Construction Diving Services Pty Ltd v Van Oord ACZ BV [1999] QSC 406

( " . ~1'1'\r 0 \ State Reporting Bureau . TRANSCRIPT OF PROCEEDINGS Copyright in this transcript is vested in the Crown. Copies thereof must not be made or sold without the written authority of the Director, State Reporting Bureau. SUPREME COURT OF QUEENSLAND CIVIL JURISDICTION MOYNIHAN J No 8671 of 1999 CONSTRUCTION DIVING SERVICES (QLD) PTY LTD (ACN 010 381 469) and VAN OORD ACZ BV (ARBN 051 409 440) BRISBANE ' .. DATE 30/09/99 JUDGMENT 1 REVtSED COP1ES ISSUED State Reporting Bureau Date I ~ / J0/ Plaintiff Respondent II 1'1.11.1', TIle I.:I\V Courts. (;"111')..:<' St!'l:ct, Brisl':lut:, Q. 4(1111) Tdcphllill': (117) .1247 -1.1(,11 1-':1'(: (117) 32-17 5532 -- 1 of 5 -- 300999 T2-3/LM23 M/T 6083/9'~ (Moynihan J) HIS HONOUR: This is an appl~cation for an injunction to restrain the respondent from having recourse to a bank guarantee pending the determ:.nation of an arbitration between the parties. The bank guarantee is pursuant to a contract which provides by clause 4.3.1 that there is no provision for retention because the performance security is to remain in force "during the entire program of the supply order II , in other words, effectively while the contract remains unperformed, or while the contract continues. The· contract provides in clause 4.4 that the performance security is valid for the period stipulated in the form of Annexure 5. The form provides for an unconditional guarantee payable on demand irrespective of the performance or non-performance of the conract. The form of the guarantee provides for its termination on the date of issue of certificate of completion. The evidence establishes that that has not occurred in this case. It is true that there has apparently been a certificate of completion of the whole of the project but the construction I give to the provisions of the contract and the guarantee is that it means a certificate of completion in terms of the contract which is in issue here. 2 JUDGMENT 10 (': 30 40 50 60 -- 2 of 5 -- i" 300999 T2-3/LM23 M/T 6083/9') (Moynihan J) There was a certificate of cnmpletion in respect of that but it was a condi tional certifil~ate and does not, in my view, satisfy the terms of the con.':ract so as to discharge the guarantee. The argument for the applicant then becomes that there is a prima facie case that the respondent had wrongfully determined the contract, that it accepted the repudiation and hence determined the contract so that the supply order program which is referred to in the contractual terms I mentioned earlier was no longer in place. Therefore it is said the guarantee was not in force at the time that the demand was made because the "entire program of supply order II had itself been determined in the circumstances I have mentioned. The difficulty that I have with that submission is that it seems to me that the combined effect of clause 4.3.1 and of clause 4.4 and the form of Annexure 5 is to specifically provide that the termination date is the date of the issue of a certificate of completion, and for the reasons that I have already mentioned that has not occurred. It therefore seems to me that there is not a serious question to be tried .. I should say that the helpful written submissions canvass other issues and it may well be true that this case is distinguishable from cases such as Woodhall Limited and the Pipeline Authority (1979) 141 CLR 3 JUDGMENT 10 20 30 :. 40 50 60 -- 3 of 5 -- 300999 T2-3/LM23 M/T 6083/9~J (Moynihan J) 443 and Burleigh Forest Estate Management Pty Ltd and Signa Insurance Australia Limited [1992] QdR 54. But having regard to the terms of the contractual provisions in this case it seems to me that the point on which it turns is the one which I have identified and I have already expressed my 10 conclusions in respect of that. It therefore, on the view I take of the matter, is not necessary to embark on a consideration of the balance of convenience. As to that, however, it is perhaps proper that I say that there is an arbitration proceeding between the parties, the respondent having successfully obtained a stay of an action commenced by the applicant in order for that to be done. The consequences of the bank guarantee having been called up can of course be accommodated in the context of the arbitration. No doubt there will be some adverse consequences to the applicant in the event that the guarantee is called up but as I have already said on the view I take of the matter it is unnecessary for me to determine the weight which they should be given in respect of an injunction. As I say I decline the application for an injunction. 4 JUDGMENT 20e\: 30 o "40 CJ 50 60 -- 4 of 5 -- 300999 T2-3/LM23 M/T 6083/9 1) (Moynihan J) HIS HONOUR: The application having failed on the basis which I have outlined it seeI1S to me that the applicant ought to pay the respondent'G costs of the application. 10 20 ( I " 50 60 5 JUDGMENT -- 5 of 5 --