Ricon Constructions P/L v Belvoir Apartments

[1994] FCA 908

908 99

JUDGMENT No. ........ ........ . J , ...,

NOT FOR DISTRIBUTION

FEDERAG COURT OF AUSTRALIA )

NEW SOUTH WALES REGISTRY	)	No. NG 808 of 1994
GENERAL DIVISION

BETWEEN :

RICON CONSTRUCTIONS PTY LIMITED

Applicant

AND :

BELVOIR APARTMENTS h ORS

Respondents

CORM:	SACKVILLE J
PLACE :	SYDNEY 28 NOV 1994
mm:	22 NOVEWBER 1994

AUSTRAUA PRINCIPAL

REASONS FOR JUDGMENT

HIS HONOUR: This is an ex parte application for injunctive

relief brought by Ricon Constructions Pty Limited as applicant. Although six respondents are named, the injunctive relief is sought only against the sixth respondent, MM1 General Insurance Limited. There is evidence on affidavit that MMI, as I shall call it, was aware, at least in general terms, that an application was to be made ex parte to the Court.

The matter arises because of what is described as a contract bond dated 15 October 1993. That bond is between MM1 as "surety", and the applicant as "principal". The contract bond provides for the payment by MM1 to the second respondent, Austcorp International

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Ltd, as llobligee'l in certain circumstances specified in the contract bond. The evidence shows that Austcorp International Ltd has been substituted as vlobligee" by Belvoir Apartments Pty

Limited, the first respondent. The purpose of the application

today is to restrain payment by MM1 to the first respondent. The relationship between the first respondent and the applicant is that the applicant was the builder for a development undertaken by the first respondent.

Mr Perram has put the applicant's case in a number of ways. I do not think it appropriate at this stage to deal in detail with what he has said beyond this one observation. Insofar as the case is based upon what is said will be misleading and deceptive conduct on the part of MMI, I can see considerable difficulties in the path of such an argument succeeding. However, it is inappropriate to express any firm, let alone concluded, view on that point.

A case might perhaps be made out that under the terms of the

contract bond, to which the applicant is a party, it has a contractual right to have the bond regarded as void if the applicant has duly performed and observed all the terms of the contract between it and the first respondent. This argument is based upon the terms of paragraph C1 of the contract bond.

The evidence adduced by the applicant goes in part at least to the proposition that the applicant has performed and observed the terms of the building contract, at least on the assumption that

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the contract has been effectively modified between itself and the first respondent in accordance with the doctrine of estoppel. By that I mean that the claim made by the first respondent on MM1 is based upon an assertion that the sum of $207,000 has become due pursuant to the terms of the contract, because the applicant has failed to complete the work by the agreed completion date.

If the case put by the applicant is made out, however, one consequence may be that the contractual completion date as between the applicant and the first respondent must be taken to have been postponed. I am not, of course, in a position to assess the strength of the evidence, nor indeed of all the legal arguments that might be put on this issue. Nontheless, the applicant seems at least to have an arguable case. There is evidence to suggest that irreparable damage might occur if payment is made under the contract bond by MM1 to the first respondent.

It seems to me, although not without some hesitation, that I should grant an injunction, but for a very short period. I should also require all respondents to be served. I apprehend that there conceivably might be difficulty in serving some of the personal respondents. If that is the case, then it will be necessary to consider what effect that may have on the balance of the interlocutory proceedings. At present however, it seems to me that the critical point is to serve not only MM1 but the first and second respondents so that they may be heard in relation to any issue that arlses in respect of the claim for

interlocutory relief.

Accordingly, I propose to do the following: upon counsel for the applicant giving the usual undertaking as to damages, I order that the sixth respondent be restrained until 5 pm on 23 November 1994 from paying to the first respondent, pursuant to the contract bond annexed to the affidavit of Eugene Marchese sworn

22 November 1994 in the sum of $207,000, or any portion of that

sum.

I should interpose here that Mr Perram has properly advised me

that the time for payment of the amount by MM1 under the contract bond is seven days from the date of notification by the first respondent that the amount is required. The evidence indicates that the letter of demand is dated 16 November 1994, although a date stamp indicates that it was not received until 18 November 1994. Accordingly, the earliestthe seven day period will expire is tomorrow, 23 November 1994; the latest appears to be 25 November 1994.

I direct that the sealed copies of the application and statement

of claim together with coples of the notice of motion and all affidavits filed in Court today, as well as a copy of the orders made by me, be serVr-.d upon the 1st and 2nd v - - dents by 5 ?m

today, 22 November 1994. I make the same order in respect of the

6th respondent, MMI. In relation to the 3rd, 4th and 5th respondents I direct that the applicant use its best endeavours to serve each of those respondents with the documents to which

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I have referred by 5.00 pm on 22 November 1994 and if that is not feasible as soon as possible thereafter.

I direct that a copy of the documents to which I have referred

be served on Tzovaras & CO, Solicitors, Level 8, 82 Elizabeth Street, Sydney, to the attention of Mr Donald Wright, by 5pm this afternoon, 22 November 1994. I make that direction because I have been told that Mr Wright has acted for the first and second respondents in the past. Of course, that is in addition to the order for service upon the first and second respondents (as well as the orders in relation to the third, fourth and fifth respondents) and not in substitution for them. I will stand the matter over until 2.15 pm tomorrow, 23 November 1994.

RECORDED NOT TRANSCRIBED

HIS HONOUR: I direct that the applicant file in Court tomorrow at 2.15 pm any amended statement of claim. I further direct that the applicant notify each of the respondents by 10.00 am tomorrow, that is 23 November 1994, of the substance of any proposed amendment to the statement of claim. I qualify this in relation to the third, fourth and fifth respondents by directing that the applicant should use its best efforts to notify the thirc' fourth and f if' respondents of ' e substance of any changes proposed in the statement of claim.

I certify that this and the preceding 4 pages are a true copy of the Reasons for Judgment of the Honourable Justice Sackville.

Dated: 22 November, 1994

Heard :	22 November, 1994
Place:	Sydney
Decision:	22 November, 1994
Appearances:	Mr N. Perram and Mr T. Davie, instructed by Monarco & CO, Solicitors, appeared for the applicant.
The respondents did not appear.