Hansen Yuncken Pty Ltd v Parliament Square Hobart Landowner Pty

Hansen Yuncken Pty Ltd (the builder) and Parliament Square Hobart Landowner Pty Ltd (the principal) were parties to a building contract for a development in Hobart. A dispute arose concerning the principal's entitlement to have recourse to an unconditional bank guarantee, and the validity of the principal's certification of liquidated damages. The matter came before the Supreme Court of Tasmania.

The central legal issues before the Court were whether the principal could draw upon an unconditional bank guarantee without prior notice to the builder, and whether the principal's certification of liquidated damages by a sub-independent certifier was valid and enforceable against the builder on a provisional basis.

The Court considered the nature of an unconditional bank guarantee, finding that its terms dictated the conditions for its enforcement. It was held that the principal was entitled to have recourse to the guarantee without prior notice to the builder, as the guarantee itself did not stipulate such a requirement. Regarding the liquidated damages, the Court examined the contract's provisions concerning the certification of such damages. It was determined that the certification by a sub-independent certifier, as permitted by the contract, was valid. Consequently, the builder was required to pay the certified liquidated damages on a provisional basis, pending the final determination of any dispute.