SAMSUNG C & T CORPORATION -v- LAING O'ROURKE AUSTRALIA CONSTRUCTION PTY LTD [2015] WASC 83 (9 March 2015)

Supreme Court of WA|2015-03-09|Before: Edelman J

Sofronoff W 'Interlocutory Injunctions Having Final Effect' (1987) 61 ALJ 341

1 This is an urgent application by the plaintiff, Samsung, for an interlocutory injunction. Samsung's application alleged that this matter was of such urgency that it needed to be heard and decided immediately. The application was for orders including a requirement that the defendant, Laing O'Rourke, deliver up construction materials (liners and structural steel modules) that Samsung needs for the performance of its duties as a principal on a massive mining project. The mining project is the Roy Hill Iron Ore Project in the Pilbara region of Western Australia.

3 Samsung's principal, Roy Hill Holdings Pty Ltd, explained the financial cost impact to the project of a delay, being $77 million a month and rising. Roy Hill Holdings will be exposed to the risk of losses on sale contracts for the sale of the iron ore. Native title groups will not receive payments for the delay period. State royalties will be delayed. Operations personnel will not be recruited and if the delay continues for more than six months then employees may be made redundant.

4 Although submissions by senior counsel for Laing O'Rourke were, as one would expect, comprehensive and, in oral argument, crystal clear, it is difficult to understand why Laing O'Rourke opposed this application. Laing O'Rourke does not need the materials. It claims a right to possess them which is asserted only in order to obtain payment of money but which, on the evidence on this application, has not fallen due. A simpler course may have been for Laing O'Rourke to release the materials to Samsung and to focus upon rapid determination of the underlying dispute including any necessary interlocutory applications to expedite the process. Even from the perspective of Laing O'Rourke's interests only, by retaining the construction materials Laing O'Rourke exposes itself to potentially significant liability for the tort of conversion, for breach of a clause of novation agreements, and possibly for the tort of inducing breach of contract.

5 Although there was conflicting evidence about the extent of any delay caused by Laing O'Rourke's retention of the construction materials, I accept that the application was urgent. Although extremely comprehensive submissions were made, and 16 affidavits filed (some running to hundreds of pages) I do not purport to express any more than a preliminary view about the strength of Samsung's case. This is because the submissions on legal matters of construction were, necessarily, highly compressed into a half day. It is, however, necessary to express a preliminary view about the strength of Samsung's case in circumstances in which the interlocutory injunction sought would give Samsung the ultimate relief that it seeks.

6 My preliminary view is that Samsung's case is very strong. Further, the balance of convenience strongly favours the grant of an injunction requiring delivery of the materials from Laing O'Rourke to Samsung and negative injunctions to restrain Laing O'Rourke from interfering with the construction materials.

A preliminary matter: leave to intervene by Roy Hill Holdings

7 Roy Hill Holdings sought leave to intervene, on the basis that its rights and interests were affected.[1] Leave was opposed by Laing O'Rourke. Senior counsel for Laing O'Rourke relied upon the decision of the High Court in Roadshow Films Pty Ltd v iiNet Ltd[2] that

A non-party whose interests would be directly affected by a decision in the proceeding, that is one who would be bound by the decision, is entitled to intervene to protect the interest likely to be affected. A non-party whose legal interest, for example, in other pending litigation is likely to be affected substantially by the outcome of the proceedings in this Court will satisfy a precondition for leave to intervene. Intervention will not ordinarily be supported by an indirect or contingent affection of legal interests following from the extra-curial operation of the principles enunciated in the decision of the Court or their effect upon future litigation.

8 Senior counsel for Laing O'Rourke raised the spectre of court hearings involving contractors and subcontractors grinding nearly to a standstill as the principal sought leave to intervene in each case. But no such general principle was suggested by Roy Hill Holdings. Each application for intervention must be decided on its own circumstances. In any event, a general principle which prevented a contractor, as third party, from intervening on an interlocutory injunction application would give rise to the absurdity that although the interests of third parties may be a bar to the award of an interlocutory injunction, the Court would be precluded from hearing evidence from those very parties about the effect on their interests. It is not sufficient to suggest, as senior counsel for Laing O'Rourke did, that submissions about the interests of the third party could be made, as Samsung proposed in this case, by a party adopting the evidence of the third party. The third party, who is in the best (and sometimes the only) position to lead evidence about its interests, may be essential for the orderly conduct of the proceedings.

9 In this case, the relevant circumstances are that Roy Hill Holdings is a third party whose evidence is that its rights are substantially affected by the grant or refusal of an interlocutory injunction. In that sense, its rights are directly affected by the decision of this Court, not merely indirectly affected by the extra-curial operation of the principles enunciated in the decision of the Court.

10 In one sense, Roy Hill Holdings' interest in these proceedings goes beyond the circumstance of merely being a third party affected by the grant or refusal of an interlocutory injunction. As senior counsel for Roy Hill Holdings submitted, Roy Hill Holdings claims to be entitled to the very materials in dispute under the Head Contract between Roy Hill Holdings and Samsung. In that sense, its application might even have been properly framed as an application to be joined fully as a party. Roy Hill Holdings is also potentially affected in circumstances in which it may be arguable that a wrongful refusal by Laing O'Rourke to provide the construction materials could amount to the tort of inducing a breach of contract by Samsung with Roy Hill Holdings.

11 For these reasons, leave was granted for Roy Hill Holdings to intervene to lead evidence about its interests as a third party, with liberty for it to seek leave to make submissions about its interests in relation to the construction materials or the tort of inducing breach of contract. That liberty was not exercised, although senior counsel for Roy Hill Holdings was clearly actively, and helpfully, engaged with the issues.

The Head Contract: Roy Hill Holdings and Samsung

12 On 30 April 2013, Roy Hill Holdings entered into a contract with Samsung. This is the Head Contract.[3]

13 The Head Contract is concerned with project works for the Roy Hill Iron Ore Project. This is a $10 billion project in the Pilbara region of Western Australia. It involves 55 million tonnes per annum (mtpa) of iron ore mining, rail and port transport.[4]

14 Under the Head Contract, Roy Hill Holdings engaged Samsung to engineer, procure, and construct the works for the Roy Hill Iron Ore Project. The contract sum was $5.59 billion.

15 The Roy Hill Iron Ore Project is currently 76% complete.[5] The date of first ore on ship is around 30 September 2015.[6]

16 As at 30 April 2013, cl 34.7 of the General Conditions of the Head Contract provided as follows:

34.7 Liquidated damages

If first ore on ship is not achieved by the date for first ore on ship, the Contractor shall be indebted to the Principal, for the liquidated damages in Item 29 for every day after the date for first ore on ship to and including the earliest of the first ore on ship date or termination of the Contract.

If an EOT is directed after the Contractor has paid or the Principal has set off liquidated damages, the Principal shall forthwith repay to the Contractor any liquidated damages paid or deducted in respect of the period to and including the revised date for first ore on ship.

The Contractor's maximum aggregate liability to the Principal for liquidated damages under this subclause 34.7 shall be limited to the amount stated in Item 29A. Subject to subclause 34.7A, if the Contractor is liable for liquidated damages under this subclause, the Principal shall not be entitled to claim common law damages in respect of the relevant period of delay.

17 Item 29 provides for a rate of liquidated damages at 1% of the contract sum per month (applied on a daily basis). The affidavit of Ms Woo asserted that 1% of the contract sum is $55,900,000.

18 Item 29A of the General Conditions of the Head Contract provides that the aggregate cap of liquidated damages for delay is 7% of the contract sum (as adjusted in accordance with the contract).

19 Clause 34.7 of the Head Contract (as varied) provides that the date of first ore on ship was 30 September 2015 and that a grace period of 30 days applied from the date for first ore on ship during which no liquidated damages would accrue.

20 Clause 34.6 of the Head Contract provides for an incentive bonus from Roy Hill Holdings to Samsung if Samsung achieves first ore on ship on or before the grace period date. The maximum incentive is $78 million.

21 As at 18 February 2015, shortly after termination of the subcontract, Samsung had been paid 73.5% of the price payable under the Head Contract for structural steel fabrication works.[7]

22 On 21 February 2014, Laing O'Rourke and Samsung entered into a subcontract.

23 The subcontract was concerned with that part of the Head Contract which was described in the subcontract as 'Package 3 - Port Landside'. It involved the construction of structural steel and associated mechanical piping, electrical, and instrumentation works at the project's port.[8]

24 The subcontract required Laing O'Rourke to carry out various work described as Landside Works.

25 Clause 2.1 of the subcontract provided for Laing O'Rourke to carry out and complete the Subcontract Works (which senior counsel for Laing O'Rourke accepted to include the provision and supply of materials).[9] Samsung was obliged to pay the subcontract sum to Laing O'Rourke, adjusted by any additions or deductions.

26 At the time of entry into the subcontract, the subcontract sum was $205,398,786.[10] Laing O'Rourke says that this was subsequently adjusted to around $212 million.

27 Further provisions of the subcontract relevant to this application are discussed in considerable detail below. Important for this application is that the subcontract provided for 'termination for convenience' in cl 39A.1.

28 On 10 February 2015, Samsung terminated the subcontract for convenience. On the evidence before the Court, Samsung's conduct posttermination has not always been conducive to an orderly, congenial, and smooth commercial post-termination transition.[11]

29 On 21 February 2015, Samsung and Laing O'Rourke entered an Interim Deed.[12] The Interim Deed set out some of the post-termination rights and obligations of the parties. In particular, cl 2 provided for payment obligations as follows.

2.1 The Contractor must, pay to the Subcontractor:

(i) AUD30 million upon execution of this Deed, this being a pre-condition to all other obligations under this Deed;

(ii) AUD10 million upon novation of the Critical Novation Agreements;

(iii) AUD5 million upon novation of the Other Novation Agreements.

(b) Costs due to the Subcontractor under clause 39A.2 of the Subcontract including:

(i) for Subcontract Works carried out prior to the date of termination, being the amount which would have been payable if the Subcontract had not been terminated and the Subcontractor submitted a Payment Claim for Subcontract Works carried out to the date of termination;

(ii) the cost of plant or materials reasonably ordered by the Subcontractor for the Subcontract Works for which the Subcontractor is obliged to pay under the Subcontract provided the value of the plant or materials is not included in the amount payable under clause (i);

(iii) the reasonable costs of removing from Site all labour, Constructional Plant and other things used in connection with WUSC (Demobilisation Costs);

(iv) the cancellation charge for the Sub-subcontracts and Subcontractor's Consultants,

(c) the costs for Subcontract Works carried out on or from the date of termination of the Subcontract to the date of novation of the Sub-subcontracts (including the Critical Novation Agreements and the Other Novation Agreements). The costs will be assessed by reference to the costs which would have been payable to the Subcontractor for the Subcontractor works at the date of novation of the Sub-contract, if the Subcontract had not been terminated. (Pre-Novation Costs);

2.2 The payment of moneys referred to in clause 2.1(a) shall be on account only and shall not constitute:

(a) evidence that the Subcontractor has completed any WUSC; or

(b) a release or discharge by either party of any claim.

30 Samsung has paid $40 million to Laing O'Rourke, on account, under the Interim Deed. The remaining $5 million is to be paid on account when the Other Novation Agreements are novated.

31 Prior to the termination of the subcontract, Laing O'Rourke had entered into sub-subcontracts. The relevant sub-subcontracts were with:

(i) Civmec Construction and Engineering Pty Ltd which was responsible for constructing bins and hoppers, using liners supplied by Bradken Resources Pty Ltd[13] and for the supply, fabrication, surface treatment and assembly of lump and fines bins and chutes;[14]

(ii) Bradken Resources Pty Ltd which would provide Duaplate D80 Liners for the bins and hoppers;[15] and

(iii) BJC Heavy Industries Public Company Limited (Thailand) in relation to structural steel fabrication.[16]

32 The first sub-subcontract was for Civmec to fabricate 12 iron hopper bins for storage of iron ore and four hopper bins and spillage chutes for a facility known as the Car Dumper.[17]

33 Prior to the termination of the sub-contract Civmec had completed the fabrication of the first four hoppers and had installed the liners.[18] The completed hoppers were delivered to site at Port Hedland. The remainder of the hoppers are still in fabrication by Civmec.[19]

34 At the date the Civmec sub-subcontract was entered with Laing O'Rourke, the anticipated sub-subcontract sum was $12,790,488.[20]

35 On 20 February 2015, Laing O'Rourke novated the Civmec subsubcontract to Samsung. By this date, Civmec had completed approximately 83.5% of the work required under the sub-subcontract.

36 Laing O'Rourke claims that Samsung has only certified and paid $856,028.70 of the total $988,789.66 that Laing O'Rourke has claimed in progress claims from Samsung.[21]

37 On 13 November 2014, Laing O'Rourke entered into a subsubcontract with Civmec for the supply of structural steel for chutes on the Roy Hill Iron Ore Project.[22] At the date the sub-subcontract was entered into, the anticipated sub-subcontract sum was $5,044,747.10.[23]

38 On 20 February 2015, Laing O'Rourke novated the chutes subsubcontract to Samsung.[24]

39 By the time of the novation of the sub-subcontract, Civmec had completed 85.1% of the work required.[25]

40 Laing O'Rourke has claimed payment of $1,149,488.72 from Samsung. Samsung has only certified and paid Laing O'Rourke $450,056.23.[26]

41 Samsung's designs required the hopper bins and spillage chutes to be lined with replaceable metal liners to prolong their life.[27]

42 On 17 October 2014, Laing O'Rourke entered into a subsubcontract with Bradken for the supply of these steel liners.[28]

43 At the date the Bradken sub-subcontract was entered into, the anticipated sub-subcontract sum was $10,006,045.[29] Under the subsubcontract Bradken was to deliver the liners to Civmec's premises in Henderson at Perth.[30]

44 On 14 February 2015, Laing O'Rourke novated the Bradken subsubcontract to Samsung.[31]

45 By 20 February 2015, Bradken had completed 78.24% of the work required under the sub-subcontract.[32]

46 By the end of December 2014, Laing O'Rourke had claimed payment of $2,363,827.95 from Samsung, of which Samsung certified and paid $1,659,974.37. Laing O'Rourke's progress claims for January 2015 and February 2015 have not been certified by Samsung.[33]

47 On 6 May 2014, Laing O'Rourke entered a sub-subcontract with BJC. The BJC sub-subcontract was for fabrication and supply of structural steel.[34]

48 At the date the sub-subcontract was entered into, the anticipated subsubcontract sum was around $21.2 million ($19.7 million after discount and contingency).

49 On 14 February 2015, Laing O'Rourke novated the BJC subsubcontract to Samsung.[35]

50 In relation to the structural steel, as at December 2014, Laing O'Rourke had made payment claims to Samsung for around $68.8 million of which Samsung only certified and paid around $34 million.[36]

51 Under the BJC sub-subcontract two shipments of structural steel for the project were made to Laing O'Rourke.[37] These have been described on this application as Shipment 4 and Shipment 5.

52 Shipment 4 arrived in Port Hedland on 1 February 2015.[38]

53 Shipment 5 was expected to arrive at the Port Hedland port on or around Thursday 5 March 2015.[39] Shipment 5 contains further 'steel structures' required for the project.

Laing O'Rourke's retention of the construction materials and their value

54 On 25 February 2015, Laing O'Rourke removed from Civmec's site some of the liners that had been supplied by Bradken for the bins and hoppers.[40]

55 Following the arrival of 2,112 gross tonnes of structural steel in Shipment 4, Laing O'Rourke arranged for Agility, a logistics provider, to deliver 1,400 gross tonnes of the structural steel to the project site.[41] The remaining structural steel remained on the dock.[42]

56 Sometime between 20 February 2015 and 28 February 2015, Laing O'Rourke removed the remainder of the shipment of structural steel to a stockyard in Port Hedland called the Bulls Buck yard.[43]

57 Arrangements were also made for Agility to take the cargo from Shipment 5 to the Bulls Buck yard after unloading the vessel and the discharge operations from the vessel were due to commence on Thursday 5 March 2015.[44] I was informed from the bar table that the discharge operations had not yet commenced on 6 March 2015.

58 As I explain below, Laing O'Rourke retains or, in the case of Shipment 5, intends to retain the construction materials because it has not been paid all the amounts which it claims for these materials. After some different amounts were suggested in oral submissions, Laing O'Rourke provided evidence that those amounts were as follows:[45]

59 The Civmec bins and chutes were included because Laing O'Rourke said that some of the liners had been incorporated into bins and chutes so that an order requiring delivery of the liners 'for use in lump and fine bins and for chutes' would also require Laing O'Rourke to deliver the bins and chutes.[46] I was informed from the bar table that the Civmec bins and chutes were not currently retained by Laing O'Rourke. They are apparently in the possession of Civmec. This may affect the determination of issues such as any claim for conversion but, for the reasons explained below, whether the Civmec bins and chutes are in the possession of Laing O'Rourke or another contractor is unlikely to affect whether title has passed from Laing O'Rourke to Samsung. It was not suggested that the Civmec bins and chutes had been incorporated into the Subcontract Works.

The alleged amount due of $34,753,000 was refined, and altered, in subsequent affidavit evidence as follows:[47]

Samsung's Certification and payments made[48]

60 As I have explained, Samsung has paid $40 million under the Interim Deed following termination on account to Laing O'Rourke. The $40 million is available to meet, and exceeds, Laing O'Rourke's remaining claims for the construction materials of $33,948,317.[49]

61 However, Laing O'Rourke wishes to allocate the $40 million paid by Samsung to other amounts which Laing O'Rourke claims from Samsung (although there may be a dispute concerning whether those claims have been properly made, as well as a dispute about the amounts). Laing O'Rourke claims a total outstanding amount of nearly $79 million (net of future claims such as for termination cost but including the claims for the construction materials[50]) as the chart on the following page illustrates.

62 Laing O'Rourke effectively wishes to allocate the $40 million payment on account for the additional uncertified claims that it says that it has, or will have, within the approximately $79 million that Laing O'Rourke still claims.

63 In other words, within the $79 million that Laing O'Rourke claims, it does not want to use the interim payment on account to discharge any claims concerning the construction materials (of up to $34 million). Instead, Laing O'Rourke wants to use the interim payment to discharge other claims, if certified, for up to $45 million. This will mean that after allocation of the $40 million payment on account, there will remain an extant claim by Laing O'Rourke which will be comprised almost exclusively of the amounts in relation to the construction materials it retains. That amount would then be subject to set off for claims made by Samsung against Laing O'Rourke. It will also be subject to reduction if the other claims were reasonably reduced by Samsung's representative.

Principles concerning mandatory and prohibitory interlocutory injunctions

64 The principles concerning whether interlocutory injunctions are awarded are well known. There was no controversy on this application concerning these principles. In summary, as I explained in Workplace Access and Safety Ltd v Mackie,[51] the relevant considerations are:

(i) whether there is a serious question to be tried or prima facie case,

(ii) whether damages are adequate for the plaintiff, and

(iii) whether the balance of convenience favours the grant of the interlocutory injunction.

65 The consideration of a prima facie case and the balance of convenience are not independent. As the apparent strength of the applicant's case diminishes, the balance of convenience moves against the making of an order.[52]

66 Also, the consideration of adequacy of damages is not independent of the balance of convenience. A court will ask whether damages are an adequate remedy, but this question is not an essential precondition that an applicant must satisfy; instead, the adequacy of damages is treated as a matter relating to the balance of convenience.[53]

67 These principles apply whether the injunction sought is a mandatory injunction rather than a prohibitory injunction.[54] It has sometimes been said that a mandatory injunction should be granted only if the court has a high degree of assurance that the plaintiff will succeed at trial. But statements to this effect should be understood merely as focusing attention to the consequences in some mandatory injunction cases which might disturb the status quo ante and cause prejudice to the respondent.[55]

68 In particular, if the grant of a mandatory injunction has the effect of determining an issue without a full hearing then this is a relevant, and sometimes very significant, consideration which can militate against the award of a mandatory injunction.[56]

A serious question to be tried The provisions concerning ownership of the materials

69 Clause 29A of the subcontract is entitled 'Transfer of Ownership'. It provides as follows:

29A Transfer of ownership

(a) Ownership of materials, plant, equipment and other items supplied under this Subcontract (other than Construction Plant) will transfer to the Contractor, free of any Security Interest:

(i) at the time of the making of payment by the Contractor under the Subcontract which is attributable (either in whole or in part) to the relevant materials, plant, equipment or other item;

(ii) when the item is delivered to the Site; or

(iii) when the item is incorporated into the Subcontract Works,

whichever occurs first.

(b) Nothing in clause 29A(a) limits or affects clauses 14.1 and 14.3 and notwithstanding that ownership of any item may have passed to the Contractor, the Subcontractor shall still ensure that the item is properly stored (and in the case of items being transported to the Site, adequately packaged), labelled the property of the Principal (unless otherwise Directed) and adequately protected and insured.

70 Laing O'Rourke submits that since the construction materials were not delivered to the Site, and were not incorporated into the Subcontract Works, ownership to those materials could only pass at the time of Samsung making payment for them.

71 The assumption made by Laing O'Rourke is that cl 29A remains operative after termination. There is no express provision which preserves the operation of cl 29A after termination, unlike other express provisions. As to those other express provisions, this application was conducted on the basis that it is possible, by agreement, for parties to provide that the operation of a clause will survive termination. At least where that termination is, as it is here, due to a contractual right to terminate, I am content to proceed on this basis.

72 Laing O'Rourke also relies upon the costs provisions consequential upon termination for convenience. In particular, the provision that concerns title to materials after termination. That provision provides that title to materials passes to Samsung upon payment of the cost of plant or materials reasonably ordered by Laing O'Rourke for the Subcontract Works for which Laing O'Rourke is legally bound to pay (with the amount as reasonably determined by Samsung's representative). Laing O'Rourke's primary submission, however, was that the amounts that it claimed were not amounts for the Subcontract Works for which Laing O'Rourke is legally bound to pay.

39A Termination for convenience

39A.l Right to terminate

Without prejudice to any of the Contractor's other rights or entitlements or powers under the Subcontract, the Contractor:

(a) may at any time for its sole convenience, including where the Main Contract has been terminated, by written notice to the Subcontractor terminate the Subcontract from the date stated in the notice; and

(b) may thereafter either itself or by third parties complete the uncompleted part of WUSC [the subcontract works].

The termination of the Subcontract by the Contractor pursuant to this clause 39A.l shall be without prejudice to the rights of either party to recover damages in respect of any prior breach of contract by the other party.

39A.2 Costs

If the Contractor terminates the Subcontract under clause 39A.l, the Subcontractor:

(a) subject to clause 37.8 [right of set-off which survives termination of the subcontract] and the limitations (if any) set out in clause 6 of the Formal Instrument of Agreement, shall be entitled to payment of the following amounts as reasonably determined by the Contractor's Representative:

(i) for Subcontract Works carried out prior to the date of termination the amount which would have been payable if the Subcontract had not been terminated and the Subcontractor submitted a Payment Claim for Subcontract Works carried out to the date of termination;

(ii) the cost of plant or materials reasonably ordered by the Subcontractor for the Subcontract Works for which the Subcontractor is legally bound to pay provided that:

(A) the value of the plant or materials is not included in the amount payable under clause 39A.2(a)(i); and

(B) title in the plant and materials shall vest in the Contractor upon payment;

(iii) the reasonable cost of removing from the Site all labour, Constructional Plant and other things used in connection with WUSC [the subcontract works],

(iv) the cancellation charge for the Sub-subcontracts and Subcontractor's Consultants.

but in no case shall the total amount payable to the Subcontractor under this clause 39A.2(a), when added to other amounts already paid and payable to the Subcontractor, be more than the Subcontract Sum as adjusted in accordance with the Subcontract; and

(i) take all steps possible to mitigate the costs referred to in clauses 39A.2(a)(ii), (iii) and (iv);

(ii) immediately hand over to the Contractor all copies of any documents provided by the Contractor under this Subcontract; and

(iii) cause to be delivered to the Contractor any plant and materials referred to in clause 39A.2(a)(ii) or any unfixed plant and materials for which the Contractor has paid pursuant to clause 37.2.

The amount to which the Subcontractor is entitled under this clause 39A.2 shall be a limitation upon the Contractor's liability to the Subcontractor arising out of, or in any way in connection with, the termination of the Subcontract and the Subcontractor shall not make any Claim against the Contractor arising out of, or in any way in connection with, the termination of the Subcontract other than for the amount payable under this clause 39A.2 (as may be limited by clause 6 of the Formal Instrument of Agreement).

After the Subcontractor has satisfied its obligations under this clause 39A.2, the Contractor shall release all Securities to the Subcontractor then held by the Contractor.

This clause 39A.2 shall survive termination of the Subcontract by the Contractor under clause 39A.l.

75 First, the amounts claimed by Laing O'Rourke for the construction materials (of around $34 million) are amounts to be assessed as amounts 'as reasonably determined by the Contractor's [Samsung's] Representative'. They have not yet been finally assessed.

76 Secondly, the terms of cl 39A.2(a)(i) are concerned with an amount (reasonably determined by Samsung's representative) for subcontract works, not necessarily the cost of the Subcontract Works or the cost of materials. Senior counsel for Laing O'Rourke clarified in oral submissions that cl 39A.2(a)(i) was the subclause with which Laing O'Rourke's claim in relation to the construction materials was concerned.[57] In contrast, cl 39A.2(a)(ii) is concerned with the cost of the construction materials.

77 Thirdly, on any view the amounts claimed by Laing O'Rourke are not immediately payable, although there is a strong basis for the submission that Samsung must act with reasonable speed to assess the termination costs under cl 39A.2.

78 Laing O'Rourke relies on cl 39A.2(a)(i) because it says that work has been done on the construction materials. The definition of Subcontract Works in cl 1.1 of the subcontract is 'the whole of the work to be carried out and completed in accordance with the Subcontract, including Variations provided for by the Subcontract, which by the Subcontract is to be handed over to the Contractor'. Hence, Laing O'Rourke says that the construction materials fall within 'Subcontract Works carried out prior to the date of termination'.

79 If Laing O'Rourke is correct, (and also on the assumption that none of the construction materials was 'reasonably ordered by the Subcontractor for the Subcontract Works for which the Subcontractor is legally bound to pay' or that the amount claimed for the construction materials includes the value of the plant or materials in the amount payable under clause 39A.2(a)(i)), then the amount owed to Laing O'Rourke for the construction materials is 'the amount which would have been payable if the Subcontract had not been terminated and the Subcontractor submitted a Payment Claim for Subcontract Works carried out to the date of termination' (clause 39A.2(a)(i)).

80 Laing O'Rourke says that the application of cl 39A.2(a)(i) invokes the regime for progress claims in cl 37. Whether this is correct, or whether it invokes a methodology which would be similar to that regime, involving assessment by Samsung's representative and a possibility of arbitration of any dispute, makes no difference to the lack of an immediate entitlement to payment.

81 Under the cl 37 regime, Laing O'Rourke has no entitlement to payment until a progress claim has been submitted by Laing O'Rourke and considered by a Samsung representative. Samsung also has a right of setoff against any such payment, which right survives termination (cl 37.8). And any dispute about payment will be arbitrated. Similarly, the terms of cl 39A.2 itself contemplate some delay in payment of a claim, with a reasonable determination of the amount to be paid to be made by Samsung's representative.

82 The subcontract provided in General Condition 9.2(g) as follows:

The Subcontractor agrees to assign or novate its rights and obligations in any Sub-subcontract to the Contractor or a nominee of the Contractor and execute any documents required by the Contractor to give effect to such assignment or novation (including execution of a deed of novation substantially in the form of schedule 2 of Annexure Part D) if both:

(i) the entire Subcontract Works under the Sub-subcontract is taken out of the hands of the Subcontractor or the Contractor terminates the Subcontract for any reason; and

(ii) the Contractor Directs the Subcontractor to do so.

If:

(i) the Main Contract is terminated; or

(ii) the entirety of WUSC [subcontract works] is taken out of the hands of the Contractor under the Main Contract,

the Subcontractor shall, after the Principal has Directed the Subcontractor and the Contractor to do so, promptly execute a deed of novation in the form of schedule [1] of Annexure Part [D].

84 The form of deed of novation that was required to be 'promptly' executed by Laing O'Rourke, after a direction from Samsung and Roy Hill Holdings, was attached to the subcontract (see General Condition 9.3(a) and Annexure Part D - Schedule 2). It contained the following provisions.

85 By cl 2.1, the parties agreed to novate the subcontract in order to substitute Samsung in place of Laing O'Rourke.

86 In relation to Laing O'Rourke's obligations, Laing O'Rourke remains liable to the sub-subcontractor only for obligations prior to the date of novation that have been notified by the sub-subcontractor to Samsung. This is because:

(i) by cl 2.2, Samsung assumes all obligations that Laing O'Rourke has except those incurred prior to the date of novation; and

(ii) by cl 3.1(a), the sub-subcontractor releases Laing O'Rourke from all obligations and liabilities arising out of or in connection with the subsubcontract except those obligations and liabilities which have been notified by Laing O'Rourke to Samsung in accordance with cl 5.2 [the notification provision] before the Date of Novation.

87 However, in relation to Laing O'Rourke's rights, cl 3.4 provides:

[Samsung] is entitled to exercise all of the rights to which [Laing O'Rourke] was entitled in relation to the Sub-subcontract, including rights which arose before the Date of Novation.

88 Laing O'Rourke submits that it is the owner of the construction materials. It submits that it has no obligation to deliver them to Samsung and it should not be ordered to do so on an interlocutory basis.

89 The starting point is that it appears to be clear that title to the construction materials has passed to Laing O'Rourke under the subsubcontracts.

90 An example is the BJC Heavy Industries sub-subcontract, where title will generally pass in Thailand after manufacture and supply of the steel.

91 In the BJC Heavy Industries sub-subcontract:[58]

(i) title to the Goods [4,464 tonnes of steel according to particular specifications and drawings in Exhibits C and D] passes on Delivery unless specified in Item 29 (cl 16.2);

(ii) Item 29 simply says that Title to the Goods passes on Delivery;

(iii) Delivery is defined in cl 1.1 as the stage which includes when the Goods have been manufactured, produced, supplied and unloaded to the Delivery Point and assembled ready for incorporation into the project; and

(iv) Delivery Point is defined in cl 1.1 as the meaning in Item 6 which is a dock in Thailand.

92 So, in relation to steel supplied under the BJC Heavy Industries subsubcontract, Laing O'Rourke had title to that steel when it reached the Delivery Point in Thailand.

93 Under clause 29A of Laing O'Rourke's subcontract with Samsung, ownership of the materials, plant, equipment or other items supplied under the subcontract passes from Laing O'Rourke to Samsung on the happening of whichever occurs first:

(i) at the time of the making of the payment by [Samsung] under the Subcontract which is attributable (either in whole or in part) to the relevant materials, plant, equipment or other item;

(iii) when the item is incorporated into the Subcontract Works.

94 Laing O'Rourke submits that since the construction materials which it retains were not delivered to the Site (because it has not permitted delivery), and because they have not been incorporated into the Subcontract Works, title to them cannot pass to Samsung until Samsung pays for them in full under the subcontract.

95 Laing O'Rourke says that cl 29A means that title will pass to the entirety of the materials if there is entire payment which is attributable to the materials, and title will pass to the relevant part of the materials where there is entire payment attributable to that relevant part of the materials.

96 It is common ground that each category of the construction materials, as a whole, has been paid for in part by Samsung (by payments of $20.8 million as seen in the chart at [59] above). But the evidence on this application does not establish that Samsung has attributed that payment to any particular materials such as particular items of structural steel.

97 Laing O'Rourke says that until Samsung makes payment for the entirety of the construction materials, or unless it can attribute its payment to part of the construction materials, the title to those materials will not pass to Samsung.

98 Senior counsel for Laing O'Rourke then submitted, with some cogency, that the cl 39A.2 regime for calculation of amounts following termination was intended to mirror the regime prior to termination.[59] Hence, on Laing O'Rourke's submission, title will not pass to Samsung until it makes a payment for all of the materials or until it can attribute its part payments to part of the materials. Title cannot pass by either of the other means contemplated in cl 29A because Laing O'Rourke will not allow the materials to be delivered to Site, nor will it allow the materials to be incorporated into the Subcontract Works.

99 There are eight obstacles to Laing O'Rourke's submission.

100 First, a competing construction to Laing O'Rourke's construction of cl 29A is that the reference to 'in whole or in part' qualifies the payment rather than qualifying the relevant plant and materials. In other words, cl 29A permits the passage of title to materials where there has been payment in whole or in part for the particular materials.

101 A reason why Samsung's construction might be preferred to Laing O'Rourke's construction is the operation of cl 37.5.

102 On this application both parties accepted that the words 'either in whole or in part' in cl 37.5 should be construed in a manner consistently with cl 29A. Clause 37.5 provides as follows.

37.5 Unfixed plant and materials

The Subcontractor must ensure that any unfixed plant and materials that have been paid for by the Contractor are insured properly in accordance with the requirements of the Subcontract, stored and protected, and labelled the property of the Principal (unless otherwise Directed by the Contractor). Upon any payment to the Subcontractor that includes an amount which is attributable (either in whole or in part) to the relevant unfixed plant and materials, the subject plant and materials shall be the unencumbered property of the Contractor.

103 On Laing O'Rourke's construction, there is a strain in attributing the words 'in whole or in part' to the relevant unfixed plant and materials. This is because the subject matter is an amount of a payment. The words 'in whole or in part' might more naturally be attributed to the amount of the payment to Laing O'Rourke. This would also mean that the reference in the second line to 'paid for' would include a payment made in part.

104 Samsung's construction might also be supported by the commercial function of cl 37.5. Suppose Samsung made part payments under the progress payment regime towards unfixed materials which were held by Laing O'Rourke and which were the subject of further work to be done by Laing O'Rourke. On Samsung's construction of the clause, it would be Laing O'Rourke which would be obliged to insure the materials from the time of the first part payment. This might be an obligation expected of the party that controls the materials. But, on Laing O'Rourke's construction, there would be no obligation for it to insure the materials, even if 90% of the progress payments for the materials had been made by Samsung, and even though Laing O'Rourke is obliged to insure when title has passed to Samsung.

105 Secondly, it may be that the evidence of contractual context at trial could illustrate that there is difficulty or impossibility in attributing precisely a payment as being for part of materials in whole and not for other work done in relation to the subcontract. On the brief oral submissions I received on this point, it did not appear that the cl 37 regime for progress payments was one in which the subcontract contemplated that progress payments would be differentiated to the degree of particular materials so that identification of the particular materials to which title passes could be possible. If such differentiation was not required, then this might militate against Laing O'Rourke's submission that cl 29A should be construed in a manner other than its literal terms.

106 Thirdly, there is a difficulty in comprehending exactly how Laing O'Rourke's construction of cl 29A would work.

107 If Laing O'Rourke's construction requires payment by Samsung in full then the immediate question is: payment in full of what?

108 Senior counsel for Laing O'Rourke did not submit that it could mean payment in full of all of Laing O'Rourke's progress claims. Such a submission would face the obstacle that Samsung is not required to pay all of Laing O'Rourke's claims. Instead, the progress payment regime in cl 37 requires payment only of a Payment Claim which is itself based upon a Payment Certificate issued by Samsung's representative, which might depart from the amount of Laing O'Rourke's progress claim.

109 If Laing O'Rourke's construction of 'payment' is to be a reference to a payment in full of all Payment Claims, based on all Payment Certificates, in relation to those materials, then one difficulty is that it does not use any of these defined terms. Another difficulty with the construction is that Payment Claims are made 'on account only' (cl 37.4). Final and conclusive payment will only occur after a Certificate of Practical Completion. A further difficulty is the lack of any express regime for payment claims in the termination provision in cl 39A.2 which Laing O'Rourke says (i) is now operative, and (ii) in circumstances in which title to the construction materials has not passed.

110 Another possibility is that payment could mean full payment as finally determined. But it was not suggested by senior counsel for Laing O'Rourke that title to all materials would only pass under cl 29A(i), all at the same time, at Practical Completion. This could render cl 29A(i) redundant. Further, it appears from cl 29A(ii) that the subcontract contemplates that title to materials might pass before they are transported to Site or incorporated into the Subcontract Works.

111 Fourthly, the construction suggested by Laing O'Rourke is capable of producing commercial inconvenience. In Electricity Generation Corporation trading as Verve Energy v Woodside Energy Ltd,[60] French CJ, Hayne, Crennan and Kiefel JJ explained that a 'commercial contract is to be construed so as to avoid it "making commercial nonsense or working commercial inconvenience"' (footnotes omitted).

112 The commercial inconvenience that might arise would be if 'payment' were construed to mean payment in full of all Payment Claims concerning the relevant materials. As I have explained above, the subcontract envisages potential delays in payment from Samsung to Laing O'Rourke. Samsung's representative must assess a claim. A dispute about payment must be arbitrated. There could be serious commercial inconvenience if title to materials and plant did not pass to Samsung until all payment processes were complete and all disputes were arbitrated.

113 Clause 29A(ii) and 29A(iii) also support a manifested contractual intention that the passage of title to materials would not be delayed in this manner. Those sub-clauses permit passage of title to Samsung in circumstances in which the materials are needed by Samsung. This passage of title occurs, irrespective of any payment made in relation to the materials, when the materials are delivered to Site or when they are incorporated into the Subcontract Works.

114 Fifthly, a lacuna might arise on Laing O'Rourke's construction. The potential lacuna arises because there is only a limited provision concerning passage of title following a termination for convenience. That provision, cl 39A.2(a)(ii)(B), provides that 'title in the plant and materials shall vest in [Samsung] upon payment'.

115 Clause 39A.2(a)(ii) is concerned only with circumstances where, as reasonably determined by Samsung's representative, there is a cost of plant or materials reasonably ordered by Laing O'Rourke for which Laing O'Rourke is legally bound to pay and where the value of the plant or materials is not included in the amount payable under clause 39A.2(a)(i).

116 There is no other provision concerning the passage of title to materials after termination where (i) the materials have been paid for by Laing O'Rourke or (ii) where Subcontract Works have been carried out on materials which have not been delivered to Site or incorporated into the Subcontract Works, or (iii) where the value of the plant or materials is included in the amount payable under clause 39A.2(a)(i).

117 Laing O'Rourke submitted that this situation (involving the absence of a termination provision concerning passage of title) applied for most, if not all, of the construction materials in relation to this application. Laing O'Rourke therefore relied on cl 39A.2(a)(i) which makes provision for the payment of an amount, as reasonably determined by Samsung's representative, as if a Payment Claim had been submitted.

118 If Laing O'Rourke's construction of cl 29A is correct, then this would mean that title to the construction materials would not pass to Samsung before termination in any of the numerous circumstances in which payment remained to be made under future Payment Claims for some of those materials. But, despite this common situation there is no express provision for passage of title to those materials and the express provision otherwise concerning title to materials (cl 29A) is not expressed to survive termination (unlike other provisions).

119 In contrast with Laing O'Rourke's construction, on Samsung's construction of cl 29A there is no lacuna in this situation because title would already have passed to Samsung.

120 Sixthly, there is a deficiency in the evidence provided by Laing O'Rourke in support of its claim that $34 million is claimed (and might become owing) for the construction materials.

121 Laing O'Rourke's evidence about the construction materials was concerned to explain the total amount claimed in relation to those materials, including work done in relation to those materials. Senior counsel for Laing O'Rourke emphasised in oral submissions that the claim was based on Clause 39A.2(a)(i) not Clause 39A.2(a)(ii).

122 It is unclear whether, even on Laing O'Rourke's construction, any part of Laing O'Rourke's claim in relation to the construction materials could, in fact, have been brought under cl 39A.2(a)(ii). For instance, there may be a possibility that the construction materials might include materials (such as those in Shipment 5), reasonably ordered by Laing O'Rourke for the Subcontract Works for which the Subcontractor is legally bound to pay and upon which no Subcontract Work has been done. Or it may be arguable, albeit with some difficulty, that cl 39A.2(a)(ii) applies to the cost of particular materials where cl 39A.2(a)(i) applies to work done on those materials (which would also raise the issue that almost all of the amount of what Samsung says is the cost of the construction materials has been paid for by Samsung's progress payments in relation to those materials). Senior counsel for Laing O'Rourke conceded on the application that some of the claim for the construction materials might fall within cl 39A.2(a)(ii).[61]

123 If some of Laing O'Rourke's claim for the construction materials falls within cl 39A.2(a)(ii), then the amount of the claim for the construction materials might need to be reduced because of the focus upon cost of those materials in cl 39A.2(a)(ii) rather than what might be thought to be the value of those materials as part of the Subcontract Works carried out (cl 39A.2(a)(i)).

124 In contrast with the approximately $55 million total amount claimed by Laing O'Rourke (including amounts paid) for the construction materials, Samsung says that the cost of the construction materials is $21.5 million to $23 million as follows: the liners removed from Civmec's yard by Laing O'Rourke ($1 million to $1.5 million); the liners remaining in Civmec's yard ($6.5 million to $7 million); and the structural steel in Shipments 4 and 5 ($14 million).[62]

125 Although it may be unlikely that the $55 million claimed by Laing O'Rourke could be reduced to the $20.8 million already paid by Samsung, the possibility of some reduction indicates both a reduced prejudice to Laing O'Rourke and an increased likelihood that, even on Laing O'Rourke's submissions, title could have passed to some part of the materials.

126 Seventhly, Laing O'Rourke's submission is in tension with the novation provisions of the subcontract.

127 The essential issue raised by this point is the manner in which the novation provisions of the subcontract operate with the transfer of ownership provisions. As I have explained, cl 3.4 of the form of the contract of novation which is contained in the subcontract provides as follows:

[Samsung] is entitled to exercise all of the rights to which [Laing O'Rourke] was entitled in relation to the Sub-subcontract, including rights which arose before the Date of Novation.

The expression 'in relation to' has been described in the context of an arbitration clause to be 'of the widest import'.[63]

128 Senior counsel for Laing O'Rourke submitted that cl 3.4 could not commercially be construed as extending 'all of the rights' to include Laing O'Rourke's rights to the construction materials. The premise of this submission was that if Laing O'Rourke remained liable to the subsubcontractor to pay for the construction materials (assuming that payment obligation had been notified by Laing O'Rourke to Samsung under cl 5.2) then title should remain with Laing O'Rourke. But this is simply to assert that which is in dispute.

129 There is no reason of commercial sense why a novation contract could not transfer Laing O'Rourke's rights to the materials to Samsung whilst (i) leaving intact Laing O'Rourke's obligation to pay for them, and (ii) providing in the subcontract for Samsung's liability to pay to Laing O'Rourke the amount reasonably determined by Samsung's representative for which Laing O'Rourke is legally bound to pay (which might require cl 39A.2(a)(ii)(B) to be construed as then describing title passing to Samsung upon payment by Laing O'Rourke).

130 Senior counsel for Laing O'Rourke also submitted that cl 3.4 is concerned with passage of contractual rights not the passage of property rights. It is possible that a clause might create such a distinction. But it is a difficult construction in a system of law, such as Anglo-Australian law, which, unlike some civilian systems such as Germany, does not recognise a Roman concept of abstraction between contract and conveyance.

131 Section 18 of the Sale of Goods Act 1895 (WA), which is in a common form across much of the Commonwealth, provides that unless a different intention appears, the rules in the Table apply for ascertaining the intention of the parties as to the time at which the property in the goods is to pass to the buyer. Rule 1 is that 'where there is an unconditional contract for the sale of specific goods, in a deliverable state, the property in the goods passes to the buyer when the contract is made, and it is immaterial whether the time of payment or the time of delivery, or both, be postponed'.

132 On Laing O'Rourke's construction of cl 29A, there is a tension between that provision and cl 3.4 of the proposed novation agreements because (i) title to materials about which Samsung has made a part payment might not have passed to Samsung, but (ii) cl 3.4 appears to permit Samsung to exercise all of Laing O'Rourke's rights in relation to those materials. This is not an inconsistency because there is nothing impossible about one party having title and another having the contractual ability to exercise the incidents of title.

133 This tension might be resolved on Laing O'Rourke's construction by the conclusion that (i) the absence of passage of title provisions in cl 39A.2(a)(i) is explicable because cl 3.4 effectively gives Samsung these rights, and (ii) the reference in cl 39A.2(a)(ii)(B) to title vesting in Samsung upon 'payment' might be construed as a reference to payment by Laing O'Rourke of the amount which it is legally obliged to pay for the plant and materials. Reconciliation of the tension in this way, however, would lead to the conclusion that title to the construction materials can be exercised by Samsung.

134 Eighthly, Samsung relies upon an implied term that Laing O'Rourke will not 'hinder or prevent the fulfilment of the purpose of the express promises' in the subcontract.[64] It might be arguable that Laing O'Rourke is in breach of this implied term by refusing to allow the construction materials to be delivered to Site or to be incorporated into the Subcontract Works.

135 Samsung also submits that there is an implication into the subsubcontract that in order for it to have the benefit of the novations, and to enjoy all the rights enjoyed by Laing O'Rourke under the subsubcontracts, Laing O'Rourke was bound by the implied term that[65]

where in a written contract it appears that both parties have agreed that something shall be done, which cannot effectually be done unless both concur in doing it, the construction of the contract is that each agrees to do all that is necessary to be done on his part for the carrying out of that thing, though there may be no express words to that effect.

136 For the purposes of this application it is not necessary to consider the extent to which these implied terms have any operation in the context of the very detailed provisions of the subcontract. The existence and extent of these implied terms will be affected by and can be qualified by the express terms of the contract.[66]

137 In the shortness of time, and in the urgency of this application, I have focused upon weaknesses of Laing O'Rourke's construction of the relevant provisions and only addressed Samsung's construction in the course of this reasoning. My reasons above illustrate the number of difficulties faced by Laing O'Rourke's construction.

138 But this is not to say that Samsung's construction is clearly correct.

139 One difficulty with Samsung's construction is the express provision in cl 39A.2(a)(ii)(B) involving plant or materials reasonably ordered by Laing O'Rourke for the Subcontract Works which Laing O'Rourke is legally bound to pay (with the exception where the value of those materials is included within cl 39A.2(a)(ii)). That provision expressly provides that 'title to the plant and materials shall vest in [Samsung] upon payment'.

140 On one approach to cl 39A.2(a)(ii)(B), the subclause is concerned with a circumstance where no Subcontract Works have been carried out on materials, but the materials have been ordered. The subclause then passes title upon payment. That could provide some support for Laing O'Rourke's construction if the reference to payment in cl 39A.2(a)(ii)(B) is a reference to a payment of the cost from Samsung to Laing O'Rourke rather than a reference to payment (of the liability to pay which had been incurred) from Laing O'Rourke to the sub-subcontractor. The support for Laing O'Rourke's construction might be thought to arise because the word 'payment' in cl 39A.2(a)(ii)(B) is not qualified by 'in whole or in part'

141 But, even if the meaning of 'payment' in cl 39A.2(a)(ii)(B) concerns a payment from Samsung to Laing O'Rourke, there may be a good reason why the reference to 'payment' in cl 39A(a)(ii)(B) is unqualified by 'in whole or in part'. This reason may be that any termination 'payment' by Samsung under this provision would be a payment of the whole amount due. The subcontract has been terminated. There is no longer any reason for part payments of the cl 39A.2 amounts as part of a progress claim procedure in an extant subcontract.

142 In contrast with Laing O'Rourke's construction, on Samsung's construction there is a readily explicable need to provide in cl 39A(a)(ii)(B) for title to pass to Samsung upon payment of the assessed amount of Laing O'Rourke's legal liability for the materials. This is because

(i) if cl 39A(a)(ii) is concerned with a scenario involving materials upon which no work had been done, no progress payments made, and only a legal liability incurred by Laing O'Rourke for payment for the materials; then

(ii) since no payment has been made by Samsung in this scenario, and since the materials have not been delivered to Site or incorporated into the Subcontract Works, title to the materials will not have passed to Samsung under cl 29A prior to termination.

143 Another possible weakness in Samsung's construction is the submission made by senior counsel for Laing O'Rourke that an impossibility could arise if Samsung made payment in part in relation to materials but title to the materials had not passed to Laing O'Rourke. How, senior counsel asked rhetorically, could title pass to Samsung under cl 29A when Laing O'Rourke had not yet obtained any title to give?

144 One possible response to this submission is that cl 29A is concerned only with goods to which Laing O'Rourke has title, or will obtain title. Hence, rather than purporting to pass title to goods that Laing O'Rourke does not own, cl 29A might be construed as providing the time when title that Laing O'Rourke obtains will pass to Samsung. An analogy could be drawn with the rule for appropriation to a contract for future goods under rule 5(1) in s 18 of the Sale of Goods Act 1895:

Where there is a contract for the sale of unascertained or future goods by description, and goods of that description and in a deliverable state are unconditionally appropriated to the contract, either by the seller with the assent of the buyer, or by the buyer with the assent of the seller, the property in the goods thereupon passes to the buyer. Such assent may be express or implied, and may be given either before or after the appropriation is made.

145 There may be further weaknesses in Samsung's construction, and there may be clearer answers to the weaknesses in Laing O'Rourke's claims than I can currently identify in this cursory assessment. Taking all of this into account, I nevertheless conclude on a preliminary basis and for the purpose only of this interlocutory application that Samsung has a very strong case that title to the construction materials has passed to it. Conversely, Laing O'Rourke's case is very weak.

The balance of convenience Prejudice to Laing O'Rourke

146 Laing O'Rourke says that the effect of a mandatory order requiring delivery of the construction of materials to Samsung will deprive it of a full hearing of the issue. The strength of Samsung's case is an important factor in circumstances in which the grant of the interlocutory injunction would effectively bring to an end Laing O'Rourke's possessory rights.[67]

147 However, it is also relevant that the only value to Laing O'Rourke of any possessory rights to the construction materials is effectively as leverage to obtain early (or, as Laing O'Rourke would assert, prompt) payment for them. Laing O'Rourke did not seek to retain the construction materials for its own use or for their value as scrap. This is supported by the evidence.

(i) The evidence is that the Bradken liners were specifically designed and built for installation into the four hoppers used on the Roy Hill Iron Ore Project.[68]

(ii) The Shipment 4 materials were supplied for the Landside Works and they related to the processes on the project being 'the Car Dumper and associated material handling structures and secondary steelwork required for the in load circuit commissioning'.[69]

148 As I explain below in relation to the undertaking, I am satisfied that Samsung will pay any amount which it is found to owe, and any amount which it accepts it owes, for the construction materials. So the only practical prejudice to Laing O'Rourke is a delay in this payment. As to any delay in payment to Laing O'Rourke, five points are important.

149 First, as I have explained, and reiterated, neither cl 39A.2 of the subcontract nor the Interim Deed entitles Laing O'Rourke to immediate payment. Some delay during which Samsung's representative assesses ('reasonably determines') claimed amounts is inevitable.

150 Even if Laing O'Rourke's construction of cl 39A.2 were both correct and accepted by Samsung, the effect would probably only be that Samsung's representative would act extremely rapidly to assess the claimed amounts in relation to the construction materials or alternatively that Samsung would order new materials. But, in either case, there is still a very strong argument for an implication that such an assessment of Laing O'Rourke's claimed 'termination costs' under cl 39A.2 must be done within a reasonable time.[70] This minimises the prejudice to Laing O'Rourke and the need for it to retain the construction materials as leverage.

At a glance

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Judgment (302 paragraphs)

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