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Parkview Queensland Pty. Ltd. v Commonwealth Bank of Australia

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Parkview Queensland Pty Ltd v Commonwealth Bank of Australia [2013] NSWCA 422 FACTS The appellant, Parkview Queensland Pty Ltd (“Parkview”), is a building contractor who commenced construction of a residential property development under a standard form building contract with Fortia funds Management Ltd (“Fortia”), the developer. Fortia financed the construction under a loan facility with the Bank of Western Australia Ltd (“BankWest”). The building contract provided for progressive payments to Parkview, with 5% of the value of the work completed to be retained by Fortia (“retention monies”) until practical completion. As per clause 5.10 (“cl5.10”) of the building contract “…The parties [i.e. Fortia and Parkview] shall hold the retention, security or the proceeds of the security on trust…”. Parkview, BankWest and Fortia signed a Builder Tripartite Deed. This entitled, but did not actually obligate, BankWest to pay all progress payments certified by Fortia directly to Parkview and to take over the building contract in the case of Fortia defaulting. The building contract allowed for Parkview to obtain payment out of part, or all of, the retention monies on provision of satisfactory alternative security to Fortia. Parkview subsequently provided a bank guarantee for part of the retention monies. BankWest received and retained the guarantee and subsequently remitted the equivalent amount of the retention monies to Parkview. Following practical completion Parkview

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