East Rockingham RRF Project Co Pty Ltd as Trustee for the East Rockingham RRF Project Trust v Acciona Construction Australia Pty Ltd

Federal Court of Australia|2024-07-12|Before: Feutrill J

Introduction 1 The applicant in these proceedings is East Rockingham RRF Project Co Pty Ltd as trustee for the East Rockingham RRF Project Trust. East Rockingham, in that capacity, is developing a thermal treatment plant that will produce energy from waste at a resource recovery facility (RRF) located in East Rockingham in Western Australia. The respondents are members of an unincorporated joint venture with which East Rockingham has contracted for the design, procurement, engineering and construction of the RRF (EPC Contract). There are two groups within the joint venturers: (1) the first, second and third respondents or the Acciona parties; and (2) the fourth and fifth respondents or the HZI parties. Disputes have arisen between East Rockingham and all respondents, but this matter primarily involves East Rockingham and the Acciona parties. 2 The Acciona parties have refused to deliver to East Rockingham replacements of certain bank guarantees that, all other things being equal, they are obliged to provide under the terms of the EPC Contract. East Rockingham commenced these proceedings seeking, amongst other things, declaratory relief and a mandatory injunction or specific performance compelling the Acciona parties to deliver the guarantees to it. East Rockingham has applied for summary judgment under s 31A of the Federal Court of Australia Act 1976 (Cth) or r 26.01(1)(e) of the Federal Court Rules 2011 (Cth) and to strike out certain paragraphs of the Acciona parties' concise statement in response and statement of cross-claim under r 16.21 of the Rules. Separately, East Rockingham has applied for suppression and non-publication orders under s 37AF and s 37AG of the Federal Court Act with respect to certain parts of the concise response, its concise statement in reply and certain parts of affidavits, submissions and transcript relating to the applications. 3 The principal issue that arises on the strike out application is whether the Acciona parties are permitted to allege that East Rockingham made statements during without prejudice negotiations from which it may be inferred that East Rockingham is insolvent and to rely on those statements to allege, directly, that it is, in fact, insolvent. That issue turns on whether it is reasonably arguable on the face of the concise response that the asserted statements and facts can be proved by admissible evidence or use of confidential and without prejudice information as a foundation for the asserted facts is otherwise justifiable under common law principles and (or) s 131 of the Evidence Act 1995 (Cth). 4 The principal issue raised on the suppression and non-publication application is whether it is necessary for the proper administration of justice to prevent disclosure and (or) publication of the asserted statements about insolvency. East Rockingham contends that the restriction is necessary because of the commercial sensitivity of the allegations and the financial and other harm that disclosure or publication of them will cause to it. 5 The summary judgment raises a number of issues. First, the Acciona parties contend that they have reasonable prospects of defending East Rockingham's contract claim because, on the proper construction of the EPC Contract, they have no obligation to provide the bank guarantees if East Rockingham is not ready, willing and able to perform its obligations under that contract. It is not so ready, willing and able because it is insolvent. That issue turns largely on the proper construction of cl 6.7(d) and cl 6.7(g) of the EPC Contract. The second issue that flows from the first is whether, if the construction issue is decided against the Acciona parties, they are in breach of cl 6.7(d) and cl 6.7(g) of the EPC Contract. The last issue is whether, assuming breach and that East Rockingham is insolvent, East Rockingham is entitled to summary judgment for injunctive relief or specific performance. This issue turns on two further questions: (1) whether cl 6.7(d) and cl 6.7(g) are capable of specific performance; relevantly, whether damages are an adequate remedy; and (2) whether in all the circumstances equitable relief is just; relevantly, whether assuming East Rockingham is unable to perform its substantive and essential obligations under the contract, there is a reasonable prospect that the Court would not consider it just that the Acciona parties should be compelled to deliver the bank guarantees to East Rockingham. 6 For the reasons which follow, the applications to strike out paragraphs of the concise response and statement of cross-claim and for suppression and non-publication orders should be dismissed. On the application for summary judgment, the construction issue should be resolved against the Acciona parties. Consequently, they have no reasonable prospects of defending the claim for breach of cl 6.7(d)(iii)(B) and cl 6.7(g) of the EPC Contract. However, summary judgment for a mandatory injunction or specific performance should be refused because the Acciona parties have reasonable prospects, on the assumed facts, of resisting that relief on equitable discretionary grounds. Nonetheless, I am satisfied that, subject to appropriate safeguards to preserve the status quo, a mandatory interlocutory injunction should be granted compelling the Acciona parties to deliver replacement bank guarantees to East Rockingham. I will hear the parties on the form of those orders and costs.

Background and Uncontentious facts 7 As already mentioned, East Rockingham, as trustee, is developing a thermal treatment plant that will produce energy from waste. It has entered into long-term energy sale agreements with the East Metropolitan Regional Council, the City of Cockburn and certain other parties for the supply and treatment of waste at the RRF. The project involves the financing, design construction, testing, commissioning, operation and maintenance of a nameplate capacity of 300,000 tonnes per year and 30 megawatt waste-to-energy facility at a site in East Rockingham in Western Australia (Project). 8 On 20 December 2019 East Rockingham (Employer), on the one hand, and the Acciona parties and HZI parties, on the other (EPCC) made the EPC Contract which is an engineering, procurement and construction contract for the design, construction, commissioning of the RRF. East Rockingham has also entered into certain financing agreements to finance construction of the Works (as defined) under the EPC Contract. 9 As these reasons make many references to the terms of the EPC Contract, for ease of reference East Rockingham, as trustee, is referred to as the Employer. Likewise, the Acciona parties and HZI parties are referred to collectively as the EPCC. Where it is necessary to differentiate between the two groups of joint venturers, they are referred to as the Acciona parties or HZI parties as required. Again, for ease of reference, capitalised terms are taken from the EPC Contract. Where it is necessary or appropriate the meaning of the term, as defined in the EPC Contract, is described in the reasons. 10 On 20 December 20219 the Acciona parties and the HZI parties made an agreement styled 'EPC Consortium Agreement' for the purpose of committing to the construction of the Project in accordance with the terms of the EPC Contract as an unincorporated joint venture. The joint venturers or EPCC are experienced contractors with considerable experience in undertaking and completing works for the design, construction and commissioning of resource recovery facilities and associated infrastructure. 11 On 20 December 2019 the Employer, the EPCC, National Australia Bank Limited (Security Trustee), Hitachi Zosen Corporation (a company incorporated in Japan) (HZI parent) and Corporacion Acciona Infraestructuras SLU (a company incorporated in Spain) (Acciona parent) made a deed styled 'Financier Side Deed'. That deed recites that HZI parent and Acciona parent (Parent Company Guarantors) have agreed to guarantee the EPCC's performance of its obligations under the EPC Contract in accordance with documents entitled 'Parent Company Guarantees'. (The Parent Company Guarantees were not in evidence.) That deed also recites that the Employer has granted a security interest, or will grant a security interest to the Security Trustee, over its rights under and interest in the EPC Contract, the Parent Company Guarantees and the Financier Side Deed, under the Security (as defined in the Financier Side Deed). (None of the instruments comprising the Security were in evidence.) 12 Under the terms of the EPC Contract, as described in more detail later in these reasons, the EPCC were obliged to deliver certain Bank Guarantees to the Employer. Both the Employer and the Security Trustee were required to be beneficiaries of the Bank Guarantees. In accordance with cl 6.7(a) of the EPC Contract the Employer or the Security Trustee may have recourse to the Bank Guarantees in certain circumstances. Pursuant to cl 6B of the Financier Side Deed, the EPCC and Parent Company Guarantors acknowledge and agree that the Security Trustee may have direct recourse to the Bank Guarantees in accordance with cl 6.7(a) of the EPC Contract. These provisions reflect the Security Trustee's security interest in the EPC Contract and, no doubt, facilitate the exercise of the Security Trustee's powers and rights under the Security or the power and rights of a controller appointed by it under the Security. 13 Relevantly, under the terms of the EPC Contract the EPCC were required to deliver to the Employer the Performance Bond. The EPCC were permitted to provide the Performance Bond through multiple Bank Guarantees provided that the aggregate amount was as required by the terms of the EPC Contract. 14 The HZI parties obtained a number of Bank Guarantees with various expiry dates. Relevantly, the HZI parties obtained three amended Bank Guarantees each in the sum of AUD 6,025,562.22 on 23 May 2023 expiring on 14 October 2024, on 15 December 2023 expiring on 31 December 2024 and on 15 December 2023 expiring on 31 December 2025. It is common ground that these Bank Guarantees have been delivered to the Employer and satisfy the obligations of the HZI parties under the EPC Contract. 15 The Acciona parties also obtained bank guarantees with various expiry dates. Relevantly, JP Morgan Chase Bank NA issued two irrevocable bank guarantees at the request of the Acciona parties naming the Employer and Security Trustee as beneficiaries. The first is in the sum of AUD 12,877,459.88 and is dated 19 December 2019 expiring on 1 February 2023. The expiry date was evidently extended to 21 November 2023 by an amendment made on 19 January 2023. The second is in the sum of AUD 25,754,099.76 and is dated 19 December 2019 expiring on 30 January 2024. 16 On 22 February 2024 a representative of the Employer sent an email to a representative of the Acciona parties indicating that the relevant bank guarantees had expired and requesting that they be 're-issued urgently'. On 21 March 2024 the Employer sent a letter to the Acciona parties asserting that the Acciona parties were in breach of the EPC Contract and requesting urgent replacement of the bank guarantees. On 24 March 2024 a similar letter was sent to the Acciona parent and to the Acciona parties. That letter called on the Acciona parent to procure the Acciona parties to provide replacement bank guarantees pursuant to the terms of the Parent Company Guarantee. 17 On 25 March 2024 a representative of the Acciona parent sent a representative of the Employer an email in which it was asserted that the bank guarantees had already been replaced. The email attached copies of letters of JP Morgan Chase Bank dated 30 November 2023 and 16 January 2024 indicating that the guarantees had been amended to extend the expiry dates to 30 September 2024 and 30 September 2026 respectively. On 26 March 2024 a representative of the Employer sent an email to a representative of the Acciona parties indicating that the Employer required the Acciona parties to deliver the original document to it. 18 On 28 March 2024 the Employer sent a letter to the Acciona parties, amongst other things, demanding that the original replacement bank guarantees be delivered to the Employer. It is common ground that the Acciona parties have not delivered any original replacement bank guarantees to the Employer. 19 On 8 April 2024 the Employer filed the originating process. 20 On 24 April 2024 the Employer issued a demand to the EPCC for payment of Delay Damages in the amount of AUD 37,716,076.04. On 26 April 2024 the parties exchanged further correspondence. On 29 April 2024 the Employer sent the EPCC a Notice of Dispute in accordance with cl 37 and cl 2.1 of Schedule 24 of the EPC Contract giving notice of a Dispute in relation to the EPCC's failure to pay the Delay Damages the subject of the Employer's demand. 21 The remaining unpaid amount of the Contract Price is AUD 45,486,500. Of that amount AUD 6,632,990 has been certified for payment and invoiced (i.e., is due and payable) and is unpaid. Of course, there may be an explanation for non-payment, such as a right of set off the Delay Damages against that amount under the terms of the EPC Contract. That is not a matter that needs to be explored because, as explained later in these reasons, for the purposes of the summary judgment application the Court is to assume that the Employer is not presently able to pay its debts. 22 Otherwise, it does not appear to be controversial that the EPCC has made 51 separate Extension of Time claims under the EPC Contract each of which has been rejected by the Employer and (or) the independent Certifier. The rejection of these claims is disputed by the Acciona parties. What I take from the evidence about these matters is that a significant dispute about extensions of time, responsibility for delays and damages flowing from delays in completion of the Works looms large and the subject matter of these proceedings is, in the scheme of things, likely to be a relatively minor skirmish.

Concise statement method 23 It is convenient to commence with the application to strike out the various paragraphs of the Acciona parties' concise statement in response and statement of cross-claim. 24 Both the Employer's proceedings and the Acciona parties' cross-claim proceedings utilise the concise statement method. As the originating application does not seek relief that includes damages, it was permitted to be accompanied by an alternative accompanying document: r 8.05(2)(b); r 15.06(1)(a); r 15.10; CPN-1 paras 6.8-6.10; C&C-1 paras 5.4-5.9. As a consequence, the notice of cross-claim was required to be accompanied by a statement of cross-claim: r 15.06(1)(a). However, as the Rules apply to the cross-claim in the same way as they apply to the principal proceedings and the parties must conduct a cross-claim in the same way as the principal proceedings, the statement of cross-claim also utilised the concise statement method: r 15.10. 25 A concise statement is not a traditional pleading. It is a document intended by the practice notes to give a concise summary of the nature of a party's case and the central issues involved. Its primary purpose is to facilitate effective case management. Effective case management may mean that the proceedings proceed with or without pleadings. If they proceed without pleadings, while a function of the concise statement method is to play a role in ensuring that there is fair disclosure of the case each party advances in the proceedings, that role is not confined to the concise statement. Moreover, none of the more technical rules concerning pleadings apply to concise statements: r 16.01A, r 16.13, Div 16.1. Application of pleading rules is limited to the primary rules that ensure that a concise statement does not contain any scandalous, frivolous or vexatious material, is not evasive or ambiguous, is not likely to cause prejudice, embarrassment or delay in the proceedings, does not fail to disclose a reasonable cause of action or defence, and is otherwise not an abuse of the process of the Court. Failure to comply with any of these primary rules may result in a concise statement or part of it being struck-out: rr 16.01A, 16.13, 16.02(2), 16.21. Notwithstanding the role played in providing notice of a party's case and the application of the primary rules of pleading to the document, a concise statement should not be viewed as a de facto pleading to which rules or principles of pleading apply unaffected by the context and character of the concise statement. Thus, in instances where there is no pleading, in considering whether a case has been stated with sufficient clarity to ensure that a party has a fair opportunity to meet that case and to define the issues for determination, the whole case management process must be taken into account: Allianz Australia Insurance Ltd v Delor Vue Apartments CTS 39788 [2021] FCAFC 121; (2021) 287 FCR 388 at [140]-[154]. 26 It follows that, in the application of r 16.21 to a concise statement, the whole case management process must be taken into account, as must the stage of the proceedings at which an application to strike out is made. Where, as here, an application to strike out is made at an early stage and before any case management orders have been made to determine if and the extent to which the proceedings should proceed on pleadings the Court should take into account that the case management of the proceedings will be undertaken with a view to ensuring that the moving party has a fair opportunity to meet the case against it and that the concise statement is not intended to contain a fulsome statement of all the material facts with particulars of the cause of action or defence identified in the document.

The parties' concise statements 27 The concise statement sets out what the Employer contends are the important facts giving rise to its claim: CS [1]-[18]. These largely mirror the background and uncontroversial facts set out earlier in these reasons up to the filing of the originating process. More specifically, paras 13-18 contain allegations to the following effect. (1) On 28 March 2024 the Employer sent a letter to the EPCC raising breach of the EPC Contract and requesting that the EPCC provide replacement Bank Guarantees: CS [13] (2) On 2 April 2024 there was a telephone conversation between a director of the Employer and the Chief Financial Officer of one of the Acciona parties during which the topic of replacement of the Bank Guarantees was discussed in the context of 'ongoing without prejudice discussions between the parties'. The Acciona parties' position was that it would 'only deal with everything together'. The Employer's position was that replacement Bank Guarantees was separate to those discussions, which the Employer characterised as 'concerning unrelated issues under the [EPC Contract]': CS [14] (3) The EPCC did not respond to the letter of 28 March 2024 and no Bank Guarantees were provided: CS [15]. (4) On 3 April 2024 during a telephone conversation between the Chief Executive Officer of the Employer and a senior representative of the Acciona parties that representative said that the Acciona parties would only provide replacement Bank Guarantees as part of any settlement of the issues the subject of the ongoing without prejudice discussions: CS [16]. (5) On 4 April 2024 there was a discussion and email correspondence between other representatives of the Employer and the Acciona parties following email correspondence from the Employer's representative of 3 April 2024 raising the issue of a response to the letter of 28 March 2024 and provision of Bank Guarantees. The Acciona representative said, in substance, that the Acciona parties were resisting providing replacement Bank Guarantees due to the ongoing negotiations between the parties: CS [17]-[18]. 28 The Employer alleges that the Acciona parties breached cll 6.7(d)(iii), 6.7(d)(iv) and 6.7(g) by failing to notify the Employer that the Bank Guarantees were due to expire before they expired, failing to provide replacement Bank Guarantees at the time required, and, thereafter, continuing to fail to provide the guarantees: CS [23]-[25]. The Employer also alleges that in circumstances where the EPCC is a sophisticated commercial party and, is or ought to be aware, that the Bank Guarantees are a material component of the Employer's security under the EPC Contract and the parties have been engaged in without prejudice discussions for more than 12 months in relation to 'unrelated' disputes, the EPCC's ongoing refusal to prove replacement Bank Guarantees is a means of exerting illegitimate pressure in the context of the parties' commercial negotiations, a lack of good faith, and conduct that is, in all the circumstances, unconscionable in contravention of s 21 of the ACL: CS [26]-[29]. The Employer seeks declarations regarding the breaches of contract and contraventions of the ACL and a mandatory injunction, alternatively an order for specific performance, compelling the EPCC to provide replacement Bank Guarantees: CS [19]-[22]. 29 The Acciona parties' amended concise statement in response largely admits the important facts described in the concise statement, but denies the substance of the conversations alleged to have taken place on 2, 3 and 4 April 2024: ACR [1]. The Acciona parties then set out what they contend are the important facts and other matters including terms of the EPC Contract: ACR [2]-[20]. 30 The Acciona parties emphasise the importance of the Employer's ability to obtain finance and ongoing solvency to the completion and possible termination of the EPC Contract. These include a right of the EPCC to terminate the EPC Contract under cl 33.9(a) for an Employer Default Event which includes an Insolvency Event in respect of the Employer. Those events include that the Employer is unable to pay its debts. If the EPC Contract is terminated, subject to certain conditions, the Employer must return all Bank Guarantees in accordance with cl 6.7(j): ACR [4]-[7]. 31 The Acciona parties set out various facts and other matters relating to the negotiations and what they characterise as the 'Employer's attempts to refinance'. The Acciona parties allege that the Works were not completed by the Scheduled Date for Practical Completion, the EPCC has made claims for Extensions of Time and Delay Costs under cl 25 of the EPC Contract that have not been granted resulting in disputes. The parties have been engaged in negotiations directed to the settlement of these disputes since at least April 2023: ACR [8]-[10]. The Acciona parties then set out a number of facts and matters that are the subject of the application to strike out the document. These may be summarised as follows. (1) In their negotiations the parties sought to agree on an amount that would be paid to the Acciona parties, a new date for the Schedule Date of Practical Completion, changes to the payment Milestones, as well as other key terms including a term relating to the 'security package' which includes the Bank Guarantees. The Employer issued various proposals and one included a key term relating to the Bank Guarantees: ACR [11]. (2) In October 2023 the Employer stated to the Acciona parties that its existing finance was insufficient and its ability to continue to fund the Project, and fund the terms of its settlement proposal, was dependent on it obtaining additional finance which it was seeking to negotiate and obtain: ACR [12]. (3) The matter of the Employer's financial position was and remains of concern to the Acciona parties and they have requested and obtained information from the Employer concerning its efforts to obtain additional finance: ACR [13]-[14]. (4) In January 2024 the Employer issued a draft settlement deed containing a term that made the commencement of the deed conditional upon the Employer obtaining certain varied, or additional, finance facilities: ACR [15]. 32 The Acciona parties assert that if the Employer does not obtain additional finance it will have a cash shortfall by the date of Practical Completion, scheduled for 30 December 2024. The Employer has not obtained additional finance and appears to have no realistic prospects of obtaining additional finance. The Employer is insolvent/unable to pay its debts within the meaning of Insolvency Event in the EPC Contract. Subject to the requirements of the Financier Side Deed, the EPCC is entitled to issue a Default Termination Notice to the Employer terminating the EPC Contract with immediate effect: ACR [16]-[20]. These assertions are substantially repeated in the statement of cross-claim: SCC [4]-[7]. 33 The Acciona parties assert, in effect, that by reason of the facts and matters stated elsewhere in the concise response, the Employer is not entitled to the relief it seeks or any relief and the Acciona parties are entitled to a declaration that an Employer Default Event has occurred within the meaning of cl 33.8 of the EPC Contract: ACR [21]-[22]. Again, these assertions are substantially repeated in the statement of cross-claim: SCC [8]. 34 Although initially they admitted the breach, following an amendment to the concise response for which leave was granted on 28 May 2024, the Acciona parties now deny, based on the asserted construction of the EPC Contract addressed later in these reasons, that failure to replace the Bank Guarantees is a breach of cl 6.7(g) of the EPC Contract in circumstances in which the Employer is insolvent: ACR [23]. Further, the Acciona parties assert that in circumstances in which they are entitled, subject to complying with the Financier Side Deed, to terminate the EPC Contract by reason of the Employer's insolvency, the Court ought not, in the exercise of its discretion in equity, grant declaratory or injunctive relief or specific performance: ACR [24]-[26]. That assertion was developed and extended in the Acciona parties' written and oral submissions into a contention that where, due to insolvency, the Employer is not ready and willing to perform all its future obligations under the EPC Contract, even if the Acciona parties are in breach of the contract, equitable relief should be refused. 35 The Acciona parties also assert that in circumstances where: (1) the security package and Bank Guarantees were an element of the negotiations between the parties; (2) the Employer made statements about its financial position; (3) a reasonable party in the position of the Acciona parties would be concerned about the Employer's financial position; and (4) the Employer is, in fact, insolvent, the conduct of the Acciona parties in respect of refusing to provide replacement Bank Guarantees is not unconscionable within the meaning of s 21 of the ACL. Accordingly, there is no basis for relief under s 232 and s 237 of the ACL: ACR [27]-[28]. 36 The Employer's concise statement in reply essentially takes issue with the concise response in terms that have resulted in the interlocutory application for summary judgment and to strike out. The Employer asserts that the Acciona parties' assertions rely on without prejudice communications that would be inadmissible. When that material is disregarded, the defence is without basis and cannot be maintained: CReply [4]-[6], [13]-[15]. The Employer also asserts that the defence to its claims for equitable relief cannot succeed: CReply [7]-[12]. 37 So, in the interlocutory application, the Employer seeks to have paras 11-20, 27(2) and 27(3) of the concise response and para 4 and para 5 of the statement of cross-claim struck out on the ground that the assertions in these paragraphs are based on statements made in communications that are prima facie confidential and subject to without prejudice privilege. Further, the document does not identify any basis for considering that the privilege has been lost (waived), disclosure falls within an exception, or otherwise that the communications are not subject to without prejudice privilege. The Employer submits that the material is thereby one or more of scandalous, frivolous, vexatious or an abuse of process. 38 The Acciona parties contend that the statement asserted in para 12 of the concise response falls outside without prejudice privilege because it was not an admission with respect to the subject matter of the dispute, but is an objective fact. As an objective fact it may be asserted and proved by any admissible evidence. Further, and in any event, the Employer's assertions regarding the alleged unconscionable conduct of the Acciona parties had the effect of 'pleading into relevance' without prejudice communications between the parties.

Are the asserted statements of insolvency sustainable or justified? 39 At common law, communications genuinely aimed at negotiating a settlement of an existing dispute are prima facie confidential and subject to without prejudice privilege: Quad Consulting Pty Ltd v David R Bleakley & Associates Pty Ltd (1990) 27 FCR 86 at 89-90; Rodgers v Rodgers [1964] HCA 25; (1964) 114 CLR 608 at 614; Rush & Tompkins Ltd v Greater London Council [1989] AC 1280 at 1299-1300. It is a joint privilege that cannot be waived by one party unilaterally: Re Turf Enterprises Pty Ltd [1975] Qd R 266 at 267; Walker v Wilsher (1889) 23 QBD 335 at 337. Subject to certain exceptions, it operates to prevent disclosure of the without prejudice communication to third parties and to prevent them from being admitted into evidence: Oceanbulk Shipping and Trading SA v TMT Asia Ltd [2011] 1 AC 662 at [19]-[29]; Unilever Plc v Procter & Gamble Co [2000] 1 WLR 2436 at 2441-2442, 2444-2446, 2448-2450; Rush & Tompkins at 1299-1301; Pihiga Pty Ltd v Roche [2011] FCA 240: (2011) 278 ALR 209 at [80]-[97]. The rationale of without prejudice privilege has been explained in many authorities. The privilege exists to serve the public interest in the administration of justice in promoting the settlement of disputes without calling in aide the courts: Pihiga at [86]; Reynolds v JP Morgan Administrative Services Australia Limited (No 2) [2011] FCA 489; (2011) 193 FCR 507 at [30]. 40 At common law, without prejudice privilege operates primarily as a rule of evidence. Subject to certain exceptions, evidence of explicit or implicit admissions made in the course of without prejudice communications are not admissible in evidence. The privilege may also preclude compulsory production of documents evidencing without prejudice communications to third parties by way of discovery, subpoena or other compulsive court processes. The privilege may also provide a basis for a joint holder of the privilege to restrain disclosure of the communications to third parties. 41 Subject to certain exceptions, evidence in proceedings in this Court is not to be adduced of a communication that was made between persons in dispute, or between one or more persons in dispute and a third party, in connection with an attempt to negotiate a settlement of the dispute: s 131(1)(a) of the Evidence Act. In general, s 131 of the Evidence Act only applies to the admissibility of evidence. Common law principles apply to circumstances in which the privilege is claimed to object to production of documents or restrain disclosure to third parties: Esso Australia Resources Ltd v Federal Commissioner of Taxation [1999] HCA 67; (1999) 201 CLR 49 at [16]-[17] (Gleeson CJ, Guadron and Gummow JJ). 42 Allegations made in pleadings, or similar documents, in this Court are not evidence of the facts stated in those documents. While concise statements must include a certificate signed by the lawyer who prepared the document that any factual and legal material available to the lawyer provides a proper basis for the matters set out in the document, the facts stated in the document are not verified by oath or affirmation: see, e.g., Laws v Australian Broadcasting Tribunal [1990] HCA 31; (1990) 170 CLR 70 at 85-86 (Mason CJ and Brennan J, Gaudron and McHugh JJ agreeing); Berry v CCL Secure Pty Ltd [2017] FCA 1546 at [200] (Rares J). Therefore, objection cannot be taken to facts asserted in a pleading, even if the pleading purports to state evidence not facts, on the ground that the fact pleaded is not admissible evidence under s 131(1)(a) of the Evidence Act (or at common law). 43 Nonetheless, there may be circumstances in which, by reason of the nature of the allegation, there is no reasonable prospect of proving the fact pleaded by admissible evidence. That there is no such reasonable prospect may be apparent on the face of a pleading or may be demonstrated by evidence on the application. If the allegation manifestly cannot be proved by admissible evidence it may be appropriate to strike out the pleading as an abuse of process: r 16.21(1)(f) of the Rules. 44 In this case, paras 11, 12 and 15 of the concise response evidently assert matters relating to communications that are, on the face of the pleading, prima facie confidential and subject to without prejudice privilege. However, in the case of para 13 and para 14, it is not clear on the face of the pleading whether or not they form part of without prejudice communications referred to in paras 11, 12 and 15. 45 The Employer relies on an affidavit of Edward John Nicholas affirmed 8 May 2024. In that affidavit Mr Nicholas deposes uncontradicted facts to the effect that there have been without prejudice negotiations between the parties as alleged in para 11 of the concise response and that the matters referred to in paras 11, 12, 14 and 15 were the subject of those negotiations. However, the extent to which the HZI parties were also parties to those negotiations and the communications asserted in the concise response is a matter of controversy. The Employer submits that the evidence of Mr Nicholas is relevant to the strike-out application because it is a complete answer to any contention that there has been 'consent' to disclosure of the communications as the HZI parties have not so consented. 46 Generally, an application to strike out a pleading is to be approached on the basis that all the facts alleged in it are taken to be proved. Consequently, in general, evidence contradicting or relating to the facts pleaded is not of assistance to determine whether the pleading should be permitted to stand. Abuse of process is an exception to the general approach. Therefore, in the circumstances of this case and for the purposes of the interlocutory applications presently before me only, I accept the uncontradicted evidence of Mr Nicholas that there were negotiations of the kind concerning the subject matter referred to in paras 11-15 of the concise response. 47 Otherwise, the evidence of Mr Nicholas regarding the truth of the specific matters asserted in paras 11-15 of the concise response is ambiguous. However, having regard to the Employer's objection to the Acciona parties' raising and relying on the contents of the without prejudice communications between the parties, I take Mr Nicolas' evidence to neither confirm nor deny the truth of the specific facts asserted in paras 11-15 insofar as they concern the substance or purport of without prejudice communications because, to address the substance of the communications, would be inconsistent with the Employer's objections to the admissibility of evidence of those communications in the proceedings. Thus, regarding the assertions in the concise response, there is evidence confirming the existence and subject matter of the negotiations but mere assertion regarding the substance of communications between the parties in the course of those negotiations. 48 In support of the Employer's application to strike out it relies on the following observations the Court made in Pigozzo v Mineral Resources Ltd [2022] FCA 1166 at [170]. Accepting the material facts and particulars pleaded to be true, a pleading may be one or more of frivolous, vexatious, oppressive or otherwise an abuse of process if it contains allegations founded on communications that prima facie the pleading party has no right to disclose and a duty to keep confidential and to which legal professional privilege or without prejudice privilege attach. Permitting such a pleading to stand would bring the administration of justice into disrepute in that the Court would be permitting a party that is prima facie in breach of a duty of confidence to take advantage of its own wrong. That abuse is all the more acute where the information is also privileged. 49 The critical feature of that passage is that the abuse of process lies in a party asserting facts, which assuming them to be true, reveal unjustified use (i.e., misuse) of confidential information. That abuse is more acute where the information is also self-evidently privileged because, as explained in Pigozzo, the public interest in the proper administration of justice for which the privilege exists (legal professional privilege or without prejudice privilege) would be undermined 'if a pleading were permitted to disclose, without justification, communications that are prima facie confidential and privileged': Pigozzo at [171] (underlining added). Where, on the other hand, the asserted facts, assuming them to be true, indicate that disclosure of the confidential information is alleged to fall within an exception or is otherwise justified no question of abuse of process arises from the facts asserted in the pleading alone. 50 The Acciona parties contend that the assertion that the Employer made statements from which insolvency may be inferred is justified for two reasons. First, the communications are not prima facie subject to without prejudice privilege because, although made in the context of negotiations to settle disputes between the parties, the communications were about objective facts ascertained during the negotiations that may be proved by direct evidence. It was not a communication in the form of an express or implied admission about a fact that related to the subject matter of the disputes. For these reasons, the Acciona parties submit that the statement would be admissible and not covered by without prejudice privilege at a trial and, therefore, asserting the statements made in the negotiations is permissible. Secondly, the Acciona parties contend that the Employer has, by its concise statement, made the subject matter of the parties' negotiations relevant because the Employer alleges that the Acciona parties refused to provide replacement Bank Guarantees as a means of exerting illegitimate pressure on the Employer in the context of the without prejudice negotiations which was unconscionable and in contravention of s 21 of the ACL. In support of the first reason, the Acciona parties rely on Airtourer Co-operative Ltd v Millicer Aircraft Industries Pty Ltd [2004] FCA 948 and Euromark Ltd v Smash Enterprises Pty Ltd [2019] VSC 299. In support of the second, they rely on Verge v Devere Holdings Pty Ltd [2009] FCA 832; (2009) 258 ALR 464. 51 Airtourer concerned an interlocutory application for security for costs. The moving party relied on a statement made during a conversation to the effect that the other party had no money and did not mind if the moving party was successful in the main proceedings. The statement was made during a discussion initiated for the purpose of negotiating settlement of the main proceedings. The responding party objected to the moving party relying on evidence of the statement in the interlocutory proceedings for security for costs on the basis of s 131(1)(a) of the Evidence Act. Beaumont J heard evidence on the voir dire and concluded that two distinct items emerged from the discussion: (1) an attempt by the moving party to compromise the main proceedings at a figure arrived at as a commercial settlement; and (2) a statement by the responding party that, because it was insolvent, it could not consider the commercial settlement. Beaumont J considered that the discussion had a double aspect similar to the context considered by the High Court in Field v Commissioner for Railways (NSW) [1957] HCA 92; (1957) 99 CLR 285 and concluded, by application of common law principles, that the statements made by the responding party were not admissions to which without prejudice privilege applies; but rather, they were objective facts ascertained during the course of negotiations. Further, Beaumont J considered that s 131(1)(a) of the Evidence Act had not altered the common law position considered in Field: Airtourer at [30]-[36]. 52 Euromark also concerned an interlocutory application. Affidavit evidence was adduced on an application for orders to dismiss, strike out or stay the main proceedings. Objection was taken, under the equivalent provision in Victorian legislation to s 131(1)(a) and s 131(1)(g) of the Evidence Act, to the admissibility of a letter and financial statements that were exhibits to an affidavit. The letter was marked 'without prejudice save as to costs' and included a statement to the effect that certain financial statements were enclosed 'on a confidential basis and for the sole purpose of seeking to resolve this dispute'. Justice Kennedy considered that these provisions were the statutory form of the without prejudice exclusion considered in Field. Justice Kennedy concluded that the exhibit fell outside s 131(1)(a) because the correspondence was sent to confirm statements made in earlier correspondence that the relevant party had 'no money' such that it could not pay anything to the other party. No settlement offer or admission was contained in the communication. It was not a communication directly 'in connection with' an attempt to negotiate a dispute. Further, if it were such a communication, the financial statements contained objective facts rather than admissions of the kind referred to in Field. 53 Field concerned an action for damages Mr Field brought against the Commissioner for Railways for personal injury he sustained alighting from a train. The Commissioner's solicitors sent a letter to Mr Field's solicitors marked 'without prejudice' opening negotiations for settlement of the proceedings on a compromise and requesting that Mr Field be examined by a medical specialist appointed on behalf of the Commissioner. Through further correspondence marked 'without prejudice' an appointment was made for Mr Field to attend on a medical practitioner. In the course of that examination, he gave an account of the manner in which he sustained his injuries and stated that 'he stepped out of a slowly moving train as it had overrun the platform'. No settlement was made and at trial Mr Field was asked during his cross-examination, without objection, if he had given that version of events to the specialist to which he answered in the negative. The Commissioner called the specialist and objection was taken to the specialist giving evidence of the prior inconsistent statement on the ground that the communication to the specialist was subject to without prejudice privilege. The objection was overruled and that ruling was upheld on appeal, ultimately, to the High Court. 54 The majority at 291-292 (Dixon CJ, Webb, Kitto and Taylor JJ) explained the rationale for without prejudice privilege in the following terms: … As a matter of policy the law has long excluded from evidence admissions by words or conduct made by parties in the course of negotiations to settle litigation. The purpose is to enable parties engaged in an attempt to compromise litigation to communicate with one another freely and without the embarrassment which the liability of their communications to be put in evidence subsequently might impose upon them. The law relieves them of this embarrassment so that their negotiations to avoid litigation or to settle it may go on unhampered. This form of privilege, however, is directed against the admission in evidence of express or implied admissions. It covers admissions by words or conduct. For example, neither party can use the readiness of the other to negotiate as an implied admission. It is not concerned with objective facts which may be ascertained during the course of negotiations. These may be proved by direct evidence. But it is concerned with the use of the negotiations or what is said in the course of them as evidence by way of admission. … (Emphasis added.) 55 The emphasised parts of this passage provide the foundation for the proposition that the common law application of without prejudice privilege is concerned with admissions and not objective facts. Relevantly, it is admissions concerning the subject matter of the dispute the subject of the negotiations that are not admissible in evidence. 56 In Rush & Tompkins Lord Griffiths (with whom all the other Law Lords agreed) (at 1300) observed that the common law rule is not absolute and resort may be had to without prejudice material for a variety of reasons when the justice of the case requires it. One example given was that the court will not permit the phrase 'without prejudice' to be used to exclude an act of bankruptcy: Re Daintrey; Ex parte Holt [1893] 2 QB 116. In that case a debtor sent a letter marked 'without prejudice' to his creditor in which he offered to compound a debt due from him to the creditor. In the letter he also stated that he was unable to pay his debts and would suspend payment unless the composition was accepted. In proceedings by which the creditor petitioned for sequestration orders to be made against the debtor, the Court of Appeal held that while the offer of composition was not admissible and was subject to without prejudice privilege, the admission that he was unable to pay his debts was admissible because it was evidence of an act of bankruptcy. A notice of an act of bankruptcy could not be given 'without prejudice' because it might have prejudicially affected whether or not the creditor accepted the terms of composition: Daintrey at 120. Having regard to the High Court's reasons in Field and the application of those reasons in Airtourer and Euromark, Daintrey may be regarded as a further example where a statement (in that case comprising an act of bankruptcy) was not relevantly an admission concerning the subject matter of the dispute, but was a statement about an objective fact. 57 The Employer submits that Airtourer and Euromark must be viewed in light of Liu v Fairfax Media Publications Pty Ltd [2012] NSWSC 1352; (2012) 84 NSWLR 547 in which, it submits, Beech-Jones J cast doubt on Airtourer and, in particular, the proposition that s 131 of the Evidence Act is limited to admissions. Liu concerned an appeal from an associate judge by which Mr Liu was ordered to produce certain documents to Fairfax Media. Under the applicable rules of procedure, the obligation to produce documents for inspection excluded documents that contained privileged information to which s 131 of the Evidence Act 1995 (NSW) applied. The associate judge rejected Mr Liu's claim that the documents should not be produced because they fell within s 131(1). The main proceedings were a defamation suit by Mr Liu against Fairfax Media. The documents in question formed part of exchanges between Mr Liu and ASIC for the purpose of attempting to settle anticipated proceedings against Mr Liu by ASIC. Fairfax Media sought to have the associate judge's decision upheld on, amongst others, the ground that the s 131(1) on its proper construction only operates to preclude adducing evidence concerning admissions made during settlement discussions and not other statements. Fairfax Media's contention was founded on an application of the common law principles derived from Field and then applying those principles to s 131(1) as nothing in the Evidence Act indicated an intention to depart from those principles. Beech-Jones J rejected that contention and said that to the extent that Airtourer decided to the contrary he disagreed: Liu at [42]-[80]. 58 I accept that there are competing first instance authorities regarding the extent to which s 131(1) is coterminous with common law principles as explained in Field. Nonetheless, given the divergent approach to the application of s 131(1), in the absence of binding appellate authority, it is reasonably arguable that s 131(1) is limited to admissions of the kind referred to in Field. Also, despite the evident width of the expression, that the asserted statement falls outside the meaning of 'communication … in connection with an attempt to negotiate a settlement of the dispute' if it was a communication intended to induce or encourage acceptance of offered terms of settlement: see, e.g., Australian Competition and Consumer Commission v Allphones Retail Pty Ltd (No 3) [2009] FCA 1075; (2009) 259 ALR 541 at [58]-[65] (Foster J) and the authorities there cited. In any event, the Employer made no submission that the asserted statement could not be proved by admissible evidence at trial. The Employer accepted that, for the purposes of the strike out application, the question as to whether the assertion was sustainable was to be determined by application of common law principles. 59 As to the application of those principles, the Employer submits that the assertions are not in the nature of objective fact ascertained in the negotiations and are different from the statements made in Airtourer and Euromark which spoke to a then 'present' state of affairs and used expression such as 'I do not have funds' or 'no money' whereas the assertion in para 12 of the concise response speaks to the future and the necessity to obtain additional finance in the future. 60 I accept that there is a difference between a statement as to a present fact and a statement of an opinion or prediction about a future event. However, implicit in a statement of opinion or prediction is a present statement to the effect that there is a reasonable basis for that opinion or prediction. Here, the asserted statement was about the ability to 'continue to fund the Project' and that was 'dependent on … obtaining additional finance'. That statement is also an implicit statement about the present state of the Employer's finances. It is not a statement that, at the time it was made, the Employer was not able to pay its debts as and when they fell due, but it was a statement, at least in part, about its present parlous financial position. To that extent, it is reasonably arguable that the asserted statement in para 12 is a statement of objective fact and not an admission made in connection with the subject matter of the parties' dispute the subject of the negotiations and, as such, falls outside the common law concept of without prejudice privilege. 61 Otherwise, the solvency or insolvency of the Employer is a matter of objective fact. It may be ascertained with or without evidence of what was said during negotiations between the parties. There is no suggestion that the Acciona parties are not permitted to use statements about the solvency of the Employer, even if made in confidence and inadmissible, to take steps to protect themselves from the potential consequences of the Employer's insolvency or raise a defence or prosecute a claim based on an allegation of insolvency. Insolvency may be proved by other evidence. Thus, the asserted statement, even if evidence of it be inadmissible, would be sufficient to allow the allegations in paras 16-20 of the concise response and paras 4-5 of the statement of cross-claim to be made. 62 It follows that, it is reasonably arguable, that evidence of the statements asserted in para 12 of the concise response fall outside the common law concept of without prejudice privilege and, therefore, the paragraph should not be struck out on the ground that the asserted statements are founded on confidential without prejudice communications. For the same reason, there are no grounds for striking out para 13 and para 14. 63 Paragraph 11 and para 15 are in a different category. These paragraphs disclose to an extent the substance of subject matter of settlement discussions and at least two terms of the Employer's settlement proposals. Therefore, these paragraphs disclose communications that are prima facie confidential and subject to without prejudice privilege. Moreover, they contain allegations that may be considered implicit, if not explicit, admissions by the Employer relating directly to the subject matter of the parties' disputes. 64 A central plank of the Employer's case is that the Acciona parties have failed to provide replacement Bank Guarantees as a means of applying illegitimate pressure on the Employer in the settlement negotiations. The Employer accepts that Bank Guarantees form part of the subject matter of the negotiations. However, the Employer contends that the subject of replacement of the Bank Guarantees and the communications about that replacement are separate from the settlement negotiations. Nonetheless, if replacement Bank Guarantees form part of the subject matter of the dispute between the parties or the terms upon which it may be resolved, the nature of what has been communicated about Bank Guarantees and other matters in the settlement negotiations may well provide important context or information that has a bearing on whether a conclusion should be reached that refusing to provide replacement Bank Guarantees amounts to 'illegitimate' pressure. It may also place the matters asserted in paras 14-18 of the concise statement into a different context. Therefore, while the Employer may not rely directly on communications made during the negotiations, its allegations may have indirectly raised them where it would be or may be misleading or unfair to exclude communications and (or) conduct during without prejudice negotiations. 65 The Employer submits that, as without prejudice is a joint privilege, there can be no consent to disclosure of communications covered by the privilege without all holders of the privilege consenting. Therefore, even if the Employer has made without prejudice communications relevant, the Acciona parties are not permitted to rely on them for their defence without the 'consent' of the HZI parties. In support of that submission the Employer relies on Mr Nicholas' affidavit in which he deposes that the facts asserted in para 10 and para 11 of the concise response are not correct in that the negotiations included representatives of the HZI parties as well as the Acciona parties. 66 Mr Nicholas deposes the facts at a very high level of generality. The facts are stated as conclusions without any statement of the facts upon which the conclusions are based. For example, there are no statements of when or in what circumstances representatives of the HZI parties were involved in negotiations or what disputes were the subject of those negotiations. In short, Mr Nicholas' evidence does not provide any firm evidentiary basis for making findings about who was involved in the negotiations and does not rise much, if at all, above bare assertion. 67 The Acciona parties also read an affidavit of Kon Nakousis sworn 20 May 2024. That affidavit exhibits the correspondence referred to in para 11 of the concise response. Objection was taken to the admissibility of that evidence apparently under s 131(1)(a) of the Evidence Act on the interlocutory application. In response to that objection, the Acciona parties sought to tender the exhibits for the limited purpose of adducing evidence to prove that these communications did not involve the HZI parties apparently on the basis of s 132(2)(g) of the Evidence Act. Namely, the Court is likely to be misled by Mr Nicholas' evidence unless the exhibits to Mr Nakousis' affidavit are adduced to contradict or qualify Mr Nicholas' evidence. The exhibits were received provisionally on the basis that I would rule on the admissibility of them in these reasons. 68 The Court may refuse to admit evidence if its probative value is substantially outweighed by the danger that the evidence might cause or result in undue waste of time: s 135 Evidence Act. I refuse to admit exhibits KN-1, KN-2, KN-3, KN-4, KN-5 and KN-6 of Mr Nakousis' affidavit into evidence on the interlocutory applications on that ground for the following reasons. 69 First, if the negotiations involved the Employer, the Acciona parties and the HZI parties, the assertion in the concise response cannot involve the 'disclosure' of confidential information to a party that is not entitled to 'know' that information. Preventing disclosure or publication of the assertions in the concise response beyond those parties may be a ground for ordering suppression or non-publication, but assertion of the fact of a communication to all parties to which that communication was made does not, on the face of it, involve breach of confidence. Second, the assertion in para 10 of the concise response is that the Employer and the Acciona parties have been engaged in negotiations directed to the settlement of disputes under the EPC Contract. For the purposes of an application to strike out, I am to assume that fact is proved, therefore, Mr Nicholas' affidavit on that subject is of no real assistance. Third, to the extent that the Employer relies on the facts deposed in Mr Nicholas' affidavit to contradict the facts asserted in the concise response, for the reasons already given, his evidence is of little weight and is not dipositive of the factual question. Fourth, as to the purpose for tendering the exhibits to Mr Nakousis' affidavit, it is not appropriate to attempt to resolve conflicting or competing affidavit evidence on an interlocutory application such as this: Shercliff v Engadine Acceptance Corporation Pty Ltd [1978] 1 NSWLR 729 at 734; Beecham Group Ltd v Bristol Laboratories Pty Ltd [1968] HCA 1; (1968) 118 CLR 618 at 622. For these reasons evidence contradicting or affirming the facts asserted in the concise response is of no real assistance in resolving the question of whether there is justification for raising matters the subject of without prejudice communications as a defence in the proceedings. Therefore, the exhibits are of minimal, if any, probative value on the application and consideration of the conflicting evidence might cause or result in undue waste of time. 70 As already mentioned, for the purposes of the strike out application, I must assume that the negotiations in question were limited to the Employer and the Acciona parties as asserted in para 10. Taking into account the function of a concise statement and the nature of the allegations made in the concise statement and concise response, it is reasonably arguable that the communications between the parties in without prejudice negotiations are relevant to the extent that these communications concerned the provision of replacement Bank Guarantees: Verge at [44]. Through paras 11-15, read with para 27, of the concise response, the Acciona parties allege, in substance, that replacement Bank Guarantees formed part of the negotiations and their conduct in refusing to provide replacement guarantees must be viewed in the context of what was said and done during those negotiations. In those circumstances, it is reasonably arguable, that proof of the negotiations should not be rendered impossible by the 'without prejudice' rule. In such a case, the subject matter of the proceedings, an alleged contravention of s 21 of the ACL, is not the same as the subject matter of the dispute between the parties at the time of the negotiations: see, e.g., Quad Consulting at 93. If a party prosecuting a cause of action under the ACL would not be precluded from alleging a contravention of the ACL by reason of conduct that took place during without prejudice negotiations, a party defending an ACL claim should also not be precluded from defending that claim where conduct during negotiations is relevant to the question of whether or not there was a contravention of the ACL. These are sufficient matters to justify asserting the conduct is relevant to the Acciona parties' defence and to 'plead' the facts. The question of the admissibility of evidence of those facts and the effect of s 131(1) of the Evidence Act, the need for consent of the HZI parties and the basis upon which that evidence may be admitted can be dealt with at trial: Verge at [44], citing Western Australia v Southern Equities Corporation Ltd (in liq) (1996) 69 FCR 245 at 249-250 (French J). 71 It follows that I do not consider that para 11 of the concise response should be struck out on the ground that it asserts matters that are manifestly founded on evidence that would not be admissible. On the other hand, there does not appear to be any ground for contending that the facts alleged in para 15 have any relevance to the defence of the ACL claim. Nor do the allegations in that paragraph contain an admission of the kind asserted in para 12. Nevertheless, given that there is evident justification for the other assertions, determining the admissibility of evidence of that assertion pre-emptively based on the contents of a concise statement would not be appropriate. Except for the rare case in which the position is self-evident on the face of the pleading, questions about the admissibility of the evidence of facts asserted in pleadings or other documents is best left to trial. Accordingly, para 15 will not be struck out notwithstanding that the justification for matters asserted in that paragraph are not obvious. Having regard to these conclusions, para 27(2) and para 27(4) should also not be struck out.

Disposition 72 Paragraph 2 and para 3 of the interlocutory application for summary judgment and to strike out will be dismissed.

Application for Suppression and Non-Publication 73 The Employer applies for suppression and non-publication orders of paras 11-20, 27(2) and 27(3) of the concise response, para 4 and para 5 of the statement of cross-claim, paras 3, 4 and 14 of the concise reply, various paragraphs of submissions and affidavits filed in the proceedings and the transcript of the hearing on 28 May 2024 that make reference to communications during the parties' negotiations on the ground that it is necessary to prevent prejudice to the proper administration of justice. The facts deposed in paras 10, 11 and 12 of Mr Nicholas' affidavit are relevant to this application in that they provide evidence that there were without prejudice negotiations between the Employer and the Acciona parties (and some evidence that these also involved the HZI parties) and the subject matter of those negotiations is identified in paras 11-15 of the concise response. However, as already mentioned, there is no evidence as to the substance of the communications or the truth or otherwise of the assertions in the concise statements. Neither the Acciona parties nor the HZI parties made submissions on the application. No other interested party appeared and made submissions. In effect, there was no contradictor on the application. 74 The Employer contends that it may be necessary in the proper administration of justice to prevent disclosure of commercially sensitive information in certain circumstances. The Employer submits that: 'the publication of unsubstantiated allegations in question would cause irreparable harm to the [Employer]. Such harm would, in the very nature of commercial life, cause significant disruption, even if only through conduct from speculation, to the [Employer's] current contractual arrangements with third-party stakeholders, including its financiers, energy off-takers, regulators, councils, [and] services providers.' There is virtually no evidence in support of that submission. In effect, it is to be inferred from the recitals to the EPC Contract and Financier Side Deed and the terms of those documents and 'the very nature of commercial life'. Nonetheless, I accept that an allegation made in open court to the effect that a company is insolvent or is unable to pay its debts as and when they fall due is likely to cause embarrassment, damage to reputation and may have financially harmful consequences for that company. 75 On the application of a party to the proceedings, the Court may prohibit or restrict the publication or disclosure of information lodged with or filed in the Court and may make such orders as it thinks appropriate to give effect to such an order: ss 37AF(1)(b)(iv), 37AF(2) and 37AH of the Federal Court Act. The Court may make a suppression or non-publication order on the ground that it is necessary to prevent the proper administration of justice: s 37AG(1)(a). In deciding whether to make such an order the Court must take into account that a primary objective of the administration of justice is to safeguard the public interest in open justice: s 37AE. But, the concept of open justice is not absolute and must, on occasion, be balanced with other considerations such as avoiding prejudice to the proper administration of justice. Nevertheless, an order restricting the ordinary open justice approach 'is not lightly made': Minister for Immigration and Border Protection v Egan [2018] FCA 1320 at [4] (Allsop CJ). 76 Justice Wigney summarised the Court's approach to suppression and non-publication orders in Rush v Nationwide News Pty Ltd [2018] FCA 357; (2018) 359 ALR 473 as follows. (1) A suppression or non-publication order should only be made in exceptional circumstances: at [186] (and the authorities there cited). (2) In general, parties and witnesses have to accept the embarrassment and damage to their reputation and possible consequential loss which can be inherent in involvement in litigation. It is the price of open justice that allegations about individuals are aired in open court. If a party, the response can be made in the same open forum: at [187]-[188] (and the authorities there cited). (3) The Rules providing that pleadings are ordinarily available for public inspection is an important part of the system of open justice. There is no reason for supposing that members of the public will not appreciate that allegations in pleadings are untested and may turn out to be proved false or incorrect: at [189]-[191], [194] (and the authorities there cited). (4) The principle of open justice demands and requires that the public are able to follow and understand all stages of a proceeding, including interlocutory steps such as the striking out of part of a pleading: at [195]. (5) There is no reason that the principles of open justice that apply to s 37AF and s 37AG should not apply equally to r 2.32 and r 16.21(2): at [199]-[200]. (6) In exceptional cases, striking out manifestly scandalous and vexatious material may justify suppression or non-publication and (or) removal of the pleading or part of the pleading from the Court file: at [196], [200]. 77 The Employer submits that, in an appropriate case, it may be necessary in the interests of justice to make a suppression and (or) non-publication order to prevent disclosure and (or) publication of confidential and commercially sensitive information: Motorola Solutions Inc v Hytera Communications Corporation Ltd (No 2) [2018] FCA 17 at [8] (Perram J) and the authorities there cited. Examples taken from other authorities upon which the Employer relies include: (a) information that would be of value to trade rivals the disclosure of which would be prejudicial to the moving party: Australian Competition and Consumer Commission v Cement Australia Pty Ltd (No 2) [2010] FCA 1082 at [16]-[24] (Greenwood J); (b) information disclosed to the Court for the purposes of liquidators obtaining approvals under s 477(2B) of the Corporations Act 2001 (Cth) that, if disclosed, may prejudice the company (in liquidation) in respect of ongoing legal proceedings: Lindholm (liquidator), in the matter of Aviation 3030 Pty Ltd (in liq) [2021] FCA 1244 at [28]-[30], [33], [35]-[36] (Anderson J); (c) information obtained from third parties subject to confidentiality provisions used for the purpose of administering a settlement scheme and in the preparation of parts of the evidence used in support of applications for approval of the settlement of representative proceedings under s 33V of the Federal Court Act: Cantor v Audi Australia Pty Limited (No 5) [2020] FCA 637 at [265], [268], [273] (Forster J). 78 The Employer also submits that suppression and non-publication orders have been made in the context of applications under s 33V with respect to events that took place during mediation or settlement discussions that resulted in the settlement for which approval of the Court was being sought: Cantor at [265], [268], [274]. The basis for such an order, as Anastassiou J explained in Clime Capital Limited v UGL Pty Limited (No 2) [2020] FCA 257 at [22], was that the information was disclosed to the Court in accordance with express orders preserving the confidentiality of the material for the purpose of a settlement approval. In those circumstances, his Honour said confidentiality orders to preserve the privileged material should be made as a matter of course. That reasoning has no application to the orders the Employer seeks in this case. 79 As has already been addressed, a pleading may be struck out as an abuse of process if on the face of the document the allegations made in it involve unjustified misuse of confidential information. There, the public interest in the proper administration of justice concerns avoiding abuse of the court's processes not disclosure of confidential information per se because the pleading is mere assertion and may, or may not, disclose or publish truly confidential information. Therefore, as Snaden J observed in Naude v DRA Global Limited [2023] FCA 493 at [25]-[29], the relevant prejudice to the administration of justice that necessitates suppression or non-publication must arise from disclosure or publication of the information not the putative breach of confidence. In Pigozzo the Court was satisfied that a non-publication order was necessary to prevent prejudice to the proper administration of justice because the statement of claim in that case contained general, unclear and ambiguous allegations of serious impropriety which, accepting the pleaded facts as true, were founded on misuse of confidential information that was subject to legal professional privilege and without prejudice privilege. In the exceptional circumstances of that case, permitting publication, reporting and wide dissemination of such allegations risked undermining the public interest in the administration of justice that underpins the common law right to legal professional privilege and the rationale of without prejudice privilege: Pigozzo at [206]-[209]. The circumstances of this case are quite different. 80 First, for the reasons already given, the assertions are not an abuse of process because it is reasonably arguable that evidence of statements made during the without prejudice negotiations will be admissible or are otherwise relevant to the Acciona parties' defence to the alleged contravention of s 21 of the ACL. Second, there is no evidence that the asserted statements were in fact made. As already mentioned, the contents of the concise response are mere assertion. Therefore, there is no evidence that disclosure or publication of the asserted facts will, in fact, result in the disclosure and publication of the substance or purport of what was communicated in without prejudice communications. Third, the assertions do not involve general, ambiguous and unparticularised allegations of serious impropriety. Fourth, as already mentioned, the allegation of insolvency may be alleged and proved independently of any statement (or admission) made during negotiations. The Employer's financial position is a question of objective fact. Last, an allegation of insolvency falls into the category of matters that are embarrassing and harmful to reputation that litigants ordinarily have to accept as the price of open justice. The Employer will have a fair opportunity to meet the allegations. There is no reason for excluding the public from knowing and understanding what is alleged against the Employer and its response to those allegations. 81 The six exhibits to Mr Nakousis' affidavit fall into a different category. It is common ground that these comprise communications that are confidential and subject to without prejudice privilege. Mr Nakousis deposes that these are the documents identified in para 11 of the concise response. The question as to whether these documents will be admissible at trial is yet to be determined. These documents do not form part of the affidavit evidence that has been read and has, in effect, become part of the materials disclosed in open court. In accordance with r 2.32 of the Rules parties may inspect these documents and non-parties may apply for leave to inspect them. Therefore, the Rules afford sufficient protection to ensure that the exhibits excluded from evidence are not published as a matter of course to non-parties. Nonetheless, I will make a direction that the Registrar must refer any application of a non-party for leave to inspect those documents to a judge of the Court and that any non-party applying for leave to inspect them must serve a copy of the application on the parties. 82 For these reasons, the application for suppression and non-publication orders will be dismissed and the interim suppression and non-publication orders made under s 37AI will cease to operate by effluxion of time.

Overview of the application 83 In para 23 of the concise response, as amended, the Acciona parties contend, in substance, that, on the proper construction of cl 6.7(g) of the EPC Contract, the EPCC has no obligation to provide the Employer replacement Bank Guarantees in circumstances in which the Employer is insolvent. Further, and in any event, the Acciona parties also contend that, in circumstances in which the Employer is insolvent, subject to complying with certain provisions of the Financier Side Deed by which notice must be given to the Security Trustee, in effect, the EPCC has a right to terminate the EPC Contract. They intend exercising that right subject to procuring the co-operation of the HZI parties to do so. If terminated, the Employer must return all Bank Guarantees under cl 6.7(j) of the EPC Contract and the EPCC (including the Acciona parties) will have no further obligation to provide Bank Guarantees under the contract. In these circumstances, the equitable relief the Employer seeks should be refused on discretionary grounds. The Acciona parties expanded the reasons for refusing discretionary relief in their written and oral submissions to extend to circumstances in which the Employer is not able to perform its future obligations under the EPC Contract including payment of the Contract Price and, if called, repayment of any overpayment under the Performance Bond. 84 The Employer contends that the Acciona parties have no reasonable prospect of succeeding in their defence based on the construction of cl 6.7(g) of the EPC Contract. It submits, in effect, that the meaning of the relevant provisions of the contract are clear and, on the uncontroversial facts, it is plain that the Acciona parties are in breach of cll 6.7(d)(iii), 6.7(d)(iv) and 6.7(g) of the contract. 85 The Employer contends that the right to terminate the Acciona parties assert is contingent. It depends upon, amongst other things, the co-operation of the HZI parties. It is not alleged that the co-operation has been secured. Therefore, there is no present 'right' to terminate and the prospect of fulfilment of all contingencies to the existence of that right is mere conjecture or speculation on the matters asserted in the concise response. Further, and in any event, on the proper construction of cl 6.7(j) of the EPC Contract, termination of the contract does not relieve the EPCC of its obligation to provide Bank Guarantees where there is a Dispute. There is an extant Dispute between the parties that has been the subject of a Dispute Notice. The Employer contends that these matters are a complete answer to the Acciona parties' defence and it cannot succeed even if the facts asserted in the concise response were assumed to be true. 86 Section 31A(1) of the Federal Court Act and r 26.01(1)(e) of the Rules provides that the Court may give judgment for one party against another in relation to the whole or any part of a proceeding if satisfied that the other party has no reasonable prospect of defending the proceeding or that part of the proceeding. Here, the Employer applies for summary judgment as to part of the proceeding. That is, its claim for declaratory relief and a mandatory injunction or specific performance relating to the Acciona parties' alleged breaches of cl 6.7(d) and cl 6.7(g) of the EPC Contract. Therefore, irrespective of the outcome of the application, the proceedings will continue with respect to the Employer's claim for contravention of s 21 of the ACL and the Acciona parties' cross-claim will continue for a declaration to the effect that an Employer Default Event has occurred within the meaning of cl 33.8 of the EPC Contract because the Employer is insolvent. Put slightly differently, a factual enquiry into the solvency or otherwise of the Employer is unavoidable, at least, for the purposes of the proceedings on the cross-claim. 87 The summary judgment application proceeded on a mixture of affidavit evidence and assumed fact. The affidavit evidence was directed to proving breach of contract and the existence of a Dispute and Notice of Dispute. Those facts were not in issue. Nor did the Acciona parties directly put in issue that the Employer had issued a Dispute Notice in respect of a bona fide Claim within the meaning of cl 6.7(a)(vi) of the EPC Contract. However, the Acciona parties served a notice to produce on the Employer and submit, amongst other things, that the documents the subject of that notice are relevant to the genuineness of the Employer's Claim. The Acciona parties do not press compliance with the notice, but tender the notice as an exhibit on the ground that the Court should infer from the Employer's failure to comply that there was nothing to produce that could have assisted on the application. I do not accept that such an inference arises given that the issue of the genuineness or otherwise of the Employer's Claim and the basis for the Notice of Dispute is not squarely in issue in the proceedings or on the application. Therefore, for the purposes of the application, I proceed on the basis that there is a dispute between the parties, the Employer has made a Claim it contends is bona fide, and there is an unresolved Notice of Dispute. 88 There was no evidence regarding the solvency of the Employer. The Employer submits that its application for summary judgment may be resolved on the assumption that the facts asserted in para 18 of the concise response are true. However, identification of the 'facts' asserted in that paragraph is not straightforward because the Acciona parties assert that the 'Employer is insolvent/unable to pay its debts within the meaning of subpara (g) of the definition of "Insolvency Event" in the contract'. Therefore, in point of detail, the assertion in para 18 is a matter of mixed fact and law. The Employer sought to distinguish between the asserted facts and the legal consequences rolled up in para 18. It submits that the facts may be assumed, but the legal consequence - that it falls within the meaning of Insolvency Event in the contract - is a question of law to be resolved on the proper construction of the contract. 89 The EPC Contract provides, relevantly, in subpara (g) of the definition that 'Insolvency Event means in relation to any person … that person becomes … insolvent or unable to pay its debts'. Therefore, what is evidently asserted in para 18 of the concise response is that the Employer, as a matter of fact, is (has become) 'insolvent or unable to pay its debts'. If true, it is at least reasonably arguable, that fact would satisfy the definition of an Insolvency Event in relation to the Employer in subpara (g) of the EPC Contract. 90 Accordingly, I proceed on the basis that for the purposes of the summary judgment application the Court is to assume that the Employer, as a matter of fact, is presently unable to pay its debts as and when they fall due. See, e.g., s 95A of the Corporations Act 2001 (Cth). As will be explained later in these reasons, that assumption has implications for the ability of the Employer to perform its principal obligations in the future to pay the EPCC the Contract Price in accordance with the terms of the EPC Contract and what further assumptions the Court can safely make, in the absence of evidence, about that ability.

Relevant principles applicable to summary judgment 91 The relevant principles in relation to summary judgment or dismissal under s 31A of the Federal Court Act were considered by the High Court in Spencer v The Commonwealth [2010] HCA 28; (2010) 241 CLR 118 and have been discussed in many judgments in this Court. These principles apply equally to r 26.01(1) of the Rules. Relevantly, the principles may be summarised as follows. (1) Section 31A of the Federal Court Act authorises summary disposition of proceedings 'on a variety of bases under its general rubric', including, but not limited to: where the pleading discloses no reasonable cause of action (or defence) and the deficiency in that regard is 'incurable'; where 'there is unanswerable or unanswered evidence of a fact fatal to the pleaded case and any case which might be propounded by permissible amendment'; and the 'longstanding category of cases which are "frivolous or vexatious or an abuse of process"': Spencer at [22] (French CJ and Gummow J). (2) A party may have no reasonable prospect of successfully prosecuting (or defending) the proceeding even if it cannot be concluded that the proceeding is hopeless or bound to fail: Spencer at [17] (French CJ and Gummow J). The inquiry required under s 31A is 'not an inquiry directed to whether a certain and concluded determination could be made that the proceeding would necessarily fail': Spencer at [52] (Hayne, Crennan, Kiefel and Bell JJ). (3) The 'exercise of powers to summarily terminate proceedings must always be attended with caution', whatever may be the basis upon which that disposition is sought: Spencer at [24] (French CJ and Gummow J). It is not a power 'to be exercised lightly': Spencer at [60] (Hayne, Crennan, Kiefel and Bell JJ). There must be a 'high degree of certainty about the ultimate outcome of the proceeding if it were allowed to go to trial in the ordinary way': Batistatos v Roads Traffic Authority (NSW) [2006] HCA 27; (2006) 226 CLR 25 at [46], referred to in Spencer at [24] (French CJ and Gummow J). 92 As to the meaning of 'reasonable prospects of success' in Spencer Hayne, Crennan, Kiefel and Bell JJ said (at [60]): … full weight must be given to the expression ['no reasonable prospect'] as a whole. The Federal Court may exercise power under s 31A if, and only if, satisfied that there is "no reasonable prospect" of success. Of course, it may readily be accepted that the power to dismiss an action summarily is not to be exercised lightly. But the elucidation of what amounts to "no reasonable prospect" can best proceed in the same way as content has been given, through a succession of decided cases, to other generally expressed statutory phrases, such as the phrase "just and equitable" when it is used to identify a ground for winding up a company. At this point in the development of the understanding of the expression and its application, it is sufficient, but important, to emphasise that the evident legislative purpose revealed by the text of the provision will be defeated if its application is read as confined to cases of a kind which fell within earlier, different, procedural regimes. 93 The evaluation of 'reasonable prospects' in this case starts with a consideration of the question of whether the construction of the EPC Contract which the Acciona parties advance gives rise to a reasonable prospect of defending the Employer's claim for breach of contract. The construction of a contract is a question of law and typically, absent a basis to receive extrinsic evidence, the question is narrow and can be decided without evidence other than the instrument or instruments in question: see, generally, Westport Insurance Corporation v Gordian Runoff Ltd [2011] HCA [37]; (2011) 244 CLR 239 at [82] (Heydon J). The principles applicable to the interpretation of written agreements are well-established and need not be set out at any length. Relevantly, these may be summarised as follows. (1) The contract must be given an objective construction, by giving proper effect to the text, context, subject matter and purpose of its provisions: e.g., Pacific Carriers Ltd v BNP Paribas [2004] HCA 35; (2004) 218 CLR 451 at [22]; Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52; (2004) 219 CLR 165 at [40]; Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd [2015] HCA 37; (2015) 256 CLR 104 at [46]-[52]. (2) The approach to be adopted in construing the contract is the 'objective approach' so that the 'meaning of the terms of a commercial contract is to be determined by what a reasonable business person would have understood those terms to mean'. Also, '[a] commercial contract is to be construed so as to avoid it making commercial nonsense or working commercial inconvenience' (omitting footnotes): Electricity Generation Corporation t/as Verve Energy v Woodside Energy Ltd [2014] HCA 7; (2014) 251 CLR 640 at [35]. (3) The contract has to be construed in context, considering its terms as a whole, giving consistent meaning to all of its terms, and avoiding any apparent inconsistency: Australian Broadcasting Commission v Australasian Performing Right Association Ltd [1973] HCA 36; (1973) 129 CLR 99 at 109 (Gibbs J, in dissent, but not on the applicable principle). Put another way, preference is to be given to a construction that gives 'a congruent operation to the various components of the whole': Wilkie v Gordian Runoff Ltd [2005] HCA 17; (2005) 221 CLR 522 at [16]. 94 However, while the construction of a contract typically involves a narrow point of law based on well-established principles, the application of the principles is frequently difficult. Deciding what reasonable business people understood the terms of a written agreement to mean is usually open to competing interpretations. In these circumstances, it might be thought somewhat difficult to conclude that the construction of the EPC Contract senior counsel for the Acciona parties advances has no reasonable prospect of success. Particularly as, regarding questions of law, in Spencer French CJ and Gummow J observed (at [25]): Section 31A(2) requires a practical judgment by the Federal Court as to whether the applicant has more than a "fanciful" prospect of success. That may be a judgment of law or of fact, or of mixed law and fact. Where there are factual issues capable of being disputed and in dispute, summary dismissal should not be awarded to the respondent simply because the Court has formed the view that the applicant is unlikely to succeed on the factual issue. Where the success of a proceeding depends upon propositions of law apparently precluded by existing authority, that may not always be the end of the matter. Existing authority may be overruled, qualified or further explained. Summary processes must not be used to stultify the development of the law. But where the success of proceedings is critically dependent upon a proposition of law which would contradict a binding decision of this Court, the court hearing the application under s 31A could justifiably conclude that the proceedings had no reasonable prospect of success. 95 Notwithstanding these observations, I do not consider they detract from the established principle that the Court may, in an appropriate case, determine a question of law, even a question that has more than a fanciful prospect of success, summarily rather than allow the proceeding to go to trial in the usual way: Jefferson Ford Pty Ltd v Ford Motor Company of Australia Ltd [2008] FCAFC 60; (2008) 167 FCR 372 at [23] (Finkelstein J), [74] (Rares J), [131] Gordon J. Further, irrespective of s 31A and r 26.01(1), the Court has power to hear and decide a question arising in the proceedings separately from other questions and to dispose of the proceedings or part of them rendered unnecessary following such a decision: r 30.01 and r 30.02 of the Rules. For instance, courts have a long history - which is consistent with s 37M of the Federal Court Act and r 30.01 and r 30.02 of the Rules - of determining the construction of contracts and other instruments summarily by a procedure known as a 'construction summons'. Having regard to these matters, in an appropriate case, it may be possible to form a view about the meaning of a contract (or other instrument) that leads to the conclusion that the construction advanced by one or other party, while having more than a fanciful prospect of success, is not correct or has insufficient prospects to warrant resolution of the legal question at the point of trial: see, e.g., ThoughtWare Australia Pty Limited v IonMy Pty Ltd [2023] FCA 906 at [62] (Derrington J).

Relevant terms of the EPC Contract 96 The EPC Contract is a bespoke engineering, procurement and construction contract. Nonetheless, the provisions of the EPC Contract follow a relatively standard structure for contracts of that nature. (As mentioned earlier, capitalised terms in the description of the EPC Contract that follow are defined in the contract. Where the contractual definition is relevant it is described in the reasons.) 97 Clause 1.8(a) provides that each EPCC Party is jointly and severally liable for the warranties, liabilities, obligations, performance or non-performance of the EPC Contract including all acts and omissions by the other EPCC Party. Clause 1.8(c) provides that the Employer may proceed against any or all EPCC Parties for any failure of the EPCC to comply with any obligation. 98 Clause 2 contains certain conditions precedent to performance of the contract. Relevantly, cl 2(b) provides that the Employer will issue the Notice to Proceed on the later of certain dates that include the date on which Financial Close has been achieved. Clause 2(c)(vii) provides that a Condition Precedent is that Financial Close is achieved or would be achieved contemporaneously with the satisfaction of all other Conditions Precedent in cl 2(c). Financial Close means that the conditions precedent to the Senior Financing Agreements coming into full force and effect have been satisfied or waived. Senior Financing Agreements means, in substance, the manner in which or instruments by which the Employer obtains financing or refinancing sufficient to fund the aggregate costs and expenses incurred in connection with the design, supply, delivery, erection, Commissioning and Testing of the Works. Clause 2(c)(i) provides that a Condition Precedent is that the Performance Bond and the Retention Bond have been provided by the EPCC in accordance with cl 6.4 and cl 6.5. (Clause 6.4 and cl 6.5 are addressed later.) Clause 2(f) provides that if the Conditions Precedent have not been satisfied or waived on or before the CP Longstop Date, either Party may terminate the EPC Contract by notice in writing to the other Party. 99 The principal obligations of the EPCC are set out in cl 18.1. In substance the EPCC must commence, provide and complete the Works so as to meet the Employer's Requirements, in accordance with the EPCC's Proposals, the Design Documentation and Design Plans and Design Report and otherwise in accordance with the EPC Contract so as to ensure that the Works meet certain specified standards. The balance of cl 18 deals with other aspects of construction of the Works. 100 Clause 25 makes provisions for timing, programming and delay in completion of the Works. In substance, the EPCC is obliged to complete the Works by the Scheduled Date for Practical Completion. In certain circumstances the EPCC is entitled to an Extension of Time. Clause 28 makes provision for the EPCC to pay the Employer Liquidated Damages if Practical Completion is not achieved by the Schedule Date of Practical Completion described as Delay Damages. Delay Damages are capped, subject to certain qualifications, at 10% of the initial Contract Price. 101 Clause 32 makes provisions relating to and for payment of the Contract Price. In substance, the EPC Contract is an entire contract with the Contract Price due and payable on completion of the Works in accordance with the terms of the agreement. However, pending final completion, the EPCC is entitled to interim payments or advances of the Contract Price that are, in effect, payments made on account of the Contract Price. At the completion of the Works the Contract Price, as adjusted in accordance with terms of the agreement, and any other amounts due from the Employer to the EPCC are determined and, after taking into account the interim payments, the balance due from the Employer to the EPCC or EPCC to the Employer is determined. 102 The Employer agrees to pay the EPCC the Contract Price in accordance with cl 32: cl 32.6(a). The EPC Contract makes provision for payment for certain parts of the Works (Milestones) in accordance with the Payment Schedule: cl 32.6(b). The aggregate of all payments for Milestones is equal to the Contract Price: cl 32.6(c). There is a mechanism by which the EPCC is to make Interim Payment Claims: cl 32.6(d)-(e). As is common with contracts of the nature of the EPC Contract, an independent person (Certifier) was appointed by the Parties pursuant to the Independent Certifier Deed to carry out the certifying functions in an independent capacity as contemplated by the EPC Contract. Interim Payment Claims are to be evaluated by the Employer and Certifier and a payment schedule issued: cl 32.6(f). After receipt of a payment schedule the EPCC is to issue a tax invoice for the amount in the schedule and within 15 days after issue of the invoice the Employer must pay the undisputed amount due from the Employer to the EPCC less any amount the Employer is entitled to withhold or offset under the agreement: cl 32.6(g)-(h), (j), (l), (m). A payment of any amount in accordance with the mechanism is not evidence of the value of the Works or that Works have been undertaken and completed in accordance with the agreement, an admission of any liability on the part of the Employer or approval by the Employer of the performance of any obligation of the EPCC or the discharge of any liability of the EPCC pursuant to the agreement: cl 32.6(i). In the event of a Dispute as to any amount owed by a Party to the other Party under the agreement, each Party must continue to perform its obligations and discharge its liabilities and continues to be entitled to exercise its rights, powers and remedies under the agreement: cl 32.6(k). The Employer has a contractual right to set off certain amounts against any amount due and payable by it to the EPCC under the agreement: cl 32.10. 103 Within 20 Business Days after the Date of Practical Completion the EPCC must submit a final statement of account to the Employer: cl 32.15(a). Within 20 days after receipt of a final statement of account, or failing that within six months after the Date of Practical Completion, the Employer will issue a Final Certificate stating the Contract Price as adjusted in accordance with the agreement less all amounts previously paid by the Employer and all sums to which the Employer is entitled under the agreement and stating the balance, if any, due from the Employer to the EPCC or from the EPCC to the Employer as the case may be: cl 32.15(b). The EPCC or Employer may issue a tax invoice for the balance due and that must be paid within 15 days after issue of the invoice: cl 32.15(c)-(d). Except for certain circumstances including unresolved issues the subject of a Dispute Notice or Notice of any Claim, the Final Certificate is to have effect as conclusive evidence that effect has been given to all necessary adjustments to the Contract Price in accordance with the agreement, all Extensions of Time as are due under the agreement have been given, and the balance shown as payable under the Final Certificate is in full and final settlement of all sums accrued to the EPCC: cl 32.15(e). 104 There are a number of other provisions of relevance that deal with suspension and termination of the EPC Contract. 105 Subject to the terms of the EPCC Financier Side Deed, if the Employer suffers an Insolvency Event, or does not pay to the EPCC any amount due and payable as required pursuant to the agreement, then the EPCC may issue a notice (Warning Notice) stating that the EPCC intends to suspend performance of the Works if the Employer does not remedy the Insolvency Event or pay the Amount Due within certain periods of time: cl 23.4(b). 106 An Insolvency Event in respect of the Employer is also an Employer Default Event: cl 33.8(a)(i). If an Employer Default Event occurs, the EPCC may, by notice in writing to the Employer, either (in its absolute discretion): require the Employer to remedy the Employer Default Event within a reasonable period or show cause as to why the agreement should not be terminated; or subject to the Financier Side Deed, terminate the agreement by issuing a Default Termination Notice: cl 33.9(a). If the EPCC requires the Employer to remedy and it is not remedied to the satisfaction of the EPCC, or the EPCC is not otherwise satisfied that the Employer has shown cause as to why the agreement should not be terminated, the EPCC may subject to the Financier Side Deed terminate the agreement: cl 33.9(b). A Default Termination Notice must specify the type and nature of the Default Event and the date upon which termination of the agreement will take effect: cl 33.9(c). Generally, the Employer has a right to remedy the Employer Default Event within a 20-day cure period: cl 33.9(d). 107 Insolvency Event (as defined) means in relation to any person, any of the following events: (a) a controller, manager, trustee, administrator or similar officer is appointed in relation to that person or any asset of that person; (b) a liquidator or provisional liquidator is appointed in respect of that person; any application (not being an application withdrawn or dismissed within fifteen (15) Business Days) is made to a court for an order, or an order is made, or a meeting is convened, or a resolution is passed, for the purpose of: (c) appointing a person described in paragraph (a) or (b) of this definition; (d) winding up that person; or (e) proposing or implementing a scheme of arrangement in respect of that person; (f) a moratorium of any debts of that person or an official assignment, composition or an arrangement (formal or informal) with the creditors of that person or any similar proceeding or arrangement by which the assets of that person are subjected conditionally or unconditionally to the control of the creditors of that person is ordered, declared or agreed to, or is applied for and the application is not withdrawn or dismissed within (ten) 10 Business Days; (g) that person becomes, admits, in writing, that it is, is declared to be, or is deemed under any applicable Law to be, insolvent or unable to pay its debts; (h) any writ of execution, garnishee order, Mareva injunction or similar order, attachment, distress or other process is made, levied or issued against or in relation to any asset of that person; or (i) any act is done or event occurs which has an analogous or similar effect to any of the events in paragraphs (a) to (h) of this definition in any jurisdiction. 108 Upon termination of the EPC Contract under cl 33.9, the Employer must (subject to its right of set off) pay to the EPCC within ten Business Days of the EPCC's demand in the form of a valid tax invoice: any amount due and payable to the EPCC under the agreement at the date of termination; any unpaid amount that has been certified in any payment schedule issued by the Certifier as being due and payable after the date of termination; regarding Works executed prior to the date of termination, the amount that would have been payable if the agreement had not been terminated and the EPCC had been entitled to and made a payment claim for such Works on the date of termination and certain other costs: cl 33.10. Termination of the EPC Contract does not affect the remedies and rights, obligations and liabilities of any Party under the agreement which have accrued to the date of termination, which continue to be enforceable: cl 33.11(a).

Terms relating to the provision of Bank Guarantees 109 Clause 6 contains provisions dealing with security and parent company guarantees. 110 Clause 6.1(a) provides that the EPCC must deliver to the Employer each of the Bank Guarantees, amongst other things: (other than the Warranty Bond) on or prior to the Commencement Date; in favour of the Employer and the Security Trustee; to the Employer in accordance with cl 6.1(b). The EPCC must replace all of the Bank Guarantees provided on or before the Commencement Date with new Bank Guarantees in the form of Schedule 20 within 20 Business Days of the Commencement Date: cl 6.1(b). The amount of the Bank Guarantees to be provided prior to the Commencement Date was calculated using the initial Contract Price: cl 6.1(c). The new Bank Guarantees were to be for amounts calculated using the updated initial Contract Price: cl 6.1(d). Bank Guarantee is defined, relevantly, to mean the Retention Bond and Performance Bond. 111 Retention Bond means one or more irrevocable and unconditional bank guarantees in the relevant form set out in Schedule 20 or a form otherwise approved by the Employer and issued by an Australian trading bank registered pursuant to the Banking Act 1959 (Cth) with the Required Rating. Performance Bond means one or more irrevocable and unconditional bank guarantee in favour of the Employer (and the Security Trustee in accordance with the terms of the EPCC Financier Side Deed): (a) in the relevant form set out in Schedule 20 or a form otherwise approved by the Employer; (b) for the amount specified in cl 6.4(b) or cl 6.4(c); and (c) issued by an Australian trading bank registered pursuant to the Banking Act with the Required Rating. 112 Clauses 6.4, 6.5, 6.7 and 6.8 of the EPC Contract provide as follows: 6.4 Performance Bond (a) The EPCC must ensure that the Performance Bonds are issued for an amount in the aggregate equal to 10% of the initial Contract Price. (b) Subject to 6.4(c), the EPCC must ensure that the Performance Bond (or a replacement bond on expiry of any initial bond) is in place, valid and effective until the Employer issues to the EPCC the Availability Certificate pursuant to clause 27.20(e). (c) Ten (10) Business Days after the later of: (i) the EPCC successfully completing the Guaranteed Performance Tests and/or paying in full to the Employer all Liquidated Damages owing from the EPCC to the Employer (as the case may be); and (ii) the Employer receiving the Warranty Bond from the EPCC, the value of the Performance Bond which the Employer and the Security Trustee are entitled to retain will be reduced from the initial 10% to an amount equal to the lesser of: (iii) 5% of the Contract Price; and (iv) an amount equal to 15% of the Contract Price less the value of all calls made on the Retention Bond and the Performance Bond prior to achieving the conditions set out in clauses 6.4(c)(i) and 6.4(c)(ii). (d) Upon the Employer issuing to the EPCC the Availability Certificate pursuant to clause 27.20(e), the Employer must return the Performance Bond to the EPCC unless: (i) the EPCC has failed to pay Liquidated Damages and Employer has not exercised its set off rights in accordance with any Liquidated Damages Payment Notice; (ii) a bona fide Claim against the EPCC by the Employer exists, the Employer has issued a Dispute Notice regarding that Claim; or (iii) an EPCC Insolvency Event occurs, in which case the Employer is not obliged to return the Performance Bond until the circumstances in clauses 6.4(d)(i) to 6.4(d)(iii) have been resolved. 6.5 Retention Bond (a) The EPCC must ensure that the Retention Bonds are issued for an amount in the aggregate equal to 5% of the initial Contract Price. (b) The EPCC must ensure that the Retention Bond (or a replacement bond on expiry of an initial bond) is in place, valid and effective from the Commencement Date until the Date of Practical Completion. (c) Within 10 Business Days of the Certificate of Practical Completion being issued, the Employer must return the Retention Bond to the EPCC. … 6.7 General Provisions relating to Security (a) The Employer or the Security Trustee may have recourse to the Performance Bond, the Retention Bond or the Warranty Bond, as applicable, at any time in relation to Claims it has against the EPCC or the Administration Building Contractor under the Administration Building Construction Contract including but not limited to: (i) for the purposes of converting to cash security, if the EPCC fails to issue any replacement Bank Guarantee as required under clause 6.7(d), 6.7(f) or 6.7(g); (ii) where a Bank Guarantee held by the Employer ceases to satisfy the requirements of clause this clause 6; (iii) where the EPCC fails to pay any amount due and payable under this Agreement including for a breach of this Agreement, or where the Administration Building Contractor fails to pay any amount due and payable under the Administration Building Construction Contract including for a breach of the Administration Building Construction Contract; (iv) if and to the extent the EPCC fails to pay Liquidated Damages and the Employer has not exercised its set off rights in accordance with any Liquidated Damages Payment Notice; (v) if the Employer exercises any of its rights under clause 33.4(a)(ii) or 33.4(b); (vi) in respect of a bona fide Claim in relation to which the Employer has issued a Dispute Notice (including any Claim under the Administration Building Construction Contract); or (vii) if an EPCC Insolvency Event or a similar event under the Administration Building Construction Contract occurs. (b) Provided the Employer or the Security Trustee was entitled to call on the relevant Security in accordance with clause 6.7(a), the Employer: (i) is not obliged to pay the EPCC any interest: (A) in relation to any Security; or (B) subject to clause 6.7(c)(ii)(C), on the proceeds of any Security if it is converted into cash; and (ii) does not hold any Security proceeds on trust for the EPCC. (c) If the Employer or the Security Trustee makes a call upon any Security and obtains payment as a consequence: (i) the Employer must, as soon as reasonably practicable and in any event within three (3) Business Days of exercising that right, provide written notice to the EPCC advising that it has exercised a right pursuant to clause 6 and the basis for doing so; and (ii) if the amount of any payment is in excess of the sum to which the Employer is entitled at the time of such call (Excess Amount): (A) the Excess Amount will be reduced by any unsatisfied amounts that subsequently become payable (whether as a debt, by way of damages or otherwise) by the EPCC to the Employer at the time such amounts arise under this clause 6; (B) the Employer will return to the EPCC any Excess Amount to the extent it has not been further reduced in accordance with clause 6.7(c)(ii)(A) at the earlier of: (aa) the EPCC providing a replacement Bank Guarantee that complies with clause 6.3 except that the relevant Bank Guarantee Amount will be the Excess Amount or any reduced amount in accordance with clause 6.7(c)(ii)(A); and (bb) the time that the Employer would otherwise have been obliged to return the Bank Guarantee under which such amount was obtained, had the Employer not made a call upon the Bank Guarantee; and (C) the Employer will pay simple interest at the same time it returns the Excess Amount, at the Default Rate, on that Excess Amount from the date of such call payment until it is returned or reduced in accordance with clause 6.7(c)(ii)(A) or 6.7(c)(ii)(B). (d) If: (i) the issuer of any Bank Guarantee ceases to have the Required Rating; or (ii) any Bank Guarantee is to expire within thirty (30) Business Days and a replacement has not been provided, the EPCC must: (iii) notify the Employer, by notice, in writing, as soon as practicable (in the case of Required Rating ceasing or expiring); and (iv) regardless of whether such notice is given, procure the issue to the Employer of one or more replacement Bank Guarantees that satisfies the requirements of clause 6.1 which have a face value such that the total aggregate amount of all Bank Guarantees in force after the replacement is equal to the total aggregate amount of all Bank Guarantees immediately before the replacement. Such replacements must be provided: (A) where the issuer ceases to have the Required Rating, within ten (10) Business Days; or (B) in the case of expiry, twenty (20) Business Days prior to the expiry date. (e) On provision of a replacement Bank Guarantee, the Employer will, as soon as reasonably practicable, return the original relevant Bank Guarantee to the EPCC. (f) If as a result of one or more Variations, the Contract Price (as at the Execution Date) has increased by 3.5% or more, then within ten (10) Business Days after the date of the applicable Variation Order that has caused the Contract Price to increase by 3.5% or more, the EPCC must procure the issue in favour of the Employer of one or more replacement Bank Guarantees (excluding the Advance Payment Bond) or additional Bank Guarantees such that the Employer is in possession of Bank Guarantees in an amount equal to the relevant Bank Guarantee Amount. If, as a result of one or more Variations, the Contract Price (as at the Execution Date) has reduced by 3.5% or more, then within ten (10) Business Days after the date of the applicable Variation Order that has caused the Contract Price to reduce by 3.5% or more, the Employer must release or swap the Bank Guarantees (excluding the Advance Payment Bond) for one or more replacement Bank Guarantees such that the Employer is in possession of Bank Guarantees in an amount equal to the relevant Bank Guarantee Amount. This clause applies each time the result of one or more Variations increases or decreases the then current Contract Price by 3.5% or more. There will be no obligation to provide any replacement Bank Guarantees if the effect of one or more Variations is to increase the Contract Price by less than 3.5%. (g) If: (i) any Bank Guarantee is not issued in accordance with clause 6.1(a) (other than in respect of the value of the Bank Guarantee Amount in the case of any replacement Bank Guarantee under clause 6.7(c)(ii)(C) or any additional Bank Guarantee under clause 6.7(f)); (ii) any replacement Bank Guarantee is not issued in accordance with clause 6.7(c)(ii)(C) or 6.7(f); or (iii) any Bank Guarantee is not enforceable or valid in accordance with its terms, the EPCC must provide replacement Bank Guarantees to the Employer and the Employer has no obligation to pay any amount to the EPCC pursuant to this Agreement until such time as the replacement Bank Guarantee is provided. To avoid doubt, the occurrence of any such circumstance does not affect any remedy or right that arose before the occurrence of any such circumstance, and does not affect the application of any other obligation. (h) The EPCC must not seek any injunction or seek to otherwise restrain: (i) the issuer of any Bank Guarantee from paying the Employer pursuant to that Bank Guarantee; (ii) the Employer from making any demand or receiving any payment or otherwise having recourse under any Bank Guarantee; or (iii) the Employer using the proceeds of any Bank Guarantee. (i) Subject to this clause 6, on the expiry of the Defects Rectification Period, the Employer must release all Bank Guarantees to the EPCC, unless any Dispute detailed in a Dispute Notice given by the Employer has not been finally determined, in which case the Employer will exchange the Bank Guarantee(s) for new Bank Guarantee(s) from the EPCC from an Acceptable Issuer for the lesser of the amount of the subject Bond and the amount in Dispute. Any such Bank Guarantee(s) must be refunded upon resolution of the relevant Dispute, net of any amount properly owing. (j) Subject to any other specific arrangement for the release and return of Bank Guarantee(s) expressly agreed in this Agreement, where this Agreement is terminated or otherwise expires, the Employer will release and return all Bank Guarantee(s) held by the Employer in connection with this Agreement to the EPCC within ten (10) Business Days, unless: (i) any Dispute detailed in a Dispute Notice has not been finally determined; or (ii) any undisputed amount which is due and payable has not been paid, in which case the Employer will exchange the Bank Guarantees for one or more new Bank Guarantees from the EPCC from a financial institution licensed in Australia with the Required Rating for the amount in Dispute. 6.8 Senior Lenders' rights The Security Trustee under the Senior Financing Arrangements will be a beneficiary of the Bank Guarantees and the Parent Company Guarantees. 113 There are two further terms of relevance to the operation of clause 6. 114 Failure of the EPCC to provide any replacement Bank Guarantee pursuant to (and within the time period referred to in) cl 6 is an EPCC Immediate Termination Event: cl 33.3(g). Where there is an EPCC Immediate Termination Event the Employer may require the EPCC to remedy it, terminate the EPC Contract or take out of the EPCC's hands the whole or part of the work remaining to be completed: cl 33.4-33.6. 115 When the EPC Contract is terminated pursuant to its terms, the Employer must return all Bank Guarantees in accordance with cl 6.7(j): cl 33.14(b). Clause 33.14(b) applies irrespective of whether the termination is as a result of EPCC Immediate Termination Event, Employer Default or termination for convenience.

The nature of performance bonds 116 The EPC Contract tendered in evidence is not complete and does not have Schedule 20. Nonetheless, it was common ground that irrevocable bank guarantees dated 19 December 2019 exhibited to the affidavit of Ante Golem sworn 5 April 2024 were delivered to the Employer and accepted as conforming with the requirements of the EPC Contract. 117 Each bank guarantee is in the form of a deed made by JP Morgan Chase Bank by attorney. Subject to expiry the bank irrevocably and unconditionally undertakes to pay on written demand by the Employer or the Security Trustee the sum or sums demanded up to a maximum of AUD 12,877,049.88 for one guarantee and AUD 25,754,099.76 for the other. The expiry date of the first guarantee was 1 February 2023, but that date was extended to 21 November 2023 by an instrument dated 19 January 2023. The expiry date of the second guarantee expired was 30 January 2024. 118 As is not uncommon in construction contracts, the expression 'bank guarantee' and 'bond' are used interchangeably. A bond is a promise by deed pursuant to which a person (obligor) promises to pay another person (obligee) a sum of money. Here, JP Morgan Chase Bank is the obligor and the Employer and Security Trustee is the obligee. Thus, what is defined in the EPC Contract as Bank Guarantee is a bond given by a bank. It is not a 'guarantee' in the sense of a guarantee of performance of any obligation of the EPCC under the EPC Contract. It is a guarantee or promise to pay a sum or sums of money irrevocably and unconditionally to the obligee. 119 Bonds in the form of irrevocable and unconditional promises by the obligor to pay a sum of money to the obligee have been described as equivalent to cash: Clough Engineering Limited v Oil and Natural Gas Corporation Limited [2008] FCAFC 136; (2008) 249 ALR 458 at [75]-[76] (French, Jacobson and Graham JJ); Wood Hall Ltd v Pipeline Authority [1979] HCA 21; (1979) 141 CLR 443 at 445 (Barwick CJ), 453 (Gibbs J), 457-458 (Stephen J). In the context of bonds issued under the terms of construction contracts, the terms of the contract may affect the circumstances in which the employer is entitled to demand payment under the bond (call on the bond). Consequently, an employer may be restrained from calling on the bond at the suit of the contractor. However, as between the bank (obligor) and employer (obligee) the bank must pay the employer if a demand is made: Clough Engineering at [77]-[85].

The nature of construction contracts 120 As already mentioned, the EPC Contract contains provisions and a mechanism for the EPCC to claim and be paid interim or advance payments on the Contract Price during performance of the Works and before the issue of a Final Certificate. Provisions of that nature are common and standard in construction contracts. 121 Generally, if an employer calls on a bond before completion of the contract works, the employer will be obliged to account to the contractor for any overpayment of amounts due to the employer when the contract is completed and the final contract price and balance due from the employer to the contractor or vice versa is determined: Cargill International SA Antigua Geneva Branch v Bangladesh Sugar & Food Industries Corporation [1996] 4 All ER 563 at 568-570 (Morrison J) affirmed [1998] 1 WLR 461; The Good Living Company Pty Limited ATF the Warren Duncan Trust No 3 v Kingsmede Pty Ltd [2019] FCA 2170 at [145]-[151] (Markovic J). In the meantime, a payment made as a result of a call on a bond, in effect, reduces the amount that the employer is obliged to pay the contractor by way of interim or advance payment on the contract price before the contract works are completed. Therefore, typically bonds perform the function of a risk allocation device as between the employer and contractor in that it provides a mechanism for prompt payment of the amounts of the employer's claims despite a dispute and provides the employer with a degree of security against insolvency of the contractor. Thus, in circumstances in which there is a bona fide dispute between the employer and the contractor, the terms of the contract and the bond provide a mechanism by which the employer, and not the contractor, is entitled to hold the disputed amount pending completion of the contract and determination of the dispute: see, e.g., Fletcher Construction Australia Ltd v Varnsdorf Pty Ltd [1998] 3 VR 812 at 826 (Callaway JA); Sugar Australia Pty Ltd v Lend Lease Services Pty Ltd [2015] VSCA 98 at [19]-[20] (Obsborn and Ferguson JJA); CPB Contractors Pty Ltd v JKC Australia LNG Pty Ltd [2017] WASC 112 at [67]-[72] (Le Miere J), affirmed in CPB Contractors Pty Ltd v JKC Australia LNG Pty Ltd (No 2) [2017] WASCA 123. 122 These general principles relating to construction contracts are reflected in the provisions of the EPC Contract to which reference has been made. For example, even in circumstances in which the EPCC is entitled to terminate the EPC Contract for an Employer Default, termination does not affect accrued rights and, while the Bank Guarantees must be returned, that is subject to the qualification that where there is a Dispute detailed in a Dispute Notice that has not been finally determined the Employer is entitled to a new Bank Guarantee for the amount in Dispute. Therefore, an early termination of the EPC Contract does not affect the risk allocation as between the Employer and the EPCC pending resolution of a Dispute.

The proper construction of clauses 6.7(d) and 6.7(g) 123 I do not accept the Employer's contention that the proper construction of cl 6.7(d)(iii) means that, in circumstances where a Bank Guarantee expires, the EPCC must notify the Employer as soon as practicable after the guarantee expires. Clause 6.7(d)(iii) is concerned with the issuer of a Bank Guarantee ceasing to have the Required Rating referred to in cl 6.7(d)(i). Notwithstanding that the expression in parenthesis in cl 6.7(d)(iii) is 'in the case of [the] Required Rating ceasing or expiring' (emphasis added), it is tolerably clear that the reference to expiring is linked to the Required Rating and the pre-condition in cl 6.7(d)(i) (the issuer of the Bank Guarantee ceasing to have the Required Rating) not the pre-condition in cl 6.7(d)(ii) (the Bank Guarantee 'is to expire'). 124 That construction accords with the natural and ordinary meaning of cl 6.7(d)(iii) when read with cl 6.7(d)(i) and cl 6.7(d)(ii). It also accords with common sense. The EPCC is required to deliver the Bank Guarantee to the Employer, thus the Employer must be taken to know the terms of the Bank Guarantee including any expiry date. There is no need for the EPCC to give the Employer notice of that which it must be taken to know. On the other hand, the Employer would not necessarily be aware of whether the issuer continues to have the Required Rating. Thus, the EPC Contract places the onus on the EPCC to monitor that information and inform the Employer of any change and the necessity to replace the Bank Guarantee in accordance with cl 6.7(d)(iv)(A). Moreover, cl 6.7(iv)(B) requires the Bank Guarantee to be replaced before it expires if the pre-condition in cl 6.7(d)(ii) is met. Therefore, the Acciona parties have reasonable prospects of defending the alleged breach of cl 6.7(d)(iii) by failing to notify the Employer that the relevant bank guarantees had expired or were due to expire. 125 The natural and ordinary meaning of cl 6.7(d)(iv) is, relevantly, that regardless of whether there has been compliance with cl 6.7(d)(iii) (where applicable), the EPCC must procure the issue to the Employer of one or more replacement Bank Guarantees that satisfies the requirements of cl 6.1. In the case of a Bank Guarantee expiring, the replacements must be provided 20 Business Days prior to the expiry date. Relevantly, the requirements of cl 6.1 are that the Bank Guarantees are in the form of Schedule 20 and for amounts calculated in accordance with the updated initial Contract Price as determined in accordance with Schedule 19. Relevantly, Bank Guarantee is defined to include the Performance Bonds, they are in turn defined to be for the 'relevant Bank Guarantee Amount'. The Bank Guarantee Amount for the Performance Bonds is defined to be the amount specified in cl 6.4(a) or cl 6.4(c) as relevant. 126 In circumstances where a Bank Guarantee expires without replacement beforehand it is 'not enforceable or valid in accordance with its terms' and, as such, falls within the natural and ordinary meaning of the pre-condition in cl 6.7(g)(iii). Therefore, on the natural and ordinary meaning of the text of cl 6.7(g) 'the EPCC must provide replacement Bank Guarantees to the Employer'. The obligation in cl 6.7(g) is a separate obligation from the obligations described in cl 6.7(d) and is not limited to circumstances where the issuer no longer has the Required Rating or that a Bank Guarantee is due to expire or has expired. It extends to any circumstance in which the Bank Guarantee is not enforceable or valid in accordance with its terms. 127 The Acciona parties contend, in substance, that the obligations in cl 6.7(d) and cl 6.7(g) anticipate or depend on the continuing performance of the parties 'mutual' obligations concerning the manner in which the Employer (or Security Trustee) may have recourse to a Bank Guarantee [cl 6.7(a)], the Bank Guarantees are to be returned [cl 6.7(j)] and, where recourse has been had to a Bank Guarantee, there is to be repayment of the Excess Amount [cl 6.7(c)] and (or) repayment of any excess in the final accounting between the parties upon the issue of the Final Certificate [cl 32.15]. Further, the obligation in cl 6.4(b) to ensure that the Performance Bond is in place, valid and effective depends on the ability of the Employer to issue to the EPCC the Availability Certificate. The Acciona parties submit, in substance, that the provision, return, call and repayment of excess form part of an interim mechanism that the parties did not intend to make permanent in circumstances where the Employer is insolvent. The Acciona parties submit that the contractual mechanism was intended to provide security for the Employer, not to convert the EPCC into a non-recourse lender to the Employer. 128 Invoking the notion of 'mutual' obligations is, in substance, a submission that the obligation of the EPCC to deliver the Performance Bond to the Employer is dependent upon the Employer remaining ready, willing and able to perform contingent future obligations regarding return of the Bank Guarantee(s) and, if recourse is had to the Performance Bond, its repay the Excess Amount or any overpayment determined in the Final Certificate. As to the question of dependence or independence of obligations, in Kay v Playup Australia Pty Ltd [2020] NSWCA 33; (2020) 19 BPR 40-037 at [62]-[66], Brereton JA (Macfarlan JA and Simpson AJA, agreeing) explained that, in the absence of an express statement of intention, there is no presumption of dependence between obligations, but rather the question is to be resolved by reference to the objective intention of the parties. Relevantly, his Honour said: [62] Of course, 'whether obligations are dependent or independent depends upon the intention of the parties' [Burton v Palmer [1980] 2 NSWLR 878 at 895 [76]]. In ascertaining that intention, "the more closely the obligations are linked to the rights, the easier it will be to construe the instrument as granting merely qualified rights" [Tito v Waddell (No 2) [1977] Ch 106 at 297 (Megarry V-C)]. Relevant considerations include the express provisions of the contract in respect of interdependence, the extent of any connection between the obligations, whether the respective covenants go to the whole consideration, whether breach of the obligation goes to the root of the contract, or whether breach may be compensated by damages [See Huntoon Co v Kolynos (Incorporated) [1930] 1 Ch 528 at 548-549, 557-559, 563-564; Highfield Property Investments Pty Ltd v Commercial & Residential Developments (SA) Pty Ltd [2012] SASC 165 at [213]; Masters Home Improvement Aust Pty Ltd v Aventus Cranbourne Thompsons Road Pty Ltd [2019] VSC 428 at [96] (Croft J)]. [63] In Newcombe v Newcombe [(1934) 34 SR (NSW) 446 at 450-451],to which Leeming JA referred with apparent approval in Hillam v Iacullo, Jordan CJ, with whom Stephen and Maxwell JJ agreed, said: Where each of two parties to an indenture makes a covenant with the other, and the two covenants are not in terms connected, the question may arise whether they are independent (in the sense that each party is bound to perform his covenant irrespectively of whether the other performs his) or dependent (in the sense that one party is not bound to perform, or to continue to perform, his covenant unless the other has performed, or does perform, his, previously or concurrently or subsequently). In the absence of express provision in the deed, recourse must be had to implication. To raise an implication of dependency of covenants which are ex facie independent the ordinary conditions justifying the introduction of an implied term into a contract must be fulfilled. The implication must be one so obviously necessary to carry into effect the intention of the parties appearing on the face of the deed, treating them as reasonable men, that they must have agreed to its insertion as a matter of course had the point occurred to them. An implication of intention that the performance of one covenant shall be conditional on the performance of the other arises where the nature of the covenants is such that any breach of either of them would necessarily be regarded by reasonable men as absolving the other party from performing his covenant: Mills v Carson (10 RPC 9 at 16, 17); (Huntoon Co v Kolynos (Inc) [1930] 1 Ch 528 at 548-9, 557-8, 563-4). But the question is in every case one of intention; and the rules laid down in the notes to Pordage v Cole (1 Wms Saund 548) are merely guides to the discovery of intention, as, indeed, those notes plainly state: Roberts v Brett ((1865) 11 HL Cas 337 at 353-4). Ambiguous expressions in the deed will not serve to introduce dependency, where the covenants are otherwise independent and the general tenor of the deed supports the presumption that they are intended to be what they in form are - independent. In such cases, participial expressions such as "the plaintiff performing all the covenants on his part": Boone v Eyre (1777) 2 Wm Bl 1312, or even such an expression as "if the plaintiff shall perform all the covenants on his part": London Gaslight Co v Chelsea Vestry (8 CBNS 215) have been held not to be enough. On the other hand, ambiguous expressions may serve to implement an implication of dependency arising from the nature of the agreement: Bastin v Bidwell ((1880) 18 Ch D 238)). Full force must, however, be given to an unambiguous and uncontrolled provision for dependency: "and if words are used in the contract so precise, express and strong, that such intention, and such intention only, is compatible with the terms employed, however inconsistent it may be with general principles of reason, a court can only give effect to such declared intention of the parties. The only question in each particular case is, whether such intention is so declared: "Stavers v Curling ((1836) 3 Bing (NC) 355 at 369-70). It must be remembered that however plain and unambiguous words may be in themselves they are always capable of being controlled by an inconsistent context: Lloyd v Lloyd ((1837) 2 My & Cr 192 at 202, 204); London Gaslight Co v Chelsea Vestry (8 CBNS 215 at 239). 129 There is no express expression of an intention that the obligations in cl 6.7(d) and (or) cl 6.7(g) and (or) cl 6.4(b) are dependent on the Employer performing its contingent future obligations under one or more of cll 6.4(j), 6.4(c) and 32.15 and (or) the issue to the EPCC of an Availability Certificate under cl 27.20(e). Thus, the construction the Acciona parties advance requires implying or inferring from the express terms an objective intention that non-performance of future obligations absolves the EPCC of the present obligation to deliver replacement Bank Guarantees. 130 The focus of the Acciona parties' submissions is the ability of the Employer to repay the Excess Amount or any overpayment that may result from the Employer having recourse to the Bank Guarantee(s). However, the Acciona parties' submissions tend to overlook or downplay the significance of the contingent nature of the Employer's obligation to make any repayment in the future. Repayment is contingent on first the Employer (or Security Trustee) having recourse to the Bank Guarantee(s) and second the amount of any payment being in excess of the sum to which the Employer is ultimately entitled. The amount of any excess being determined in the Final Certificate or earlier in some other manner. If the Employer (or Security Trustee) has recourse to the Bank Guarantee(s) it may ultimately be vindicated and be entitled to keep the amount paid to it. Given the contingent nature of any obligation of the Employer in the future to make a payment to the EPCC arising from the delivery of the Bank Guarantees, there is no basis for considering that the present certain performance by the EPCC is dependent on the future uncertain performance by the Employer. That is, there is no reason for considering that inability to perform future obligations that may never need to be performed should absolve the EPCC from performing a present obligation that it is required to be performed. 131 More specifically, under cl 6.7(g) the Employer has no obligation to pay any amount to the EPCC pursuant to the agreement until a replacement Bank Guarantee is provided. That is, the Employer's obligation to make interim payments to the EPCC, any payment in a Final Payment Certificate or any payment otherwise is expressly dependent upon the EPCC performing its obligation to provide replacement Bank Guarantees. Put another way, the Employer is expressly absolved of performance if the EPCC fails to perform and not the converse. The Acciona parties' construction is also at odds with cl 33.3(g) which provides that the failure to provide a replacement Bank Guarantee pursuant to and within the time period referred to in cl 6 is EPCC Immediate Termination Event. Thus, the Acciona parties' construction results in incongruency with the operation cl 6.7(g) and cl 33.3(g) in that the Employer need not be ready and willing to perform its obligation to pay the EPCC under the agreement unless and until the EPCC provides replacement Bank Guarantees and, if the EPCC fails to do so, the Employer may terminate the EPC Contract bringing to an end any future obligations on its part. 132 Further, even in circumstances in which the EPCC has a right to terminate and has terminated for an Employer Default, including an Insolvency Event, the EPC Contract contemplates the continuing existence of Bank Guarantees. That is, while there is an obligation on the Employer to return Bank Guarantees upon termination under cl 33.14(b) and cl 6.7(j), where there is a Dispute the Employer will exchange the Bank Guarantee to be returned with one for the amount in Dispute. Therefore, even in circumstances in which the EPC Contract has been validly terminated for an Employer Default, the Employer continues to have a right to hold a Bank Guarantee covering amounts in Dispute pending resolution of the Dispute. Accordingly, the EPC Contract expressly contemplates that even where the EPC Contract is terminated due to an Insolvency Event concerning the Employer, that the EPCC may be required to maintain a Bank Guarantee in respect of a Dispute with an insolvent Employer. 133 As has already been mentioned, the Bank Guarantees operate as a risk allocation device. Amongst other things, they provide the Employer with prompt payment of bona fide Claims pending resolution of a Dispute. The main purpose of the mechanism is to allow the Employer, in effect, to hold the disputed amount (either as the Bank Guarantee or as cash through recourse to it) for the period during which its entitlement to that amount remains uncertain. Reasonable business people would not understand that object to be dependent on the Employer's continuing ability to pay any amount to which the EPCC is ultimately found to be entitled upon resolution of the Dispute. 134 Returning to the Performance Bond specifically, cl 6.4(a) provides that the EPCC must ensure that Performance Bonds are issued for an amount in the aggregate equal to 10% of the initial Contract Price. Clause 6.4(c) provides for a reduction in the aggregate amount of the Performance Bond ten Business Days after the later of successful completion of the Guaranteed Performance Tests and (or) paying in full to the Employer all Liquidated Damages and the Employer receiving the Warranty Bond from the EPCC. 135 Separately, under cl 6.4(d), upon the Employer issuing to the EPCC the Availability Certificate pursuant to cl 27.20(e) the Employer must return the Performance Bond to the EPCC unless: (a) the EPCC has failed to pay Liquidated Damages and the Employer has not exercised its set off rights in accordance with any Liquidated Damages Payment Notice; (b) a bona fide Claim against the EPCC by the Employer exists, the Employer has issued a Dispute Notice regarding that Claim; or (c) an EPCC Insolvency Event occurs, in which case the Employer is not obliged to return the Performance Bond until the circumstance referred to in sub-paras (a) to (c) have been resolved. 136 Clause 6.4(b) provides that subject to cl 6.4(c), the EPCC must ensure that the Performance Bond (or a replacement bond on expiry of any initial bond) is in place, valid and effective until the Employer issues to the EPCC the Availability Certificate pursuant to cl 27.20(e). Having regard to cll 6.4(a), 6.4(c) and 6.4(d), the expression 'Subject to 6.4(c)' should be understood as meaning 'Subject to 6.4(d)'. 137 In substance, the Acciona parties submit that cl 6.4(b) qualifies the obligations in cl 6.7(d) and cl 6.7(g) in that the EPCC's obligation to ensure that the Performance Bond is in place, valid and effective ends upon the issue to the EPCC of the Availability Certificate. The issue of the Availability Certificate, in turn, is contingent (dependent) upon the Employer remaining ready, willing and able to perform its obligations under the EPC Contract such that, ultimately, the Employer will be in a position to issue to the EPCC the Availability Certificate. The Acciona parties submit that, on the assumption that the Employer is insolvent, it is not ready, willing and able to perform and will not be in a position to issue the Availability Certificate. Another way of characterising the Acciona parties' submission and construction is that, through the operation of cl 6.4(b) the present obligation to deliver replacement Bank Guarantees under cl 6.7(d) and (or) cl 6.7(g) is dependent on the Employer remaining ready, willing and able to perform its obligations under the EPC Contract in the future including issuing the EPCC the Availability Certificate. 138 In effect, the Acciona parties' construction requires cl 6.4(b) to be read as if the following italicised words were included in the clause 'Subject to cl 6.4(d) and the Employer remaining ready, willing and able to perform its obligations under this agreement'. That is because it is only through the continuing performance of the Employer's obligations that, ultimately, an Availability Certificate will be issued. For the reasons already given and the additional reasons given below, there is no real foothold in the text or context for reading cl 6.4(b) as having that meaning. 139 The effect of cl 6.4(b), in context, is twofold. First, it qualifies and places a limit on the obligations of the EPCC under cl 6.7(d) to procure the issue of a replacement Performance Bond (as a Bank Guarantee). That is, subject to cl 6.4(d), the obligation to maintain the Performance Bond ends upon issue to the EPCC of the Availability Certificate. However, that obligation does not end, if one or more of the circumstances described in cl 6.4(d)(i) to cl 6.4(d)(iii) exist, until the issue(s) so described have been resolved. Second, cl 6.4(b) qualifies the obligation of the EPCC to provide a replacement Performance Bond (as a Bank Guarantee) that arises under cl 6.7(g). That is, cl 6.7(g) gives rise to a separate obligation to ensure that a valid and enforceable Performance Bond is in place in circumstances in which, for reasons which may include but are not limited by those identified in cl 6.7(d), the Performance Bond ceases to be in place, valid and effective. 140 Relevantly, the primary source of the obligation to replace expiring or expired Bank Guarantees is cl 6.7(d) and (or) cl 6.7(g) and not cl 6.4. Further, the obligations under cll 6.7(d), 6.7(g) and 6.4(b) regarding the Performance Bond are qualified and are only at an end when the circumstances calling for return of the Performance Bond exist under cl 6.4(d). That is, cl 6.4(d) qualifies the obligations under cl 6.7(d) and cl 6.7(g) regarding the Performance Bond, not cl 6.4(b). The qualification is return of the Performance Bond, not the obligation, in the meantime, to ensure that the Performance Bond is in place, valid and effective. Therefore, these provisions suggest that the obligation to replace the Bank Guarantees is independent from the circumstances in which the obligation to return them arises. 141 As to dependency more generally, the EPC Contract contemplates the continuing existence of Bank Guarantees, including the Performance Bonds, after the issue of the Availability Certificate and after termination of the EPC Contract for an Employer Default. As already mentioned, the Employer need not return of the Performance Bond upon issue of the Availability Certificate in certain circumstances if the EPCC has failed to pay Liquidated Damages or a bona fide Claim against the EPCC by the Employer exists. Put another way, the Employer continues to enjoy a right to hold the Performance Bond until those issues are resolved. Subject to the terms of the EPC Contract, the Employer also continues to have the right to call on the Performance Bond in those circumstances. These qualifications to the circumstances in which the Performance Bond must be returned are also firm indications that the EPCC obligation to replace the Performance Bond is not dependent upon the Employer's ability to issue an Availability Certificate or, indeed, its readiness and willingness to perform its obligations under the EPC Contract more broadly. 142 Additionally, even if the Employer continues to perform its obligations under the EPC Contract, the issue of an Availability Certificate need not take place because it cannot be issued until the RRF passes the Availability Tests. Passing the Availability Tests and issue of an Availability Certificate is also contingent upon a number of earlier steps described below. These provisions are also indications that the obligation to replace the Performance Bond does not depend on the ability of the Employer ultimately to issue an Availability Certificate. 143 Clause 27 sets out a process for the commissioning and testing of the RRF. Amongst other things the steps involve Practical Completion and the issue of a Certificate of Practical Completion and handover to the Employer [cll 27.12, 27.13, 27.14], Guaranteed Performance Tests [cl 27.18, cl 27.19], Availability Tests and the issue of an Availability Certificate in the Approved Form stating that the RRF has passed the Availability Tests [cl 27.20] and Final Acceptance and the issue of a Final Acceptance Certificate [cl 27.21]. The reduction of the Performance Bond comes after Practical Completion, handover and Guaranteed Performance Tests. Subject to cl 6.4(d), return of the Performance Bond comes after the next stage of commissioning and testing referred to as Availability Testing. 144 Clause 6.6 provides that as a condition precedent to achieving Practical Completion, the EPCC must provide the Employer with the Warranty Bond. The amount of the Warranty Bond is the same as the reduced amount of the Performance Bond. The Employer must return the Warranty Bond within ten Business Days of the Final Acceptance Certificate unless a bona fide Claim against the EPCC by the Employer exists and the Employer has issued a Dispute Notice regarding that Claim, or an EPCC Insolvency Event occurs. 145 It follows that the EPCC continues to have obligations to maintain Bank Guarantees (in the form of the Warranty Bond) even after issue of an Availability Certificate and even after the issue of a Final Acceptance Certificate in certain circumstances where a bona fide Claim against the EPCC exists. Again, the continuing existence of an obligation to maintain Bank Guarantees is not dependent on the ability of the Employer to issue the Availability Certificate. 146 In short, I do not consider there to be any real reason in the text, context or purpose of object of the contract for construing the obligations in cl 6.7(d) and cl 6.7(g) to be qualified such that the obligations are dependent upon the absence of an Insolvency Event in relation to the Employer or are dependent upon the Employer remaining ready and willing to perform its principal obligation to pay the Contract Price in accordance with the EPC Contract. There is no reason not to give cl 6.7(d) and cl 6.7(g) the natural and ordinary meaning of the text of those provisions. The literal meaning of those provisions is also consistent with context, purpose and object of these provisions to which reference has been made earlier in these reasons.

Is there a reasonably arguable defence to breach of clauses 6.7(d) and 6.7(g)? 147 It was common ground that the relevant Performance Bonds have expired and that the Acciona parties had not provided replacement Performance Bonds within 20 Business Days before they expired or at all. Having regard to the manifest difficulties with the construction the Acciona parties advance, I am satisfied that the Acciona parties have no reasonable prospect of defending the Employer's claim that the Acciona parties have breached cl 6.7(d)(iv)(B) and cl 6.7(g) of the EPC Contract. There is insufficient merit in the Acciona parties' contentions to warrant the construction issue proceeding to trial.

Is there a reasonably arguable defence to an order for a mandatory injunction?

Principles applicable to the grant of a mandatory injunction 148 Specific performance may be described as an order of the court directing a party to a contract to perform that party's obligations under the contract according to its terms. However, specific performance in a strict sense presupposes an executory contract as distinct from an executed contract with something remaining to be done, such as the execution of a transfer of land document in the case of a contract for the sale of land, in order to put the parties in the legal position in which they intended, by their preliminary agreement, to be placed. Enforcement of the provisions of an executed contract is not specific performance in that strict sense. It is enforcement of the executed contract which has been described as 'relief approximate to specific performance': Pakenham Upper Fruit Co Ltd v Crosby [1924] HCA 55; (1924) 35 CLR 386 at 394; see, also, Heydon JD, Leeming MJ and Turner PG, Meagher, Gummow & Lehane's Equity: Doctrines & Remedies (5th ed, LexisNexis, 2014) at [20-005]. In this case, the Employer seeks a mandatory injunction for enforcement of part only of an executed contract, alternatively, an order for specific performance of that part. Accordingly, the Employer does not seek specific performance in the strict or proper sense. 149 The distinction between specific performance in the narrower strict sense and in the wider analogous sense can be of importance when considering the principles that apply to the grant of relief. Specific performance in the strict sense is an order for performance of the whole of the contract, not individual obligations under it. Specific performance in the analogous sense may be ordered with respect to the whole or part of the obligations under the contract: Burns Philp Trust Co Pty Ltd v Kwikasair Freightlines Ltd [1963] SR (NSW) 492; (1963) 80 WN (NSW) 801 at 497-499 (Sugerman, Hardie and Collins JJ); Bridge Wholesale Acceptance Corporation (Aust) Ltd v Burnard (1992) 27 NSWLR 415 at 423-424 (Clarke JA, Mahoney and Meagher JJA agreeing). Where an order is made for performance of part of the contract the term specific performance is inapposite. In that case, the order is in the nature of a mandatory injunction requiring the performance of specific obligations under the contract. Nonetheless, general equitable considerations such as adequacy of damages, readiness and willingness, hardship and other discretionary defences apply both to specific performance of the contract as a whole in the analogous sense and to injunctive relief amounting to specific performance of a discrete contractual obligation: Equity Doctrines & Remedies [20-010]. 150 Where 'specific performance' in the form of a mandatory injunction compelling performance of a discrete contractual obligation is sought, it has been suggested that the Court should consider, first, whether that term would be specifically enforceable if it stood alone, and, secondly, whether in all the circumstances it would be just to enforce it: Equity Doctrines & Remedies at [21-450], citing Burns Philp and Dowty Boulton Paul Ltd v Wolverhampton Corporation [1971] 2 All ER 277; [1971] 1 WLR 204. Neither Burns Philp nor Dowty Boulton Paul is direct authority for that proposition, but it is broadly consistent with the approach taken by the court in each of those cases. It is also consistent with the general approach of courts to the grant or refusal of specific performance or injunctive relief with respect to executed contracts. There are well-established principles which govern the exercise of the discretion which suggest classes of case in which specific performance is or is not available. However, like all equitable principles, they are flexible and adaptable to achieve the ends of equity. Therefore, much depends upon the specific facts of a particular case and, thus, ultimately whether it would be just to enforce the term of the contract: see, e.g., Co-operative Insurance Society Ltd v Argyll Stores (Holdings) Ltd [1998] AC 1 at 9 (Hoffmann LJ). 151 It is a well-established principle that Equity will not decree specific performance of a contract if the applicant has an adequate remedy at law: Equity Doctrines & Remedies at [20-030]. That principle may be regarded as an indication that it would not be just in all the circumstances to enforce a term where common law damages is an adequate remedy. That is, '[t]he Court gives specific performance instead of damages only when it can by that means do more perfect and complete justice': Wilson v Northampton & Banbury Junction Railway Company (1874) LR 9 Ch App 279 at 284 (Selbourne LJ). While there may be some uncertainty as to whether inadequacy of damages is a jurisdiction requirement or a discretionary consideration to be taken into account as part of a broader inquiry as to whether it is just in all the circumstances that the moving party be confined to damages, for present purposes, it may be assumed that demonstrating inadequacy of damages remains a fundamental requirement to obtain an order for a mandatory injunction or specific performance: Sino Iron Pty Ltd v Mineralogy Pty Ltd (No 2) [2017] WASCA 76; (2017) 55 WAR 36 at [132]-[137]. 152 Also, underpinning the well-established principles is the notion that 'before injunction can be applied some equity attracting it must be shown.' In the case of strict specific performance of an executory contract, 'the equity is the obligation of placing the parties in the relative legal positions contemplated'. In the case of analogous specific performance of an executed contract, 'the equity must be sought in some other consideration appropriate to the actual legal relative situations of the parties': Pakenham Upper Fruit Co at 395 (Isaacs and Rich JJ). Put another way, the equity in the case of an executed contract is to be found in performance of the particular obligation of the contract for which damages, at common law, would not be an adequate remedy: Sydney Consumers' Milk & Ice Co Ltd v Hawkesbury Dairy & Ice Society Ltd (1931) 31 SR (NSW) 458 at 468-460 (Long Innes J); Burns Philp Trust Co at 498-499 (Sugerman, Hardie and Collins JJ). 153 As the equity in the case of an executory contract is to place the parties in the position relative to each other in which they agreed by execution of some final instrument or other act, it is necessary for the moving party to allege and prove that it is ready and willing to be placed in that position. In the case of an executed contract and performance of a particular term of it, the parties have already, by execution of the contract, been placed in the place relative to each other in which they agreed. Consequently, it would be superfluous for the moving party to allege or prove that it is ready and willing to be placed in that position: Sydney Consumers' Milk & Ice Co at 462-463. It follows that, in the case of an executed contract, it is not necessary to allege and prove as elements of the cause of action that the moving party is ready and willing to perform, but readiness and willingness may remain a relevant consideration in the exercise of the Court's discretion to grant injunctive relief or specific performance. 154 Relevantly, in the case of an executed contract, equitable relief will be denied in two circumstances. First, where the moving party is in breach of a term that is interdependent with the term or obligation the moving party is seeking to enforce. Second, 'where the agreement is one which involves continuing or future acts to be performed by the [moving party], [it] must fail unless [it] can show that [it] is ready and willing on [its] part to carry out those obligations, which are, in fact, part of the consideration for the undertaking of the [other party] that the [moving party] seeks to have enforced: Australian Hardwoods Pty Ltd v Commissioner for Railways [1961] 1 WLR 425 at 432-433 (Lord Radcliffe, who delivered judgment for the Privy Council). 155 Regarding what is necessary to prove readiness and willingness to perform future obligations, in Gurney v Gurney (No 2) [1967] NZLR 922 Gresson J said (at 925): … Whether a plaintiff can prove that he is ready and willing to perform his obligations in futuro by entering into a binding covenant so to do, or whether he must go further and establish an actual or probable ability to perform these future commitments, is an uncertain question upon which I have been unable to find any decisive authority. It maybe, as Mr Harding submitted, that, in the absence of proof of likely inability to perform these obligations, a Court of Equity will accept the sufficiency of his covenant in this regard. In any event the respondent here accepted the burden of proving actual ability to perform all his obligations under the deed, and then discharged this onus to the satisfaction of the trial Judge. … 156 In Bishop v Taylor [1968] HCA 68; (1968) 118 CLR 518 Menzies J observed that '[t]he requirement of readiness and willingness does not demand that a purchaser should always have the purchase price in his pocket; all that is necessary is readiness and willingness to perform the contract according to its terms.' However, that does not necessarily mean that the moving party need not allege and prove that it is ready and willing, in the sense of will have the ability, to perform future obligations where readiness and willingness to perform them is relevant to the injunctive relief or specific performance with respect to an executed contract. In terms of what must be demonstrated, it is not necessary to prove with certainty that when the time comes the moving party will, as a matter of fact, perform the obligation. Rather, the moving party must prove on the balance of probabilities that it wishes, intends and, in substance, has the ability to perform: Carydis v Merrag Pty Ltd [2007] NSWSC 1220 at [34] (Brereton J). 157 Where the performance of the obligation sought to be enforced is dependent on earlier performance of an obligation of the moving party there is little difficulty in identifying the inequity of ordering performance of an obligation in circumstances in which the moving party is in breach or is not ready and willing to perform at the time a mandatory order is sought. Likewise, where the moving party has fully performed or executed all its obligations under the contract, there is little difficulty in concluding that, subject to inadequacy of damages or a relevant discretionary factor, it would generally be equitable to require the other party to perform the promised, yet unperformed, obligation. Burns Philp Trust Co is an example of such a case. In that case, a company issued certain securities (notes) to noteholders as part of consideration for acquiring from the noteholders shares held in another company. The company and a trustee made a trust deed relating to the notes a term of which gave the trustee a right to inspect the register of the company for the purpose of exercising its office as trustee under a trust deed. The company refused to allow the trustee to inspect the register. The court enforced the obligation by mandatory order and observed that the consideration for the promise 'in the form of the transfer by the noteholders of their shares in the company "taken over", was entirely executed': Burns Philp Trust Co at 497. Where the moving party has completely performed its obligations no question of readiness and willingness to perform future obligations arises. 158 A more difficult question arises where an obligation is sought to be enforced in circumstances in which the moving party has not performed all obligations under the contract and it is alleged that the moving party is not ready and willing to perform those obligations in the future. In these circumstances, there may be difficulty in identifying the 'consideration for the undertaking' sought to be enforced to which Lord Radcliffe made reference in Australian Hardwoods. In the absence of a clear link, such as the performance of work and payment for that work, the consideration for many kinds of obligations in a contract may not be identified or identifiable and, in substance, the consideration consists of the parties' mutual promises within the terms of the contract as a whole. Further, not all such mutual promises or obligations may be regarded as dependent or interdependent in the sense that non-performance by one party would, by implication, absolve the other of its obligation to perform: Newcombe v Newcombe (1934) 34 SR (NSW) 446 at 450-451 (Jordan CJ). 159 Nonetheless, it is clear that the absence of readiness and willingness to perform dependent future obligations will generally provide a discretionary basis to refuse injunctive relief. 'Probably the true rule is that an injunction should not be granted which compels, in substance, the defendant to perform his side of the agreement when the continuance of his obligation to do so depends upon the future conduct of the plaintiff in observing conditions to be fulfilled by him': JC Williamson Ltd v Lukey (1931) 45 CLR 282 at 299 (Dixon J). Likewise, generally, specific performance of a contract will not be refused where the moving party has breached or is unwilling to perform a term that is not interdependent and (or) is non-essential to performance of the contract: Green v Sommerville [1979] HCA 60; (1979) 141 CLR 594 at 608-609 (Mason J, Murphy and Aickin JJ, agreeing). However, these general principles do not necessarily mean that enforcement of an independent and (or) non-essential obligation should be ordered in circumstances in which the moving party is not ready and willing to perform other future substantive obligations or essential albeit non-dependent terms. For instance, in circumstances in which a contract is severable, as opposed to entire, and specific performance of a severable part of the contract could otherwise be ordered, the court may nevertheless treat that contract as entire if treating it as severable does not meet the justice of the case: Wilkinson v Clements (1872) LR 8 Ch App 96 at 111 (Sir Mellish LJ). 160 It is important to keep in mind that the well-established principles and discretionary factors are derived from equitable principles and maxims that are of more general application. Thus, it has been said that readiness and willingness to perform may be regarded as an exemplification of the equitable maxim 'He who comes to equity must come with clean hands': Green v Sommerville at 611 (Mason J). It may also be regarded as an application of the maxim 'He who seeks equity must do equity': Telstra Corporation Ltd v First Netcom Pty Ltd [1997] FCA 860; (1997) 78 FCR 132 at 136 (Lockhart, Beaumont and Hill JJ); Equity Doctrines & Remedies at [3-055], [3-085]. Having regard to these and other potentially relevant equitable principles and maxims, it is at least reasonably arguable that unreadiness and unwillingness of the moving party to perform future substantive obligations or essential albeit non-dependent terms of a contract may provide discretionary grounds for refusing to enforce a particular term or obligation of the contract against the responding party. Much, of course, depends upon the particular facts and circumstances of any given case, but in such a case the moving party may not be regarded as 'doing equity' if it is not ready and willing to perform its bargain as a whole. There is also a sense in which it may be futile to compel performance of a discrete term in circumstances in which the moving party is not in a position to perform the contract as a whole. As to futility generally, see, Equity Doctrines & Remedies at [20-145]. 161 Hardship is another discretionary factor that may be invoked to refuse injunctive relief or specific performance. In Coles Supermarkets Australia Pty Ltd v Australian Retail Freeholds Pty Ltd (1996) 16 WAR 282, in the context of proceedings to restrain a breach of a restrictive term of a lease that would have had the effect of preventing the landlord redeveloping a shopping centre, Anderson J (at 288-289) observed: It is accepted that there is always a discretion to withhold an injunction and it would be a relevant consideration if enforcement of covenants would cause undue hardship to the defendant or to others. As to considerations of hardship I think the following passage in I C F Spry, Equitable Remedies (4th ed, 1990) p 195 correctly states the law: ''It must not be forgotten that if damages are inadequate an applicant is prima facie entitled to specific performance of a valid and enforceable contract. Specific performance is not refused merely because inconvenience or even hardship to the defendant would be caused thereby. But if the hardship suffered by the defendant, if specific enforcement took place, would be so much greater than the detriment that would be suffered by the plaintiff if he were confined to remedies and damages that it would be unreasonable and oppressive to grant relief, specific enforcement is denied. In these regards there must be a balancing of the interests of the parties; and indeed, the court takes into account other matters as well, such as the manner in which the grant of relief would affect third persons or any advantage that the plaintiff may have taken of the defendant at the time of entry into the material agreement, in order to determine what course is most reasonable in all the circumstances.'' It is not difficult to think how that doctrine might be applied by the courts justly to decline specific performance of covenants in a shopping centre lease. If the lessor proposed some minor alteration to the configuration of the car park so as to cure, say, a drainage problem seriously affecting other tenants, and if the alteration could have no practical effect on the plaintiff's tenancy the court would probably not assist the plaintiff to stop the works. But that is a very different case from the case under consideration. Here the hardship pointed to as likely to flow from the grant of an injunction is really the first defendant's inability to take advantage of a particular commercial opportunity, that is, to obtain a price for the centre enhanced by a redevelopment which cannot be undertaken except in breach of its covenants with the plaintiff. I do not think that is a sufficient hardship. I accept Mr Macaw QC's submission: that what must be shown is hardship amounting to an injustice which would be inflicted on the first defendant by holding it to its bargain with the plaintiff in a manner which would be unreasonable. What must be shown is that in all the circumstances, including hardship to the defendant and third parties, it is unfair and unreasonable to hold the defendant to his contract, recognising that fairness runs down both sides of the case: see Suttor v Gundowda Pty Ltd ( 1950) 81 CLR 418 at 439; ANZ Executors & Trustees Ltd v Humes Ltd [1990] VR 615 at 635. 162 Thus, hardship in the relevant sense may arise where there is a significant disparity between the benefit to the party seeking enforcement of the term and the burden to the party if required to perform. In Co-operative Insurance (at 15) Lord Hoffman made reference to the potential injustice for the moving party to be enriched at the expense of the other party. Also, to the consequence that it may place the moving party in a position in which it can bargain with the other party so as to extract from that party a release from the obligation at a 'price' exceeding common law damages and approaching the loss that the other party would sustain from performance. The court should 'not, by granting a mandatory injunction, to deliver over the Defendants to the Plaintiff bound hand and foot, in order to be made subject to any extortionate demand that he may by possibility make': Isenberg v East India House Estate Co Ltd (1863) 3 De GJ & Sm 263 at 273. After citing that passage, Lord Hoffman went on to observe (at 15-16): It is true that the defendant has, by his own breach of contract, put himself in such an unfortunate position. But the purpose of the law of contract is not to punish wrongdoing but to satisfy the expectations of the party entitled to performance. A remedy which enables him to secure, in money terms, more than the performance due to him is unjust. 163 There are other established discretionary factors that may be invoked, in substance, as defences to injunctive relief or specific performance which do not appear to have any relevance to the issues raised in these proceedings. These are discussed in Equity Doctrines & Remedies at [20-055]-[20-060] (personal services or relationships), [20-065]-[20-085] (continual supervision), [20-085]-[20-090] (mistake or misrepresentation), [20-140] (impossibility of performance), [20-150]-[20-165] (lack of mutuality), [20-170] (laches or delay) and [20-175] (unenforceability). Mention is made of them here simply to emphasise the discretionary nature of the equitable relief that the Employer seeks to have ordered summarily. 164 What emerges from the principles to which reference has been made is that, in the context of an application for summary judgment, the discretionary nature of injunctive relief and specific performance renders it difficult, where a factor is raised against the exercise of the discretion, to reach the conclusion that there is no prospect of defending a claim for equitable relief unless it is clear that the factor is of no import to the claimed relief. That difficulty is all the more apparent when it is appreciated that it is usually necessary to apply the applicable principles in a fact-specific manner that achieves the ends of equity.

Are clauses 6.7(d) and 6.7(g) specifically enforceable? 165 The principal issue concerning the availability of specific performance or a mandatory injunction is the inadequacy of damages. Separately, there is a question as to whether a mandatory injunction should be ordered compelling the Acciona parties to provide a Bank Guarantee that, in theory, requires the co-operation and agreement of a third-party bank in order for it to comply with that order. However, I do not consider that issue to provide a ground for refusing relief because any order may be made in a conditional form that addresses that concern. 166 As to the adequacy or inadequacy of damages the Employer's primary submission is that damages cannot be adequate because the obligation to deliver Bank Guarantees extends to guarantees that name the Security Trustee as a beneficiary. In general, where the applicable term is for the benefit of a third party damages will not be regarded as an adequate remedy for the promisee. The Acciona parties submit that the Security Trustee only has a right to call on the Performance Bond, in effect, as agent of the Employer and, therefore, in truth, it is not a third party. Further, the insolvency of the contractor has been considered in certain authorities as the reasons that damages would not be an adequate remedy for the employer where the employer has sought a mandatory injunction to require the contractor to provide bank guarantees. The Acciona parties contend that the opposite is the case here, on the assumed facts, and the Employer (by its controller, administrator or liquidator, in due course) should be left to its common law remedy for damages as there is no suggestion that the Acciona parties are insolvent. 167 Relevantly, damages may be regarded as an inadequate remedy where the provision of the contract sought to be enforced confers a benefit on a third party or damages for breach of contract would be nominal or negligible: Coulls v Bagot's Executor & Trustee Co Ltd [1967] HCA 3; (1967) 119 CLR 460 at 478 (Barwick CJ), 503 (Windeyer J); see, also, Sudbrook Trading Estate Ltd v Eggleton [1983] 1 AC 444 at 478 where Lord Diplock explains that nominal or negligible damages is the foundation for ordering specific performance in favour of a purchaser in a sale of land contract. Having regard to these principles there are at least two reasons why damages would be an inadequate remedy for the Acciona parties' breach of cl 6.7(d)(iv)(B) and cl 6.7(g) of the EPC Contract. 168 First, the Performance Bond is a Bank Guarantee that must be in favour of the Employer and the Security Trustee: cl 6.1(a)(ii) and cl 6.8. Further, the Security Trustee has an express right to call on a Bank Guarantee: cl 6.7(a). In cl 6B of the Financier Side Deed the EPCC acknowledge and agree that the Security Trustee may have direct recourse to the Bank Guarantees in accordance with cl 6.7(a) of the EPC Contract. Therefore, the obligation to provide the Performance Bond is, at least in part, an obligation that is for the benefit of the Security Trustee which is not a party to the EPC Contract. However, in this case, the extent to which the existence of third-party rights renders damages inadequate is diminished because the obligation is also owed directly to the Employer. Further, the EPC Contract is governed by the law of Western Australia: cl 45.14(a). Section 11(2) of the Property Law Act 1969 (WA) provides a third party with a direct right to enforce (and damages for breach) contractual provisions for its benefit. Nonetheless, it is evident that the Employer itself will not be fully or completely compensated insofar as loss or damage flowing from the breach is suffered by the Security Trustee. To that extent, the Employer's loss or damage would be nominal. 169 The Acciona parties submit that the Security Trustee's rights are as agent and not truly as a third party because, while it has a right to call on the Bank Guarantees, all of the obligations associated with the Bank Guarantees fall on the Employer. I do not accept that submission. 170 While not all the security instruments were in evidence, it may be inferred from the recitals and terms of the EPC Contract and Financier Side Deed that the Security Trustee holds a security interest in the EPC Contract. That is, the contractual rights have been transferred (in equity if not in law) to the Security Trustee as security for the performance of certain secured obligations. The benefit of a contract may be assigned, but not the burden. Therefore, it is consistent with the Security Trustee's security interest that it may exercise the right to call, but does not have the burden of repayment and so forth. That the Security Trustee has an independent right to be a beneficiary of the Bank Guarantees and to have recourse to them is also consistent with the text of the relevant provisions of the EPC Contract and Financier Side Deed. It is also consistent with commercial common sense that the Security Trustee, as the secured party with a security interest, should have an independent right to call on the Bank Guarantees as part of its security interest. Therefore, there is nothing in the text of the EPC Contract or its context purpose or aim to suggest that the Security Trustee's rights are limited to a right as an agent of the Employer as opposed to the third party rights of a person with a security interest in the EPC Contract. 171 Second, as already mentioned, the provision of the Performance Bond and other Bank Guarantees forms part of a contractual mechanism regulating interim payments or advances under the EPC Contract up to the Final Certificate and (or) resolution of any Dispute the subject of a Dispute Notice. The consequence of a failure to provide the Performance Bond means that the Employer will be deprived of that risk allocation mechanism and its right to an interim payment, by way of calling on the Performance Bond, of the amount of any bona fide Claim it has against the Acciona parties. The Employer's damages for the loss of the 'interim payment' are unlikely to be significant because, if vindicated in the dispute, it will ultimately obtain an award of damages, most likely with interest, against the EPCC. If not vindicated, it will not obtain an award of damages or interest and, if a call has been made, it would have to repay any overpayment it has received from calling on the Performance Bond. Therefore, damages are likely nominal for breach of cl 6.7(d) and (or) cl 6.7(g) and would not be an adequate remedy. Specific performance (by way of a mandatory injunction) would provide a better means of doing justice. 172 In Ewing International LP v Ausbulk Ltd (No 2) [2009] SASC 381; (2009) 267 LSJS 107 (at [28]-[29], [151], [194], [347]-[377]) Layton J applied the principles to which I have referred to order specific performance of a contract that required the provision of a replacement bank guarantee pending the determination of a dispute between the parties by arbitration. Damages were not considered an adequate remedy in that case because the contractor (the party which was to provide the guarantee) was insolvent. For similar reasons, in Liberty Mercian Ltd v Cuddy Civil Engineering Ltd [2014] EWHC 3584 (TCC) a remedy equivalent to specific performance was ordered for the failure of a party to a construction contract to provide a performance bond: Liberty Mercian v Cuddy [2014] EWHC 3584 (TCC) at [18]; see, also, Liberty Mercian Ltd v Cuddy Civil Engineering Ltd [2013] EWHC 4110 (TCC) at [51]-[55]. These authorities are illustrations of the application of the principles in the particular circumstances of those cases. 173 The absence of any suggestion that the Acciona parties are insolvent is not a reason for considering that damages are an adequate remedy, it simply removes insolvency of the EPCC as a consideration as to why damages are not adequate. Security against the insolvency of the EPCC is only one element of the risk allocation the Bank Guarantees afford. The other is prompt payment of the Employer's bona fide Claim pending resolution of the Dispute. While damages would be an adequate remedy if the Employer makes a Claim and is ultimately vindicated on that Claim, damages are not an adequate remedy for the loss of the benefit of the promised risk allocation mechanism in the meantime.

In all the circumstances is it just to enforce clause 6.7(d) and clause 6.7(g)? 174 As already mentioned, due to the discretionary nature of final injunctive relief it is difficult, except in a very clear case, to reach the conclusion that there is no reasonable prospect of defending the claim where, as here, the respondent to the application has raised a factual issue that might have a bearing on the exercise of the discretion. Relevantly, the Acciona parties allege that the Employer is insolvent and that provides a discretionary reason for refusing relief because it must be assumed that the Employer is not ready and willing to perform its future obligations under the EPC Contract and the Acciona parties are in the process of taking steps to have the EPCC exercise its right to terminate that contract. 175 As to whether the EPCC's contingent right to terminate the EPC Contract provides reasonable grounds for a defence, I accept the Employer's submissions to the effect that the contingent right is, on the facts asserted in the concise response, speculative. In any event, as already mentioned, termination of the EPC Contract does not necessarily mean that all Bank Guarantees must be returned to the EPCC. Therefore, in that sense, delivery of the Performance Bond to the Employer is not futile or likely futile even if the Employer is not able to perform its future obligations under the contract. Therefore, I do not consider the assumed insolvency provides a basis to refuse equitable relief on the ground of that performance is essentially futile because termination of the obligation to provide replacement Bank Guarantees is imminent. 176 As to the assertion of insolvency and its implications for future performance of the EPC Contract more broadly, it is more difficult to dispense, at the threshold, with the contention that absence of the ability of the Employer to perform its essential future obligation under the EPC Contract to pay the balance of the Contract Price provides reasonable prospects for defending the claim for a mandatory injunction or specific performance. 177 Relying on Laing Management Ltd v Aegon Insurance Co (UK) Ltd [1997] 86 BLR 70; (1997) 55 Con LR 1, cited in Dennys M and Clay R, Hudson's Building and Engineering Contracts (13th ed, Sweet & Maxwell Ltd, 2015) at [11-091], the Employer submits that insolvency does not usually constitute an act of repudiatory or anticipatory breach of contract at common law. That is because the appointment of a controller (receiver or receiver and manager), administrator or liquidator does not necessarily evince an intention not to be bound by the terms of a contract, as the controller, administrator or liquidator may decide to continue to perform the contract. The contract may be performed with the backing of secured creditors or through a deed of company arrangement or some other mechanism. Additionally, insolvency can have varying degrees of severity ranging from insufficient liquidity that may be resolved through the provision of further financial accommodation or capital raising to hopeless insolvency with little or no prospect of trading out of financial difficulty. Therefore, the assumed present insolvency of the Employer does not provide a basis for making the further assumption that the Employer will not have the ability to perform its future obligations under the EPC Contract when the time comes for performance of those obligations. However, that does not mean that there is no reasonable prospect of the Acciona parties demonstrating on the balance of probabilities that the Employer will not be able to perform in the future. 178 Therefore, the real question is whether assuming the Employer does not and will not have the ability to perform its future obligations under the EPC Contract, would that fact provide a discretionary defence to the equitable relief the Employer claims. That assumed fact means the Employer will not be able to pay any amounts certified as due as interim payments or any amount certified as due in the Final Certificate. Separately, if there is a Dispute Notice and that dispute is resolved in favour of the Acciona parties, the Employer will not be able pay further amounts due to the Acciona parties in debt or for damages for breach of contract or repay any amount paid through the Employer having recourse to a Bank Guarantee. 179 On the assumption of a true inability of the Employer to perform its future substantive and essential obligations I am troubled by the notion that Equity would insist on the Acciona parties performing an independent obligation to deliver Bank Guarantees that forms part of contract machinery that is intended to affect the parties' rights on an interim and temporary basis when the effect of the mandatory order would be to arm the Employer with the ability to render interim rights effectively permanent and final rights of negligible or much diminished value. While the EPCC accepted the risk at the outset that the Employer would become insolvent and retain the right to have recourse to Bank Guarantees while insolvent, on the assumed facts, the Employer comes to Equity knowing that the risk is now a reality. The question is whether in the assumed circumstances it would be more just to leave the Employer to its rights at common law given that its damages for the breach are likely minimal, whereas the potential for harm to the Acciona parties is significant. These circumstances appear to raise, at least, the spectre of hardship and whether the Employer as a party seeking equity is doing equity. For these reasons, I am not satisfied that on the assumed facts alone the Acciona parties have no reasonable prospect of defending the Employer's claimed equitable relief.

Should defence of the contract claim be made conditional? 180 Notwithstanding that I am not satisfied the Employer should have summary judgment for the equitable relief claimed, the practical effect of refusing that relief at this time may be to determine the proceedings finally in the Acciona parties' favour. Given the nature of the issues raised by an allegation of insolvency, I apprehend that there will be a need for discovery and expert evidence to determine that question which will run in parallel with the proceedings on the cross-claim. In the circumstances, it is highly unlikely that a judgment would be delivered in the proceedings before the end of this year or before the apparent current estimated date for completion of the work under the EPC Contract. As a consequence, if the Employer is ultimately successful in the proceedings, refusing relief at this time may make such a victory pyrrhic. Accordingly, there is a risk that refusing relief will result in an unjust outcome. 181 Section 23 of the Federal Court Act confers power on the Court to make orders of such kinds, including interlocutory injunctions, as it thinks appropriate. Although there has been a degree of difference of view in the past, it is now settled that the principles applicable for the grant of a mandatory interlocutory injunction are the same as the principles that apply for a prohibitory interlocutory injunction: see, e.g., Mineralogy Pty Ltd v Sino Iron Pty Ltd [2016] WASCA 105 at [76]-[85] (Newnes JA, McLure P and Corboy J, agreeing). Those principles are well-established and need not be restated at any length. 182 The Full Court set out the 'correct approach' in Samsung Electronics Co Ltd v Apple Inc [2011] FCAFC 156; (2011) 217 FCR 238 at [52]-[74]. Applicants must first show that they have a prima facie case in the sense of 'a sufficient likelihood of success to justify in the circumstances the preservation of the status quo pending the trial': Australian Broadcasting Corporation v O'Neill [2006] HCA 46; (2006) 227 CLR 57 at [65] (Gummow and Hayne JJ, Gleeson CJ and Crennan J agreeing at [19]). This is commonly referred to as a serious question to be tried. What will be sufficient will depend on 'the nature of the rights [the applicant] asserts and the practical consequences likely to flow from the order he seeks': Beecham Group Ltd at 622. Secondly, a party must also demonstrate that the balance of convenience and justice favour the grant of an injunction. 183 There are certain kinds of cases in which, for the purpose of seeing where the balance of convenience lies, it is desirable for the Court to evaluate the strength of the applicant's case for final relief. One class of case where that principle applies is where the decision to grant or refuse an interlocutory injunction will in a practical sense determine the substance of the matter in issue: Kolback Securities Ltd v Epoch Mining NL (1987) 8 NSWLR 533 at 536 (McLelland J). The grant of a mandatory interlocutory injunction in favour of the Employer would have that effect. However, as already mentioned, refusal to grant an injunction may also have that effect. For the reasons already given, I am satisfied that the Employer has a relatively strong case for final relief. 184 In the circumstances the observations of Hoffmann J in Films Rover International Ltd v Cannon Film Sales Ltd [1986] 1 WLR 670 at 680 are pertinent: … I think it is important in this area to distinguish between fundamental principles and what are sometimes described as 'guidelines', ie useful generalisation about the way to deal with the normal run of cases falling within a particular category. The principal dilemma about the grant of interlocutory injunctions, whether prohibitory or mandatory, is that there is by definition a risk that the court may make the 'wrong' decision, in the sense of granting an injunction to a party who fails to establish his right at the trial (or would fail if there was a trial) or alternatively, in failing to grant an injunction to a party who succeeds (or would succeed) at trial. A fundamental principle is therefore that the court should take whichever course appears to carry the lower risk of injustice if it should turn out to have been 'wrong' in the sense I have described. The guidelines for the grant of both kinds of interlocutory injunctions are derived from this principle. 185 Having regard to the applicable principles and the matters referred to earlier in these reasons I am satisfied that it is appropriate, subject to appropriate safeguards to preserve the status quo, to make an order for interlocutory mandatory injunction compelling the Acciona parties to deliver to the Employer replacement(s) of the Performance Bond. It is the course which carries the lower risk of injustice should it turn out that I have made the 'wrong' decision in the sense Lord Hoffman describes in Films Rover International.

Disposition 186 Subject to hearing the parties on the final form of the orders, I will make orders along the following lines: (1) The lawyers representing the Employer and the Acciona parties in the proceeding must open a bank account with an Australian trading bank registered pursuant to the Banking Act 1959 (Cth) in their joint names (Stakeholder Account). (2) Any funds paid into the Stakeholder Account be held on trust by the account holders for the benefit of the Employer and the Acciona parties pending determination of the party entitled to the funds. (3) Any payment out of the Stakeholder Account be subject to and at the direction of the Court. (4) Upon each of the Employer and the Security Trustee undertaking to the Court that, if it has recourse to the Performance Bond, it must direct the issuer bank to pay the amount demanded under the Performance Bond into the Stakeholder Account; the Acciona parties do all things reasonably necessary to procure one or more irrevocable and unconditional bank guarantee in favour of the Employer and the Security Trustee in the form set out in Schedule 20 to the EPC Contract or in a form other approved by the Employer in the aggregate sum of AUD 38,631,149.64 and, thereafter, immediately deliver such bank guarantee(s) to the Employer (Performance Bond). 187 Additionally, I will hear the parties on the extent to which, having regard to these reasons, the declaratory relief sought concerning the breach of contract is necessary and appropriate. I will also hear the parties on the question of costs. I certify that the preceding one hundred and eighty-seven (187) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Feutrill.

SCHEDULE OF PARTIES WAD 72 of 2024 Respondents Fourth Respondent: HITACHI ZOSEN INOVA AG SWITZERLAND STATE REGISTERED COMPANY NUMBER CHE-105.894.972 Fifth Respondent: HITACHI ZOSEN INOVA AUSTRALIA PTY LTD ACN 603 901 382

Corporations Act 2001(Cth)ss 95A, 477(2B)

Evidence Act 1995(Cth)ss 131, 131(1), 131(1)(a)

Federal Court of Australia Act 1976(Cth)ss 23, 31A, 31A(1), 33V, 37AE, 37AF, 37AF(1)(b)(iv), 37AF(2), 37AG, 37AG(1)(a), 37AH, 37AI, 37M

Federal Court Rules 2011(Cth)rr 1.32, 1.40, 1.34, 2.32, 8.05(2)(b), 15.06(1)(a).

tion [1996] 4 All ER 563 Carydis v Merrag Pty Ltd [2007] NSWSC 1220 Clime Capital Limited v UGL Pty Limited (No 2) [2020] FCA 257 Clough Engineering Limited v Oil and Natural Gas Corporation Limited [2008] FCAFC 136; (2008) 249 ALR 458 Coles Supermarkets Australia Pty Ltd v Australian Retail Freeholds Pty Ltd (1996) 16 WAR 282 Co-operative Insurance Society Ltd v Argyll Stores (Holdings) Ltd [1998] AC 1 Coulls v Bagot's Executor & Trustee Co Ltd [1967] HCA 3; (1967) 119 CLR 460 CPB Contractors Pty Ltd v JKC Australia LNG Pty Ltd [2017] WASC 112 CPB Contractors Pty Ltd v JKC Australia LNG Pty Ltd (No 2) [2017] WASCA 123 Dowty Boulton Paul Ltd v Wolverhampton Corporation [1971] 2 All ER 277; [1971] 1 WLR 204 Electricity Generation Corporation t/as Verve Energy v Woodside Energy Ltd [2014] HCA 7; (2014) 251 CLR 640 Esso Australia Resources Ltd v Federal Commissioner of Taxation [1999] HCA 67; (1999) 201 CLR 49 Euromark Ltd v Smash Enterprises Pty Ltd [2019] VSC 299 Ewing International LP v Ausbulk Ltd (No 2) [2009] SASC 381; (2009) 267 LSJS 107 Field v Commissioner for Railways (NSW) [1957] HCA 92; (1957) 99 CLR 285 Films Rover International Ltd v Cannon Film Sales Ltd [1986] 1 WLR 670 Fletcher Construction Australia Ltd v Varnsdorf Pty Ltd [1998] 3 VR 812 Green v Sommerville [1979] HCA 60; (1979) 141 CLR 594 Gurney v Gurney (No 2) [1967] NZLR 922 Isenberg v East India House Estate Co Ltd (1863) 3 De GJ & Sm 263; (1863) 46 ER 637 JC Williamson Ltd v Lukey [1931] VLR 221; (1931) 45 CLR 282 Jefferson Ford Pty Ltd v Ford Motor Company of Australia Ltd [2008] FCAFC 60; (2008) 167 FCR 372 Kay v Playup Australia Pty Ltd [2020] NSWCA 33; (2020) 19 BPR 40-037 Kolback Securities Ltd v Epoch Mining NL (1987) 8 NSWLR 533 Laing Management Ltd v Aegon Insurance Co (UK) Ltd [1997] 86 BLR 70; (1997) 55 Con LR 1 Laws v Australian Broadcasting Tribunal [1990] HCA 31; (1990) 170 CLR 70 Liberty Mercian Ltd v Cuddy Civil Engineering Ltd [2013] EWHC 4110 (TCC) Liberty Mercian Ltd v Cuddy Civil Engineering Ltd [2014] EWHC 3584 (TCC) Lindholm (liquidator), in the matter of Aviation 3030 Pty Ltd (in liq) [2021] FCA 1244 Liu v Fairfax Media Publications Pty Ltd [2012] NSWSC 1352; (2012) 84 NSWLR 547 Mineralogy Pty Ltd v Sino Iron Pty Ltd [2016] WASCA 105 Minister for Immigration and Border Protection v Egan [2018] FCA 1320 Motorola Solutions Inc v Hytera Communications Corporation Ltd (No 2) [2018] FCA 17 Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd [2015] HCA 37; (2015) 256 CLR 104 Naude v DRA Global Limited [2023] FCA 493 Newcombe v Newcombe (1934) 34 SR (NSW) 446 Oceanbulk Shipping and Trading SA v TMT Asia Ltd [2011] 1 AC 662 Pakenham Upper Fruit Co Ltd v Crosby [1924] HCA 55; (1924) 35 CLR 386 Quad Consulting Pty Ltd v David R Bleakley & Associates Pty Ltd (1990) 27 FCR 86 Pacific Carriers Ltd v BNP Paribas [2004] HCA 35; (2004) 218 CLR 451 Pigozzo v Mineral Resources Ltd [2022] FCA 1166 Pihiga Pty Ltd v Roche [2011] FCA 240: (2011) 278 ALR 209 Re Daintrey; Ex parte Holt [1893] 2 QB 116 Re Turf Enterprises Pty Ltd [1975] Qd R 266 Reynolds v JP Morgan Administrative Services Australia Limited (No 2) [2011] FCA 489; (2011) 193 FCR 507 Rodgers v Rodgers [1964] HCA 25; (1964)114 CLR 608 Rush & Tompkins Ltd v Greater London Council [1989] AC 1280 Rush v Nationwide News Pty Ltd [2018] FCA 357; (2018) 359 ALR 473 Samsung Electronics Co Ltd v Apple Inc [2011] FCAFC 156; (2011) 217 FCR 238 Shercliff v Engadine Acceptance Corporation Pty Ltd [1978] 1 NSWLR 729 Sino Iron Pty Ltd v Mineralogy Pty Ltd (No 2) [2017] WASCA 76; (2017) 55 WAR 36 Spencer v The Commonwealth [2010] HCA 28; (2010) 241 CLR 118 Sudbrook Trading Estate Ltd v Eggleton [1983] 1 AC 444 Sugar Australia Pty Ltd v Lend Lease Services Pty Ltd [2015] VSCA 98 Sydney Consumers' Milk & Ice Co Ltd v Hawkesbury Dairy & Ice Society Ltd (1931) 31 SR (NSW) 458 Telstra Corporation Ltd v First Netcom Pty Ltd [1997] FCA 860; (1997) 78 FCR 132 The Good Living Company Pty Limited ATF the Warren Duncan Trust No 3 v Kingsmede Pty Ltd [2019] FCA 2170 ThoughtWare Australia Pty Limited v IonMy Pty Ltd [2023] FCA 906 Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52; (2004) 219 CLR 165 Unilever Plc v Procter & Gamble Co [2000] 1 WLR 2436 Verge v Devere Holdings Pty Ltd [2009] FCA 832; (2009) 258 ALR 464 Walker v Wilsher (1889) 23 QBD 335 Western Australia v Southern Equities Corporation Ltd (in liq) (1996) 69 FCR 245 Westport Insurance Corporation v Gordian Runoff Ltd [2011] HCA [37]; (2011) 244 CLR 239 Wilkie v Gordian Runoff Ltd [2005] HCA 17; (2005) 221 CLR 522 Wilkinson v Clements (1872) LR 8 Ch App 96 Wilson v Northampton & Banbury Junction Railway Company (1874) LR 9 Ch App 279 Wood Hall Ltd v Pipeline Authority [1979] HCA 21; (1979) 141 CLR 443

At a glance

Court

Decision date

Before

Source

Judgment (22 paragraphs)

Parties

Legislation Cited (7)

Cases Cited (91)

Cited By (2)