Siemens Gamesa Renewable Energy Pty Ltd v Bulgana Wind Farm Pty Ltd [2019] VSCA 318

PRACTICE AND PROCEDURE - Injunctive relief - Serious question to be tried - Balance of convenience - Risk allocation regime - Reputational harm avoidable - Damages an adequate remedy - Interim injunction refused.

1 Siemens[1] is constructing a large wind farm for Bulgana[2] in western Victoria. The contract pursuant to which the wind farm is being constructed required practical completion of the works by 16 August 2019. Practical completion is yet to be achieved.

2 Under cl 13.8 of the contract_,_ if Siemens fails to reach practical completion of the works by the date for practical completion, it is liable to pay delay liquidated damages ('delay damages' or 'DLDs') at agreed daily rates up until practical completion is achieved.[3] By cl 13.3, Siemens may apply for an extension of the date for practical completion. It contends that it has done so and it is entitled to an extension of time. Bulgana does not agree. Siemens has served a dispute notice under cl 41.2 of the contract, which will have the effect that the dispute will be referred to arbitration under cl 41.4.

3 Under cl 25.1 of the contract, Siemens was required to give security. Pursuant to that clause, Siemens provided security in the form of two unconditional bank guarantees (referred to in the contract and other materials as the 'performance securities').[4] Bulgana alleges that, as at 28 November 2019, the amount of delay damages is $15,854,132.90. It asserts that it is entitled to draw on the performance securities in relation to this amount.

4 Under cl 13.8(d) of the contract, delay damages are immediately due and payable on the issue of a notice by Bulgana to Siemens. By cl 13.8(e), Bulgana is entitled to recover the amount of delay damages by three means:

(1) on demand from Siemens - ie by Siemens paying the delay damages following demand;

(2) 'by deducting the amount' from any amount due by Bulgana to Siemens for a certified progress payment claim - ie by set-off; or

(3) 'by deducting the amount from or calling on the Performance Security'.

5 It is common ground that Bulgana's right to set-off under cl 13.8(e)(2) is subject to Siemens's rights to progress payments under the Building and Construction Industry Security of Payment Act 2002 ('SOP Act'), which the parties referred to in correspondence as 'the security of payment legislation'. In general terms, the effect of this legislation is that, if Siemens were to rely on it and activate its terms, Bulgana is limited to calling on the bank guarantees if Siemens refuses, as it does, to pay delay damages. As the bank guarantees are in a limited amount, this is to Bulgana's disadvantage if delay damages exceed the amount of the bank guarantees.

6 Clause 41 of the contract contains a submission of disputes to arbitration. By cl 41.5, the submission of a dispute to arbitration does not affect the obligation of the parties to continue to perform their obligations under the contract. Clause 41.6 contains an important carve-out to the submission to arbitration:

Nothing in this clause 41 prejudices either party's right to institute proceedings to seek injunctive or urgent declaratory relief in respect of a Dispute under this clause 41 or any other matter arising under this [contract].

7 In the proceeding at first instance, Siemens sought an interlocutory and permanent injunction restraining Bulgana from making any demand under or pursuant to the performance securities pending the arbitral reference or until further order. Siemens contended that there was a serious question to be tried in relation to Bulgana's entitlement to draw on the performance securities. That question involved the construction of an agreement entered into between the parties on 30 September 2019 (the '30 September agreement').

8 The 30 September agreement is constituted by a letter from Siemens to a related company of Bulgana, Neoen Australia Pty Ltd. The letter was signed by Richard Lim as Company Secretary/Legal Counsel for Siemens, and counter-signed by Vaughan Williams, Legal Director (Australia) for Neoen and Bulgana, and is set out below:

Dear Vaughan

Bulgana Green Hub Facility EPC Contract dated 18 September 2017 between Bulgana Wind Farm Pty Ltd ("BWF") and Siemens Gamesa Renewable Energy Pty Ltd ("SGRE") as amended by Deed of Amendment dated 16 March 2018 ("EPC Contract")

Subject: Delay Liquidated Damages ("DLDs")

We refer to the above matter and our telephone conversations between our two (2) organisations today.

Without the admission of any liability and reserving any rights SGRE may have, we confirm as follows:

1. BWF will continue to offset any DLDs against payments or any amounts due to SGRE for the above project.
2. Except in any process provided for in clause 41 of the EPC Contract, SGRE undertakes not to object to or oppose any such offset (other than for mathematical mistakes apparent in the DLDs calculations) and additionally will not exercise its rights under or in connection with the security of payment legislation in relation to this matter.
3. BWF will accordingly not exercise its rights to draw on the Performance Securities in its possession in relation to this matter. For the avoidance of doubt, BWF will not make a demand or claim under the Performance Securities before giving at least 5 business days prior written notice.

Please do not hesitate to contact me, if you have any queries or require further clarification.

Yours faithfully

9 In summary, Siemens contends that, by the terms of the 30 September agreement, Bulgana agreed that it would not call on the bank guarantees to obtain payment of delay damages, but would instead rely on its right to set-off those damages against the amount of progress claims made by Siemens. Bulgana contends that, construed in context and having regard to its evident commercial purpose, the 30 September agreement only limited its right to call on the bank guarantees in relation to the balance of delay damages for the period 16 August to 31 August 2019 ('August delay damages') which could not be set off against progress claims for that month. Bulgana accepts that it agreed to give five days' notice before calling on the bank guarantees - a requirement which is not imposed by the contract - and thus varied the contract in that limited respect.

10 The primary judge determined that he should construe the 30 September agreement on an 'as if' final basis,[5] accepted Bulgana's contentions and dismissed the application for an injunction.[6] However, pending an application for leave to appeal to this Court, the primary judge extended an interim injunction which had previously been in place until 5:00 pm on 10 December 2019.[7] On 10 December, this Court[8] extended the interim injunction restraining Bulgana from calling on the bank guarantees until the hearing and determination of the appeal or further order, and fixed the application for leave to appeal and the appeal, if leave be granted, for hearing on 16 December 2019.

11 Siemens's proposed grounds of appeal raise the following questions:

(1) Did the judge err in deciding the proper construction of the 30 September agreement on an 'as if' final basis? (grounds 1, 2 and 3).

(2) Did the judge err in his construction of the 30 September agreement? (grounds 4, 5 and 7).

(3) Did the judge err in failing to find that there was a serious question to be tried, that damages would not be an adequate remedy and that the balance of convenience favoured the granting of an interlocutory injunction? (ground 6).

12 By notice of contention, Bulgana contends that if the judge erred in dealing with the application on an 'as if' final basis, the application should nevertheless have been dismissed on the balance of convenience.

13 The 30 September agreement was entered into in the following context.

14 It is common ground that the requirement to give the bank guarantees as performance securities was a 'risk allocation' mechanism, as Bulgana was entitled to call on the bank guarantees for amounts it contends are owing under the contract on an unconditional basis.[9] Such arrangements are often referred to as making bank guarantees 'as good as cash' or providing for a 'pay now, argue later' regime.

15 Clause 25.7(a) of the contract sets out the unconditional nature of the bank guarantees constituting the performance securities:

(a) Without limiting the unconditional nature of the Performance Security and the Principal's right to demand, receive or use the proceeds of the Performance Security, the Principal may demand, receive and use the proceeds of any Performance Security whenever the Principal asserts a right to the payment of money by the Contractor under, arising out of or in connection with:

(1) this Agreement (including liquidated damages); or

(2) otherwise at law relating to the Works under this Agreement.

16 Thus, if the 30 September agreement does not have the effect of preventing Bulgana from calling on the bank guarantees for unpaid delay damages, there is nothing in the contract which would prevent it from doing so in the circumstances which presently exist. If it later transpires that Siemens was entitled to an extension of the date for practical completion, cl 13.8(f) of the contract provides that Bulgana must repay the delay damages paid or set-off against progress claims in respect of the period before the extended date within 10 business days, and cl 25.7(f) provides that Bulgana must repay any amount drawn down under the bank guarantees which was not payable by Siemens at the time, together with interest, within 30 days.

17 Clauses 13.8(d), 13.8(e)(1), 13.3(h) and 41.5 when read together, provide in effect that, notwithstanding a claim for an extension of the time for practical completion, delay damages are payable pending any arbitral dispute about a claimed extension of time. In substance, this is also a risk allocation mechanism agreed by the parties under the terms of the contract.

18 Further, the terms of the contract are subject to a consent deed between the parties and National Australia Bank, Bulgana's financier. Relevantly, cl 3.1(e) of that deed provides that Siemens consents and acknowledges that Bulgana cannot, without the bank's prior written consent, amend, vary or supplement the contract except for 'permitted amendments' under cl 3.2. Permitted amendments include those 'of an immaterial, minor or inconsequential nature' (cl 3.2(c)), and minor variations to the contract works which result in additional cost of less than $500,000 and do not 'materially impact on or materially alter the performance of the Works' (cl 3.2(b)). The deed provides that an amendment or variation purporting to be made contrary to these provisions is of no effect.

19 There was extensive correspondence between the parties as the date for practical completion passed without practical completion having been achieved. The relevant correspondence began soon after the date for practical completion. By letter dated 19 August 2019 from Bulgana to Siemens, Bulgana noted that Siemens had failed to reach practical completion by the date for practical completion (16 August 2019) and, accordingly, that Siemens was liable to pay delay damages at the rate of $218,400 per day, in respect of the Main Works. Bulgana formally reserved its rights to obtain payment of the delay damages by any manner permitted under the contract - a clear reference to cl 13.8(e). As appears below, Bulgana maintained this position throughout the relevant correspondence leading up to the 30 September agreement.

20 By letter dated 2 September 2019 from Bulgana to Siemens, Bulgana calculated the amount of the August delay damages, stated that it would deduct them from the current certified progress payment claim, claimed a balance due (which was later re-calculated), and reserved its right to recover delay damages by any manner permitted under the contract or at law.

21 By letter dated 5 September 2019 from Siemens's solicitor, Clayton Utz, Siemens rejected any liability to pay delay damages and claimed that Bulgana was obliged to pay the certified progress claim amount without deduction or set-off. Clayton Utz demanded written confirmation from Bulgana that it would pay the progress claim without deduction and that it would not make any demand on the performance securities on the basis of an alleged entitlement to delay damages without first giving Siemens five business days' prior notice.

22 By letter dated 9 September 2019 from Bulgana to Clayton Utz, Bulgana repeated its assertions that delay damages were due and payable, stated that Clayton Utz's letter provided no indication of 'any conceivable basis' on which Bulgana's right to delay damages could be contested, and continued:

It is not reasonable to expect the Principal to forego or fetter its rights to Delay Liquidated Damages. Particularly in circumstances where your client at present appears unwilling or unable to address, or articulate any cogent plan and timing to address, an issue as fundamental as the GPS impedance issue.

If your client has a reasonable proposal or preference regarding the Principal's rights to recover Delay Liquidated Damages, including a preference as to whether the current amount is accepted to be set-off against payments otherwise due or recovered from security, or satisfied by some other means, then please provide written confirmation of your client's position by 11am on 10 September 2019.

Subject to express agreement in writing to the contrary, the Principal expressly reserve [sic] all of its right to recover Delay Liquidated Damages from the Contractor by any manner permitted under the EPC Contract or at law.[10]

23 By letter dated 13 September 2019 from Bulgana to Siemens, Bulgana demanded delay liquidated damages in respect of the BESS Works of $150,000 for the period 16 to 31 August - 15 days at $10,000 per day - in addition to the delay damages due in respect of the Main Works, and provided a recalculation of the amounts which it asserted were due after deducting delay damages from the currently certified progress claim amount, as follows:

The effect of the deduction is as follows:

1. Amount certified as being due to the Contractor = $3,341,839.60 less

1. $3,276,000 (15 days x $218,400 p/d) being the amount of Delay Liquidated Damages (Main Works) due to the Principal as of 31 August 2019 less
2. $150,000 (15 days x $10,000 p/d) being the amount of Delay Liquidated Damages (BESS Works) due to the Principal as of 31 August 2019 less

4. Amount owing ... $84,160.4 as of 31 August 2019

24 By letter dated 13 September 2019 from Clayton Utz to Bulgana and Williams of Neoen, Clayton Utz denied that Bulgana had any entitlement to delay damages, and again demanded immediate payment of the currently certified progress claim amount.

25 By letter dated 19 September 2019 from Bulgana to Siemens, Bulgana repeated its claim to delay liquidated damages, and again asserted that it could recover those damages 'by any manner prescribed under cl 13.8(e)' of the contract.

26 By letter dated 19 September 2019, Bulgana's solicitors, White & Case, wrote to Clayton Utz concerning the merits of the dispute as to whether delay damages were due and payable by Siemens, rejected the arguments put forward by or on behalf of Siemens, and stated:

In the meantime, absent responsible efforts and effective engagement by your client on the real issues, there is no basis for commercial concessions to be sought or considered, and your client is on notice that the Principal expressly reserves all rights under the EPC Contract and at law, without limitation.

27 Against the background of this correspondence, Thomas Hertling (Managing Director Technical of Siemens) had telephone conversations and text message exchanges with Laurent Francisci (a director of Bulgana) on 30 September 2019. Later that day, the respective legal counsel of the parties (Richard Lim for Siemens and Vaughan Williams for Bulgana) drafted two letters from Siemens to Neoen, each of which was signed by Lim and counter-signed by Williams. The first 30 September letter which was signed was in the following terms:

Dear Vaughan

Bulgana Green Hub Facility EPC Contract dated 18 September 2017 between Bulgana Wind Farm Pty Ltd ('BWF') and Siemens Gamesa Renewable Energy Pty Ltd ('SGRE') as amended by Deed of Amendment dated 16 March 2018 ('EPC Contract')

Subject: Delay Liquidated Damages ('DLDs')

We refer to the above matter and our telephone conversations between our two (2) organisations today.

Without the admission of any liability and reserving any rights SGRE may have, we confirm as follows:

1. BWF will continue to offset any DLDs against payments or any amounts due to SGRE for the above project.
2. SGRE undertakes not to object to or oppose any such offset (other than for mathematical mistakes apparent in the DLDs calculations) and additionally will not exercise its rights under or in connection with the security of payment legislation in relation to this matter.
3. BWF will accordingly not exercise its rights to draw on the Performance Securities in its possession in relation to this project.

Please do not hesitate to contact me, if you have any queries or require further clarification.

Yours faithfully,

28 The second 30 September letter was the 30 September agreement. It superseded the first letter and differed from the terms of the first 30 September letter, as follows:

(2) paragraph 2 - the words 'Except in any process provided for in clause 41 of the EPC Contract', have been inserted as opening words and the word 'project' has been changed to 'matter'; and

(3) paragraph 3 - the word 'project' at the end of the single sentence has been changed to 'matter', and a second sentence has been added:

For the avoidance of doubt, BWF will not make a demand or claim under the Performance Securities before giving at least 5 days prior written notice.

29 The circumstances in which the amendments were made to the initial letter agreement are considered below, when dealing with the evidence concerning the 30 September conversations between Hertling and Francisci.

30 Hertling and Francisci each swore two affidavits. In the first Hertling affidavit, which was the principal affidavit in support of Siemens's application for an interlocutory injunction, Hertling summarised his interpretation of the 30 September agreement.[11] This was obviously inadmissible as evidence. Hertling referred to the first 30 September letter as having been 'replaced' by the later 30 September agreement, and said that Lim informed him that the final agreement was the result of Williams contacting him and requesting a variation.[12] In his first affidavit, Francisci referred to the correspondence in August and September, referred to above; referred to discussions between him and Hertling to resolve technical issues concerning 'GPS Non-Compliance' by establishing a proposed 'war room' of representatives of both parties and his 25 September letter to Hertling in that regard; and gave evidence as to his recollection of a telephone conversation between him and Hertling at about 12:00 pm on 30 September. In paragraphs [37] and [38] of his first affidavit, Francisci deposed:

1. On 30 September 2019, at about 12pm, I received a return call from Mr Hertling. To my recollection, we had a conversation to the following effect:

(a) I said words to the effect of "Thank you for calling me back. I wanted to speak to you about the commercial stream. You know we have invoiced liquidated damages which you have not paid. We wrote to you to offer to set off but your legal team rejected this and pointed us to the Security of Payment Act. Our position is that you should pay or I find myself having to call on the guarantee. I am calling because I wanted to know before I call on security if you want to go back to setting off instead of us calling on it. If we don't call the security you could send me a letter for set off and we would stay within the contract and you would not make a Security of Payment Act claim. I am sorry that I am putting you between a rock and a hard place";

(b) Mr Hertling said words to the effect of "Thank you for calling me about this. But I don't want you to call on our security. But I also don't want to make a claim under the Act. We have an understanding. I would prefer you to set off";

(c) I said words to the effect of "Ok. This is good we have spoken then. You should put Richard in touch with Vaughan about this. It needs to be done quickly so that I can report internally that we will not make the call on the security";

(d) Mr Hertling said words to the effect of "Yes. I will tell Richard to contact Vaughan and they will be able to finalise the letter";

(e) I said words to the effect of "Thanks and we can talk about the agenda for the war room separately but let's make sure this is finalized in the coming 45 minutes."

1. The conversation was not long, 5 minutes at most. We did not discuss the GPS Noncompliance issue. We did not discuss BWF giving away its right to call on Security. I did not at any time state that BWF would never call on the Performance Security. I agreed that BWF would set off DLDs against the August Payment Sum, and SGRE would not object and would not claim under the SoP Act. I was also in agreement with this approach continuing, and BWF giving notice if there was no money due for set off before calling on security. At the time of my agreement with Mr Hertling, I was aware that there would still be about $100k of DLDs that would remain due after setting-off against the August Payment Sum, but I was also aware that another SGRE payment claim had been certified in the meantime.[13]

31 The primary judge accepted that the evidence in paragraph [37] of the first Francisci affidavit was admissible to construe the 30 September agreement,[14] but did not accept that paragraph [38] was admissible for that purpose.

32 Hertling affirmed a second affidavit in reply to the first Francisci affidavit. In paragraph [27] he deposed:

1. At 12:11 pm, I called Mr Francisci. Mr Francisci and I had a conversation to the following effect:

He said: I want to make you aware that we will be calling on the bank guarantees in relation to our claims for liquidated damages.

I said: That's not good. What are the alternatives?

He said: You can agree to us continuing to deduct liquidated damages from payment claims. You will also have to give up claims under the Security of Payment Act.

I said: Neither option is very palatable for me, it is a choice between a rock and a hard place. We don't accept that you have any entitlement to liquidated damages, but we would rather you continue to deduct liquidated damages from payment claims than call on our bank guarantees. We will also agree to not make claims under the Security of Payment Act.

He said: That's acceptable.

I said: I will speak to Richard and ask him to document this with Vaughan.[15]

33 The primary judge held that this paragraph was, like paragraph 37 of the first Francisci affidavit, admissible to construe the 30 September agreement.

34 As to paragraph 38 of the first Francisci affidavit, set out above, Hertling deposed in his second affidavit:

1. I disagree with paragraph 38 of the Francisci Affidavit. My discussion with Mr Francisci at 12.11pm was about BWF not calling on the Performance Security in connection with its claims for Delay Liquidated Damages, and in return SGRE agreeing not to make a claim under the SOP Act and allowing BWF to continue to set off its claims for Delay Liquidated Damages against SGRE's payment claims, but not accepting that SGRE has any liability for Delay Liquidated Damages. We did not discuss at any time that BWF's promise not to call on the Performance Security in connection with its claims for Delay Liquidated Damages:

(a) would not apply if there was no money due for set off;

(b) would apply only to the Delay Liquidated Damages BWF had claimed to that date; or

(c) was otherwise limited to the "Demand" referred to at paragraph 33 of the Francisci Affidavit (which, as I note at paragraph 39 below, I was unaware of prior to reading the Francisci Affidavit).[16]

35 The primary judge found that this paragraph of the second Hertling affidavit was, like paragraph 38 of the first Francisci affidavit, not admissible to construe the 30 September agreement.[17]

36 The first 30 September letter was countersigned by Williams and emailed to Lim at 3:05 pm on 30 September 2019. By email sent at 3:30 pm that day, Williams sought to vary the wording of the letter, and further negotiations ensued. The terms of the final letter constituting the 30 September agreement were finally agreed at 6:29 pm, and the countersigned version of the final letter was circulated by Williams at 6:34 pm that day. During the course of the negotiations, Hertling and Francisci had a further telephone conversation at about 5:20 pm. We set out the relevant evidence later in these reasons.

37 The primary judge refused to accept Hertling's account of this conversation as evidence to construe the 30 September agreement.[18] If the judge had accepted it was admissible to construe the 30 September agreement, by his second affidavit, Francisci flatly denied that there was a conversation to the effect alleged by Hertling.[19] Given the judge's rejection of Hertling's evidence in this respect, the primary judge held that none of the matters deposed to in the second Francisci affidavit were admissible to construe the 30 September agreement.[20]

38 Immediately following the 30 September agreement, Bulgana asserted that it was entitled to be paid delay damages for September. By letter dated 2 October 2019 to Siemens, Bulgana:

(1) asserted its entitlement to delay damages of $6,852,000 for the month of September;

(2) stated its intention to deduct that amount from certified payment claims by Siemens of $3,593,797;

(3) asserted that a balance of $3,342,363 remained due to Bulgana after the set-off; and

(4) stated that Siemens had five business days to pay the balance due, failing which Bulgana intended to claim it under the performance securities without further notice.

39 On 3 October 2019, Siemens's solicitors, Clayton Utz, wrote to Bulgana's solicitors, White & Case, and disputed that any amount was due for delay damages.

40 Also on 3 October, Siemens served a dispute notice on Bulgana under cl 41.2 of the contract in relation to the dispute as to whether Siemens was liable to pay delay damages.

41 By letter dated 4 October 2019 from Clayton Utz to White & Case, Siemens contended that the 30 September agreement did not permit Bulgana to draw down on the performance securities in relation to its claim for delay damages. Clayton Utz sought an undertaking from Bulgana that it would not draw on the performance securities.

42 The dispute quickly escalated. On 7 October Bulgana's solicitors gave an undertaking on its behalf that it would not draw down on the performance securities in relation to delay damages before Thursday 10 October 2019. We infer that this undertaking was extended until the hearing of Siemens's injunction application.

43 The following day, 9 October 2019, Siemens commenced a proceeding in the Commercial Court seeking an interlocutory injunction restraining Bulgana from calling on the performance securities pending further order of the Court and subject to any contrary order by an arbitral tribunal to be appointed under cl 41 of the contract.

44 On 16 October 2019, Siemens served a supplementary dispute notice on Bulgana under cl 41.2 of the contract. The supplementary notice relates to the dispute about the proper interpretation of the 30 September agreement and Bulgana's threat to call on the performance securities.

45 The application for an injunction was heard by the primary judge on 17 October 2019. On that day, he gave Siemens leave to amend its claimed relief by, in the alternative, seeking a permanent injunction restraining Bulgana from calling on the performance securities in relation to delay damages.

46 The primary judge reserved his decision on the injunction. Pending delivery of his decision, Bulgana extended its undertaking that it would not call on the performance securities until the handing down of judgment. The primary judge delivered his reasons for judgment on 27 November 2019 and determined that the injunction application should be dismissed.

47 After describing the factual background, the parties' submissions on the application for interlocutory relief and the applicable legal principles, the primary judge turned to consider first whether he should decide the construction of the 30 September agreement in an interlocutory setting or by making a final determination as to the matter. He decided that it was appropriate, convenient and just to finally determine the proper construction of the letter.

48 Among other factors, the judge found that there would be 'probable injustice' by reason of significant delay until final disposition of the matter, defeating 'the parties' contractual intent in relation to a contractual regime which in substance provides for immediate access' to the performance securities.[21] This would 'disrupt the parties' agreed risk allocation regime'.[22] Further, although Siemens had argued that the matter should proceed on an interlocutory basis, it had made full submissions as to the question of interpretation.[23] At no time had Siemens submitted that it should be permitted to test Bulgana's affidavit evidence or to obtain further disclosure (except in respect of one document) or to make further submissions.[24]

49 Next, the judge set out with apparent approval a submission made by Bulgana to the effect that the court should ordinarily determine a controversial issue of law, on an application for an interlocutory injunction to restrain recourse to a security provided under a building contract, unless in the particular circumstances it is not practicable or appropriate to do so (citing cases including Sugar Australia[25]).

50 The judge stated that he had also weighed in the balance that conflicts of affidavit evidence might be relevant in deciding the question of interpretation on a final basis. However, he considered that this was of little consequence because the matters in conflict were of very little or no weight and were not probative in relation to the question of construction.[26]

51 The judge then set out the parties' submissions on the question of construction and the principles governing the interpretation of commercial contracts, before turning to the context in which the 30 September agreement was made. He started by describing the performance securities regime under the contract, concluding that the arrangement was intended to make security readily accessible and 'as good as cash' pending resolution of relevant disputes, and that this was in the nature of a contractual risk allocation regime.[27] In that context, he referred also to the consent deed.[28]

52 Next, the judge set out much of the pre-contractual correspondence between the parties before turning to the affidavit evidence, including drafts of the 30 September agreement that were in evidence. He concluded that the drafts 'and associated communications' should not be taken into account in construing the 30 September agreement because they were only communications of the parties' preferred positions and language, rather than a reflection of any discrete agreement or understanding. In this respect, he rejected a submission by Bulgana that earlier draft documents assisted in the proper construction of the second sentence of paragraph 3 of the 30 September agreement.[29]

53 After concluding that there was ambiguity in paragraph 3 of the 30 September agreement, the judge addressed objections to the affidavit evidence. He had earlier ruled that the evidence should be admitted but subject to the parties' objections. In that regard, as explained above, he attached no weight to the evidence of Hertling and Francisci as to their subjective intentions, desires, opinions, conclusions and understandings.[30] The end result was that the only evidence which the judge considered to be probative as to the conversations between the two men was the specific evidence in [27] of the second Hertling affidavit and [37] of the first Francisci affidavit (set out at [30] and [32] above), regarding their conversation at approximately 12:00pm no[31] on 30 September 2019.31

54 The judge then examined the evidence of the conversation he had identified. He found it noteworthy that neither witness mentioned having discussed a general or ongoing moratorium or prohibition on Bulgana calling on the performance securities. Rather, their conversation took place within the context of an existing invoice from Bulgana in relation to an unpaid liquidated damages claim, being the claim in respect of August 2019.[32] The judge concluded as to the object and purpose revealed by this evidence, as follows:

In my view, the admissible and persuasive parts of the above evidence of Hertling and Francisci in relation to the telephone discussion at about midday on 30 September 2019 persuade me that the call was one in which the discussions did not reflect that the parties intended to deal in their agreement with an unqualified or an ongoing fetter on [Bulgana's] ability to access the Performance Securities, but rather the focus was on an agreement whereby [Bulgana] would deduct DLDs from [Siemens's] payment claims in respect of then invoiced unpaid DLDs. On this aspect, as I have earlier noted, the parties accept that at that time the only invoiced DLDs were the August 2019 DLDs. This, in my view, also reconciles with Francisci's statement that 'if we don't call the security you ([Siemens]) could send me a letter for set-off and we would stay within the contract and you would not make a security of payment claim'. Hertling does not directly dispute that the above statement was made by Francisci.

I am persuaded that the object and purpose of the 30 September 2019 Agreement are informed in relation to the ambiguous text of paragraph 3 of that agreement, by those aspects of the parties' affidavit evidence referred to above, and although any final conclusion as to the proper interpretation of the 30 September 2019 Agreement is subject to the primacy of the text of that agreement, I am persuaded for the reasons I have outlined, that Hertling and Francisci's discussions at about noon on 30 September 2019, support the conclusion that, as [Bulgana] submits, that the object or purpose of that agreement was to agree to the sequence in which [Bulgana] would exercise its contractual right to recover DLDs from [Siemens] by way of contractual set-off and, if and when the Performance Securities were to be called up, for [Bulgana] to give 5 business days' prior written notice in relation to its intend [sic] to do so.[33]

55 The judge then turned to the interpretation of the 30 September agreement. Commencing with its text, he said that the agreement was 'generally to do with the subject' of delay damages in relation to the project.[34] However, references to 'this matter' in paragraphs 2 and 3 of the letter were not to such damages generally but were informed by the noon conversation and other express terms.[35] The judge held that, if Siemens's construction were accepted, meaning that Bulgana promised not to exercise its rights to call on the performance securities in respect of any delay damages claims under the contract, there would be no need to include a term expressly recognising Bulgana's right to make demands or claims under the securities.[36] Moreover, if, as Siemens submitted, what was being preserved was Bulgana's right to claim under the securities for reasons other than an entitlement to delay damages, this gave a different meaning to the word 'matter' in paragraph 3 to that advanced by Siemens, namely Bulgana's entitlement to delay damages.[37]

56 The judge then accepted a submission made by Bulgana that the parties intended that the last sentence of paragraph 3 would apply to future delay damages which could not be set off against Siemens's progress payment entitlements. He added that the 'work the parties intended to be done by the first sentence of paragraph 3' was in relation to the August 2019 damages that were not set off.[38] As noted further below, we read the reasons as holding that the 30 September agreement required Bulgana to set off future delay damages claims, and not only those in respect of August 2019, before claiming under the performance securities after five business days' notice. However, the judge does not appear to have addressed why, if the subject matter of the letter was the August damages claim, the requirement to set off and give notice applied to later damages claims as well.

57 The judge then examined the context which he had found to be relevant to the question of interpretation. He referred again to the correspondence regarding the August delay damages claim, in which both parties formally addressed their contractual rights and entitlements. The consent deed also formed part of the context, along with the noon conversation between Hertling and Francisci. He repeated that the object and purpose of the agreement was to afford accommodation to Siemens in relation to the August invoice for liquidated damages.[39]

58 The judge said that he did not consider it unlikely that the parties would make an agreement confined to the August damages, despite being aware that the issue would arise again in September so that the agreement would almost terminate in operation before it began.[40] Further, it was commercially improbable that Bulgana would agree to accept only an ongoing right of set-off, giving up access to the performance securities, in circumstances where there was going to be a very large shortfall after set-off in damages for September and that situation was going to escalate if practical completion was not achieved.[41]

59 Siemens had argued, conversely, that it would have been inherently unlikely to agree not to pursue its SOP Act claim in return for nothing more than a promise not to rely on the performance securities in relation to the August 2019 claim, especially since the right of set-off in relation to August 2019 would have meant there was almost nothing to claim under the securities for that month. The judge rejected that argument on the basis that the likely value of the progress payment entitlements would diminish as work was more and more complete, and it could be inferred that the value of Siemens's potential security of payments claims would also diminish for the same reason.[42]

60 In relation to the consent deed, the judge held that the 30 September agreement, if it had the effect contended for by Siemens, relevantly amended or varied the contract, materially altering the operation of cls 13.8(e) and 27.5(1) and perhaps other terms. The exception in cl 3.2(b) of the consent deed would not apply and the consent of the security trustee was likely to have been required. Both parties could be taken to have been aware of this, and this was a further contextual fact militating against Siemens's construction.[43] In contrast, on Bulgana's construction it might be inferred that the letter did no more than agree immaterial, minor or inconsequential procedural matters, namely a sequence as to set-offs and notice prior to future access to the performance securities, and non-recourse to the securities in relation to the outstanding balance of August 2019 liquidated damages.[44]

61 Finally, as to construction, the judge turned to the purpose of the 30 September agreement. The analysis repeated that the agreement prescribed an order as to set-off for future claims of liquidated damages, not being confined to the August claim. It is necessary to set out the passage at some length:

I consider that the contextual matters identified above also all support [Bulgana's] construction of the 30 September 2019 Agreement, namely to make an agreement by which the sequence in which [Bulgana] would exercise its contractual rights in relation to the recovery of DLDs and to agree to give [Siemens] 5 business days' prior written notice of a demand under the Performance Securities, which in the result avoided [Bulgana] accessing the Performance Securities in relation to the August 2019 DLDs Invoice.

In the circumstances, bearing in mind the position in which [Siemens] considered itself to be at 30 September 2019, and the numerous occasions in September 2019 on which [Bulgana] had formally communicated to [Siemens] that it was entitled to insist upon its rights under the EPC Contract and was not disposed to compromising those rights, it is most improbable that [Bulgana] would enter into an agreement which abandoned, or even materially impaired its very clear cut right to draw on the Performance Securities in the sum of $25 million provided under the EPC Contract, particularly when at 30 September 2019 the Contract Works had failed to reach Practical Completion on time, and were still not Practically Complete, and [Bulgana] had at that stage accrued entitlements to DLDs, which entitlements were continuing to accrue on a daily basis and were already accruing at a rate above the [Siemens's] entitlement to payment as certified in August 2019 and that position would be more aggravated from [Bulgana's] perspective in September 2019.

In the circumstances referred to, as earlier observed, I consider that it would be most improbable and would have amounted to commercial nonsense for [Bulgana] to enter into an agreement on 30 September 2019 which fettered its right to access the Performance Securities under the EPC Contract, whereas I consider that it made commercial sense for [Siemens] to agree the terms of that agreement as I consider it was intended to operate.

These matters render it far more likely that the 30 September 2019 Agreement was intended to have the effect argued for by [Bulgana], namely an agreement which did not alter the EPC Contract in any material respect and effected an agreement whereby [Bulgana] would not exercise its rights to draw on the Performance Securities in relation to that part of the August 2019 DLDs which could not be set-off against [Siemens's] certified progress entitlement and [Bulgana] would in the future first set-off DLDs against [Siemens's] certified progress entitlements before accessing the Performance Securities with any such access would be on 5 business days' prior written notice, thus also not breaching the prohibitions on amendment or variation, or the like under the Consent Deed.

It was however not improbable and not in my view commercially contradictory or nonsensical for [Siemens] to enter into the 30 September 2019 Agreement, if it had the effect argued for by [Bulgana] because leading up to 30 September 2019 [Siemens] appreciated the very difficult contractual position which had developed, in particular, post the Date for Practical Completion that it was 'between a rock and a hard place'[45] in relation to such matters, and sufficiently pressed by the financial exigencies and the Principal's clear rights under the EPC Contract and [Bulgana's] stated intentions in that regard, that [Siemens] readily gave up its rights under the SoP Act in return for accommodation by [Bulgana] in relation to [Siemens's] desire to do all it could to avoid access to any part of the Performance Securities in relation to the August 2019 DLDs claim.

I consider for the above reasons that, save in respect of any outstanding August 2019 DLDs, properly construed the parties agreement of 30 September 2019 contains no express or implied fetter of [Bulgana's] right to call upon the Performance Securities as established by the terms of the underlying EPC Contract.[46]

62 At first blush, the last sentence in the above extract appears to give the agreement a more limited operation than the preceding analysis suggests. But read in context, together with what follows in the reasons, it is apparent that the judge considered a requirement to have resort to a right of set-off, together with a 5 business day waiting period before calling on the performance securities in respect of any balance, did not amount to a fetter on the right to call upon the performance securities. The judge went on to say:

In my view as elsewhere mentioned, the terms of paragraph 1 and 2 of the subject agreement are clear on the usual meaning of the language used therein by the parties, including [Bulgana's] agreement to offset DLDs (where an offset could be effected), as the primary means of recovering certified DLDs and [Siemens's] agreement to eschew its SoP Act claims.[47]

I have decided and hold that on the proper construction and meaning of the parties' 30 September 2019 Agreement that Agreement does not give rise to any express or implied fetter upon the EPC Contract Performance Securities regime, but effects an agreement whereby [Bulgana] would not exercise its rights to draw on the Performance Securities in relation to that part of the August 2019 DLDs which could not be set-off against [Siemens's] certified progress entitlement and reflects an agreement whereby [Bulgana] would in the future first set-off DLDs against [Siemens's] certified progress entitlements before accessing the Performance Securities and that any such access would be on 5 business days' prior written notice.[48]

64 Having finally determined the question of construction in favour of Bulgana, the judge did not find it necessary to address balance of convenience issues. The application for a permanent injunction, and the proceeding generally, was accordingly dismissed.

65 The judge announced his decision on 22 November 2019 but for technical reasons was not in a position to publish his written reasons. Bulgana through its counsel extended an undertaking not to call on the performance securities before 27 November 2019. As it happened, the judge's reasons were published on that day. It seems that the undertaking was extended for a further day and the matter came before the judge again on 28 November 2019. On that occasion, junior counsel for Siemens indicated that her client intended to seek leave to appeal and sought an interim injunction or further extension of the undertaking pending determination of the leave application and any appeal. After argument, the judge ruled that there should be an interim injunction until 5 December 2019 and that Siemens should file and serve its appeal proceedings by the day before the injunction was due to expire.

66 For reasons that are not now relevant, Siemens did not properly commence its application for leave to appeal. The matter went back before the judge on 6 December 2019, when he refused an application for a further interim injunction. He did so partly on the basis that if the foreshadowed appeal succeeded, the likely outcome would be that any moneys paid by Siemens or claimed under the performance securities would be required to be repaid, and there was evidence of Bulgana's ability to do so. However, the judge extended the interim injunction until 5 pm on 10 December 2019, solely for the reason that Siemens had indicated that it preferred to make payment of the presently claimed amount itself rather than have the securities called upon, so as to avert perceived reputational damage arising from that event.

67 On 10 December, the present application for leave to appeal having been duly commenced, but with the amounts claimed remaining unpaid despite the judge's expressed basis for the final extension of the injunction, this Court granted an interim injunction pending the hearing and determination of the leave application and any appeal, on the basis of an expedited hearing. The Court's main reason for doing so was that to do otherwise would have the effect of entitling Bulgana to the immediate payment which was the whole subject matter of the proposed appeal, and which it was sought to restrain, in circumstances where maintaining the status quo for a further short period pending appeal would not cause Bulgana identified prejudice.

68 Siemens submitted that in refusing the interim injunction application, the judge made a number of errors, falling principally into three related categories as follows:

(1) Given there was relevant contested, but untested, witness evidence about the 30 September agreement, the judge erred in determining the construction of paragraph 3 of that agreement on an 'as if' final basis, as opposed to determining the construction of the clause on a prima facie case basis (grounds 1, 3 and 6).

(2) The judge erred in his assessment of the witness evidence, disregarding parts of it as having no, or no material, weight and wrongly assessing the difference between the parts to which he did give weight as minor and inconsequential (ground 2).

(3) The judge erred in his construction of paragraph 3 of the 30 September agreement, whether on a prima facie case basis or on an 'as if' final basis (grounds 4, 5, 6(a) and 7(a)).

69 As Siemens observed, the second category of error identified by it related both to the first category and the third category. Siemens submitted that the judge's incorrect assessment of the witness evidence led him to conclude that he could determine the construction of paragraph 3 on an 'as if' final basis (the first category of error); and the same incorrect assessment of the witness evidence also formed part of what was submitted to be a large number of errors adversely affecting the judge's construction of paragraph 3 (the third category of error).

70 In relation to the first two categories of error identified by Siemens (the 'as if final' errors, and the 'assessment of witness evidence' error), Siemens made the following submissions:

(1) There was contested, but untested, witness evidence relevant to the construction of paragraph 3 of the 30 September agreement. In those circumstances, it was wrong for the judge to apply Sugar Australia.[49] That case held, in relation to performance bonds, that the construction of such bonds may be resolved on an 'as if' final basis where the construction issues 'did not depend upon the assessment of evidence, but was confined to an examination of the four corners of the document'[50] and not 'where the determination of the points of law requires a factual matrix which is not available until the facts in the entire proceedings have been proved'.[51]

(2) The judge erred in finding that the only probative witness evidence that was relevant to the construction of the 30 September agreement was that contained in the second Hertling affidavit at [27] and the first Francisci affidavit at [37]. The judge was wrong not to take into account the evidence of Hertling at [29] and [36] of his second affidavit. This evidence was 'every bit as material' to the construction of the 30 September agreement as the evidence the judge relied upon.

(3) The judge erred in treating Siemens as having submitted that it was 'open to the court' to determine the construction of the 30 September agreement on an 'as if' final basis. Siemens's submissions to the judge were to the opposite effect.

71 In relation to the third category of error identified by Siemens (the construction errors), in addition to the submissions referred to in the previous paragraph, Siemens submitted:

(1) The judge erred in treating the first sentence of paragraph 3 as being concerned only with August delay damages which could not be offset - thus giving the words 'this matter' in that clause a different meaning from that given to the same 'and like expressions' in the balance of the 30 September agreement. Contrary to the judge's conclusion, the words 'this matter' at the end of the first sentence of paragraph 3 refer to Bulgana's disputed claim to delay damages generally.

(2) The judge erred in failing to construe the second sentence of paragraph 3 as simply making clear that the first sentence of paragraph 3 did not prevent Bulgana from calling on the performance securities in relation to matters other than disputed DLDs. The second sentence of paragraph 3 begins with the words '[f]or the avoidance of doubt', indicating that it was included for clarity and was not intended to alter the substance of the first sentence of paragraph 3 or the balance of the 30 September agreement. The judge incorrectly treated the second sentence of paragraph 3 as indicating that, despite the terms of the first sentence, Bulgana retained an immediate and ongoing right to call on the performance securities, including in relation to DLDs, thus rendering paragraph 3 as a whole ambiguous. While it is true that the balance of the agreement was only concerned with disputed delay damages, that is why the second sentence of paragraph 3 is prefaced by the words '[f]or the avoidance of doubt'.

(3) The judge made a number of errors about the purpose of the 30 September agreement and the context in which it was made. Specifically:

• (a) The judge's finding that the purpose of the 30 September agreement was to afford accommodation to Siemens in relation to the August delay damages was inconsistent with his finding that paragraphs 1 and 2 of the agreement were concerned with Bulgana setting off any delay damages, including future delay damages, against payments due to Siemens.
• (b) The judge was wrong not to treat as relevant context the fact that the parties entered into an initial agreement constituted by the signing of the first 30 September letter.
• (c) The judge erred in relying upon correspondence prior to the 30 September agreement 'as showing that Siemens asked Bulgana to agree to set off delay damages against amounts due to Siemens'.[52] To the contrary, Siemens in fact rejected proposals made by Bulgana to that effect.
• (d) The judge erred in relying upon the consent deed as a relevant contextual consideration. Even if the consent deed applied to the 30 September agreement, it came with the exception created by cl 3.2(b) of the deed, such that the security trustee's consent to the agreement was not required.
• (e) The judge erred in finding that the result of Siemens's construction of paragraph 3 was 'most improbable' or 'a commercial nonsense'. To the contrary, on the judge's construction, the 30 September agreement 'would be over almost before it began'. Further, both parties knew that Siemens had in its favour a claim under the SOP Act which exceeded $3 million in relation to a payment for July 2019. By paragraph 2 of the 30 September agreement, Siemens undertook not to pursue that claim. It was in those circumstances unlikely that the parties made an agreement by which Siemens did that in return for no more than Bulgana's promise not to call on the performance securities in relation to the August DLDs which could not be offset ($84,160.40).

72 Siemens submitted that the judge should have decided the construction of paragraph 3 of the 30 September agreement in its favour, either on a prima facie case or final basis. If the judge had decided the issue in its favour on a prima facie basis, he should then have found that the balance of convenience favoured the granting of the injunction.

73 In contending that the balance of convenience favoured the granting of an injunction, Siemens relied upon two matters. First, it contended that it would suffer reputational damage if the performance securities were called upon.[53] In support of the proposition that a contractor's reputation may be damaged if a principal is allowed to access a performance security, Siemens relied upon passages in Lucas Stuart Pty Ltd v Hemmes Hermitage[54] and the authorities referred to therein to that effect. Secondly, it alleged that it may have difficulty recovering the funds from Bulgana in the event that it was subsequently successful in defeating Bulgana's claim for delay damages.

74 In response to Siemens's arguments, Bulgana supported the reasoning of the judge. Bulgana contended that there was no error in the way the judge determined the proceeding (grounds 1 to 3 and 6), and no error in the judge's construction of the 30 September agreement (grounds 4, 5 and 6(a)). In addition, Bulgana relied upon a notice of contention in which it was asserted that even if the judge should have decided the application on an interlocutory basis, rather than upon an 'as if' final basis, the judge was nevertheless correct to dismiss the injunction application, as the balance of convenience favoured that result (grounds 6(b) and (c)).

75 In relation to the basis upon which the judge determined the proceeding, Bulgana submitted that none of the authorities relied upon by Siemens supported the proposition that questions of construction must not be determined on an 'as if' final basis where there is contested evidence bearing on construction. Bulgana contended that it was for the judge to evaluate whether he had sufficient material to be able to construe the contract on a final basis. This was a matter which required judgments of fact and degree to be made, and this Court should only set aside the judge's determination if satisfied that it involved a clear error.

76 Bulgana supported the judge's conclusion that the construction question should be determined on an 'as if' final basis, identifying five reasons why the judge was correct to do so:

(1) The commercial purpose of the contractual performance security regime was to operate a risk allocation mechanism pending final determination of any underlying dispute. The nature of the relevant provisions as a risk allocation device was critical to a consideration of the justice of an application to restrain recourse to the performance securities.

(2) There was no substantial contest in the evidence as to the discussions that occurred around midday on 30 September, prior to the entering into of the 30 September agreement. The evidentiary contest upon which Siemens seeks to rely related to a later discussion and his Honour appropriately gave this no weight because the evidence involved was no more than an interpretation or opinion about the intentions of the parties.

(3) Notwithstanding Francisci's presence in court, at no time did Siemens submit that it needed to, or should be permitted to, test Bulgana's affidavit evidence by cross-examination; or that it needed to obtain any further disclosure of documents.

(4) The approach taken by the judge was consistent with the overarching purposes set out in the Civil Procedure Act 2010.

(5) Siemens conceded that the matters advanced by it in supporting a serious question to be tried also supported the construction for which Siemens contended on an 'as if' final basis.

77 As to the construction of the 30 September agreement, Bulgana contended that the agreement simply sets out the sequence in which Bulgana would exercise its contractual rights to recover delay damages, namely reliance first on the set of provisions of cl 13.8 of the contract, and an undertaking to provide five business days' notice before calling on the performance securities. Bulgana contended that the construction posited by Siemens was strained and would result in the second sentence of paragraph 3 'being devoid of content and having little or no work to do'.

78 In relation to context, Bulgana submitted that when the 30 September agreement is considered in its objective context, Siemens's construction cannot stand. Rather, it was submitted, the context powerfully supports the construction for which Bulgana has consistently contended and which was adopted by the judge. In relation to the two additional pieces of evidence that Siemens sought to place weight on, Bulgana submitted that the judge rightly gave that evidence little weight - the evidence that was central being the content of the telephone call between Hertling and Francisci earlier in the day.

79 Further, the terms of the consent deed were submitted to indicate objectively, contrary to Siemens's case, that the parties did not intend, by the 30 September agreement, to alter in a material sense the agreed allocation of risk under the contract. Such an alteration would have 'offended' cls 3.1(e) and 3.2 of the consent deed. If the 30 September agreement had effected such an alteration it would, in consequence, have been invalid and not binding upon the parties. Siemens's submission to the contrary should be rejected because the exception created by cl 3.2(b) is concerned only with amendments to Siemens's work requirements under the contract which may result in Bulgana having to pay additional monies to Siemens for the performance of works under the contract.

80 Finally on the construction issue, Bulgana submitted that Siemens's construction of the 30 September agreement was not commercially rational. It was submitted that is was objectively unlikely that Bulgana would give up entirely its ability to call on the performance securities in relation to disputed delay damages in exchange for the 'modest' promise made by Siemens in paragraph 2 of the agreement.

81 While Bulgana submitted that the judge did not err when he dealt with the matter on an 'as if' final basis, in oral argument, senior counsel for Bulgana said that if this Court concluded that the matter should have been dealt with on a prima facie basis then he did not contend that there was no serious question to be tried on the construction issue. Counsel submitted, however, that Siemens's position on the construction question was weak and that this itself detracted from its position on the balance of convenience.

82 As to Siemens's balance of convenience argument based upon reputational issues, Bulgana referred to authorities that it submitted showed that potential damage to reputation should be given little weight, particularly where the party seeking the injunction has provided an unconditional bank guarantee and accepted the contractual risk that it will be called upon and Siemens is able to avoid the risk by making payment on account of the amount in dispute.[55] Bulgana also submitted that the only evidence from Siemens regarding reputational damage was a 'broad assertion' from Hertling and that this was insufficient to justify the granting of an injunction - again, particularly where it is open to Siemens to manage that risk by tendering payment on account.

83 In relation to the argument in Siemens's written case that it might have difficulty recovering funds in the event that it was subsequently successful in defeating Bulgana's claim for delay damages, Bulgana submitted that the evidence did not bear out any such assertion. To the contrary, the evidence disclosed 'very significant levels of profit, current assets and net equity' in the financial report relied upon by Siemens during the 5 December 2019 hearing before the judge.

84 Bulgana submitted that there was cogent evidence that its inability to have recourse to the performance securities, in the absence of payment of delay damages by Siemens, would cause it severe prejudice - particularly in light of the project financing terms applicable to Bulgana and potential risks in relation to its contract with the State. It was also submitted that the balance of convenience was to be assessed in the context of the terms of the contract as to risk allocation, including the provisions regarding payment of disputed delay damages. This, too, it was submitted, 'powerfully supports' that the balance of convenience lay strongly against the grant of an injunction.

Did the judge err in deciding the proper construction of the 30 September agreement on an 'as if' final basis? (Grounds 1, 2, 3 and 6(a))

85 Grounds 1, 2, 3 and 6(a) contend that the judge erred in making a final determination as to the construction of the 30 September agreement rather than deciding the question of construction on an interlocutory or prima facie basis. Part of the reasoning of Siemens in this context involves the evaluation of the affidavit evidence (Ground 2) and it is convenient to deal with these matters together.

86 The proper approach to be taken to questions of construction of contracts which involve performance bonds or similar arrangements, when injunctive relief is being sought, was considered by this Court in Sugar Australia.[56] That case involved an application for an injunction to restrain recourse to two bank guarantees under a building contract. The primary judge had decided not to determine a question which had arisen as to the meaning of the words 'acting reasonably' in the provision governing availability of the guarantees, because the question was difficult and of wider importance, and there was little time available. He had also taken into account the consequences to the respective parties of a final determination of the construction issue at that stage.

87 On appeal, both Osborn and Ferguson JJA and Kaye JA examined the authorities and concluded that the primary judge had erred in taking this approach.[57] Together, the reasons draw attention to two considerations relevant to the present matter. First, if the parties to a contract have agreed upon a mechanism to allocate risk, by which one party is to be out of pocket while a dispute between them is resolved, then that commercial purpose might be frustrated by the grant of an interlocutory injunction preventing the use of the agreed mechanism.[58]

88 Secondly, the question whether the contract has the commercial purpose of allocating risk during pending disputes, rather than merely providing for security, is a matter of construction of the contract.[59] It may therefore be necessary to make a determination as to an issue of construction, at least on a provisional basis, in order to see whether the first principle is applicable.[60]

89 More generally, Osborn and Ferguson JJA referred to authorities to the effect that, in an application for an interlocutory injunction, questions of law should ordinarily be decided unless time does not permit or the matter requires a factual matrix which is not available pending trial.[61] Such an approach, while always subject to the particular circumstances of each case, was said to conform with the overarching purpose in s 7 of the Civil Procedure Act 2010, to facilitate the just, efficient, timely and cost effective resolution of the real issues in dispute.[62]

90 The judge referred extensively to Sugar Australia and held that, if he were not to decide the question of construction finally, this would defeat 'the parties' contractual intent in relation to a contractual regime which in substance provides for immediate access' to the performance securities,[63] and 'disrupt the parties' agreed risk allocation regime'.[64] He did not consider that possible conflicts in the affidavit evidence were sufficient to warrant a different approach.[65]

91 There was clearly much to be said in favour of the judge's approach, if the question of construction could properly be determined on a final basis on the material available to the court. It could not be doubted (nor was it really in dispute before us) that the performance securities regime in the contract was intended as a risk allocation mechanism while disputes as to the underlying obligations of the parties were determined. On that basis, an injunction precluding Bulgana from taking advantage of that regime might be said to frustrate the commercial purpose of the contract. This was the express finding of the primary judge.[66]

92 On the other hand, the dispute about the 30 September agreement was, in substance, about whether the parties had put aside the contractual regime to the extent that it provided for the performance securities, leaving the delay liquidated damages arrangements on an unsecured basis after set-off had taken place. As senior counsel for Bulgana pointed out in oral argument, on the contention of Siemens, there was still a risk allocation mechanism, albeit an essentially unsecured one. On this basis, it was said that the first principle set out above applied.

93 The second principle drawn above from the reasons in Sugar Australia might in any event suggest that resolution of the construction of the 30 September agreement was necessary in order to determine whether or not the commercial purpose of the parties, in agreeing to the modified performance guarantee arrangements, was to preserve a risk allocation mechanism - with the result that a grant of an injunction would tend to defeat the parties' intentions in that regard - or whether the modified purpose concerned questions of security alone. In other words, if there was doubt as to whether the risk allocation purpose was extant after 30 September 2019, that doubt could only be resolved by construing the 30 September agreement.

94 In this way, the general approach explained in Sugar Australia points towards the desirability of finally determining the question of construction rather than granting interlocutory relief. However, as the authorities including Sugar Australia make clear, there is no absolute rule governing these cases. In particular, it is well recognised that a court may decide not to proceed to a final determination of a question of construction, notwithstanding the above considerations, if it does not have the benefit of evidence necessary for that purpose.[67] The judge took this matter into account, as we have mentioned. But in our view, he erred in the course of doing so.

95 It will be recalled that the judge decided that the only evidence that was probative as to the conversations between Hertling and Francisci before the making of the 30 September agreement was the account found in [27] of the second Hertling affidavit and [37] of the first Francisci affidavit of their conversation at approximately 12 noon on 30 September 2019.[68] Siemens had relied on other evidence, in particular the following parts of [29] of the second Hertling affidavit regarding that conversation:

We did not discuss at any time that BWF's promise not to call on the Performance Security in connection with its claims for Delay Liquidated Damages:

(a) would not apply if there was no money due for set off;

(b) would apply only to the Delay Liquidated Damages BWF had claimed to that date; or

(c) was otherwise limited to the 'Demand' referred to at paragraph 33 of the Francisci Affidavit (which, as I note ... below, I was unaware of prior to reading the Francisci Affidavit).

96 The primary judge stated that he gave no weight to this evidence because it consisted of Hertling's personal views, interpretations, opinions and conclusions and was in the nature of a submission.[69] It amounted to conclusive assertions rather than dealing with what was actually said. Those criticisms were properly made in respect of the balance of [29], which we have set out in full at [34] above. But in our opinion they do not apply to the above extract. In that evidence, Hertling deposed to what was not said. This was direct evidence of the conversation, relevant to a determination of the subject matter to which the parties were addressing themselves when they entered into the 30 September agreement. It was not evidence to which no weight could be attached on the basis adopted by the judge.

97 Siemens also pointed to evidence given by Hertling about a second conversation on 30 September 2019. The evidence, in [36] of the second Hertling affidavit, was as follows:

At 5:20pm, I received a telephone call from Mr Francisci. Mr Francisci and I had a conversation to the following effect:

He said: Lawyers are making this terribly complicated. They are arguing about 5 or 10 days.

I said: I don't know why it would be so complicated. Our agreement is you will not call on the bank guarantees, you can continue to deduct liquidated damages from payment claims, and we will not make claims under the Security of Payment Act, and we don't accept that you have any entitlement to liquidated damages. Is that correct?

98 In a responding affidavit, Francisci said that he did not agree that there was any discussion with him which restated what he had discussed with Hertling in the earlier call, and that if Hertling had a discussion to the effect stated it was not with him.

99 The judge again attached no weight to this evidence. He stated that it did no more than refer to 'the earlier agreement with Francisci at about noon on 30 September 2019' and that Francisci denied the conversation.[70] In our opinion, this reasoning was in error. The alleged conversation did not merely refer to an 'earlier agreement'. It recorded an understanding as to the content of an agreement shortly to be made. It is significant that, between the two alleged conversations, the parties had executed an earlier version of the letter which, with amendments, became the 30 September agreement. In other words, matters had moved on since the midday conversation. If there was a later conversation, reflecting the reopening of discussions after it had been thought that agreement had earlier been reached, and that later discussion drew oral discussions to a close, it was not open to the judge to give an account of that conversation no weight. It was also not pertinent that the conversation was disputed. That did not go to its relevance or weight. Instead, it made the failure to take the evidence into account and make findings in relation to it more significant.

100 In Sugar Australia, Osborn and Ferguson JJA stated that the discretionary nature of the decision whether to leave a question of construction to a final determination, together with the fact that the matter involves multifactorial considerations and case management issues, means that this Court will not lightly interfere with the primary judge's decision. It was said that 'clear error' is required.[71]

101 In our view, that test is made out in this case. It was critical to the judge's reasoning that the question of construction could be decided having regard to the two accounts of what was said in the midday conversation, without regard to the above material. For the reasons we have given, it was not open to approach the matter on this basis. Moreover, the evidence was in controversy between the parties. It would have been difficult for the matter to be decided on a final basis in the absence of any cross-examination as to the competing accounts. Indeed, on a final hearing, all the relevant evidence of conversations is likely to be given orally to the best of the witnesses' recollections, in accordance with standard Commercial Court practice.[72] It will be recalled that the judge considered that, by the way that the case was run, Siemens acceded to a final determination being made without requiring cross-examination. Siemens challenged that conclusion before us. But even if the judge's decision in that respect is accepted, the fact that there was material and probative evidence to which no weight was given means, in the circumstances of this case, that the discretion miscarried.

102 The errors identified above are in our view sufficiently clear that the decision of the judge to proceed to a final determination of the question of construction must be set aside. Having heard full argument, we are then in a position to exercise the discretion for ourselves. Neither party sought a remitter in these circumstances.

103 Both parties contended that there was a basis upon which this Court could now make a final determination as to the construction of the 30 September agreement. Siemens submitted that the construction advanced by Bulgana was simply not open on the text and a final determination in Siemens's favour could be made for that reason. Bulgana submitted that the judge's construction was correct. But in our view it is plain that the matter cannot proceed to a final determination without the testing of the evidence to which we have referred. It no longer matters that neither party sought cross-examination before the primary judge. There is an arena of factual controversy as to which it is clear that at least Siemens wants cross-examination, and we assume that this would occur at any trial. Without properly identifying the factual matrix, the question of construction cannot be finally determined.

104 The question of construction accordingly falls for decision at this stage only on a prima facie basis, pending the determination at trial of the relevant factual matrix.

Did the judge err in his construction of the 30 September agreement? (Grounds 4, 5 and 7)

105 As we have concluded that the primary judge was wrong to construe the 30 September agreement on an 'as if' final basis, rather than an interlocutory basis, the grounds of appeal which challenge the judge's interpretation of the agreement do not arise for determination. In that regard, Bulgana rightly concedes that Siemens has put forward an arguable case supporting its construction, and has thus established a serious question to be tried.[73] Having heard extensive argument, we are also persuaded that Bulgana's construction is equally arguable. Specifically, in the absence of the full context, which is to be examined at trial, we express no view as to the strengths of the respective contentions on construction of the 30 September agreement.

Did the judge err in failing to find that there was a serious question to be tried, that damages would not be an adequate remedy and that the balance of convenience favoured the granting of an interlocutory injunction? (Ground 6)

106 Plaintiffs seeking an interlocutory injunction must establish that they have a prima facie case for the relief that they seek and that the balance of convenience favours the granting of an injunction.[74] The Court will consider either separately or as part of the consideration of the balance of convenience whether the plaintiff is likely to suffer injury for which damages would not be an adequate remedy.[75] In considering how strong the plaintiff's case needs to be, the Court will take into account 'the nature of the rights [the plaintiff] asserts and the practical consequences likely to flow from the order [sought]'.[76]

107 Whether the relief sought is prohibitory or mandatory, the Court should take whichever course appears to carry the lower risk of injustice if it should turn out to have been wrong to grant or refuse the injunction.[77]

108 As we have said, there is no issue that there is a serious question to be tried as to the proper interpretation of the 30 September agreement. As to whether damages will be an adequate remedy, and matters affecting the balance of convenience, both parties filed substantial affidavit evidence. Much of that evidence was in general terms and contained some assertion and speculation, sometimes without supporting documents. That is unsurprising given the affidavits were prepared urgently in the context of an interlocutory injunction application and, after the primary judge dismissed the application, in the context of an urgent interim injunction application pending leave to appeal to this Court. We have considered the evidence carefully, and take the overall view that each party will likely suffer financial loss if it is unsuccessful in this application and that such loss can, with the possible exception of asserted reputational damage, be compensated for by an order for damages or, more particularly, by the operation of cls 13.8(f) or 25.7(f) of the contract.

109 As part of its balance of convenience contentions, Siemens expressed a concern that it may be unable to recover moneys paid to Bulgana. In his first affidavit, Hertling deposed that Siemens would be prejudiced if no injunction were granted because he was concerned that Siemens may have difficulty recovering money paid to Bulgana for delay damages in the event that Siemens later establishes that it was not liable to pay delay damages.[78] He based that concern on Bulgana's financial statements lodged with ASIC, which have since been updated, as discussed below.

110 In response to Hertling's concerns that Bulgana could not repay the money, Francisci said in his first affidavit in respect of Bulgana's financial condition that Bulgana's financial report for the half year ending 30 June 2019 reveals that $84 million has been injected by way of equity and $185.2 million has been received by Bulgana by way of non-recourse debt from commercial lenders under a project finance scheme.[79] That report was in evidence and not challenged by Siemens. On this issue, although Siemens formally submitted that the concern about Bulgana's ability to repay in the event that it later loses the dispute is maintained, it was not pressed in oral submissions and we attach no weight to it. We are satisfied that if Bulgana draws on the bank guarantees, and it later transpires that it was not entitled to do so, Bulgana will be able to honour its contractual obligations to repay the amounts obtained from the bank guarantees within the specified contractual time under cl 25.7(f).

111 Siemens put forward as its principal concern on the balance of convenience evidence from Hertling that a call on the bank guarantees will have a significant adverse effect on Siemens's reputation in the heavy engineering and construction industry. In that regard, Hertling deposed in paragraph [35(c)] of his first affidavit:

(c) If [Bulgana] converts any of the Performance Security into money, [Siemens's] reputation in the heavy engineering and construction industry would be significantly damaged for the reasons summarised below:

(i) to pre-qualify as a tenderer and advantageously negotiate contracts, [Siemens] must assure the other parties that it has a reputation as and is a reliable and competent contractor;

(ii) I know from experience that project proponents often ask tenderers during such negotiations to demonstrate such a reputation by stating whether or not it has ever had a bank guarantee or security cashed or called upon. It is important to [Siemens] that it retain an unblemished reputation. This is because its competitors in the relevant market include a number of multinational companies such as General Electric, Hitachi, Vestas, ABB and other world renowned entities against whom it competes for large scale heavy engineering and construction contracts;

(iii) it is the general practice for all contractors working in the heavy engineering and construction industry to demonstrate their reputation in the manner I have referred to above;

(iv) if a tenderer has previously had a bank guarantee or security cashed or called upon then its chances of successfully tendering for other contracts in the future is impaired. Siemens, and in my experience at Siemens' other group companies in which I have worked, there has not been an occasion in which a call on the security has been made and so it has not lost out on a tender on this basis and this a record I wish to maintain;

112 As to Hertling's expressed concerns about Siemens's reputation if the bank guarantees are called on, Francisci deposed in his first affidavit:

1. Mr Hertling expresses concern about the reputational impact of a call on Performance Securities. In my experience, participants in major projects understand that:

(a) major infrastructure contracts typically entitle securities to be called and the proceeds held notwithstanding that the right to the proceeds may be disputed; and

(b) a call on securities probably indicates a claim, but is equivocal as to whether there is any responsibility.

61. Based on my experience:

(a) major contractors who are genuinely concerned about their reputation make every effort to ensure that they achieve Practical Completion and would never leave a project unfinished; and

(a)[sic] major contractors who do not wish their securities to be called appreciate advance notice so that they have the time and opportunity to avoid the call by making payment.

113 This contested evidence, general in nature but plausible on both sides, was not tested by cross-examination and so we do not attribute any significant weight to it. Moreover, having regard to Bulgana's evidence that it may also suffer reputational damage - set out in the next paragraph - this is a neutral factor in assessing the balance of convenience.

114 Bulgana also expressed concern about it suffering reputational damage and consequent difficulty in securing project finance. Francisci deposed in his first affidavit:

1. Further, based on my experience, I am concerned that if [Bulgana] is delayed in recovering the agreed DLDs by an injunction, then the reputation of [Bulgana] and of the broader Neoen Group will be significantly damaged because:

(a) securing financing for major infrastructure projects is an expensive and serious endeavour for all concerned and is highly competitive. The banks rely not only on the express terms of documents like the Tripartite Deed and EPC Contract, but also rely on the parties to those documents, including both [Bulgana] and [Siemens], honouring those terms;

(b) the failure of major development groups and contractors like the Neoen Group and the Siemens Group, respectively, to recognize and abide by the terms of documents like the Tripartite Deed and to recover (or pay) DLDs as and when due, irrespective of any underlying disputation, is likely to have an adverse impact on the ability of, or terms on which:

(i) the Neoen Group is able to secure financing for future projects;

(ii) [Bulgana] is able to secure refinancing for the Bulgana Project;

(f) financing terms have a direct impact on the financial viability of financed projects; and

(g) difficulty in achieving financing in order to initiate new projects has an adverse impact not only in terms of the direct costs of financing and related financing processes, but also on the present and future value of a development business.[80]

115 In his first affidavit, Williams - Bulgana's legal director - deposed as to concerns about the adverse effect of Siemens's failure to pay delay damages on Bulgana's project financing arrangements for the project.[81] In his second affidavit, Williams deposed as to the financial consequences for it under the project financing arrangements for the project. In general terms, Williams explained that the project financing to Bulgana for this project limits repayment to the lenders to revenue generated by the project, and thus the financiers insisted on the delay damages and performance security regimes in the contract. In his experience, contractors such as Siemens would be well familiar with these kinds of project financing requirements.[82] Williams then deposed to the possible financial consequences for Bulgana, under its financing arrangements, of Siemens continuing to withhold payment of delay damages.[83]

116 Williams's evidence, while commercially plausible, is general in nature and unsupported by any documents. Nonetheless, its plausibility entitled it to be given some weight.

117 As we have said, Siemens's principal concern is possible reputational risk which it contends it may suffer if the bank guarantees are called upon. Subject to weight, we accept that potential reputational risk may be relevant to the balance of convenience, not only for Siemens but for Bulgana also.[84] We note, however, that it lies within the ability of Siemens to pay the outstanding delay damages and thus avoid the bank guarantees being called upon.[85] As appears above, at the hearing before the primary judge on 6 December 2019, the judge was informed by counsel for Siemens that it preferred to make payment of the presently claimed amount of delay damages rather than have the bank guarantees called upon, so as to avert perceived reputational damage arising from that event.[86]

118 Before this Court, counsel for Siemens acknowledged that this choice remained open to it, but contended that it should not be forced into that position because adopting such a course would mean it lost the benefit of the bargain that it contends was made by the 30 September agreement; and because if it is forced into that position it will 'swap one form of prejudice for another'. By these contentions, we understood Siemens to be submitting that:

(1) if it pays the delay damages it will be paying them in compliance with its obligations under cls 13.8(d) and 13.8(e)(1) of the contract;

(2) these payments would not be repayable under cl 13.8(f) unless the extension for practical completion which it seeks is granted in the arbitration, which counsel for Bulgana contended will likely be a lengthy international arbitration;

(3) thus, if the delay damages are paid and Siemens wins at trial, it will still have to wait a long time for its money, as it is only if the bank guarantees are called on, and that call is in breach of the 30 September agreement, that Siemens can resort to cl 25.7(f) to obtain early repayment of the delay damages amount; and

(4) while the combined effect of cls 13.8(d), 13.8(e)(1) and 13.3(h) is that delay damages are payable pending the arbitration, that position may change depending on the final interpretation which the Court places on the 30 September agreement.

119 We do not accept that these contentions tip the balance of convenience in Siemens's favour. Given Siemens's submissions to the primary judge after dismissal of its application for an interim injunction pending appeal, we infer that it will likely pay the delay damages rather than allow the bank guarantees to be called on - so as to avoid the asserted reputational prejudice. If so, its only loss will be financial and capable of being compensated for by repayment with interest if it succeeds in the arbitration. If it chooses not to pay, and thus allows the bank guarantees to be called on, it has rights for repayment with interest under the contract and, as appears below, the Commercial Court can provide an urgent trial to determine the issues on a final basis.

120 Moreover, on either party's construction of the 30 September agreement, the relevant status quo should in our view be treated as being the contractual regime which requires payment of delay damages pending arbitration, and repayment with interest should it transpire that some or all of the delay damages were paid before any extended date for practical completion. We note in that regard that, notwithstanding the 30 September agreement concerns delay damages, it contains no express statement that delay damages are not due and payable above those amounts which can be recovered by the agreed set-off.

121 We have referred to the risk of injustice being suffered by Siemens. The potential injustice to Bulgana is of a different kind. If its construction is ultimately found to be correct, the grant of an interlocutory injunction will have prevented Bulgana from relying on its security which, on that construction, is integral to the risk allocation regime agreed between the parties. As we have discussed above, this is a prospect about which courts considering applications to restrain reliance on performance bonds need to be vigilant. In the present case, the weight of that consideration is somewhat reduced because the material before us suggests that either Siemens would pay the amounts due in any event, or Bulgana could enforce its contractual entitlement to unpaid delay damages - either in the arbitration or by counterclaiming for urgent declaratory relief at trial. Nonetheless, in our view, the potential injustice of denying Bulgana its security is real.

122 Taking all the factors into account, we are of the view that the course which carries the lesser risk of injustice should Siemens succeed in its contentions as to the construction of the 30 September agreement is to refuse the application for an interlocutory injunction. Put simply, we place little weight on Siemens's asserted reputational prejudice; note that it can be avoided by Siemens's choice to pay delay damages rather than risk the bank guarantees being called on; and note the fact that damages or contractual entitlements to repayment with interest will be an adequate remedy.

123 The primary judge erred in determining the application before him on an 'as if' final basis rather than an interlocutory basis. Error having been established, we have ourselves considered the application on an interlocutory basis, and come to the conclusion that the application for an interlocutory injunction should be refused. The primary judge also dismissed the injunction application, but he did so on a final basis. By paragraphs [4] and [5] of his orders made 2 December 2019, he dismissed the proceeding and ordered Siemens to pay Bulgana's costs of it. On this basis, although we have also dismissed the application for an injunction, we have done so on a different basis and it is necessary that the appeal be allowed, paragraphs [4] and [5] of the judge's final orders be set aside, and it be ordered in their place that the application for an interlocutory injunction is dismissed. We will hear the parties as to the costs below and of this appeal, and as to any directions they seek in the proceeding going forward. In that regard, we note that a judge of the Commercial Court stands ready to hear a trial of the proceeding on 29 January 2020.

[1] Siemens Gamesa Renewable Energy Pty Ltd, referred to as 'SGRE' in much of the material.

[2] Bulgana Wind Farm Pty Ltd, referred to as 'BWF' in much of the material.

[3] The contractually agreed rates are $218,400 per day in respect of what is described as the 'Main Works' and $10,000 per day in respect of what is described as the 'BESS Works'.

[4] Issued by the Australia & New Zealand Banking Group Ltd with a combined value of $24,920,646.40.

[5] Applying Sugar Australia Pty Ltd v Lend Lease Services Pty Ltd [2015] VSCA 98 ('Sugar Australia').

[6] Siemens v Bulgana [2019] VSC 771 ('Reasons').

[7] Siemens v Bulgana [No 2] [2019] VSC 807 ('Second Reasons').

[11] Affidavit of Thomas Hertling affirmed 8 October 2019, [27] ('first Hertling affidavit').

[12] Ibid. An email from Williams to Lim explaining the request was in evidence but neither party before this Court sought to rely on it.

[19] First Francisci affidavit [15]-[16].

[25] [2015] VSCA 98, [43]-[56] (Osborn and Ferguson JJA), [111]-[128] (Kaye JA).

[33] Reasons [187], [189] (emphasis added).

[46] Reasons [231]-[236] (emphasis added).

[49] [2015] VSCA 98.

[53] See first Hertling affidavit [35].

[54] [2010] NSWCA 283 [9] (Campbell JA), [45] (Macfarlan JA) ('Lucas Stuart').

[55] Sugar Australia [2015] VSCA 98, [233] (Kaye JA); Patterson Building Group Pty Ltd v Holroyd City Council [2013] NSWSC 1484, [79]; Central Petroleum Limited v Century Energy Services Pty Ltd [2011] WASC 211, [78]-[80]; CPB Contractors Pty Ltd v JKC Australia LNG Pty Ltd [No 3] [2017] WASCA 132, [35]; CPB Contractors Pty Ltd v JKC Australia LNG Pty Ltd [2017] HCA Trans 147, 24 (Nettle ACJ).

[56] [2015] VSCA 98, [43]-[56] (Osborn and Ferguson JJA), [111]-[128] (Kaye JA).

[57] See, for example, Lucas Stuart [2010] NSWCA 283; Fletcher Construction Australia Ltd v Varnsdorf Pty Ltd [1998] 3 VR 812 ('Fletcher'); Hortico (Aust) Pty Ltd v Energy Equipment Co (Aust) Pty Ltd (1985) NSWLR 545 ('Hortico').

[58] Sugar Australia [2015] VSCA 98, [18], [21], [25] (Osborn and Ferguson JJA), [123] (Kaye JA).

[59] Ibid [18], [19], [22] (Osborn and Ferguson JJA), [123] (Kaye JA); see also Fletcher Construction Australia Ltd v Varnsdorf Pty Ltd [1998] 3 VR 812, 821 (Charles JA), 826-7 (Callaway JA).

[60] Sugar Australia [2015] VSCA 98, [28]-[31], [35], [36], [38] (Osborn and Ferguson JJA); cf [122] (Kaye JA).

[61] Ibid [49] citing Hortico (1985) 1 NSWLR 545, 549 (Young J).

[67] Sugar Australia [2015] VSCA 98, [44], [49] (Osborn and Ferguson JJA).

[71] Sugar Australia [2015] VSCA 98, [57]-[59]; see also [107] (Kaye JA).

[72] Supreme Court of Victoria, Commercial Court Practice Note SC CC 1: Commercial Court, December 2017, [15.13].

[74] Australian Broadcasting Corporation v O'Neill [2006] HCA 46; (2006) 227 CLR 57.

[76] Beecham Group Ltd v Bristol Laboratories Pty Ltd [1968] HCA 1; (1968) 118 CLR 618, 622.

[77] Bradto Pty Ltd v Victoria [2006] VSCA 89; (2006) 15 VR 65, 73 [33]-[35].

[78] First Hertling affidavit [35(b)].

[80] There are no sub-paras (c), (d) and (e) in original document.

[81] Affidavit of Joshuah Vaughan Williams affirmed 22 November 2019, [27].

[82] Affidavit of Joshuah Vaughan Williams affirmed 5 December 2019, [5]‑-[9].

[84] For example, Lucas Stuart Pty Ltd v Hemmes Hermitage Pty Ltd [2010] NSWCA 283, [9] (Campbell JA), [45] (Macfarlan JA).

[85] CPB Contractors Pty Ltd v JKC Australia LNG Pty Ltd [No 3] [2017] WASCA 132, [35]; CPB Contractors Pty Ltd v JKC Australia LNG Pty Ltd [2017] HCA Trans 147, 24 (Nettle ACJ).

[86] See [66] above.