JUDGE:	NICHOLS J
WHERE HELD:	Melbourne
DATES OF HEARING:	18 March 2020; further written submissions 6, 29 May 2020; further written submissions 10, 15 September 2020
DATE OF JUDGMENT:	18 September 2020
CASE MAY BE CITED AS:	Uber Builders and Developers Pty Ltd v MIFA Pty Ltd
MEDIUM NEUTRAL CITATION:	[2020] VSC 596

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CONTRACTS – Injunctive relief – Performance securities – Contractual risk allocation mechanism – Disputed agreement regarding ability to call on performance securities for delay damages – Disputed agreement regarding ability to call on performance securities for variations – Whether calling upon performance security is unconscionable – Sugar Australia Pty Ltd v Lend Lease Services Pty Ltd (2015) 31 BCL 407 – Siemens Gamesa Renewable Energy Pty Ltd v Bulgana Wind Farm Pty Ltd [2019] VSCA 318 – Re Concrete Constructions Group Pty Ltd [1997] 1 Qd R 6 – Olex Focas Pty Ltd v Skodaexport Co Ltd [1998] 3 VR 380 – Boral Formwork & Scaffolding Pty Ltd v Action Makers Limited (2003) 1 BFRA 34 – Australian Standard General Conditions of Contract for Design and Construct AS4300-1995.

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PRACTICE AND PROCEDURE – Injunctive relief – Building contract – Application to restrain principal from call on bank guarantees – Serious issue to be tried – Consideration of whether appropriate to decide contract interpretation question as if on a final basis – Proper approach – Balance of convenience – Application for injunction dismissed.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Ms J R Anthony-Shaw	Nicholas William Albon
For the Defendant	Mr N A Andreou	KCL Law

HER HONOUR:

Introduction

The plaintiff, Uber, seeks orders restraining the defendant, MIFA, from calling upon bank guarantees issued in its favour pursuant to a contract dated May 2017 between MIFA as developer-principal and Uber as contractor-builder, for the construction of an apartment complex in Breese Street, Brunswick (the Contract).

Uber issued this proceeding in January 2020 seeking interlocutory injunctive relief. Upon Uber providing an undertaking as to damages,[1] an interim order was made requiring MIFA to withdraw its demands for payment pending the determination of Uber’s application for an injunction.[2] The parties subsequently engaged in ultimately unsuccessful attempts at resolution of the dispute before the matter returned for determination.
[1]Orders dated 13 January 2020; 3 February 2020; 19 February 2020.
[2]Orders dated 13 January 2020.

MIFA contends that the security is intended to allocate risk between the parties pending a final determination of their rights, and that it is entitled to have recourse to it because an amount due and payable to MIFA under the Contract remains unpaid, and MIFA has given notice of its intention to call on the guarantee.

MIFA claims an entitlement to call on the security on the ground that Uber failed to…

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.

Continue reading Uber Builders and Developers Pty Ltd v MIFA Pty Ltd

Details

AGLC: Uber Builders and Developers Pty Ltd v MIFA Pty Ltd [2020] VSC 596
Case: [2020] VSC 596
Decision Date: 18 September 2020

CaseChat Overview and Summary

Uber Builders and Developers Pty Ltd brought an application against MIFA Pty Ltd seeking to restrain the principal from calling upon bank guarantees provided under a building contract. The case was heard by the Supreme Court of New South Wales. The primary issue before the court was whether it was appropriate to decide a question of contract interpretation as if on a final basis when considering an application for injunctive relief. The court also had to determine the balance of convenience in favour of either party to decide whether to grant the injunction.

The court considered the established principles for granting injunctive relief, which included the need for a serious issue to be tried and the balance of convenience. It noted that in determining the balance of convenience, the court should consider the relative strength of the parties' cases and the potential harm that might result if the injunction were or were not granted. The court further explored whether it was appropriate to decide the contract interpretation question as if on a final basis. It concluded that in the context of an application for injunctive relief, the court should not decide the interpretation of the contract as if on a final basis, but rather consider the matter on a prima facie basis. The court found that the applicant had not established a serious issue to be tried or demonstrated a sufficient balance of convenience in their favour.

Accordingly, the court dismissed the application for an injunction. The court held that the question of contract interpretation should be considered on a prima facie basis when deciding whether to grant injunctive relief. The court also found that the applicant had not shown a sufficient balance of convenience in their favour to warrant the grant of an injunction.

Orders