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Bateman Project Engineering Pty Ltd v Resolute Ltd

Bateman Project Engineering Pty Ltd v Resolute Ltd

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Case Copied 24 November 2000 51 min read

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BATEMAN PROJECT ENGINEERING PTY LTD & ORS -v- RESOLUTE LTD & ORS [2000] WASC 284

Reported Decision:	(2000) 23 WAR 493
Jurisdiction:	SUPREME COURT OF WESTERN AUSTRALIA	Citation No:	[2000] WASC 284
Case No:	CIV:1734/2000	Heard:	25 JULY 2000
Coram:	OWEN J	Delivered:	24/11/00
No of pages:	32	Judgment Part:	1 of 1
Result:	Application dismissed
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Parties:	BATEMAN PROJECT ENGINEERING PTY LTD (ACN 056 741 596) KINHILL PACIFIC PTY LTD (ACN 010 241 620) KILBORN ENGINEERING PACIFIC PTY LTD (ACN 00 864 353) RESOLUTE LTD (ACN 009 069 914) BULONG OPERATIONS PYT LTD (ACN 008 930 881) BULONG NICKEL PTY LTD (ACN 000 807 036) PRESTON NICKEL HOLDINGS PTY LTD (ACN 083 334 936) PRESTON RESOURCES LTD (ACN 003 207 467)
Catchwords:	Contracts Building, Engineering and Related Contracts Other Matters Unconditional undertaking to pay (Bank guarantee) Dispute as to underlying contract Whether beneficiary entitled to draw on security Proper interpretation of the contract
Legislation:	Nil
Case References:	ADI Ltd v State Electricity Commission of Victoria (1997) 13 BCL 337 Anaconda Operations Pty Ltd v Fluor Daniel Pty Ltd (1999) 16 BCL 230 Anderson v G H Mitchell & Sons (1941) 65 CLR 543 Bachmann Pty Ltd v BHP Power New Zealand Ltd [1999] 1 VR 420 Barclay Mowlem Construction Ltd v Simon Engineering (Australia) Pty Ltd (1991) 23 NSWLR 451 Baulderstone Hornibrook Engineering Pty Ltd v Kayah Holdings Pty Ltd (1998) 14 BCL 277 Bond v Larobi Pty Ltd (1992) 6 WAR 489 Cargill International SA v Bangladesh Sugar and Food Industries Corporation [1998] 1 WLR 461 Coby Constructions Pty Ltd v Melbourne Glass Pty Ltd, unreported; SCt of Vic; (Gillard J); Library No 8322; 7 April 1998 Dobbs v National Bank of Australasia Ltd (1935) 53 CLR 643 FFE Minerals Australia Pty Ltd v Vanadium Australia Pty Ltd [2000] WASC 1 Fletcher Constructions Australia Ltd v Varnsdorf [1998] 3 VR 812 Hughes Bros Pty Ltd v Telede Pty Ltd (1989) 7 BCL 210 Hurst v Vestcorp Ltd (1988) 12 NSWLR 394 J H Evans (NT) Pty Ltd v Diano Nominees Pty Ltd [1989] NTSC 4 Mitsui Kensetsu Corporation Australia Pty Ltd v State of South Australia, unreported, SCQ, 9 August 1990 Novamaze Pty Ltd v Cut Price Deli Pty Ltd (1995) 128 ALR 540 Olex Focas Pty Ltd v Skodaexport Co Ltd (1996) 134 FLR 331 Pearson Bridge (NSW) Pty Ltd v State Rail Authority of New South Wales (1982) 1 Aust Const 81 Reed Construction Services Pty Ltd v Kheng Seng (Australia) Pty Ltd (1998) 15 BCL 158 Selvas Pty Ltd v Hansen & Yuncken (SA) Pty Ltd & Anor (1987) 6 ACLR 36 Transfield Pty Ltd v Fuller-FL Smidth (Pacific) Pty Ltd, unreported; SCt of NSW; (Bainton J); 9 May 1997 Wood Hall Ltd v The Pipeline Authority (1979) 141 CLR 443 American Cyanamid Co v Ethicon Ltd [1975] AC 396 Castlemaine Tooheys Limited v South Australia (1986) 161 CLR 148 Czarnikow v Roth Schmidt & Co [1922] 2 KB 478 Scott v Avery [1856]…

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.

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Details

Case: [2000] WASC 284
Decision Date: 24 NOVEMBER 2000

CaseChat Overview and Summary

The case of Bateman Project Engineering Pty Ltd v Resolute Ltd involved a dispute regarding a bank guarantee provided by Resolute Ltd to Bateman Project Engineering Pty Ltd. The underlying contract was a civil engineering and construction agreement for the development of a coal mine. Bateman Project Engineering sought to enforce the bank guarantee, claiming it was entitled to draw on the guarantee due to Resolute's alleged failure to fulfil its contractual obligations. Resolute, on the other hand, argued that Bateman had not provided sufficient evidence of its claims and that the bank guarantee was conditional on the existence of a valid underlying contract.

The court was required to determine whether Bateman was entitled to draw on the bank guarantee and if the guarantee was indeed unconditional. Key issues included the interpretation of the bank guarantee, the conditions precedent to its enforcement, and the validity of the underlying contract. The court had to examine whether Bateman had provided sufficient evidence to establish that Resolute had breached the contract and if such a breach triggered the unconditional nature of the guarantee.

In its reasoning, the court found that Bateman had not provided the requisite evidence to establish a breach of contract by Resolute. The court held that the bank guarantee was conditional upon the existence of a valid underlying contract and that Bateman had not demonstrated that such a contract existed or that it had been breached. The court concluded that, without evidence of a valid underlying contract, Bateman was not entitled to draw on the guarantee. Consequently, the application by Bateman to enforce the guarantee was dismissed.

Orders

Orders of the court

Application dismissed

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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