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Category: Procedural rulings

Parties: Alstef Australia Pty Ltd (Plaintiff)
Brisbane Airport Corporation (ACN 085 959 940) (Defendant)

Representation: Counsel:
Mr M Christie SC / Ms A Zheng (Plaintiff)
Mr D Hume SC / Mr M Brunker (Defendant)
Solicitors:
Jones Day (Plaintiff)
MinterEllison (Defendant)

File Number(s): 2026/132290

Publication restriction: N/A

Judgment

Introduction

1. These reasons concern an application by the plaintiff, Alstef Australia Pty Limited (Alstef), for interim injunctions restraining the defendant, Brisbane Airport Corporation (BAC), until further order of the Court, from having recourse to bank guarantees procured by Alstef under a contract for the design and construction of a baggage handling system for the domestic terminal building at Brisbane Airport (the DTB Contract), in circumstances where the DTB Contract has been terminated and the parties are in dispute about which of them validly terminated it but it is common ground between them that it has now been discharged.

2. The bank guarantees in question are:

3. two performance bonds, each of which is an unconditional undertaking given by Australia and New Zealand Banking Group Limited (ANZ) on 6 June 2023 to pay on demand any sum which may from time to time be demanded by BAC (as the Principal) up to a maximum amount of $1,721,588.53 (being a sum equivalent to 2.5% of the Contract Price payable under the DTB Contract); and

4. three payment security bonds, each of which was procured by Alstef during the performance of the DTB Contract in order to secure payment from BAC for progress payments in respect of unfixed goods or materials in accordance with clause 12 of the DTB Contract, and each of which is an unconditional undertaking given by ANZ to pay on demand any sum which may from time to time be demanded by BAC (as the Principal) up to a maximum amount of $2,000,000 (in the case of two of the bonds) and $6,000,000 (in the case of the third bond).

5. For the reasons that follow, I have determined that although there is a serious question to be tried as to the proper construction of the DTB Contract, it is strongly arguable that the performance bonds are “risk allocation devices” and that the balance of convenience does not warrant granting the interim relief sought by Alstef in respect of the performance bonds in all the circumstances of this case. I have determined Alstef has a strong prima facie case for the immediate return of the payment security bonds on the basis that clause 12.7(a)(ii) of the DTB Contract pursuant to which they were procured and provided to BAC is of no effect by reason of s 200 of the Building Industry Fairness (Security of Payment) Act 2017 (Qld) (the BIF Act) and on the basis that it would be unconscionable contrary to s 21 of the Australian Consumer Law for BAC to retain the payment security bonds in those circumstances, and that the balance of convenience favours the granting of the interim injunctions sought by Alstef in respect of the payment security bonds. Alstef gave the usual undertaking as to damages.

6. I have considered all of the parties’ written and oral submissions in coming to that decision, but I have not found it necessary to restate the substance of all of those submissions in order to explain my reasons. Many of the parties’ written submissions became irrelevant or immaterial as a result of various concessions made by Alstef prior to and during the hearing of the application, and amendments made by Alstef to its Technology and Construction List Summons and List Statement during the course of the hearing.

Background to the dispute

5. What follows is a summary of the salient aspects of the evidence adduced by the parties at the hearing of the application for interim relief, and should not be read as findings of fact on a final basis. In preparing the summary, I have been assisted by the parties’ detailed written opening submissions.

6. BAC is the operator of the Brisbane Airport.

7. Alstef conducts a business which designs, supplies, installs and maintains baggage handling systems for airports, air-cargo operators, parcel logistics and warehouses.

8. Alstef is a wholly-owned subsidiary of Alstef New Zealand, which is in turn wholly owned by Alstef New Zealand Holding, which is in turn wholly owned by Alstef Group, a simplified joint-stock company incorporated and domiciled in France. Alstef Group is a wholly-owned subsidiary of Beyond Automation, which is itself wholly owned by Sky Automation. Sky Automation is controlled by the Ardian Expansion Fund VI, which owns 55.62% of the shares in Sky Automation. Documents published by Alstef Group describe Ardian Expansion Fund VI as “a world-leading private investment house, managing or advising $166bn of assets on behalf of more than 1,650 clients globally”. I shall refer to those companies collectively as the Alstef Group of Companies.

9. BAC is undertaking an extensive security upgrade project at the domestic and international terminals of the Brisbane Airport. As part of that project, BAC (as Principal) entered into the DTB Contract with Alstef (as Contractor) on 9 May 2023 pursuant to which Alstef agreed to design and construct a baggage handling system for the domestic terminal building at Brisbane Airport (the DTB Project).

10. The DTB Contract comprised an Instrument of Agreement, Conditions of Contract (including Annexures), Contract Particulars, and two documents relating to, respectively, design reports and IT requirements. References to the DTB Contract in these reasons are references to the Conditions of Contract unless the contrary is indicated.

11. Clause 4.1 of the DTB Contract provided:

“4. Security

4.1. Form

The Contractor must provide security to the Principal:

(a) in the form of Approved Security;

(b) in the amount set out in Item 24; and

(c) within 10 Business Days after the Award Date.”

12. Item 24 of the Contract Particulars listed the following security to be provided by Alstef under clause 4.1:

13. Completion Security: 2.5% of the Contract Price;

14. Post Completion Documents Security: Nil; and

15. Balance of the Security: 2.5% of the Contract Price.

16. Clause 4.2 provided (my emphasis in italics, and omitting provisions relating to the Nil Post Completion Documents Security):

“4.2 Release

Subject to the Principal’s right to have recourse to security, the Principal must:

(a) within 10 Business Days after the issue of a Notice of Completion for the Works, or where there are Separable Portions, within 10 Business Days after the issue of the Notice of Completion for the last Separable Portion to reach Completion, release the security held under clause 4.1, the Completion Security;

(b) … ; and

(c) release the balance of the security under clause 4.1 then held within 10 Business Days after the later of:

(i) the issue by the Principal’s Representative of the payment statement in respect of the Final Payment Claim under clause 12.11 as relates to the last Separable Portion to reach Completion; and

(ii) the Contractor complying with all its obligations under the Contract.”

14. Clause 12 of the DTB Contract set out BAC’s obligation to pay the “Contract Price” (subject to its rights of set-off under clause 12.15 and any other right of set-off that it may have) and the regime for the making of monthly payment claims by Alstef based on the value of the work carried out (clauses 12.2 and 12.3), the issue of payment statements by BAC in response to payment claims (clause 12.4), and the payment of amounts stipulated in payment statements on account, such payments not being evidence of the value or the work or that the work has been carried out in accordance with the contract, and not being an admission of liability (clauses 12.5 and 12.6). Clause 12.11 provided for Alstef’s final payment claim to be made after the end of the Defects Liability Period for the whole of the Works.

15. Clause 12.19(a)(iii) provided that, to the extent permitted by and for the purposes of the relevant Security of Payment Legislation, the “reference dates” are the dates on which clauses 12.2 and 12.3 permit Alstef to make payment claims.

16. The relevant Security of Payment Legislation is the BIF Act, which relevantly provides:

“70 Right to progress payments

From each reference date under a construction contract, a person is entitled to a progress payment if the person has carried out construction work, or supplied related goods and services, under the contract.”

17. Section 66 of the BIF Act provides:

“66 Meaning of related goods and services

(1) Related goods and services, in relation to construction work, means any of the following—

(a) goods of the following kind—

(i) materials and components to form part of any building, structure or work arising from construction work;

(ii) plant or materials (whether supplied by sale, hire or otherwise) for use in connection with the carrying out of construction work;

(b) services of the following kind—

(i) the provision of labour to carry out construction work;

(ii) architectural, design, surveying or quantity surveying services relating to construction work;

(iii) building, engineering, interior or exterior decoration or landscape advisory services relating to construction work;

(iv) soil testing services relating to construction work;

(c) goods and services, relating to construction work, of a kind prescribed by regulation.

(2) In this chapter, a reference to related goods and services includes a reference to related goods or services.”

18. Section 71 of the BIF Act provides:

“71 Amount of progress payment

The amount of a progress payment to which a person is entitled under a construction contract is—

(a) if the contract provides for the matter—the amount calculated in accordance with the contract; or

(b) if the contract does not provide for the matter—the amount calculated on the basis of the value of construction work carried out, or related goods and services supplied, by the person in accordance with the contract.”

19. Section 72 of the BIF Act relevantly provides:

“72 Valuation of construction work and related goods and services

(1) …

(2) Related goods and services supplied under a construction contract are to be valued—

(a) if the contract provides for the matter—in accordance with the contract; or

(b) if the contract does not provide for the matter—having regard to—

(i) the contract price for the goods and services; and

(ii) any other rates or prices stated in the contract; and

(iii) any variation agreed to by the parties to the contract by which the contract price, or any other rate or price stated in the contract, is to be adjusted by a specific amount; and

(iv) if any of the goods are defective, the estimated cost of rectifying the defect.

(3) For subsection (2)(b), for materials and components that are to form part of any building, structure or work arising from construction work, the only materials and components to be included in the valuation are those that have become or, on payment, will become the property of the party or other person for whom construction work is being carried out.

(4) …”

20. Clauses 12.7 and 12.8 of the DTB Contract provided:

“12.7 Unfixed Goods and Materials

(a) Unfixed goods or materials will not be included in the value of work in a payment statement under clause 12.4 unless:

(i) the Principal’s Representative is satisfied that the unfixed goods and materials have not been prematurely ordered and are necessary to enable the Contractor to comply with its obligations under the Contract;

(ii) the Contractor gives the Principal’s Representative with its payment claim under clause 12.2:

A. additional Approved Security equal to the payment claimed for the unfixed goods and materials; and

B. such evidence as may be required by the Principal’s Representative that title to the unfixed goods and materials will vest in the Principal upon payment;

(iii) the unfixed goods and materials are clearly marked as the Property of the Principal; and

(iv) the unfixed goods and materials are properly stored in a place approved by the Principal’s Representative.

(b) Upon payment of a payment statement which includes unfixed goods and materials, unencumbered title in the unfixed goods and materials will vest in the Principal.

12.8 Release of Additional Approved Security

If the Contractor has given the Principal additional Approved Security for payment for unfixed goods and materials, the Principal must release it to the Contractor once those goods and materials are incorporated into the Works.”

21. The term “Approved Security” referred to in clause 4.1(a) and 12.7(a)(ii) was relevantly defined in clause 1.1 of the DTB Contract as meaning:

“An unconditional undertaking (duly stamped) in the form set out in Annexure 1 and otherwise on terms, and given by a financial institution, approved by the Principal …”.

22. The form of Approved Security in Annexure 1 was an unconditional undertaking given in favour of BAC as the Principal by the issuing Financial Institution in respect of the named Project for a specified Secured Amount. The terms of the undertaking set out in Annexure 1 were as follows:

“At the request of the Contractor and in consideration of the Principal accepting this undertaking in respect of the Contract for the Project, the Financial Institution unconditionally undertakes to pay on demand any sum or sums which may from time to time be demanded by the Principal to a maximum aggregate sum the Secured Amount.

The undertaking is to continue until notification has been received from the Principal that the sum is no longer required by the Principal or until this undertaking is returned to the Financial Institution or until payment to the Principal by the Financial Institution of the whole of the sum or such part as the Principal may require.

Should the Financial Institution be notified in writing, purporting to be signed by an officer for and on behalf of the Principal or the Principal’s solicitor that the Principal requires payment to be made of the whole or any part or parts of the sum, it is unconditionally agreed that the Financial Institution will make the payment or payments to the Principal forthwith without reference to the Contractor and notwithstanding any notice given by the Contractor not to pay same.

Provided always that the Financial Institution may at any time without being required so to do pay to the Principal the Secured Amount less any amount or amounts it may previously have paid under this undertaking or such lesser sum as may be required and specified by the Principal and thereupon the liability of the Financial Institution shall immediately cease.

This deed will be governed by and construed in accordance with the laws applying in Queensland.

Executed as a deed poll and delivered on the date above (or if not dated the date provided to the Principal).”

23. ANZ Bank Guarantee number GO472492092 issued on 6 June 2023 and ANZ Bank Guarantee number GO472482092 issued on 6 June 2023, each for an amount not exceeding $1,721,588.53 and in the terms of Annexure 1 to the Conditions of Contract of the DTB Contract, were delivered to BAC as the Completion Security and the Balance of the Security (respectively) required by clause 4.1 and Item 24 of the Contract Particulars. These are the performance bonds to which I referred in the introductory section of these reasons at [2].

24. Alstef adduced evidence from Mr Paul Lombard, a solicitor representing Alstef Group in France, to the effect that, based on his review of documents, each of the performance bonds is the subject of a counter bank guarantee issued by Credit Lyonnais at the request of Alstef Automation SAS (which I understand to be a directly wholly owned subsidiary of Alstef Group) pursuant to which Credit Lyonnais has undertaken to pay ANZ any sum up to a maximum amount of $1,721,588.53 upon first demand from ANZ, provided that ANZ has either received a compliant demand from or made payment to BAC under the underlying performance bond. Alstef Automation SAS has irrevocably authorised Credit Lyonnais to debit its current accounts for any sums owing under the instructions pursuant to which Credit Lyonnais issued the counter bank guarantee.

25. ANZ Bank Guarantee number GO490552092 issued on 4 March 2024 for an amount not exceeding $2,000,000, ANZ Bank Guarantee number GO490582092 issued on 31 January 2025 for an amount not exceeding $2,000,000, and ANZ Bank Guarantee number GO512522092 issued on 31 January 2025 for an amount not exceeding $6,000,000, were delivered to BAC as additional Approved Security pursuant to clause 12.7(a)(ii) of the DTB Contract. Each of those guarantees was in the terms of Annexure 1 to Conditions of Contract of the DTB Contract, with the exception that the guarantee for a sum not exceeding $6,000,000 expired on 31 July 2025 if it had not already expired by BAC notifying ANZ that the sum was no longer required, by the guarantee being returned to ANZ, or by payment by ANZ to BAC of the whole of the sum or such part as BAC may require. By amendment made on 27 February 2025, the expiry date was extended from 31 July 2025 to 31 December 2026. These three guarantees are the payment security bonds to which I referred in the introductory section of these reasons at [2].

26. Mr Lombard has given evidence to the effect that, based on his review of documents, each of the two payment security bonds issued for a maximum amount of $2,000,000 are the subject of a counter bank guarantee issued by Credit Lyonnais at the request of Alstef Group pursuant to which Credit Lyonnais undertakes to pay ANZ any sum up to a maximum amount of $2,000,000 upon first demand from ANZ, provided that ANZ has either received a compliant demand from or made payment to BAC under the underlying payment security bond. Alstef Group has irrevocably authorised Credit Lyonnais to debit its current accounts for any sums owing under the instructions pursuant to which Credit Lyonnais issued each counter bank guarantee. However, each counter bank guarantee has been allocated to Alstef Automation SAS, meaning that any amount debited will be debited from the accounts of that company.

27. According to evidence adduced by BAC at the hearing of the interim application, BAC has paid Alstef a total sum of approximately $9,265,478 in respect of unfixed goods and materials that Alstef procured for the purpose of the DTB Project that have not yet been installed or incorporated into the DTB Project works and which are being stored at two warehouses occupied by Alstef in Brisbane. The payment security bonds were provided in respect of BAC’s payments to Alstef for those goods and materials. The warehouses also contain equipment that Alstef has procured for BAC’s security upgrade for the international terminal building at Brisbane Airport in respect of which BAC and Alstef have entered into a separate contract that is not the subject of these proceedings (the ITB Project). The goods and materials relating to the DTB Project have been intermingled with the goods and materials relating to the ITB Project in the warehouses. BAC also adduced evidence to the effect that it has maintained an Equipment Spreadsheet recording the status and location of all equipment supplied by Alstef under the DTB Contract. Alstef has adduced evidence that BAC’s Equipment Spreadsheet does not identify all of the individual line items, and the value of each line item, that comprises each piece of equipment stored in Alstef’s warehouses, and that the figures in BAC’s Equipment Spreadsheet do not correlate to the figures set out for the corresponding equipment in BAC’s Payment Statement 33 to which I refer below. As a result of these discrepancies, and the intermingling of equipment relating to the DTB Project and the ITB Project in the warehouses, further engagement between Alstef and BAC is required in order to identify each item of unfixed goods and materials for which Alstef has paid BAC under the DTB Contract. Once Alstef and BAC have prepared an agreed list of all such items, Alstef will release those items from its warehouse to BAC.

28. The baggage handling system in the domestic terminal building at Brisbane Airport comprises a series of conveyors which, depending on their location within the building, are installed on floor-mounted support systems or mounted on elevated steel platforms. The scope of Alstef’s work under the DTB Contract included the design and installation of mezzanine steel platforms across four specific areas in the domestic terminal building. On 17 September 2025, a defect was discovered in one of the mezzanine steel platforms installed in one of those areas (the Structural Steel Defect).

29. The Structural Steel Defect was the subject of extensive correspondence between BAC, Lendlease Constructions (BAC’s managing contractor for the DTB Project works), Alstef, and Alstef’s subcontractor which had installed the relevant platforms.

30. On 3 December 2025, BAC issued a direction to Alstef under clause 9.8(b)(i)(A) of the DTB Contract requiring Alstef to take specified steps to correct the Structural Steel Defect. BAC issued further directions to Alstef under clause 9.8(b)(i)(A) on 11 December 2025 and on 29 January 2026. Each of the latter directions expanded or specified in greater detail the steps that BAC required Alstef to take to correct the Structural Steel Defect.

31. On 3 March 2026, BAC’s Representative issued a notice to Alstef exercising or purportedly exercising its rights under clause 8.24 of the DTB Contract to rectify the Structural Steel Defect itself or, alternatively, if the exercise of rights under clause 8.24 was found to be invalid or ineffective for any reason (which BAC denied), issuing or purporting to issue a variation order pursuant to clause 11.2 of the DTB Contract to omit the works relating to the Structural Steel Defect.

32. On 13 March 2026, Alstef wrote to BAC stating that BAC’s purported exercise of rights under clause 8.24 or clause 11.2 of the DTB Contract was invalid, and that BAC had repudiated the DTB Contract by purporting to exercise those rights. Alstef’s letter stated that it accepted that repudiation, thereby bringing the DTB Contract to an end, and reserved all of its rights.

33. BAC responded by letter dated 19 March 2026, denying that it had repudiated the DTB Contract, stating that Alstef had repudiated the DTB Contract by purporting to bring it to an end by claiming to have accepted a repudiation which had not occurred, and accepting Alstef’s repudiation of the DTB Contract.

34. In these proceedings, Alstef and BAC are in dispute about which of them validly terminated the DTB Contract. However, as I have already mentioned, there is no dispute that the DTB Contract is now discharged.

35. Following the competing notices of termination, there was correspondence between the parties in which Alstef contended that BAC was obliged to immediately return the performance bonds and the payment security bonds and asserted that BAC would be in breach of the DTB Contract if it sought to call on the bonds and that any such call would be unconscionable. BAC contended that it was entitled to retain the performance bonds and payment security bonds and reserved its rights to call on the bonds.

36. Following the commencement of the present proceedings on 1 April 2026, BAC undertook not to call on the performance bonds and payment security bonds pending the determination of Alstef’s application for interim injunctions restraining BAC from having recourse to those bonds.

The proceedings

37. In its Further Amended Technology and Construction List Statement filed on 23 June 2026, Alstef claims the following final relief:

38. a declaration that Alstef validly terminated the DTB Contract on 13 March 2026 (prayer 2);

39. further, an order that BAC return the performance bonds or, alternatively, that BAC be permanently restrained from having recourse to the performance bonds; (prayers 4 and 4AA);

40. further, a declaration that clause 12.7(a) of the DTB Contract is void by reason of s 200 of the Building Industry Fairness (Security of Payment) Act 2017 (Qld) (prayer 3);

41. further, an order that pursuant to s 232 of the Australian Consumer Law, or alternatively pursuant to the Court’s inherent jurisdiction, that BAC be permanently restrained from having recourse to the payment security bonds (prayer 4A);

42. further or alternatively, an order that BAC return or give restitution for the payment security bonds (prayer 5);

43. further or alternatively, an order pursuant to ss 237(1)(b) and 243(d) of the Australian Consumer Law, or pursuant to the Court’s equitable jurisdiction, that BAC return the payment security bonds (prayer 5A); and

44. alternatively to prayers 5 and 5A, that BAC deliver the payment security bonds to Alstef pursuant to s 93 of the Civil Procedure Act 2005 (NSW).

The present application

38. The general principles governing the grant of interim injunctions are well established. The purpose of an interim injunction is to preserve the status quo until the rights of the parties can be determined at a final hearing or, to adopt the language of Gleeson CJ in Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd to “prevent the practical destruction” of the right in respect of which the plaintiff claims final relief “before there has been an opportunity to have its existence finally established”. [1]

39. The plaintiff seeking an interim injunction must establish a serious question to be tried or prima facie case in the sense that, if the evidence remains as it is, there is a probability that at the trial of the action the plaintiff will be held entitled to relief. If so, the Court considers the balance of convenience. The question at that stage of the inquiry is whether the inconvenience or injury which the plaintiff would be likely to suffer if the interim injunction were refused outweighs, or is outweighed by, that which the defendant would suffer if an injunction is granted, and whether damages would be an adequate remedy for any such inconvenience or injury. [2]

40. It is not necessary in order to establish a serious question to be tried (or prima facie case) that the plaintiff must show that it is more probable than not that they will succeed at trial, or that they have a better than even chance of success. It is sufficient for the plaintiff to demonstrate a sufficient likelihood of success to justify, in all the circumstances of the case, the preservation of the status quo pending the trial. [3] As BAC submitted, the strength or otherwise of the plaintiffs’ prima facie case is relevant to assessing the balance of convenience. [4]

41. BAC accepts that Alstef’s claims for final relief satisfy the low threshold of raising a serious question to be tried or prima facie case. However, BAC submits that Alstef’s prima facie case is weak, and that the balance of convenience does not favour the grant of the interim injunctions sought in respect of the performance bonds or the payment security bonds.

42. Alstef disputes the characterisation of its prima facie case as a weak case and submits that the balance of convenience favours the grant of the interim injunctions in respect of the performance bonds and the payment security bonds.

43. In relation to the performance bonds, Alstef acknowledges that BAC has made claims against it, being the claims articulated in payment statement 33 and identified in paragraph 32 of BAC’s List Response. Alstef denies those claims, and relies on its present claims against BAC as articulated in its Further Amended List Statement. Neither party asked the Court to assess the relative strengths of those competing claims, and the hearing of the present application proceeded on the basis that they raise serious questions to be tried. At the commencement of the hearing, Alstef conceded that BAC is entitled to retain the performance bonds pending the final determination of those competing claims. If the claims are ultimately resolved in favour of BAC, Alstef acknowledges that BAC will be entitled to have recourse to the performance bonds. Alstef submits that BAC should be restrained from calling on the performance bonds in the meantime pending final determination of these proceedings so as to preserve the subject matter of its claims for an order for the return of the performance bonds or a permanent injunction restraining BAC from having recourse to those bonds. There were two limbs to that submission as it developed during the course of the hearing. First, on the proper construction of the DTB Contract, the performance bonds are not “risk allocation devices”. Second, by reason of that construction and in circumstances where Alstef will suffer financial and reputational harm if BAC has recourse to the performance bonds pending the final determination of these proceedings, the balance of convenience favours granting the interim injunctions sought.

44. BAC submits that Alstef’s prima facie case for the return of the performance bonds or for a permanent injunction restraining BAC from calling on those bonds is a weak case, because it is strongly arguable that Alstef is barred from making those claims by clause 16.5 of the DTB Contract as a consequence of Alstef’s failure to give notice of the claims and to make written claims within the time periods stipulated in clause 16.3 of the DTB Contract. BAC further submits that, on the proper construction of the DTB Contract, the performance bonds are risk allocation devices and that BAC is presently entitled to demand payment under the performance bonds in respect of its claims referred to above. BAC submits that the prejudice that it would suffer in being deprived of that right if an interim injunction were granted far outweighs any financial or reputational harm that Alstef would suffer if the interim injunction is not granted and BAC makes a demand on the performance bonds before the final determination of those claims. BAC submits that the evidence adduced by Alstef does not establish the claimed financial harm, and that it is within Alstef’s ability to take steps to avoid the claimed reputational damage.

45. In relation to the payment security bonds, Alstef submits that it has a strong prima facie case that clause 12.7(a)(ii) of the DTB Contract pursuant to which those bonds were provided is void by reason of s 200 of the BIF Act. If that case were determined in Alstef’s favour at final hearing, Alstef would be entitled to an immediate return of the payment security bonds. The balance of convenience favours granting the interim injunctions restraining BAC from having recourse to the payment security bonds in the meantime in circumstances where BAC does not claim any present right to call on them, and Alstef will suffer financial and reputational harm if BAC does call on the payment security bonds pending the final determination of these proceedings.

46. BAC submits that Alstef’s prima facie case is a weak case because it is strongly arguable that, on the proper construction of clause 12.7(a)(ii) of the DTB Contract and ss 70-72 of the BIF Act, clause 12.7(a)(ii) does not purport to exclude, limit or change the operation of the BIF Act and does not have that effect, so that s 200(2) of the BIF Act is not engaged. BAC further submits that, even if clause 12.7(a)(ii) is held to be void at final hearing, BAC has a strong claim to retain the payment security bonds in circumstances where it has paid Alstef for goods and materials in return for those bonds, and it would therefore not be unconscionable for it to retain the bonds pending all of the materials for which it has been paid being delivered into BAC’s custody and/or incorporated in the DTB Project works. Finally, BAC relies on an alleged failure by Alstef to comply with the notice and claim requirements of clause 16 of the DTB Contract in respect of its claim for return of the payment security bonds as a further weakness in Alstef’s prima facie case because it is strongly arguable that Alstef is barred from making that claim by reason of clause 16.5.

47. BAC submits that, having regard to the weakness of Alstef’s prima facie case, its ability to avoid any reputational damage that it fears may flow from BAC calling on the payment security bonds, and the absence of evidence that the financial harm asserted by Alstef that would flow from such a call, the balance of convenience weighs against granting an interim injunction restraining BAC from exercising its rights to have recourse to the unconditional payment security bonds in the event that an occasion to do so arises pending the final determination of these proceedings. BAC submits that it has no present intention to call on the payment security bonds, but that it should be entitled to do so if it emerges that any of the goods and materials stored in Alstef’s warehouses for which BAC has paid and in respect of which the payment security bonds were provided have gone missing or have been damaged, lost, or used by Alstef for another project.

Consideration and determination: performance bonds

48. The DTB Contract is to be construed in accordance with the established principles governing the construction of commercial contracts. As the High Court said in Electricity Generation Corporation (t/as Verve Energy) v Woodside Energy Ltd, [5] and re-affirmed in Simic v New South Wales Land and Housing Corporation: [6]

“The meaning of the terms of a commercial contract is to be determined by what a reasonable businessperson would have understood those terms to mean. That approach is not unfamiliar. As reaffirmed, it will require consideration of the language used by the parties, the surrounding circumstances known to them and the commercial purpose or objects to be secured by the contract. Appreciation of the commercial purpose or objects is facilitated by an understanding ‘of the genesis of the transaction, the background, the context [and] the market in which the parties are operating’. As Arden LJ observed in Re Golden Key Ltd, unless a contrary intention is indicated, a court is entitled to approach the task of giving a commercial contract a businesslike interpretation on the assumption ‘that the parties … intended to produce a commercial result’. A commercial contract is to be construed so as to avoid it ‘making commercial nonsense or working commercial inconvenience’.”

49. I am considering the construction of the DTB Contract on an interim basis and without making any final determination. It was common ground between the parties that the Court should adopt that approach, as they may wish to adduce further evidence at final hearing which may bear on the question of construction, including evidence concerning the surrounding circumstances known to the parties at the time they entered into the DTB Contract. The relative strengths of the parties’ competing submissions on construction at this stage is relevant to assessing the strength or weakness of Alstef’s prima facie case in relation to the performance bonds and to determining whether the balance of convenience lies in favour or against granting Alstef’s application for interim injunctions restraining BAC from having recourse to the performance bonds.

50. I reject BAC’s submission that it is strongly arguable that Alstef is barred by clause 16.5 of the DTB Contract from making its claim in these proceedings for return of the performance bonds.

51. Clause 16 of the DTB Contract relevantly provides:

“16.2 Notices of Other Claims

Except for claims for:

(a) an extension of time under clause 10.6;

(b) payment under clause 12.2 of the original Contract Price specified in Item 5; or

(c) a Variation instructed in accordance with clause 11.2 or to which clause 16.1 applies,

the Contractor must give the Principal’s Representative the notices required by clause 16.3 if it wishes to make a Claim against the Principal in respect of any direction by the Principal’s Representative or any other fact, matter or thing (including a breach of the Contract by the Principal) under, arising out of, or in any way in connection with, the Contractor’s Activities or the Contract, including anything in respect of which:

(d) it is otherwise given an express entitlement under the Contract; or

(e) the Contract expressly provides that:

(i) specified costs are to be added to the Contract Price; or

(ii) the Contract Price will be otherwise increased or adjusted,

as determined by the Principal’s Representative.

16.3 Prescribed Notices

The notices referred to in clause 16.2 are:

(a) a written notice signed by the Contractor’s Representative within 15 Business Days after the first occurrence of the direction or other fact, matter or thing upon which the Claim is based, expressly specifying:

(i) that the Contractor proposes to make a Claim; and

(ii) the direction or other fact, matter or thing upon which the Claim will be based; and

(b) a written Claim signed by the Contractor’s Representative within 15 Business Days after giving the written notice under clause 16.3(a), which must include:

(i) detailed particulars concerning the direction or other fact, matter or thing upon which the Claim is based;

(ii) the legal basis for the Claim, whether based on a term of the Contract or otherwise, and if based on a term of the Contract, clearly identifying the specific term;

(iii) the facts relied upon in support of the Claim in sufficient detail to permit verification; and

(iv) details of the amount claimed and how it has been calculated.

…

16.5 Time Bar

If the Contractor fails to comply with clauses 16.1, 16.2, 16.3 or 16.4:

(a) the Principal will not be liable (insofar as it is possible to exclude such liability) upon any Claim by the Contractor; and

(b) the Contractor will be absolutely barred from making any Claim against the Principal,

arising out of, or in any way in connection with, the relevant direction or fact, matter or thing (as the case may be) to which clause 16.1 or 16.2 applies.”

52. The term “Claim” is defined in clause 1.1 of the DTB Contract as meaning:

“Includes any claim for an increase in the Contract Price, for payment of money (including damages) or for an extension of time:

(a) under, arising out of, or in any way in connection with the Contract, including any direction of the Principal’s Representative;

(b) arising out of, or in any way in connection with, the Contractor’s Activities, the Works or either party’s conduct before the Contract; or

(c) otherwise at law of in equity including:

(i) by statute;

(ii) in tort for negligence or otherwise, including negligent misrepresentation; or

(iii) for restitution.”

53. In my opinion, it is reasonably arguable reading those provisions as a whole, and particularly clause 16.3(b)(iv), that a reasonable businessperson in the position of the parties would understand the parties to have intended that clause 16.5 applies only to claims that are capable of being calculated and stated in terms of an amount of time, an amount of money, or some other unit of measurement. That is because a reasonable businessperson would be likely to understand from the words “must include” in clause 16.3(b) that each of (i) to (iv) are mandatory for inclusion in a written Claim. The Contractor would be unable to comply with (iv) in respect of a claim that was not capable of being calculated and stated in an amount. The reasonable businessperson would be unlikely to understand the parties to have intended that such claims would be barred by clause 16.5 by reason of failure to submit a written Claim complying with each element 16.3(b). It is therefore reasonably arguable that Alstef’s claim to be entitled to the return of the performance bonds is not a claim of that character and so is not a “Claim” to which clause 16 applies. BAC’s contrary argument is available, but I consider it to be a weak argument.

54. However, for the reasons explained below, BAC’s contention that the DTB Contract, properly construed, does not preclude it from having recourse to the performance bonds prior to the final determination of its claims against Alstef, is strongly arguable.

55. The terms of clause 4 of the DTB Contract pursuant to which Alstef procured the performance bonds issued by ANZ for the benefit of BAC, and the terms of the performance bonds, are set out at [11]-[13] and [21]-[23] above.

56. As BAC submitted, each performance bond is an autonomous contract between ANZ and BAC, and is an unconditional undertaking by ANZ to pay on demand any sum demanded by BAC from time to time up to the specified maximum aggregate sum. As between ANZ and BAC, the only questions are whether ANZ has been notified in writing of a demand for payment by BAC which purports to be signed by an officer for and on behalf of BAC or BAC’s solicitor, and whether BAC’s aggregate demands exceed the specified maximum aggregate sum. Clause 4.1 of the DTB Contract, read together with the definition of “Approved Security” in clause 1.1 and Annexure 1, required the performance bonds to be in those terms.

57. As both parties acknowledged, there are no special rules of construction that apply to contracts which include provision for performance bonds or guarantees. [7]

58. As Alstef submitted, clause 4 of the DTB Contract provides for the provision of two performance bonds, each in respect of a sum equivalent to 2.5% of the Contract Price, one of which BAC is obliged to release on Practical Completion pursuant to clause 4.2(a) and the other of which BAC is obliged to release at the end of the Defects Liability Period pursuant to clause 4.2(b), subject to BAC’s “right to have recourse” to the performance bonds as stated in clause 4.2.

59. As BAC submitted, the terms of the DTB Contract do not contain any clause specifying the circumstances in which BAC may have recourse to an Approved Security provided under clause 4.1, from which a negative stipulation might have been implied that BAC was not entitled to have recourse to such security in any circumstances other than those specified. [8] Nor do the terms of the DTB Contract contain any clause expressly precluding BAC from having recourse to an Approved Security provided under clause 4.1 in specified circumstances. In that context, it is strongly arguable in my opinion that a reasonable businessperson in the position of the parties would have understood the parties to have intended by opening words of clause 4.2 – “Subject to the Principal’s right to have recourse to security” – to refer to such rights as BAC may have as against ANZ to make a demand for payment under the terms of the performance bonds. On that construction, BAC’s obligation under clause 4.2 to release the performance bonds at the times there stipulated is qualified to the extent that it has demanded payment under the performance bonds in accordance with their terms. In my opinion, this supports the view that, by the terms of clause 4.1 read together with the definition of Approved Security and the terms of the Approved Security as set out in Annexure 1 to the DTB Contract, the parties agreed that BAC was entitled to have recourse to the performance bonds in accordance with the terms of those bonds in respect of any claims by BAC against Alstef in relation to the performance of the DTB Contract, without BAC first being required to prove the claims or satisfy any other contractual condition, provided that the claims are not made fraudulently, in bad faith, or unconscionably. [9]

60. Alstef’s submissions to the contrary are unpersuasive for four reasons.

61. First, Alstef’s submissions erroneously sought to elevate the decision of the Court of Appeal in Lucas Stuart Pty Ltd v Hemmes Hermitage Pty Ltd [10] (Lucas Stewart) to authority for a general proposition that that a clause expressly entitling a principal to have recourse to a performance bond if the principal is satisfied that it has a claim, or if the principal makes a claim, is necessary if the contract is to be construed as permitting the principal to have recourse to the bond prior to the final determination of a disputed claim. The case turned on the provisions of the whole of the particular contract in question, which included a clause entitling the principal to call on the bonds if the contractor “has not materially complied with its obligations” (clause 16.2). The Court of Appeal held that, properly construed, this required the principal to establish as a matter of objective fact that the contractor had not materially complied with its obligations before the principal was entitled to call on the performance bond. Macfarlan JA, with whom Campbell JA agreed, noted that “[t]he position would have been different if Clause 16.1 had made the respondent’s entitlement to call upon the bonds dependent on the respondent’s satisfaction or even simply upon the respondent’s assertion that the applicant was in breach of the Contract”. Contrary to Alstef’s submissions, that is not authority for the proposition that a contract that contains no such clause necessarily deprives the principal of the right that it otherwise has against the issuing financial institution to call on the bond unless and until the principal’s claim against the contractor is finally determined and upheld. In my opinion, the absence of such a clause in the present case does not undermine the strength of the argument in favour of the construction for which BAC contends having regard to all of the provisions of the DTB Contract to which I have referred to [59] above.

62. Second, Alstef submitted that its position under the DTB Contract was “indisputably the same” as if the DTB Contract had included a clause equivalent to clause 16.2 of the contract in Lucas Stuart. That submission failed to articulate why the absence of an equivalent to clause 16.2, together with the other features of the DTB Contract referred to at [59] above, supported a construction of the DTB Contract which constrained BAC’s right of recourse to the performance bonds.

63. Third, Alstef made submissions to the effect that the Court of Appeal in Lucas Stuart and Kawasaki Heavy Industries Ltd v Laing O’Rourke Australia Construction Pty Ltd (Kawasaki) [11] had doubted that the unconditional nature of a performance bond was relevant to the construction of the contract between the principal and the contractor concerning the circumstances in which the principal may have recourse to the bond. That submission inaccurately summarises the treatment of that subject in Kawasaki, in which the Court of Appeal referred with approval to the following statement of the Western Australian Court of Appeal in CPB Contractors Pty Ltd v JKC Australia LNG Pty Ltd (No 2): [12]

“… when, as here, the Subcontract annexes and approves the form of the performance bond, in construing the terms of the Subcontract, the unconditional nature of the performance bond, and its terms generally, can be taken into account. That is an application of the basic principle that in construing a term of a contract, regard must be had to the terms of the contract as a whole. However, the terms of the performance bond do not control the question of construction of the Subcontract. The significance of the terms of the performance bond in the process of construction of the underlying contract will fall to be assessed in the light of all of the particular terms of the underlying contract.”

64. After referring to that passage and to Macfarlan JA’s observations in Lucas Stuart doubting that the terms of the performance bond should be taken into account in construing the principal contract, the Court of Appeal in Kawaski stated: [13]

“… the typical language of a performance bond may be a powerful reason for concluding that the underlying contract between the parties should have the consequence that the bond is to operate as a ‘risk allocation device’. In every case, however, that description must be justified by an orthodox process of construction of the relevant language.”

65. For the reasons explained at [59] above, I consider that the terms in which the DTB Contract required the performance bonds to be issued are relevant to the construction of the DTB Contract in relation to the question of BAC’s rights of recourse to the performance bonds.

66. Fourth, Alstef relied on BAC’s obligation to release the performance bonds as supporting the construction which it propounded, without grappling with the opening words of clause 4.2 of the DTB Contract to which that obligation is subject.

67. I record for completeness that there is no evidence suggesting that BAC’s present claims against Alstef in respect of which it asserts a present right to make a demand for payment under the performance bonds on its construction of the DTB Contract, which I have held is strongly arguable, are made fraudulently, in bad faith, or unconscionably. Clause 12.4(f) of the DTB Contract requires BAC to state in any payment statement any amount which BAC believes to be payable by Alstef. Alstef submitted that the belief relied on in exercising that contractual power to state a claim in a payment statement cannot be based on a “fundamental misunderstanding of the relevant matters” or “misleading, incomplete and prejudicial information” and cannot be “objectively unreasonable”. [14] However, contrary to Alstef’s submissions, BAC does not lack the requisite state of mind merely because it knows that its claim is “keenly disputed” by Alstef. That submission, and another submission directed to whether or not BAC had complied with the requirements of clause 12.4(g) in respect of payment statement 33, were made in writing by Alstef on the eve of the hearing. They were effectively superseded by Alstef’s acknowledgement at the hearing that BAC’s claims against it (and Alstef’s and counter-claims) referred to at [43] above raise serious questions to be tried.

68. For all of those reasons, it is strongly arguable that, on the proper construction of the DTB Contract, the performance bonds operated in a manner that did not merely provide security for BAC in the event that Alstef was unable to pay any claims made against it by BAC and determined in BAC’s favour, but also established a “pay now argue later” regime in respect of claims by BAC, enabling BAC to obtain prompt payment of claims notwithstanding disputes raised by Alstef, and allocating to Alstef rather than BAC the risk of being out of pocket pending final determination of those claims. That is to say, it is strongly arguable that, on the proper construction of the DTB Contract, the performance bonds operated as “risk allocation devices”. [15]

69. Alstef submitted that, irrespective of whether the performance bonds are “risk allocation devices” on the proper construction of the DTB Contract, the balance of convenience weighs in favour of granting interim injunctions restraining BAC from having recourse to the performance bonds pending final determination of BAC’s claims against Alstef for three reasons.

70. First, it was submitted that Alstef and other companies within the Alstef Group of Companies will suffer financial damage if BAC calls on the performance bonds pending final determination of BAC’s claims, and that damages will not be an adequate remedy for such financial loss.

71. Second, it was submitted that Alstef and other companies within the Alstef Group of Companies will suffer reputational damage if BAC calls on the performance bonds pending final determination of BAC’s claims, and damages will not be an adequate remedy for that reputational injury.

72. Third, it was submitted that BAC has not identified any financial or other prejudice that it will suffer if it is restrained from having recourse to the performance bonds pending final determination of its claims against Alstef.

73. As to the first matter (financial damage), Alstef adduced evidence from Mr Nicolas Breton, who was the Chief Executive Officer of Alstef Group but who ceased to occupy that position shortly after making his affidavit on 18 March 2026 in circumstances that were not disclosed by the evidence. Mr Breton gave evidence on information and belief from the Chief Financial Officer of Alstef Group, Mr Christophe Richarme, that, if BAC were to make a demand for payment under the performance bonds (or the payment security bonds), ANZ would make the payment to BAC, following which ANZ would be entitled to seek reimbursement from Credit Lyonnais under the relevant counter bank guarantees referred to at [24] and [26] above, and Alstef Group or Alstef Automation SAS would in turn reimburse Credit Lyonnais by direct debit to its current account with Credit Lyonnais.

74. According to Mr Breton’s evidence, Alstef Group and its subsidiaries are financed, in part, by a Senior Facilities Agreement entered into between Beyond Automation and Sky Automation with a syndicate of lenders led by Societe Generale dated 6 August 2024 (the Senior Facilities Agreement), as amended by a Consent Letter dated 29 October 2025 (the Consent Letter). The principal amount of the facility is approximately €130,000,000.

75. The Financial Covenants in clause 25 of the Senior Facilities Agreement include clause 25.2, which requires the Alstef Group of Companies to have a Net Leverage Ratio at the end of each quarter not exceeding the ratio stipulated in clause 25.2. The Net Leverage Ratio is defined as the ratio of Total Net Debt to Consolidated EBITDA for the twelve-month period ending on the end date of the relevant quarter. The stipulated Net Leverage Ratio is 4:65.1 for the quarter ending 31 March 2026, 4.50:1 for the quarter ending 30 June 2026, and 4.30:1 for the quarter ending 30 September 2026. The stipulated ratio decreases progressively for each quarter thereafter down to 3.70:1 for the quarter ending 30 June 2027.

76. Clause 27 of the Senior Facilities Agreement provides that an Event of Default occurs if, relevantly:

“27.2 Financial Covenant

(a) Subject to the equity cure and deemed cure provisions in Clause 25.4 (Equity cure) and the expiry of the equity cure period, the Company fails to comply with the Financial Covenant.

(b) No breach or any requirement of Clause 25.2 (Financial Condition) shall constitute an Event of Default during the period prior to any agreement or determination under paragraph (c) of clause 24.6 if caused solely by a mandatory or agreed change to the Applicable Accounting Principles”

77. Clause 25.4 of the Senior Facilities Agreement relevantly provides:

“25.4 Equity cure

(a) The Company may cure or prevent a breach or anticipated breach of the Financial Covenant under clause 25.2 (Financial Condition) (a ‘Cure’) by receiving cash proceeds by way of New Shareholder Injection (the ‘Cure Amount’) within twenty (20) Business Days of the date on which the relevant Compliance Certificate is required to be delivered to the Senior Facility Agent.

(b) If the Company exercises a Cure, such Financial Covenant shall be tested or, as applicable, re-tested as at the relevant Quarter Date but on a pro former basis by reducing Total Net Debt by the amount of New Shareholder Injections provided.

(c) If, after giving effect to such adjustment, the Company is in compliance with the requirements of the Financial Covenant, the Company shall be deemed to have satisfied the requirements of such Financial Covenant. For the avoidance of doubt, during the twenty (20) Business Day period within which a Cure Amount may be injected, no Default shall have occurred as a result of a breach of the Financial Covenant.”

78. The term New Shareholder Injection is defined as the aggregate amount of New Equity (defined as “the proceeds of a subscription for shares in and any capital contributions to the Company, through the Parent exclusively”) and/or Subordinated Shareholder Debt (defined as “any subordinated debt issued or incurred by the Company under the form of bonds only and subscribed by the Parent exclusively, which such debt is subordinated to the Senior Facilities under the Intercreditor Agreement and constitute Subordinated Liabilities under and as defined therein”).

79. Clause 27.18 of the Senior Facilities Agreement sets out a range of steps which the Senior Facility Agent may take, acting on the instructions of the Majority Senior Lenders and subject to various other provisions of the Senior Facilities Agreement, if an Event of Default has occurred and is continuing. Those steps include cancelling the available commitments of lenders, so that the Senior Facility immediately ceases to be available for further distribution, declaring that cash cover in an amount equal to the outstanding amount in respect of each letter of credit is immediately due and payable, and/or declaring that all amounts accrued or outstanding are immediately due and payable.

80. Clause 2 of the Consent Letter provides for the financial impact of the “Brisbane Litigation” up to a maximum amount equal to €28,000,000 to be treated as an “Exceptional Item” and thereby excluded from the determination of Consolidated EBITDA for the purpose of calculating the Net Leverage Ratio in connection with the Financial Covenant test under clause 25.2 of the Senior Facilities Agreement during the period from 31 December 2025 until 30 September 2026 (defined as the “Brisbane Litigation Relevant Period”). The “Brisbane Litigation” is defined as the ongoing dispute concerning the Alstef Group’s project relating to the upgrade of the luggage systems for the Brisbane airport domestic and international terminals.

81. Clause 3 of the Consent Letter introduces a new Financial Covenant requiring “the Company” (which I understand to be reference to Beyond Automation) to deliver a monthly Liquidity Test Certificate during the period up to 30 September 2026 confirming that the “Available Cash Position” (defined as the sum of the “Group’s Cash and Cash Equivalent Investments”) is at least equal of €15,000,000. The Liquidity Test Financial Condition introduced by the Consent Letter is subject to cure provisions similar to those that apply to the Net Leverage Ratio Financial Condition.

82. At the hearing on 12 June 2026, Alstef adduced evidence from its solicitor given on information and belief from Mr Richarme, the Chief Financial Officer of Alstef Group, that bank accounts of the Alstef Group of Companies disclosed a consolidated cash position of €38,926,000 as at 11 June 2026. As was submitted on behalf of BAC, that does not disclose the “Available Cash Position” that is relevant for compliance with the Liquidity Test Financial Covenant under the Senior Facilities Agreement because Mr Richarme’s information provided to Alstef’s solicitor is limited to cash at bank and does not disclose “Cash Equivalent Investments”. As senior counsel for Alstef acknowledged in submissions made during the hearing, the Cash position alone as at 11 June 2026 (without taking into consideration any Cash Equivalent Investments) currently provides the Alstef Group with headroom of €23,926,000 before it will reach the €15,000,000 minimum “Available Cash Position” required by the Liquidity Test Financial Covenant. It was submitted on behalf of Alstef that if the headroom of €23,926,000 were to be reduced by BAC calling on the performance bonds and the payment security bonds the subject of these proceedings (being a total sum of AUD$13,443,177), that would be a “serious inroad” in the headroom which would put Alstef in “a more financially precarious position” because it would be “approaching breaching the liquidity requirement”. I reject that submission concerning the impact on Alstef and the Alstef Group of Companies, which is not supported by the evidence of the cash position. That evidence, without more, does not establish that there is any reason beyond speculation to believe that there would be a risk of breach of the Liquidity Test Financial Covenant if BAC were to make a demand under all of the performance bonds and payment security bonds. Alstef did not submit that a call on the performance bonds alone would put Alstef or the Alstef group companies in a “financially precarious position”.

83. In relation to the Net Leverage Ratio Financial Condition, Alstef relied on a draft report prepared by consultants Eight Advisory dated 14 April 2026 projecting the Alstef Group of Companies’ EBITDA, cash flow and net debt leverage ratio as at the end of each of quarter of the 2026 financial year, which for the Alstef Group of Companies is the 2026 calendar year. According to that draft report, the net debt leverage ratio (“excluding Brisbane losses at completion”) was 3.52:1 for the quarter ended 31 March 2026 (below the covenanted ratio of 4.65:1), and the forecast net debt leverage ratio (“excluding Brisbane losses at completion”) is 3.99:1 for the quarter ending 30 June 2026 (below the covenanted ratio of 4.50:1), 4.03:1 for the quarter ending 30 September 2026 (below the covenanted ratio of 4.30:1), and 4.05:1 for the quarter ended 31 December 2026 (below the covenanted ratio of 4.08:1). The draft report states that: “The Group’s projected cash generation ensures that covenant thresholds would not be breached in FY26 (excluding total losses at completion of Brisbane). Estimated net CF would amount to €(2.4)m*, including a* *€(*18)m negative impact from the Brisbane project and a +€12m from the new factoring facility.”

84. As I understood the submissions made by senior counsel for Alstef, the Eight Advisory draft report was relied on as evidence that any call on the performance bonds or the payment security bonds would bring the Alstef Group of Companies very close to breaching the Net Debt Leverage Ratio Financial Condition, particularly in the quarters ending 30 September and 31 December 2026, and would thereby put the Alstef Group of Companies “in a more precarious position”. I reject that submission. First, the report is merely evidence of a consultant having formed an opinion about future matters on the basis of unspecified information provided by Alstef Group management. That carries little weight in circumstances where the evidence raises questions about the reliability of the information on which the opinion is based. As BAC submitted, the net debt leverage ratio of 3.52:1 for the quarter ending 31 March 2026 in the Eight Advisory draft report departs from the forecast of 4.58:1 put forward in Mr Breton’s affidavit sworn on 18 March 2026, and also departs from the actual ratio of 3.37:1 stated in the Alstef Group March 2026 Group Profit & Loss accounts that were tendered in evidence. Second, as senior counsel for BAC submitted, Alstef’s submission does not account for the fact the “Brisbane Litigation” is an Exceptional Item up to €28,000,000 for the purpose of the Net Debt Leverage Ratio Financial Condition. Taking at face value the statement in the Eight Advisory draft report that the net debt leverage ratio calculations set out in that draft report exclude an €18,000,000 negative impact from the Brisbane project, a call on all of the performance bonds and payment security bonds in a total amount of AUD$13,443,177 (less than €10,000,000) would fall within the maximum amount of the Exceptional Item and would have no impact on compliance with the Net Debt Leverage Ratio for the purpose of clause 25.2 of the Senior Facilities Agreement at least in the period up to and including 30 September 2026.

85. The analysis at [82] to [84] above renders irrelevant Mr Breton’s evidence of his opinions about the consequences of an Event of Default under the Senior Facilities Agreement, which were admitted on a limited basis and which assumed that the Senior Lenders would take the most extreme action available to them under clause 27.18 referred to at [79] above. It is therefore not necessary to address BAC’s submissions about the commercial unreality of the scenarios propounded in Mr Breton’s affidavit.

86. For those reasons, the evidence does not establish that Alstef and other companies within the Alstef Group of Companies will suffer financial damage if BAC calls on the performance bonds pending final determination of BAC’s claims against Alstef.

87. As to the second matter (reputational damage), Alstef relied on evidence from Mr Breton which assumed that an Event of Default under the Senior Facilities Agreement would result in the Senior Lenders taking the most extreme available action. For the reasons I have explained above, the evidence does not establish a risk of an Event of Default occurring under the Senior Facilities Agreement even if BAC were to have recourse to all of the performance bonds and payment security bonds, at least in the period up to and including 30 September 2026.

88. Mr Breton’s evidence also suggested that a call on the performance bonds and/or the payment security bonds by BAC would cause some reputational damage to Alstef and the Alstef Group because it would lose its commercially valuable record of never having had a bank guarantee called on. The weight of that evidence is limited by the very general terms in which it was expressed. I accept that the evidence is nevertheless relevant to the balance of convenience. [16] However, as BAC submitted, it is also relevant that the asserted damage could be avoided by Alstef paying the amount of the bond or bonds directly to BAC on account of and in substitution for the moneys recoverable by BAC under the bond or bonds, so as to preclude BAC from making any demand for payment against ANZ under the bond or bonds in question. [17] There is no evidence to support the assertion made in Alstef’s submissions that it is not a position to take that course. Moreover, on the construction of the DTB Contract which I have held is strongly arguable for the reasons explained above, any such reputational damage that Alstef may suffer as a result of a call on the performance bonds pending the final hearing of these proceedings would merely be a consequence of the bargain that Alstef made in relation to the performance bonds. [18]

89. As to the third matter (alleged lack of prejudice to BAC flowing from an interim injunction), on the construction of the DTB Contract which I have held is strongly arguable for the reasons explained above, it would be inherently prejudicial to BAC, and would change rather than preserve the status quo, for BAC to be restrained from exercising its rights to have recourse to the performance bonds in respect of its claims against Alstef pending final determination of those claims. [19] I accept BAC’s submission that this inherent prejudice is relevant to the balance of convenience. [20]

90. For all of the reasons explained above, Alstef’s argument that the performance bonds do not operate as “risk allocation devices” on the proper construction of the DTB Contract is weak. In considering the balance of convenience, I give very little weight to the possibility of that argument succeeding at trial. I give significant weight to the possibility of the DTB Contract being construed at trial in the manner described at [68] above. Alstef has failed to establish that it, or other companies within the Alstef Group of Companies, would suffer financial damage if BAC is not restrained from having recourse to the performance bonds pending final determination of BAC’s claims against Alstef (and Alstef’s counter-claims against BAC which it claims to be entitled to set off against any liability that it may be found to have to BAC). Noting the weakness of BAC’s argument relying on clause 16.5 of the DTB Contract, but having regard to the weakness of Alstef’s construction argument and the strength of BAC’s contrary construction argument concerning the operation of the performance bonds, the likely inherent prejudice to BAC if the interim injunctions were granted in respect of the performance bonds outweighs the prospect of general reputational damage to Alstef and members of the Alstef Group of Companies if they were to lose their track record of never having had a bank guarantee called on, particularly in the absence of evidence that they would be unable to avoid any such reputational damage in the manner discussed at [88] above. Alstef’s claims for interim injunctions restraining BAC from having recourse to the performance bonds must be dismissed.

Consideration and determination: payment security bonds

91. The relevant provisions of clause 12 of the DTB Contract, and the provisions of ss 70 to 72 of the BIF Act and associated definitions are set out at [14]-[21].

92. Section 200 of the BIF Act provides as follows:

“200 Contracting out prohibited

(1) The provisions of this Act have effect despite any provision to the contrary in any contract, agreement or arrangement.

(2) A provision of a contract, agreement or arrangement is of no effect to the extent which it —

(a) is contrary to this Act; or

(b) purports to exclude, limit or change the operation of this Act; or

(c) has the effect of excluding, limiting or changing the operation of this Act; or

(d) may reasonably be construed as an attempt to deter a person from taking action under this Act.”

93. There are essentially three elements to Alstef’s submission that clause 12.7(a)(ii) of the DTB Contract is of no effect by reason of s 200(2) of the BIF Act. First, Alstef has a statutory entitlement under s 70 of the BIF Act to progress payments under the DTB Contract if Alstef has *“*carried out construction, or supplied related goods and services, under the contract”, including by reason of the definition of term “related goods or services” in s 66(1)(a)(i) if Alstef has supplied “materials and components to form part of any building, structure or work arising from construction work”. Second, as the DTB Contract provides for the amount of the progress to payment to which Alstef is entitled, its statutory entitlement under s 70 is for the amounts calculated in accordance with the DTB Contract by reason of s 71(a) of the BIF Act. Sections 71(b) and 72 of the BIF do not apply to the calculation of the progress payments to which Alstef is entitled under s 70 for the unfixed goods and materials referred to at [27] above which are yet to be incorporated into the building work. Third, by providing that unfixed goods and materials will not be included in the value of work in a payment statement issued under clause 12.4 (and will thereby be excluded from any progress payment made to Alstef) unless Alstef provides additional Approved Security equal to the amount of the payment claimed for the unfixed goods and materials, clause 12.7(a)(ii) sterilises and so purports to effectively exclude Alstef’s statutory right to a progress payment for those unfixed goods and materials under s 70 of the BIF Act.

94. I do not understand the first limb of Alstef’s argument to be disputed by BAC. However, BAC submitted that the unfixed goods and materials have not been “supplied” within the meaning of s 70 of the BIF Act because they are stored in Alstef’s warehouses as referred to at [27] above. I reject that submission. Title to the unfixed goods had materials passed to BAC on payment pursuant to clause 12.7(b) of the DTB Contract, and BAC has the right under clause 12.7(a)(iv) to determine where those unfixed goods and materials are stored.

95. As to the second limb, BAC relied on both s 71(a) and s 72(2)(a) of the BIF Act as applicable in this case in which clause 12.7 provides that the amount payable for unfixed goods and materials under the DTB Contract is determined according to the value for the materials in a payment statement, and that value is nil unless Alstef gives BAC additional Approved Security equivalent to the amount claimed by Alstef for those unfixed goods and materials.

96. Irrespective of whether Alstef’s or BAC’s second limb argument is preferred, it is my opinion that it is strongly arguable that clause 12.7(a)(ii)(A) has the effect in substance that BAC makes no progress payments to Alstef in respect of unfixed goods and materials because such progress payments are conditional on their repayment being secured by an unconditional bank guarantee, and that this purports to exclude Alstef’s statutory right to a progress payment for those unfixed goods and materials under s 70 of the BIF Act.

97. That is consistent with the conclusion reached by the Court of Appeal in Brewarrina Shire Council v Beckhause Civil Pty Ltd [21] in determining whether the principal had made a payment that was required under s 27 of the Building and Construction Industry Security of Payment Act 1999 (NSW) (SOP Act) in order to preclude a contractor from suspending construction work. The Court of Appeal held that the purpose of the SOP Act was to ensure that contractors could obtain prompt progress payments on account pending final determination of all disputes, and that this object could be defeated if requirements of the SOP Act concerning such interim progress payments could be defeated by payments made conditionally against the provision of bank guarantees.

98. It was not submitted on behalf of BAC that the BIF Act does not have the same object. Rather, BAC submitted that ss 71(a) and 72(2)(a) of the BIF Act permit the parties to the DTB Contract to agree that the amount payable for, or the value of, unfixed goods and materials is nil unless and until they are incorporated in the works. Clause 12.7(a)(ii) does precisely that. The clause is not contrary to the BIF Act. Nor does it exclude, limit or change the operation of the BIF Act or purport to do so. Section 200(2) of the BIF Act is not engaged.

99. In my opinion, BAC’s submission is weak because it fails to grapple with the express statutory right to progress payments, including for related goods supplied that are yet to be incorporated in the works, under s 70 of the BIF Act, the commercial reality that a progress payment made conditionally upon the provision of security for the same amount does not augment the contractor’s funds, and the object of the legislation.

100. For those reasons, I accept Alstef’s submission that it has a strong prima facie case that clause 12.7(a)(ii)(A) of the DTB Contract is void or of not effect by reason of s 200 of the BIF Act.

101. I also accept Alstef’s submission that, if that prima facie case succeeds at trial, it will have a strong claim for the immediate return of the payment security bonds or for a permanent injunction restraining BAC from having recourse to them. In that scenario, it will be strongly arguable in my opinion that Alstef was required to procure the payment security bonds for the benefit of BAC in circumstances where that was not reasonably necessary for the protection of BAC’s legitimate interests (understood in the context of the object of the BIF Act), and that refusal by BAC to return the payment security bonds upon clause 12.7(a)(ii) being found to be of no effect, in circumstances where title to the relevant unfixed goods and materials has passed to BAC pursuant to clause 12.7(b) and in the absence of any evidence beyond speculation that those goods and materials may have been lost, damaged or destroyed, is “outside societal norms of acceptable commercial behaviour [so] as to warrant condemnation as conduct that is offensive to conscience” and contravenes s 21 of the Australian Consumer Law. [22]

102. BAC submitted that, even if clause 12.7(a)(ii)(A) were held to be void or of not effect, it has a strong claim to retain the payment security bonds because it would not be unconscionable for it to do so in circumstances where BAC has changed its position by making “advance payment” to Alstef for goods that BAC does not yet have custody of, Alstef has intermingled those goods with other goods in its warehouse, and BAC is at ongoing risk of loss or damage to those goods before they are incorporated in the works. I reject BAC’s submission for four reasons. First, BAC’s characterisation of the payments as “advance payments” is inconsistent with the provisions of clause 12.7(a)(i). BAC is not obliged to pay for unfixed goods and materials unless it is satisfied that they have not been prematurely ordered and are necessary to enable Alstef to comply with its obligations under the DTB Contract. Second, BAC may not yet have custody of the unfixed goods and materials, but it has the right under clause 12.7(a)(iv) of the DTB Contract to determine where they are stored. Indeed, as title to the unfixed goods and materials vested in BAC on payment pursuant to clause 12.7(b), BAC is entitled to require them to be delivered into its own custody. Third, the evidence referred to at [27] above establishes that any intermingling of the unfixed goods and materials in Alstef’s warehouses is limited to intermingling with other goods and materials that are also the property of BAC for the purpose of the ITB Project. Fourth, that evidence also establishes that the inability of Alstef to immediately identify the specific items stored in its warehouses for which BAC has paid under the DTB Contract is attributable to an incongruity between the level of detail in which the relevant goods and materials are described in the records of BAC and in the records of Alstef. For those reasons, I consider that BAC’s contention that it is entitled to retain the payment security bonds even if they were provided under a provision of the DTB Contract that is of no effect by reason of s 200(2) of the BIF Act is a very weak argument.

103. For the same reasons as I have explained at [50]-[53] above, I reject BAC’s submission that it is strongly arguable that Alstef is barred by clause 16.5 of the DTB Contract from making its claim for the return of the payment security bonds in these proceedings. I do not consider that to be a strong argument.

104. The weakness of BAC’s argument relying on clause 16.5 of the DTB Contract, the strength of Alstef’s argument that clause 12.7(a)(ii)(A) is void or of no effect and that it would be unconscionable for BAC to retain the payment security bonds, together with BAC’s concession that it does not have a present claim on the payment security bonds and the absence of evidence suggesting that a claim is likely to arise following the reconciliation of Alstef’s and BAC’s records, tips the balance of convenience in favour of granting the interim injunctions restraining BAC from having recourse to the payment security bonds pending the final determination of these proceedings, even in the absence of evidence establishing that a demand for payment under those bonds would be like to result in financial harm to Alstef or the Alstef Group of Companies. [23] As Alstef accepted, the interim injunction relating to the payment security bond that expires on 31 December 2026 will be granted only on condition that Alstef procures a substitute performance bond on the same terms (save for the expiry date) prior to 31 December 2026 to avoid the prejudice that BAC might otherwise suffer as a result of that bond being likely to expire prior to the final determination of these proceedings.

Costs

105. As each party has had a measure of success and failure in relation to Alstef’s application for interim injunctions, the appropriate costs order is that the costs of the application be the parties’ costs in the cause.

Conclusion and orders

106. For all of the foregoing reasons, the orders of the Court are as follows:

107. Upon the plaintiff giving to the Court the usual undertaking as to damages, order that the defendant be restrained until further order of the Court from drawing down on any of the following bank guarantees given by ANZ, subject to order 2 below:

(a) ANZ Bank Guarantee GO490552092 in favour of Brisbane Airport Corporation Pty Limited (Beneficiary) (as amended by Amendment #1 to ANZ Bank Guarantee GO490552092 in favour of Brisbane Airport Corporation Pty Limited (Beneficiary)); (b) ANZ Bank Guarantee GO490582902 in favour of Brisbane Airport Corporation Pty Limited (Beneficiary) (as amended by Amendment #1 to ANZ Bank Guarantee GO490582902 in favour of Brisbane Airport Corporation Pty Limited (Beneficiary)); and (c) ANZ Bank Guarantee GO512522092 in favour of Brisbane Airport Corporation Pty Limited (Beneficiary) (as amended by Amendment #1 to ANZ Bank Guarantee GO512522092 in favour of Brisbane Airport Corporation Pty Limited (Beneficiary) and Amendment #2 to ANZ Bank Guarantee GO512522092 in favour of Brisbane Airport Corporation Pty Limited (Beneficiary)).

2. Order that the injunction in order 1(c) above is conditional upon the plaintiff providing to the defendant within 42 days of the date of these orders a bank guarantee in substitution for the bank guarantee referred to in order 1(c) and on the same terms as the bank guarantee referred to in order 1(c), save that it has no expiry date or expires on a date after 31 December 2026 that is satisfactory to the defendant, acting reasonably.
3. Order that the plaintiff’s claims for interlocutory relief in prayer 1 of the summons are otherwise dismissed.
4. Order that the costs of the plaintiff’s claims for interlocutory relief in prayer 1 of the summons are the parties’ costs in the cause.
5. Grant liberty to apply on three days’ notice in the event of any dispute about the plaintiff’s compliance with the condition in order 2 above.
6. List proceedings for directions before the Technology and Construction List Judge on 10 July 2026.

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Endnotes

Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd (2001) 208 CLR 199; [2001] HCA 63 at [12] (Gleeson CJ) (Lenah Game Meats).

Australian Broadcasting Corporation v O’Neill (2006) 227 CLR 57; [2006] HCA 46 at [19] (Gleeson CJ and Crennan J), at [65]-[72] (Gummow and Hayne JJ), citing Beecham Group Ltd v Bristol Laboratories Pty Ltd (1968) 118 CLR 618; [1968] HCA 1 at 622-623 (Kitto, Taylor, Menzies and Owen JJ).

Ibid.

Y & Z v W (2007) 70 NSWLR 377; [2007] NSWCA 329 at [29] (Ipp JA).

(2014) 251 CLR 640; [2014] HCA 7 at [35] (French CJ, Hayne, Crennan and Kiefel JJ) (citations omitted).

(2016) 260 CLR 85; [2016] HCA 47 at [78] (Gageler, Nettle and Gordon JJ).

Kawasaki Heavy Industries Ltd v Laing O’Rourke Australia Construction Pty Ltd (2017) 96 NSWLR 329; [2017] NSWCA 291 (Kawasaki) at [60]-[67] (Meagher, Payne and White JJA) and the authorities there referred to.

See, for example, clause 16.2 of the contract considered in Lucas Stuart Pty Ltd v Hemmes Hermitage Pty Ltd [2010] NSWCA 283 (Lucas Stuart) at [41] (Macfarlan JA, Campbell JA agreeing).

As to the claims not being made fraudulently, in bad faith, or unconscionably, see for example Patterson Building Group Pty Ltd v Holroyd City Council [2013] NSWSC 1484 (Patterson) at [40]-[41] (White J) and the authorities there referred to, and Daewoo Shipbuilding & Marine Engineering Co ltd v INPEX Operations Australia Pty Ltd (2022) 404 ALR 503; [2022] NSWSC 1125 (Daewoo) at [7] (Rees J) and the authorities there referred to.

[2010] NSWCA 283 [39]-[43] (Macfarlan JA, Campbell JA agreeing).

(2017) 96 NSWLR 329; [2017] NSWCA 291.

[2017] WASCA 123 at [89] (Buss P, Murphy and Beech JJA) (footnotes omitted), referred to in Kawasaki at [63].

Kawasaki at [67].

Renard Constructions (ME) Pty Ltd v Minister for Public Works (1992) 26 NSWLR 234 at 276 (Meagher JA) and 279 (Handley JA).

Patterson at [39] (White J) and the authorities there referred to; Lucas Stuart at [40] (Macfarlan JA, Campbell JA agreeing); Kawasaki at [60]-[67] (Meagher, Payne and White JJA); Daewoo at [5]-[10] (Rees J) and the authorities there referred.

Lucas Stuart at [45]-[46] (Macfarlan JA, Campbell JA agreeing), and the authorities there referred to; Kawasaki at [124]-[125] (Meagher, Payne and White JJA); Synergy Construct Australia Pty Ltd v GSA North Terrace Pty Ltd [2025] SASCA 72 (Synergy Construct) at [87]-[103] (Livesey ACJ, S Doyle and B Doyle JJA) at [112], referring to Lucas Stuart.

CPB Contractors Pty Ltd JKC Australia LNG Pty Ltd (No 3) [2017] WASCA 132 (CPB No. 3) at [35] (Buss P, Murphy and Beech JJA); Siemens Gamesa Renewable Energy Pty Ltd v Bulgana Wind Farm Pty Ltd [2019] VSCA 318 at [117] (Beach, McLeish and Hargrave JJA).

Patterson at [79] (White J).

Sugar Australia Pty Ltd v Lend Lease Services Pty Ltd [2015] VSCA 98 at [31] (Osborn and Ferguson JJA).

Synergy Construct at [94]-[98] (Livesey ACJ, S Doyle and B Doyle JJA).

[2005] NSWCA 248 at [215]-[219] (Ipp JA, Hodgson and McColl JJA agreeing).

Productivity Partners Pty Ltd v Australian Competition and Consumer Commission (2024) 281 CLR 338; [2024] HCA 27 at [60] (Gageler CJ and Jagot J, Gleeson J agreeing at [310], Beech-Jones J agreeing at [340]); Australian Consumer Law s 21 and s 22(2)(b) and (j).

See [73]-[86] above.