Case Reports

Bank guarantee - Injunction to restrain exercise of rights to security

In Bruton Pty Ltd, M. v NSW Land & Housing Corp & Anor [2009] NSWSC 1431 (11 December 2009), the New South Wales Supreme Court considered an application for interlocutory injunction to retrain the Respondent calling upon a guarantee to compensate cost of rectifying defects and losses arising from late completion.  The building contract required Applicant to provide bank guarantee as security of performance.  Respondent claimed breach of contract because defects in building work and construction completed outside time stipulated, making allowance for extensions.  Applicant claimed no material breach of contract.  Held: Application granted. Balance of convenience favoured injunction because Applicant would incur financial difficulties whereas Respondent would not suffer any hardship and would still have security of bank guarantee.