The contractor's application for an interlocutory injunction restraining the principal from having recourse to performance security (two bank guarantees and one performance bond totalling $6,100,630.50) was dismissed; however, the Tribunal ordered the principal to deliver up two bank guarantees constituting materials security ($2,500,000 and $1,319,999) for cancellation. Clause 5.2 of the amended AS4902-2000 contract was construed as operating both as security for performance and as a risk allocation device with a 'pay now, dispute later' function, meaning the principal need only assert, acting reasonably, a bona fide entitlement to payment — not prove an absolute entitlement to liquidated damages. The Tribunal held that disputes over the superintendent's provisional EOT assessments, including allegations of late assessment and failure to assess within 28 days, did not render the principal's assertion of entitlement unreasonable or unconscionable, and rejected the contention that clause 34.5 operated as a deeming provision. Materials security provided for unfixed plant and materials under clause 37.3 was held to be functionally distinct from performance security and not subject to the same risk allocation analysis; once the materials were incorporated into the works, the strong prima facie case for return tipped the balance of convenience in the contractor's favour.
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