The New South Wales Supreme Court has provided a salient reminder that superintendents (and parties) must understand the requirements of the terms of the contract, particularly when granting practical completion. If the parties desire a course of action not permitted under the contract, they will need to agree on that separate process or amend the contract.
In H & M Constructions (NSW) Pty Ltd v Golden Rain Development Pty Ltd (No 4) [2023] NSWSC 925, the developer (Golden Rain) enforced an entitlement to $22 million in liquidated damages for delays in achieving practical completion of high-rise apartments in Erskineville.
By mid-2018, the date for practical completion had passed, entitling Golden Rain to liquidated damages. On 24 September 2018, the Superintendent issued a "conditional" certificate of practical completion requiring H&M to complete seven outstanding issues.
The Court found the "conditional" certificate was invalid for two reasons:
- the Superintendent was not empowered to issue conditional certificates under the contract: it could only either grant practical completion unconditionally or give written reasons why it had not been achieved; and
- was inconclusive as to whether and when practical completion was achieved, leaving the parties "in a state of uncertainty".
Justice Stevenson evaluated the circumstances which led to the issue of the "conditional" certificate and concluded that H&M had not established any of its alternative arguments in estoppel, unconscionable conduct or pursuant to the prevention principle.
