› Take out of contractor's hands — adjustment on completion
Equity
› Equitable remedies
› Interlocutory injunctions — restraining recourse to unconditional bonds
Quick Take
1Where a construction contract permits a principal to have recourse to security 'in respect of any claim to payment the Principal may have or claims to have against the Contractor under the Contract', the words 'claims to have' introduce subjectivity into the entitlement to recourse: the principal need only advance in good faith the assertion that it has a claim to payment under the contract, without the court needing to objectively assess the validity of the underlying claim.
2The phrase 'claims to have' a claim represents a further qualitative broadening beyond the 'has any claim or entitlement' formulation considered in FMT Aircraft Gate Support Systems v Sydney Ports Corporation, such that a contractor seeking to restrain recourse to security must challenge the principal's good faith in advancing the claim, not merely the objective merits of the claim itself.
3Whether clause 39.6 of an amended AS4000-1997 contract permits interim certification by the superintendent before all work taken out of the contractor's hands has been completed was left open, though the Court of Appeal identified arguments on both sides of the question.
