The Court held that a contractual obligation to provide a parent company guarantee under an amended AS4000 construction contract is a standalone mandatory obligation, not merely a condition precedent that lapses if not met within the stipulated timeframe; failure to provide it within time does not extinguish the obligation. Council's conduct in allowing site access, accepting payment claims, and paying the advance payment amount over three years without demanding the guarantee did not constitute waiver, particularly given express no-waiver clauses in the contract and the absence of knowledge by either party that the guarantee had not been provided. However, the Court rejected Council's claim that the parent company (ADCO Constructions) had entered into a collateral or direct contract to provide the guarantee, finding insufficient promissory conduct, no actual or ostensible authority in the individuals relied upon, and no intention to create legal relations separate from the eventual execution of the guarantee deed itself. A mandatory injunction was granted against ADCO Group to do all things within its power to provide the executed guarantee, with the Court finding damages inadequate because the guarantee functions as a forward-looking risk allocation mechanism.
The full text is available to signed-in members.