Tomkins Commercial & Industrial Builders Pty Ltd v Pacific Diamond 88 Pty Ltd as trustee for the Pacific Diamond 88 Unit Trust

In this matter, Tomkins Commercial & Industrial Builders Pty Ltd (appellant) brought an appeal against Pacific Diamond 88 Pty Ltd as trustee for the Pacific Diamond 88 Unit Trust (respondent) before the court. The dispute between the parties revolved around a building contract, where the appellant issued a liquidated damages certificate and a payment certificate to the respondent. The appellant sought to set off the liquidated damages against payment that was otherwise certified due to the respondent. Subsequently, the appellant notified the respondent of its intention to have recourse to security under the contract, which the respondent contested. The primary court had ruled in favour of the respondent, stating that the appellant was not entitled to set off the liquidated damages against the money owed to the respondent in the form of a progress certificate.

The court was tasked with determining whether the primary judge's interpretation of the contract was correct, specifically if the appellant had a right to elect to set off certified liquidated damages against money owed to the respondent in the form of a progress certificate. Additionally, the court had to consider if the primary judge was right in using evidence of deletions made to the standard form of contract and certain antecedent negotiations in aid of constructing the contract. Another issue was whether the evidence of a party's refusal to include a provision in their contract, which would give effect to something suggested to be their presumed intention, was admissible in aid of construction of the contract.

The court found that the primary judge was correct in their interpretation of the contract, and the appellant did not have the right to set off certified liquidated damages against money owed to the respondent in the form of a progress certificate. The court also held that the primary judge was entitled to consider evidence of deletions made to the standard form of contract and certain antecedent negotiations in aid of construction. Furthermore, the court ruled that evidence of a party's refusal to include a provision in their contract, which would give effect to something suggested to be their presumed intention, was admissible in aid of construction of the contract. Consequently, the appeal was dismissed with costs.