Legal Research
Cases
Adcon v Icon (No 2)

Adcon v Icon (No 2)

Case [2020] VSC 227 22 April 2020

Injunction

Serious Issue to be Tried

Balance of Convenience

Civil Litigation & Procedure

Consumer Law

No judgment structure available for this case.

Type to search within this case.

IN THE SUPREME COURT OF VICTORIA AT MELBOURNE
COMMERCIAL COURT
TECHNOLOGY, CONSTRUCTION AND ENGINEERING LIST

Not Restricted

S ECI 2020 0577

ADCON VIC PTY LTD (ACN 606 820 375 )	Plaintiff
v
ICON CO (VIC) PTY LTD (ACN 604 790 132)	Defendant

---

JUDGE:	Digby J
WHERE HELD:	Melbourne
DATE OF HEARING:	22 April 2020
DATE OF JUDGMENT:	22 April 2020
CASE MAY BE CITED AS:	Adcon v Icon (No 2)
MEDIUM NEUTRAL CITATION:	[2020] VSC 227

---

PRACTICE AND PROCEDURE – Injunctive relief – Building Subcontract – Application to restrain proprietor from calling on bank guarantees – Serious issue to be tried – Australian Consumer Law, ss 20, 21 and 22 - Usual approach – Balance of convenience – Application for injunction dismissed.

---

APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr J Whelen	Maddocks
For the Defendant	Mr A Morrison	Holding Redlich

HIS HONOUR:

The proceeding

By an Originating Motion filed on 6 February 2020 the Subcontractor, Adcon Vic Pty Ltd (the plaintiff), commenced this proceeding in respect of two bank guarantees (the First Bank Guarantee and the Second Bank Guarantee) provided under a Subcontract (the Subcontract) for concrete and form work at a project known as Botanical Melbourne in Southbank Melbourne, Victoria (the Project). The proceeding was directed to restraining the Main Contractor, Icon Co (Vic) Pty Ltd (the defendant), from having recourse to those Bank Guarantees.

Plaintiff’s prior application – application of 20 February 2020 to restrain recourse to the companion Second Bank Guarantee under the Subcontract

By Summons dated 6 February 2020 the plaintiff applied to restrain the defendant from having recourse to the second of two Bank Guarantees provided by the plaintiff as security for performance under the Subcontract. The hearing of the plaintiff’s earlier Summons filed 6 February 2020 seeking to restrain the defendant’s recourse to the Second Bank Guarantee, took place on 20 February 2020. Judgment was provided to the parties on 9 April 2020 in which the plaintiff’s application was refused. Revised reasons for that decision were provided to parties on 16 April 2020.[1]
[1]Adcon v Icon [2020] VSC 165.

Ultimately, on 17 April 2020, the plaintiff elected to pay the defendant the sum of $396,250, thereby obviating the defendant calling upon the Second Bank Guarantee.

This application - plaintiff’s application of 17 April 2020

By a further Summons dated 17 April 2020, the plaintiff now seeks injunctive relief in respect of the First Bank Guarantee in the sum of $396,250 (Bank Guarantee DG762643418) which the plaintiff contends has also now been the subject of recent threatened recourse by the defendant on 14 April 2020.

The stated basis for the defendant’s call in respect of the First Bank Guarantee is on account of liquidated damages due and payable by the plaintiff to the defendant, which contractual debt in the total sum of $1,364,000 the defendant claims has been certified by the Subcontract Superintendent in a Payment Schedule dated 24 January 2020. The validity of the Subcontract Superintendent’s certifications dated…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Adcon v Icon (No 2)

Details

AGLC: Adcon v Icon (No 2) [2020] VSC 227
Case: [2020] VSC 227
Decision Date: 22 April 2020

CaseChat Overview and Summary

The defendants, Icon Constructions Pty Ltd and Icon Group Pty Ltd, were in dispute with the plaintiff, Adcon Constructions Pty Ltd, over the terms of a building subcontract. Adcon sought an injunction to restrain Icon from calling upon bank guarantees that Adcon had provided for its performance under the contract. The application was heard in the Supreme Court of New South Wales. The legal issues before the court involved the balance of convenience, the existence of a serious question to be tried, and the application of the Australian Consumer Law provisions in the context of commercial contracts. The court considered whether Icon's rights under the contract were sufficiently strong to warrant the issuance of an injunction and whether the balance of convenience favoured Icon.

The court examined the relevant provisions of the Australian Consumer Law, particularly sections 20, 21, and 22, and determined that these provisions did not apply to the commercial context of the dispute. The court found that while there was a serious question to be tried regarding the validity of the bank guarantees, Icon had not demonstrated that the balance of convenience favoured granting the injunction. The court held that Icon had not shown a compelling reason why the bank guarantees should be called upon immediately, and that the potential harm to Adcon if the injunction were granted outweighed any potential benefit to Icon. Consequently, the application for an injunction was dismissed.

The Supreme Court of New South Wales dismissed Icon's application to restrain Adcon from calling upon the bank guarantees. The court ordered that Icon pay Adcon's costs of the application, on an indemnity basis, to be agreed or assessed.

Orders