated damages owing and GMW sought interlocutory relief to restrain the calling of the bank guarantees as the adjudicator had found that the Superintendent had not carried out his duties as required by the contract.
The question for the court was whether restraining the bank guarantees would vitiate the benefit of the proceedings under Security of Payments Act. The interim injunction was granted and demonstrated that the Court will attempt to find a fair balance of rights and obligations in accordance with the legislative scheme which involves a “conscious decision” to transfer the risk of insolvency from contractors to proprietors.
The case demonstrates a more commercial approach to the status of bank guarantees in construction contracts and has implications for payment claims and Superintendents.
By Jim Doyle
The post Legal | GMW Urban V Alexandria Landfill [2012] NSWSC 237 Synopsis appeared first on DesignBuild Source.
