Galileo Miranda Nominee Pty Ltd v Duffy Kennedy Pty Ltd

Galileo Miranda Nominee Pty Ltd (the Principal) sued Duffy Kennedy Pty Ltd (the Contractor) over alleged breaches of contract. The Principal sought an order for the Contractor to complete the penetration schedule and provide copies of subcontracts. The dispute also included whether the Principal’s take-out notice was valid and whether the Contractor was entitled to suspend works due to non-payment of interest on a progress claim under the Building and Construction Industry Security of Payment Act 1999 (NSW). Additionally, the Principal argued that the Contractor failed to proceed with due diligence in a competent manner and did not comply with the principal certifier’s occupation certificate requirements. The Contractor claimed it had reasonable cause to suspend works.

The court addressed whether the Contractor was entitled to suspend works due to the Principal’s non-payment of interest on a progress payment. It considered whether interest accrued under section 11 of the Act forms part of the "scheduled amount" under section 27(1). The court determined that interest must be quantified in a final way and its accrual should be interpreted consistently with statutory entitlement under the Civil Procedure Act 2005 (NSW), section 100. The court also assessed whether the Contractor was entitled to suspend works with reasonable cause and whether it failed to proceed with due diligence and comply with the certifier’s requirements. The court concluded that the Contractor’s erroneous view did not negate its failure to satisfy the preconditions for the issue of an occupation certificate.

The court found that the Principal’s default notice was valid as it was authorised by the Principal’s Representative, even though the Representative did not take an active role in its preparation. The notice served as a precursor to the rights to terminate and was not invalidated by technical deficiencies where its commercial purpose was achieved. The court also found that the Principal’s show-cause and take-out notices were valid, as the Representative’s determination was closely connected with the Principal’s exercise of power to terminate. The court concluded that the Principal’s Representative validly formed the determination.

The final orders of the court were that the Principal’s default notice and show-cause and take-out notices were valid, and the Contractor was not entitled to suspend works on the grounds presented. The court also ruled that the Principal was entitled to the return of the contractual security, which extended to the Principal’s claim for unliquidated damages.