Martinus Rail Pty Ltd v Qube RE Services (No 2) Pty Ltd [2023] NSWSC 1550

Supreme Court New South Wales

Medium Neutral Citation: Martinus Rail Pty Ltd v Qube RE Services (No 2) Pty Ltd [2023] NSWSC 1550 Hearing dates: 11 December 2023 Date of orders: 20 December 2023 Decision date: 20 December 2023 Jurisdiction: Equity - Commercial Arbitration List Before: Rees J Decision: Refuse application for interim measures. Catchwords: COMMERCIAL ARBITRATION — Interim measures — Contractor provides security by unconditional undertakings from bank — Principal yet to make demand to bank — Principles at [3]-[9] — Contractor obtains ex parte injunction restraining principal from making demand to bank — Whether interlocutory measure should be made pending arbitration — Whether right to call on bank guarantee a 'risk allocation device' — principal entitled to call on guarantee at an early stage in the dispute BUILDING AND CONSTRUCTION — Where adjudication determinations rendered — Whether right to call on bank guarantees in construction contract void under s 34 of the Building and Construction Industry Security of Payment Act 1999 (NSW) — Case law review at [94]-[102] — Adjudication determination does not stand in the way of the principal making a demand on security INTERLOCUTORY INJUNCTION — Whether serious question to be tried as to principal's right to have recourse to bank guarantee — Principal required to "act reasonably" — No serious question to be tried as to whether the principal was "acting reasonably" in forming the view that the principal was entitled to terminate for cause — Balance of convenience favours principal. Legislation Cited: Commercial Arbitration Act 2010 (NSW) Building and Construction Industry Security of Payment Act 1999 (NSW) Cases Cited: Acciona Infrastructure Projects Australia Pty Ltd v EnerMech Pty Ltd [2023] NSWSC 1565 Australian Broadcasting Corporation v O'Neill (2006) 227 CLR 57 Beecham Group Ltd v Bristol Laboratories Pty Ltd (1968) 118 CLR 618; [1968] HCA 1 Clough Engineering Ltd v Oil and Natural Gas Corporation Ltd (2008) 249 ALR 458; [2008] FCAFC 136 CPB Contractors Pty Ltd v JKC Australia LNG Pty Ltd (No 2) [2017] WASCA 123 Daewoo Shipbuilding & Marine Engineering Co Ltd v INPEX Operations Australia Pty Ltd [2022] NSWSC 1125 Descon Group Australia Pty Ltd v 35 Merivale Pty Ltd [2023] QSC 276 Dualcorp Pty Ltd v Remo Constructions Pty Ltd (2009) 74 NSWLR 190; [2009] NSWCA 69 Fabtech Australia Pty Ltd v Laing O'Rourke Australia Construction Pty Ltd [2015] FCA 1371 FMT Aircraft and Gate Support Systems 8B v Sydney Ports Corporation [2010] NSWSC 1108 Grocon (Belgrave St) Developer Pty Ltd v Construction Profile Pty Ltd [2020] NSWSC 409 Harlech Enterprises Pty Ltd v Beno Excavations Pty Ltd [2022] ACTCA 42 John Holland Pty Ltd v Roads and Traffic Authority of New South Wales [2007] NSWCA 140 Kawasaki Heavy Inustries Ltd v Laing O'Rourke Australia Construction Pty Ltd (2017) 96 NSWLR 329; [2017] NSWCA 291 Lucas Stuart v Hemmes Hermitage Pty Ltd [2010] NSWCA 283 Mineralogy Pty Ltd v Sino Pty Ltd [2016] WASCA 105 Patterson Building Group Pty Ltd v Holroyd City Council [2013] NSWSC 1484 Probuild Constructions (Aust) Pty Ltd v Shade Systems Pty Ltd (2018) 264 CLR 1; [2018] HCA 4 Reid Construction Services Pty Ltd v Kheng Seng (Australia) Pty Ltd (1999) 15 BCL 158 RJ Neller Building Pty Ltd v Ainsworth [2008] QCA 397 Siemens Gamesa Renewable Energy Pty Ltd v Bulgana Windfarm Pty Ltd [2019] VSCA 318 Simic v New South Wales Land and Housing Corporation (2016) 260 CLR 85; [2016] HCA 47 Sugar Australia Pty Ltd v Lendlease Services Pty Ltd [2015] VSCA 98 Wood Hall Ltd v The Pipeline Authority (1979) 141 CLR 443 Texts Cited: UNCITRAL Model Law on International Commercial Arbitration (as adopted by the United Nations Commission on International Trade Law on 21 June 1985, and as amended by the United Nations Commission on International Trade Law on 7 July 2006) Category: Principal judgment Parties: Martinus Rail Pty Ltd (Plaintiff) Qube RE Services (No 2) Pty Ltd (Defendant) Representation: Counsel: Mr S Robertson SC / Mr AR Langshaw (Plaintiff) Mr TJ Breakspear SC / Mr TJ Boyle (Defendant)