The builder called your bank guarantee. What to check today

A guarantee call can move before the wider dispute is sorted

When a builder goes under, the next move may be a demand to cash the bank guarantee you gave as security. That can feel abrupt, especially if you still think the underlying payment or defect dispute is unresolved. The practical risk is simple: once the bank acts, the money can leave the picture quickly.

The safer approach is to compare the demand against the actual guarantee and the contract documents together. The key question is whether the wording, notice steps and any certification requirements have been met. That is the document trail a lawyer needs to see before any urgent step is taken. ([legislation.gov.au](https://www.legislation.gov.au/F2011L01551/2019-05-02/2019-05-02/text/1/epub/OEBPS/document_1/document_1.html?utm_source=openai))

Read the instrument first, not just the demand letter

Start with the guarantee itself. Check the named parties, the amount, the expiry position, any notice condition, and whether it is an on-demand guarantee or tied to a particular contract trigger. Then read the contract clause that deals with calling security. The two documents need to sit side by side.

Do not guess from the administrator’s letter alone. Your record should show the clause number, the asserted breach, and any missing step. That matters because an interlocutory application is for a specific issue, and urgent applications can be brought to the court without notice where the matter is genuinely urgent. ([fedcourt.gov.au](https://www.fedcourt.gov.au/__data/assets/pdf_file/0014/101255/1-Contents-pages.pdf?utm_source=openai))

Source: Official guidance

If there is no proper basis, dispute the call in writing immediately

If the demand does not match the paperwork, send a short written dispute straight away. State that you do not agree the guarantee should be called, identify the clause, and ask the builder, administrator or liquidator to withdraw the demand pending review. Keep the message factual and brief so the objection is on record without delay.

At the same time, tell your bank in writing that the call is disputed and ask what it needs to hold action while you seek urgent advice. Attach the demand and the relevant documents. Federal Court guidance confirms that urgent applications, including injunctions, can be listed quickly, and that a usual undertaking as to damages is commonly required. ([fedcourt.gov.au](https://www.fedcourt.gov.au/contact/urgent-duty-matters?utm_source=openai))

Move fast if the bank is likely to process payment in days

This is not the kind of problem you leave until next week. If the bank pays out before you act, the argument becomes harder and more expensive. The practical file is simple: guarantee, contract, demand, any defect or default notices, and every email or site note tied to the alleged trigger. That is the evidence set an urgent lawyer needs.

If the builder is in administration or liquidation, that does not automatically answer whether the call is proper. It does change the pressure and the time available. Supreme Court of Victoria practice materials show genuinely urgent applications are heard quickly, and urgent injunction applications are within that class of work. ([supremecourt.vic.gov.au](https://www.supremecourt.vic.gov.au/forms-fees-and-services/forms-templates-and-guidelines/urgent-hearing-application-form?utm_source=openai))

Use today to lock in the record and get urgent help

Today, do three things: read the calling clause, send the written dispute, and notify your bank. Then get urgent legal advice before the money moves. If you need help coordinating that response, call CRP today about legal intervention. CRP coordinates independent qualified professionals and can help you plan the next step without promising an outcome.

This article is general information only and is not legal, financial or insolvency advice. The useful next move is not to argue broadly. It is to test the documents, preserve your position, and act while an urgent injunction is still a live option. ([legislation.gov.au](https://www.legislation.gov.au/F2011L01551/2019-05-02/2019-05-02/text/1/epub/OEBPS/document_1/document_1.html?utm_source=openai))