Acciona Industrial Australia Pty Ltd v Kwinana WTE Project Co Pty Ltd - [2022] WASC 380

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CIVIL

CITATION:   ACCIONA INDUSTRIAL AUSTRALIA PTY LTD -v- KWINANA WTE PROJECT CO PTY LTD [2022] WASC 380
CORAM:   SOLOMON J
HEARD:   22 & 23 JUNE 2022
DELIVERED          :   11 NOVEMBER 2022
PUBLISHED           :   14 NOVEMBER 2022
FILE NO/S:   CIV 2309 of 2021
BETWEEN:   ACCIONA INDUSTRIAL AUSTRALIA PTY LTD
First Plaintiff
ACCIONA CONSTRUCTION AUSTRALIA PTY LTD
Second Plaintiff
JOHN BEEVER (AUST.) PTY LTD
Third Plaintiff
AND
KWINANA WTE PROJECT CO PTY LTD
First Defendant
BTA INSTITUTIONAL SERVICES AUSTRALIA LTD
Second Defendant

Catchwords:

Application for declaratory relief – Construction issue – Definition of force majeure event – Whether COVID-19 a force majeure event – Whether issue too hypothetical – Whether relief will quell controversy between parties

Legislation:

Biosecurity Act 2015 (Cth)
Competition and Consumer Act 2010 (Cth), sch 2 ('Australian Consumer Law'), s 18
Emergency Management Act 2005 (WA)
Jurisdiction of Courts (Cross-vesting) Act 1987 (Cth), s 5(2)
Native Title Act 1993 (Cth)
Rules of the Supreme Court 1971 (WA), O 18 r 16
Supreme Court Act 1935 (WA), s 24(7), s 25(6)

Result:

Application dismissed
Declarations not granted

Category: B

Representation:

Counsel:

First Plaintiff	:	JC Giles SC & R Young
Second Plaintiff	:	JC Giles SC & R Young
Third Plaintiff	:	JC Giles SC & R Young
First Defendant	:	B W Walker SC & T Boyle
Second Defendant	:	No appearance

Solicitors:

First Plaintiff	:	Corrs Chambers Westgarth
Second Plaintiff	:	Corrs Chambers Westgarth
Third Plaintiff	:	Corrs Chambers Westgarth
First Defendant	:	King & Wood Mallesons
Second Defendant	:	MinterEllison

Case(s) referred to in decision(s):

Ainsworth v Criminal Justice Commission [1992] HCA 10; 175 CLR 564
Aussie Airlines Pty Ltd v Australian Airlines Ltd [1996] FCA 813; (1996) 68 FCR 406
Bass v Permanent Trustee Company Ltd [1999] HCA 9; (1999) 198 CLR 334
Edwards v Santos Ltd [2011] HCA 8; (2011) 242 CLR 421
Forster v Jododex [1972] HCA 61; (1972) 127 CLR 421
Hobart International Airport Pty Ltd v Clarence City Council [2022] HCA 5; (2022) 399 ALR 214
Mine Trades and Maintenance-Electrical Pty Ltd v Freo [2012] WASC 78
Mineralogy Pty Ltd v Sino Iron Pty Ltd [2013] WASC 194 (S)
National Australia Bank Ltd v Nautilus Insurance Pte Ltd (No 2) [2019] FCA 1543; 377 ALR 627
Sanderson Computers Pty Ltd v Urica Library Systems BV (1998) 44 NSWLR 73
The Commonwealth v Sterling Nicholas Duty Free Pty Ltd [1972] HCA 19; (1972) 126 CLR 297

SOLOMON J:

Overview

The first defendant, whom I shall refer to as Project Co, is developing a substantial thermal treatment plant to produce energy from waste, in the industrial suburb of Kwinana, Western Australia. It is anticipated that the plant will process some 400,000 tonnes of waste annually and produce approximately 36MW of power to the grid. The project is plainly a sophisticated and very substantial enterprise.
By a written contract dated 16 October 2018 (EPC Contract), Project Co entered into an agreement with the three plaintiffs, collectively referred to in the Contract as 'the Contractor' for the provision of engineering, procurement, and construction services for the development of the project. In these reasons I shall refer to the Contractor as Acciona.
Project Co and Acciona, together with the second defendant, are also parties to a further agreement dated 16 October 2018 titled Consent Deed - EPC Contract (Consent Deed). Under the Consent Deed, the second defendant is designated the Security Trustee and is the grantee of a security interest over certain rights of Project Co in respect of the EPC Contract. Among other things, the Consent Deed imposes obligations on Acciona to give the Security Trustee notice and seek consent in prescribed circumstances.
The parties are involved in quite a vast and complex array of disputes in relation to the project and the rights and entitlements of Acciona under the EPC Contract.
Most relevantly for this proceeding, Acciona has asserted that one or more force majeure event or events, as defined by the EPC Contract (Force Majeure Event), has or have arisen. Project Co denies that a Force Majeure Event has arisen. Whether or not any Force Majeure Event has arisen has particular significance to the parties and the rights under the EPC Contract, as will be explained.
Broadly speaking, each asserted Force Majeure Event related to circumstances emanating from the COVID‑19 global pandemic, which Acciona claimed had a significant impact on its capacity to perform the EPC Contract.
A 'force majeure' is not of itself a term of any particular meaning. As noted, 'Force Majeure Event' is defined in the EPC Contract, and it means what the EPC Contract says it means. In this proceeding, Acciona seeks declaratory relief to confirm that certain uncontroversial, and indeed agreed facts in relation to the pandemic met the relevant descriptions contained in the contractual definition of Force Majeure Event; namely, 'declared national emergency', 'blockade or embargo' and 'biological contamination'. In addition, Acciona, as will be explained, seeks a declaration that the absence of a suspension or extension of time for a Force Majeure Event under cl 28 of the EPC Contract does not preclude Acciona's right to terminate for an extended Force Majeure Event under cl 36.11 of the EPC Contract.
Project Co denies that Acciona ought to be granted the relief it seeks, primarily because it contends it is hypothetical and that in substance, Acciona seeks an advisory opinion from the court. Thus, Project Co's primary position is that the court should not embark upon the exercise of considering, less still determining, whether the facts as agreed amounted to occurrences that meet the defined description of a Force Majeure Event. Project Co maintains in any event that the facts do not meet the terms of the definition on their proper construction such that the occurrences cannot be Force Majeure Events under the EPC Contract.

The EPC Contract

Before turning to the disputes and the contentions advanced by the parties, it is necessary to set out some of the relevant terms of the EPC Contract, particularly those terms to which the parties have drawn attention.
Clause 1.1 sets out the definitions of terms used by the EPC Contract, including the definition of Force Majeure Event, and I will return to those definitions as necessary.
Clause 4 imposes what might be considered fairly standard but onerous obligations on Acciona in respect of the works. Acciona is required to complete the works, including commissioning and testing by a specified date, referred to as the Target Commercial Operation Date. Under cl 1.1 that date is, in effect, 36 months from commencement unless adjusted pursuant to the terms of the EPC Contract. Clause 4(d)(ii) provides that Acciona is to undertake the works at its own cost and risk unless otherwise provided for by the EPC Contract. That allocation of risk is amplified in cl 4.2, which provides that Acciona accepts all risks including the cost of the works being greater than assumed or estimated. Clause 19.1 also provides for Acciona's acknowledgement that other than as expressly set out in the EPC Contract, it has taken into consideration and made allowance for all circumstances that might affect the undertaking of the works.
Clause 14 assumed some importance in the dispute that has arisen, because it contains obligations which, among others, Acciona maintains it was unable to perform due to the Force Majeure Event. It obliges Acciona to employ a sufficient number of appropriately experienced, qualified and skilled people, with all requisite accreditation and training, to undertake the works. It also imposes obligations on Acciona to provide superintendence of the works and personnel engaged in the works.
Clause 20 is a lengthy provision that imposes onerous obligations on Acciona to satisfy the requirements of the works in a manner that meets a range of professional and industrial standards.
Clause 22 provides for Project Co to direct variations to the works, and the mechanisms that operate in the event that Acciona considers that a direction amounts to a variation. The clause also provides the machinery for the valuation of variations. Under cl 8.9 a 'Change of Law' entitles Acciona to a variation under cl 22 to compensate for the cost arising from or in connection with complying with and performing works required to implement the change. A Change of Law is defined in cl 1.1 to include a change in any regulation or ministerial direction.
Clause 25 provides for suspension of the works (in whole or in part) by Project Co, effectively, at its discretion. Acciona is entitled to a commensurate extension of time unless the suspension was rendered necessary by Acciona's own conduct. The right of suspension under this clause is quite different from the notion of suspension provided for under cl 28, a matter to which I shall return.
Clause 27 is an important clause in the context of the disputes between the parties. It provides for extensions of time and delay costs. First, cls 27.1 and 27.2 set out the obligation of Acciona to undertake and progress the works. They provide as follows:
27.1 Commencement
(a)The contractor must promptly commence diligently and expeditiously to progress the Works on and from the Commencement Date and undertake and complete the Works in accordance with this Contract and thereafter progress the Works and undertake and complete the Works in a diligent, expeditious and orderly manner and otherwise in accordance with this Contract.
(b)Notwithstanding any other provision in this Contract, if for any reason there is a delay in the progress of the Works of more than ten (10) consecutive days, by notice, in writing, either Party may require the other Party to meet to discuss in good faith and acting reasonably how the delay may be overcome.
27.2 Time for Commercial Operation
Without affecting the application of any other provision, at all times, the Contractor must undertake the Works diligently and expeditiously to progress the Works so as to achieve Commercial Operation by the Target Commercial Operation Date.
(Cl. 1.1 defines:
'Commercial Operation' to mean, effectively, completion of the works and its associated requirements;
'Target Commercial Operation Date' to mean, effectively, 36 months from commencements or a date adjusted in accordance with the EPC Contract).
Clause 27.3 is an important provision. It sets out the circumstances in which Acciona is entitled to an extension of time, thereby avoiding exposure to liquidated damages provided for by cl 31. Clause 27.3 provides:
27.3Extension of Time for Commercial Operations
The Contractor may Claim an Extension of Time for each Day that the Contractor is delayed in achieving Commercial Operation by the Target Commercial Operation Date by reason directly of any of the following causes:
(a)Any breach of this contract by Project Co Personnel (other than a failure to pay money);
(b)Any act of omission of Project Co Personnel (not expressly authorised or permitted under this Contract):
(c)Any failure or delay by the Certifier in making a determination or delivering certificates or other deliverables within the required timeframes set out in this Contract;
(d)Any delay due to disruption to the Works caused by an Other Contractor (an/or their Personnel), or any Third Party;
(e)Any opening up as provided for in clause 21.1(f);
(f)Any non-compliance with clause 13.1(a) by Project Co;
(g)Any Variation agreed or determined pursuant to clause 22;
(h)Any suspension pursuant to clause 25.1 (other than where the suspension was necessary because of one or more of the circumstances set out in clause 25.3 or 15.1 (e));
(i)Any suspension pursuant to the Construction Contracts Act;
(j)Subject to the Contractor complying with its obligation under clause 29.3(f), the delay or failure of Project Co to procure the delivery of relevant quantities of Acceptable Waste in accordance with clause 29.3(e) and 29.3(g);
(k)Project Co failing to provide or procure access to the Connection Point by the time identified in the Work Plan Contract Program, provided that if Project Co implements the Grid Connection Contingency Plan in accordance with clause 27.3(k), the entitlement to an Extension of Time will be limited to ten (10) Business Days;
(l)Any failure by Project Co to comply with the Site Access Protocol;
(m)The discovery of any Artefact; or
(n)Any other provision under this Contract that provides expressly for an Extension of Time.
(each an Extension Event)
Clause 27.4 and cl 27.5 provide for Acciona to claim extensions of time in accordance with a prescribed process and subject to conditions precedent. Clause 27.6 provides for Acciona to claim the costs of delay associated with an extension of time. The provisions prescribe a strict regime by which Acciona may apply for an extension of time, and they supply the basis upon which Acciona is entitled to be compensated for the costs of delay.
Clause 28 deals with the impact of a Force Majeure Event. It provides as follows:
(a)The Affected Party must notify the other Party of any Force Majeure Event that precludes the Affected Party (whether partially or wholly) from complying with its obligations under this Contract (Affected Obligations) promptly upon the occurrence of, and in any event within sixteen (16) Business Days of, the Force Majeure event and must either:
(i) to the extent practicable, specify in the notice the length of delay or disruption that will result from the Force Majeure Event; or
(ii) where it is not practicable to specify the length of delay or disruption at the time the notice is delivered, provide the other Party with periodic supplemental notices during the period over which the Force Majeure continues to have effect.
(b)Subject to clause 28(c), the Affected Party's obligation to perform the Affected Obligations is suspended for the duration of the actual delay or disruption arising out of the Force Majeure Event and any event that would otherwise give rise to a right to terminate this Contract is disregarded to the extent arising out of the non-performance of the Affected Obligations. Project Co must grant an extension to the Target Commercial Operation Date for the period of the actual delay or disruption on achieving Commercial Operation by the Commercial Operation Date.
…
(d)The Parties must use their reasonable endeavours to remove or relieve the Force Majeure Event and to minimise the delay or disruption caused by any Force Majeure Event. If the Contractor is the Affected Party with Affected Obligations, the Contractor must also prepare a plan as soon as practicable following notice being given of the Force Majeure Event, describing how the effects of the Force Majeure Event can be overcome. The purpose of the plan is to assist the Parties to comply with their obligations in this clause 28(d) only (and to assist Project Co to comply with its obligations pursuant to clause 18.1(e) of the RRC WAS).
(e) Each of the Parties will be responsible for their own costs incurred during the period of the Force Majeure Event.
(f)Without entitling the Contractor to any further extension of time for any Force Majeure Event, during any Force Majeure Event that has continued for at least seven (7) consecutive days and which is not reasonably likely to cease within a further fourteen (14) days, the Contractor may by written notice to Project Co demobilise the Contractor Personnel from the Site as part of its obligation to mitigate the effects of the Force Majeure Event. As soon as the Force Majeure Event ceases, the Contractor will commence remobilising Contractor Personnel to continue performing the Works.
(g)The Contractor is not entitled to:
(i)Recover costs from Project Co (other than to the extent provided in clause 31.10); or
(ii)Without limiting Project Co's obligation to extend the Target Commercial Operation Date in accordance with clause 28(b), an Extension of Time pursuant to clause 27.3,
in respect of a Force Majeure Event.
The EPC Contract defines Force Majeure Event in cl 1.1 as follows:
Force Majeure Event means the occurrence after the Commencement Date of:
(a)fire, explosion, lightning storm, tempest, flood, cyclone, ionising radiation, earthquakes, riot and civil commotion, but not including spontaneous combustion in the Acceptable Wastes at the Facility;
(b)any blockade or embargo
(c)any:
(i)official or unofficial strike
(ii)lockout;
(iii)go-slow; or
(iv)other dispute,
generally affecting the haulage, construction, or waste management industries in the Perth metropolitan area or a significant sector of them.
(d)war, civil war, declared national emergency, armed conflict or terrorism;
(e)nuclear, chemical or biological contamination, provided that in respect of the contamination arising out of the Wastes delivered, the Contractor has complied with the Waste Acceptance Protocol
(f)pressure waves caused by devices travelling at supersonic speeds,
which causes a party (the Affected Party) to be unable to comply with all or a material part of its obligations under this Contract and is outside the reasonable control of the Affected Party (or those for whom it is responsible) but does not include:
(g)a failure or inability to pay money or financial hardship;
(h)an event to the extent that it is caused or contributed to by the Affected Party or, to the extent that the effect of the event could have been avoided or mitigated by a prudent contractor or project developer (as the case may be) acting reasonably; or
(i)any event to the extent that it is caused or contributed to by a breach of this Contract or Law by the Affected Party or to the extent that the effect of the breach of Contract or Law could have been avoided or mitigated by a prudent contractor or project developer (as the case may be), acting reasonably.
As noted, the significance of the contractual mechanism for an extension of time arises at least in part because Acciona is liable for liquidated damages for delay beyond the Target Commercial Operation Date. Clause 31.1 of the EPC Contract provides that:
31.1Liquidated Damages for delay to Commercial Operation
If Commercial Operation is not achieved by the Target Commercial Operation Date, without affecting the application of any other provision, immediately the Contractor will be liable to Project Co for, and must pay Project Co unless Project Co has exercised its set off rights in respect of such amounts, Liquidated Damages in the amount of the Delay Liquidated Damages Rate for each day of the period after the Target Commercial Operation Date up to and including the first to occur of the Commercial Operation Date in relation to the Works and the date of termination of this Contract pursuant to clause 36.
Clause 36 deals with breach and termination. Clauses 36.1 to 36.5 are concerned essentially with breach by Acciona and its consequences, including termination by Project Co. Clause 36.6 entitles Project Co to terminate at its convenience at any time by giving 21 days' notice. Clauses 36.7 to 36.9 are concerned with a breach by Project Co and its consequences, including termination by Acciona.
Clause 36.11 of the EPC Contract deals with the entitlement to termination in the event that a Force Majeure Event 'or its effects' continue for 180 days. It provides as follows:
36.11Termination for prolonged Force Majeure Event
(a)If a Force Majeure Event occurs and it or its effects subsist for a period of 180 days, either Party may, by notice, in writing, terminate this Contract with immediate effect.
The provision then goes on to set out, in some detail, what follows in the event of such a termination.

Clause 36.12 imposes certain obligations upon Acciona in the event of a termination, including that it must immediately cease executing the works.
Clause 40 provides that any dispute is to be resolved in accordance with schedule 20. That schedule provides for formal notices to be given in respect of a dispute, and among other things, prescribes a regime for negotiation.

Some observations on terms of the EPC Contract

It is convenient at this point to make some observations about the construction and operation of the provisions most directly relevant to this proceeding.
In broad terms it may be observed that the definition of Force Majeure Event has two elements, each of which must be satisfied. The first is the nature of the event itself, such as a flood, a cyclone, an industrial strike, a civil war or nuclear contamination. The second limb requires the relevant event to have caused a party to be unable to comply with all or a material part of its obligations under the EPC Contract. That second limb is qualified by a number of express exclusions. For example, if the party's inability to comply with its contractual obligations is by reason of financial hardship or is caused or contributed to by that party's own conduct, then no Force Majeure Event arises.
It is therefore uncontroversial that in order to establish a Force Majeure Event, it is necessary to show not only that the relevant event has occurred but also that it had the requisite causal effect on a party's ability to comply with its contractual obligations. It follows that even if it can be established that a relevant event has occurred, that in itself will not be sufficient to establish a Force Majeure Event for the purposes of the EPC Contract; it will still be necessary to demonstrate the causal connection and effect. Therefore, it also follows that a determination as to whether any of the relevant events occurred as is sought in these proceedings, will not resolve the controversy as to whether a Force Majeure Event has occurred. It will only resolve one aspect of that controversy and leave open the factually dense and difficult issue of the causal connection and effect.
Relevantly, the existence of a Force Majeure Event has significance in two primary respects under the EPC Contract. First, it may provide the basis for the suspension of obligations and a commensurate extension of time under cl 28. Secondly, it provides an entitlement to terminate the EPC Contract under cl 36.11.
It is important to make a number of observations about cl 27 and cl 28.
Both cl 27 and cl 28 provide for an extension of time. However, there are significant differences between the two clauses in that regard.
The extension of time is framed and operates differently under the two clauses. Clause 27 provides for a claim by Acciona for an extension of time if one of the events identified under cl 27.3 has occurred. The claim is for a delay to the Target Commercial Operation Date caused by one or more of the events specified in cl 27.3. Acciona's entitlement to an extension of time is also conditioned in the manner that is common in such contexts. It must comply with the prescribed notice provisions, the delay must be on the critical path, and there will be no extension to the extent that the cause was within the control of Acciona and/or Acciona failed to take mitigating action. The claim is assessed by the 'Certifier', an independent third party appointed by the parties pursuant to a deed. If all the conditions are met, the Certifier 'will extend the Target Commercial Operation Date' by the period of the delay. Importantly, under cl 27.6, if granted an extension of time, Acciona will also be entitled (with minor exceptions) to be paid its direct costs of delay plus a margin of 10%.
In contrast, in circumstances of a Force Majeure Event, cl 28 directs attention to the obligations under the EPC Contract from which the party is precluded from compliance by reason of the Force Majeure Event. That party's duty to perform those obligations is then 'suspended' by force of cl 28(b) for the duration of the preclusion. Two consequences necessarily flow under cl 28(b). First, any right of termination that would otherwise arise from the failure to perform those obligations is extinguished. Secondly, Project Co is required to grant an extension to the Target Commercial Operation Date for the period of delay or disruption. Subclauses (e) and (g) of cl 28 are significant. In contrast to the regime under cl 27 in which the plaintiff is entitled to the costs of a delay event, those subclauses expressly provide that there is no cost entitlement for any delay or disruption caused by a Force Majeure Event.
The mutual exclusivity of an extension of time under the two clauses is reinforced by cl 28(g), which provides in effect that Acciona is not entitled to an extension of time for a Force Majeure Event other than pursuant to cl 28(b).
The confined operation of the 'suspension' under cl 28 warrants some comment. It does not necessarily bring an end to the works entirely. Indeed, it is not the 'works' that are suspended (in contrast to the notice of suspension under cl 25). Rather, the clause suspends those obligations which the relevant party is precluded from performing. It thus may not result in a suspension of the works such as is provided for by cl 25. In addition, there is no prescribed process or mechanism for suspension as there is under cl 25; the relevant obligations are suspended by force of the contractual provision.
A consideration of the contractual provisions illustrates some complexity that may arise in characterising an event causing delay as a Force Majeure Event or as something else. The conduct of a third party with no relationship to either Project Co or Acciona, which causes delay or disruption, provides the basis for an extension of time under cl 27.3(d) and delay costs under cl 27.6. However, if that third party conduct constitutes a Force Majeure Event, then no costs or compensation will be available. For example, if the action of a third party creates delay and disruption to Acciona's progress of the works by preventing travel or access, then that may be an event entitling the plaintiff to compensation under cl 27(3)(d) and cl 27.6. However, if that conduct amounts to a strike or a 'lockout', or a blockade, then depending on the circumstances, it may amount to a Force Majeure Event. If that is the case, then no compensation is available to Acciona for the consequential delay. However, under cl 36.11, if the occurrence 'or its effects' persist for 180 days, there is an entitlement to terminate; a right not conferred by cl 27.
In a similar vein, if the prevention of travel is caused by a change in ministerial direction, then that may amount to a Change in Law as defined in cl 1.1. As noted above, that would entitle Acciona to payment as a variation under cl 8.9 for the costs arising from or in connection with complying with such a change. If, however, Acciona were to contend that the restriction on travel amounted to a blockade or embargo, and therefore a Force Majeure Event, then under cl 28(g) no compensation would be available.
It may be possible that the same broad set of circumstances gives rise to both a compensable claim for delay and a Force Majeure Event. A dispute as to Acciona's progress with the works caused by a third party may begin as a disruption that causes Acciona to be delayed in completing the works by the Target Commercial Operation Date. That conduct may then evolve into circumstances of a blockade or a war that causes Acciona to be unable to comply with a material obligation and is outside its reasonable control, and Acciona is thereby precluded from complying with its obligations under the EPC Contract.
The fact that those outcomes both emanate from the same third-party source and broad set of circumstances does not detract from the quite distinct and separate operation of cl 27 and cl 28. If Acciona is to claim an extension of time and delay costs under cl 27, it will need to comply with and demonstrate fulfilment of the criteria contained in that clause. If Acciona seeks to take advantage of cl 28 and/or cl 36.11, it will need to satisfy the requirements of those provisions, including the definition of Force Majeure Event in cl 1.1. Depending on the circumstances, Acciona may seek to advance its rights under both cl 27 and cl 28. But those rights and the circumstances that give rise to them are distinct. The extension of time and financial compensation are available under cl 27 to the extent that the conduct has delayed Acciona's ability to complete by the Commercial Operation Target Date. It is entitled to an extension of time and financial compensation to that extent, and that extent only. In contrast, if the circumstances have evolved into a Force Majeure Event, then from that point, Acciona is entitled to the rights conferred by cl 28 and cl 36.11 (if sufficient time lapses), but not cl 27. Acciona will be entitled to an extension of time, assessed not by reference to the number of days required to reach the Commercial Operation Target Date, but rather by reference to the duration of its preclusion from performing its obligations. In addition, under cl 28(g), from that point it is not entitled to financial compensation for the delay or disruption.

The Consent Deed

It is necessary also to refer to certain clauses of the Consent Deed.
Clause 8.1 requires Acciona to give the Security Trustee notice as soon as it becomes aware of any 'Default'. Default is defined, in broad terms, to include an event which would entitle Acciona to terminate the EPC Contract. On its face, such a right would include the right to terminate for a Force Majeure Event after 180 days under cl 36.11 of the EPC Contract. Clause 8.3 of the Consent Deed provides that Acciona must not terminate the EPC Contract unless it has given notice to the Security Trustee setting out details of the Default giving rise to that exercise.
Senior counsel for Project Co pointed to the awkwardness of cl 8 in respect of the right to terminate for a Force Majeure Event under cl 36.11. That difficulty arises because the right of termination under cl 36.11 is not consequential upon any default in the usual sense. Yet, the notice required by cl 8 appears to relate to default in its ordinary semantic sense, involving some form of breach or delinquency. Broadly on that basis, senior counsel for Project Co said it was open to doubt, should the question arise in the future, whether cl 8 of the Consent Deed applied in the context of a termination under cl 36.11 of the EPC Contract. Senior counsel for Project Co accepted that on the material before the court this did not appear to be a matter of controversy and the doubt that he raised was not agitated in those materials. Senior counsel for Acciona pointed out, quite fairly in my view, that the parties appear to have operated on the basis that cl 8 applied in the context of the right to terminate under cl 36.11. It was in any event common cause that this is not a matter for determination in these proceedings and appears to be one of many matters that may arise for another day.[1]
[1] Transcript, Acciona Industrial Australia Pty Ltd & Ors v Kwinana WTE Project Co Pty Ltd & Anor, Supreme Court of Western Australia, 23 June 2022, 158, 181.
Be that as it may, there is no doubt that quite apart from cl 8, under cl 5.2, Acciona covenanted that it would not terminate the EPC Contract without the prior written consent of the Security Trustee. Under the provision, such consent cannot be unreasonably withheld.
Importantly, it is uncontroversial that as yet no consent has been sought by Acciona under cl 5 of the Consent Deed to terminate the EPC Contract.

The dispute about Force Majeure Event and the right to terminate

The parties agreed a set of facts for the purpose of this proceeding. Those facts are contained in an Agreed Statement of Facts which are annexed to these reasons (Annexure A).
In addition to the Agreed Statement of Facts, a considerable volume of documents was admitted into evidence. A large proportion of these documents included what appeared to be a selection of correspondence between the parties in relation to claims made by Acciona under the EPC Contract. These documents were admitted as evidence of the existence and scope of the dispute, but not as evidence of the truth of the contentions they contained.[2]
[2] Transcript, Acciona Industrial Australia Pty Ltd & Ors v Kwinana WTE Project Co Pty Ltd & Anor, Supreme Court of Western Australia, 22 June 2022, 49.
The parties filed a handful of affidavits in the proceedings. The plaintiffs filed three affidavits of Glyn James Watson sworn on 27 October 2021, 17 November 2021, and 14 February 2022. The first defendant filed the affidavit of Franklyn John Drummond Smith sworn on 24 May 2022. The annexures to the affidavits of Mr Watson and Mr Smith were admitted as part of the aggregated trial bundle.
Multiple disputes have arisen between the parties. The Statement of Agreed Facts records that as at the date of that document (20 May 2022) there were in the vicinity of 120 claims advanced by Acciona under the EPC Contract. These included claims for extension of time under cl 27.3 with significant claims for delay/disruption costs under cl 27.6, compensation for Change of Law variations under cl 8.9, and claims for extensions of time for Force Majeure Events under cl 28.
These proceedings arose in the particular context of a notice from Acciona to the Security Trustee dated 1 October 2021.[3] On 1 October 2021, Acciona wrote to the Security Trustee (copied to Project Co) and purported thereby to give notice under cl 8.1(a) and cl 8.3(a) of the Consent Deed.
[3] Trial Bundle 3.
As noted above, it appears to have been accepted by the parties that cl 8 of the Consent Deed operates in the event of a proposed termination for a Force Majeure Event under cl 36.11 of the EPC Contract, because 'Default' under the Consent Deed includes a right to terminate. The notice was given for that purpose, that is, to advise the Security Trustee that several Force Majeure Events had occurred and that Acciona considered it was therefore entitled, or would become entitled with the lapse of time, to terminate the EPC Contract under cl 36.11.
The notice of 1 October 2021 explained that the Force Majeure Events defined in the EPC Contract which Acciona contended had occurred were each of:
(a)a declared national emergency in accordance with sub-paragraph (d) of the definition;
(b)a biological contamination in accordance with sub-paragraph (e) of the definition; and
(c)a blockade or embargo in accordance with sub-paragraph (b) of the definition.
In the notice, Acciona explained why in its view each of those defined events had occurred. It set out the relevant parts of the definition for each 'event' and the facts said to satisfy the relevant part of the definition. Those facts correlate in large measure with the facts contained in the Agreed Statement of Facts, at least insofar as they stood as at 1 October 2021.
In summary, both in its notice of 1 October 2021 and in these proceedings, Acciona identified three occurrences that, for the purposes of cl 1.1 of the EPC Contact, constituted a Force Majeure Event:
(a)For the purposes of sub-paragraph (d) of the definition of Force Majeure Event, Acciona contended that the presence, potential and actual community transmission of COVID-19 in Australia was a declared national emergency. Acciona relied on the Declaration of the Governor-General made on 18 March 2020 pursuant to s 475 of the Biosecurity Act 2015 (Cth). In order to make that Declaration, the Health Minister was required to be satisfied that 'a listed human disease is posing a severe and immediate threat, or is causing harm, to human health on a nationally significant scale'. The Declaration identified that 'a human biosecurity emergency exists', and that the biosecurity emergency was the 'human coronavirus with pandemic potential'. It was contended that the commencement, and continuous extension of that Declaration constituted a declared national emergency for the purposes of the definition of a Force Majeure Event.[4]
(b)Further or in the alternative, for the purposes of sub-paragraph (e) of the definition of Force Majeure Event, Acciona contended that the presence of COVID-19 in Australia constituted a biological contamination. Specifically, Acciona relied on a series of Department of Health infographics published in 2020 and 2021 to argue that the disease and virus had been transmitted between persons in Australia and had the potential to be transmitted further. It was contended that the presence and transmission of COVID-19 in Australia constituted a biological contamination for the purposes of the definition of a Force Majeure Event.[5]
(c)Further or in the alternative, for the purposes of sub‑paragraph (b) of the definition of Force Majeure Event, Acciona contended that various Commonwealth, State and Territory directives in response to COVID-19 constituted a blockade or embargo. In that regard, Acciona identified a series of regulations and ministerial directions that, alone or in combination, had the effect of restricting or preventing travel in and out of Australia, in and out of Western Australia, and between Western Australia and other states. Those regulations and directives also had the necessary effect of restraining or hindering international and interstate commerce. Acciona contended that for the duration of each of those regulations and directives, there was a blockade or embargo for the purposes of the definition of a Force Majeure Event.[6]
[4] Statement of Claim [14] - [20].
[5] Statement of Claim [23] - [24].
[6] Statement of Claim [21] - [22].
The factual foundation for the asserted blockade or embargo was more complex than the other asserted Force Majeure Events. At trial, Acciona helpfully and meticulously prepared an aide memoire, which set out the effect of the various travel restrictions imposed by the Commonwealth Government and WA State Government. Among other things, the aide memoire identified the commencement date and duration of each directive, the various restrictions that attached to the directive, and the extent to which the directive prohibited, prevented or disincentivised entry within or between States. It emerged from submissions in respect of the aide memoire, that there were isolated time periods within the broader period of travel restrictions regarding Western Australia, in respect of which Acciona did not seek to establish the existence of a blockade or embargo.[7]
[7] ts 86.
In its notice of 1 October 2021, Acciona also addressed the second limb of the definition of a Force Majeure Event. It contended that the relevant events had caused Acciona to be unable to comply with a material part of its obligations under the EPC Contract. In that context, Acciona made reference to cl 27.1(a) and cl 27.2 of the EPC Contract and explained that by reason of the relevant events or 'occurrences', it had not been able to meet the obligations contained in those provisions, namely, to undertake the works diligently, expeditiously and in an orderly fashion, and to progress the works so as to achieve 'Commercial Operation' by the 'Target Commercial Operation Date'. The letter went on to assert that because of those circumstances, Acciona was also unable to meet its obligations under cl 5.2(a), cl 14.1(a), cl 18.6 and cl 20.3(a)(i) of the EPC Contract. Those provisions, in broad terms, relate to Acciona's obligation to engage people of requisite skill and qualification, to procure the appropriate labour, plant and equipment, and to supervise the production of plant, materials and equipment.

Acciona advised in the notice that '[t]he Contractor has not been able to meet these obligations because of restrictions on travel into Australia and/or into Western Australia, themselves caused by the occurrences'.[8]
[8] Trial Bundle 7 [44].
As noted, the notice also contended that each relevant Force Majeure Event or its effects had persisted or would persist for 180 days and accordingly, Acciona was entitled, or would with the lapse of time become entitled, to terminate the EPC Contract under cl 36.11. Acciona added that no other provisions in the EPC Contract conditioned the right of termination under cl 36.11, and in that context made express reference to cl 28. The significance of that reference will be explained in the context of the ensuing correspondence discussed below.
In short, Acciona contended by its notice of 1 October 2021 that events emanating from the global COVID‑19 pandemic constituted one or more events of a declared national emergency, blockade or embargo, or biological contamination as those terms were defined in the EPC Contract; each of those occurrences had led to travel restrictions into Australia and Western Australia; and those travel restrictions had rendered Acciona unable to perform material obligations under the EPC Contract. Acciona therefore was, or would in due course become, entitled to terminate the EPC Contract under cl 36.11.
In response, by letter dated 12 October 2021, Project Co wrote to the Security Trustee (copied to Acciona) and, inter alia, stated its view that no event of default had occurred because none of the claimed Force Majeure Events as defined in the EPC Construct, had occurred.[9] The letter explained why in Project Co's view, each of the defined events had not occurred. For that reason, Project Co expressed its view that Acciona was not, and could not become, entitled to terminate the EPC Contract under cl 36.11. Project Co also addressed the second limb of the definition of Force Majeure Event. It maintained that additionally, no Force Majeure Event had occurred because Acciona was delayed in performance of the works for reasons of its own making. There had been no relevant inability to comply with all or a material part of its obligations which was caused by any asserted Force Majeure Event. Therefore, the requirements of a Force Majeure Event under the EPC Contract had not been met. On those bases, Project Co reiterated its view that no right to terminate under cl 36.11 had or could arise.

Other disputes between the parties

[9] Trial Bundle 8.

The correspondence referred to above and the ensuing further exchange of correspondence admitted into evidence also embodied further matters of controversy between the parties. They include the matters set out below.
The parties were at odds not only as to factual questions of whether the asserted occurrences had caused Acciona's inability to perform its obligations, but also on the meaning of 'unable' in the phrase 'which causes a party…to be unable to comply with all or a material part of its obligations…'. In denying that a Force Majeure Event had occurred because Acciona had not been unable to perform its contractual obligations, Project Co emphasised the degree of inability required by the terms of the EPC Contract for the existence of a Force Majeure Event. It was not sufficient for the obligations to have been rendered more difficult or expensive; that risk was expressly cast upon Acciona by the EPC Contract. It was necessary for the Force Majeure Event to have rendered the relevant obligations unable to be performed. Project Co asserted that the requisite standard was that 'it must be literally or physically impossible to carry out performance or legally impossible to do so'.[10] In that context, Project Co maintained that under the EPC Contract, 'the Force Majeure regime operates in a way whereby if the EPC Contractor is unable to carry out the Works, then the Works may be suspended, and an Extension of Time is granted for that period of suspension'.[11] Project Co pointed to the fact that Acciona had continued to progress the works and there had not been, and Acciona had not sought, any suspension of its obligations.
[10] Trial Bundle 8 [39].
[11] Trial Bundle 8 [42].
Acciona disputed Project Co's construction that what was required was a 'literal or physical impossibility', arguing that the proper enquiry is not physical impossibility but rather, whether the occurrence causes an inability to comply with contractual obligations, having regard to what is reasonable. If the inability can be overcome, for example, by massively disproportionate expenditure, then that party is 'unable to comply' because the inability can only be cured by that which is objectively unreasonable. That construction was in turn rejected by Project Co by reference to both the wording of the EPC Contract and case law.[12]
[12] Trial Bundle 15.
The parties were also at odds on whether the right to terminate under cl 36.11 of the EPC Contract required the causal effects of the Force Majeure Event to persist for 180 days, or merely the Force Majeure Event itself. That is, if the causal effect could be established, but that causal impact did not endure, yet the occurrence or event itself endured for 180 days, does the right of termination under cl 36.11 arise?
A further matter that divided the parties is important because it is the subject of the fourth declaration sought by Acciona. As noted in [61] above, Project Co in its responsive correspondence pointed to the absence of any suspension under cl 28 and that the works had continued to progress. On that basis, Project Co contended that a Force Majeure Event could not have arisen so as to trigger the right of termination under cl 36.11. It is not clear whether by that position, Project Co was intending to advance a constructional argument that the right to terminate under cl 36.11 did not arise unless obligations under cl 28 had first been suspended. Indeed, it is not entirely clear how Project Co understood and deployed the notion of 'suspension' in its correspondence. It may be observed that the correspondence adopts a meaning of 'suspension' that might sit somewhat awkwardly with its meaning in cl 28 and is perhaps more consistent with its (different) meaning in cl 25. Be that as it may, it appears to me that Project Co was possibly not advancing a constructional argument at all. Rather, Project Co was contending that as a matter of fact there was no relevant inability to perform as required by the second limb of the definition of a Force Majeure Event, and that fact was demonstrated by the absence of any suspension under cl 28. The same ambiguity may be said to be apparent in respect of the manner in which this aspect of the dispute is reflected in the pleadings. Whatever the correct position, it is sufficient for present purposes to note that this is the issue that sits behind the fourth declaration sought by Acciona in these proceedings.
It is plain from the exchange of correspondence referred to above, that a very real controversy existed between the parties in relation to a range of matters concerning Acciona's assertion that a Force Majeure Event had arisen. It is equally plain from that correspondence, that the question of whether the relevant events or occurrences amounted to a blockade or embargo, and/or a declared national emergency, and/or a biological contamination as those terms are deployed in the EPC Contract, was only one part of that controversy, and a relatively confined aspect. Other substantial matters divided the parties, including especially whether the second limb of the definition of Force Majeure Event had been satisfied; that is, whether any of those occurrences had caused Acciona to be unable to comply with all or a material part of its obligations under the EPC Contract. It was similarly plain that the latter controversy was a factually intense and complex controversy as well as involving legal argument about the meaning of 'unable to comply' and whether just the event itself or its effects had to persist for 180 days. Those controversies were not resolved by further correspondence. On the contrary, the disputation hardened and expanded.

Court proceedings

On 29 October 2021, Acciona issued proceedings in the Supreme Court of New South Wales. Acciona did not seek relief in respect of the broad spectrum of issues in contention relating to a Force Majeure Event referred to above. Nor did the proceeding concern any of the other disputes that are discussed below. Rather, Acciona limited the relief it sought to declaratory relief that the events of a declared national emergency, a biological contamination and blockade or embargo, as each of those terms are defined in the EPC Contract, had occurred. Acciona sought that relief in respect of a Force Majeure Event in the context of Acciona's asserted entitlement of termination expressed in its notice of 1 October 2021. Declaratory relief was also sought that the absence of a suspension or extension of time under cl 28 of the EPC Contract did not preclude Acciona's entitlement to terminate for a Force Majeure Event under cl 36.11.
By order of the Supreme Court of New South Wales on 23 November 2021 under s 5(2) of the Jurisdiction of Courts (Cross-vesting) Act 1987 (Cth), the New South Wales proceedings were transferred to this court and became these proceedings. Notwithstanding the ongoing and indeed expanded range of disputes between the parties, some of which are referred to below, the essential curial relief has not altered from that sought in the initial proceedings. It remains limited to declaratory relief in respect of the first limb of the definition of Force Majeure Event and the constructional question of the interface between cl 28 and cl 36.11.
It is convenient at this point to set out the precise declaratory relief sought by Acciona in these proceedings. Acciona sought the following relief:
(1)A declaration that the Emergency Circumstances constitute the occurrence after the Commencement Date of a 'declared national emergency' for the purposes of sub-paragraph (d) of the Definition.
(2)Further or alternatively, a declaration that the Embargo Circumstances constitute the occurrence after the Commencement Date of a 'blockade or embargo' for the purposes of sub-paragraph (b) of the Definition.
(3)Further or alternatively, a declaration that the Contamination Circumstances constitute the occurrence after the Commencement Date of 10 'biological contamination' for the purposes of sub-paragraph (e) of the Definition.
(4)Further or alternatively, a declaration that the Non-suspension Circumstances and the EOT Entitlement (or either of them) are not a bar to the right to terminate under cl 36.11 of the EPC Contract accruing to the EPC Contractor.
The relevant events said to amount to Force Majeure Events were first identified in the plaintiff's letter to Project Co dated 1 October 2021 as explained in [51] above,[13] and that position was maintained in substantially the same terms in the NSW proceedings and the Amended Statement of Claim in these proceedings.

Further correspondence – dispute regarding Force Majeure Events

[13] Trial Bundle 7.

Further correspondence ensued following the issuing of proceedings which expanded on the controversy regarding the existence of one or more Force Majeure Events.
By a lengthy document dated 19 November 2021 (enclosed with Acciona's letter of 22 November 2021), Acciona provided to Project Co the further information that it had foreshadowed in its letter of 1 October 2021.[14] The document is a lengthy analysis of the impact on Acciona's planned performance of its contractual obligations experienced due to travel restrictions into Australia and Western Australia. The information was provided in support of the contentions in Acciona's letter of 1 October 2021 that Acciona had, or would have, a right of termination under cl 36.11 of the EPC Contract on the basis that the Force Majeure Event had rendered Acciona unable to comply with a material part of its obligations under the EPC Contract.[15]
[14] Trial Bundle 12.
[15] Trial Bundle 12 [15].
By a separate letter dated 22 November 2021, Acciona advised that it was thereby giving notice under cl 28(a) of a Force Majeure Event that precluded it from complying with its obligations under the EPC Contract and that it claimed a consequential extension of time under cl 28(b).[16] Unsurprisingly, Acciona contended that the same occurrences - a declared national emergency, a blockade or embargo and a biological contamination - had arisen. In that context, Acciona contended that it was unable to comply with its obligations and relied broadly on the same obligations it had referred to in its letter of 1 October 2021 where it claimed an entitlement to terminate under cl 36.11. Again, Acciona contended that the inability had arisen on the following basis: 'The Contractor has not been able to meet these obligations because of restrictions on travel into Australia and/or Western Australia, themselves caused by the occurrences described above'.[17]
[16] Trial Bundle 11.
[17] Trial Bundle 11 [52].
By letter dated 24 November 2021, Acciona provided a Notice of Dispute to Project Co under cl 40 asserting that a dispute had arisen between Acciona and Project Co.[18] The notice stated that the dispute related to:
[18] Trial Bundle 13.
(a) whether:
(i)there has been an occurrence of a declared national emergency within the meaning of sub-paragraph (d) of the definition of Force Majeure Event in the Contract;
(ii)there has been an occurrence of blockade or embargo within the meaning of sub-paragraph (b) of the definition of Force Majeure Event in the Contract; and
(iii)there has been an occurrence of biological contamination within the meaning of sub-paragraph (e) of the definition of Force Majeure Event in the Contract; and
(b) whether
(i)the fact that performance of Works has not been suspended due to the occurrence of a Force Majeure Event; or
(ii)Project Co's duty under clause 28(b) of the Contract to grant an extension of time,
is a bar to the accrual to the Contractor of an entitlement to terminate under clause 36.11 of the Contract for a prolonged Force Majeure Event.
It is evident from the terms of that notice, that the notice of dispute was circumscribed in the same way as the New South Wales proceedings and, in turn, these proceedings. The dispute was fashioned to refer to a subset only of the matters in contention and was limited to whether the particular occurrences met the relevant descriptions in the first limb of the definition of Force Majeure Event and the constructional question of whether the absence of suspension or an extension of time under cl 28 precluded the right of termination under cl 36.11.
By letter dated 8 December 2021, Project Co responded in a fulsome manner to Acciona's contention that it had, or would have, the right to terminate the EPC Contract under cl 36.11.[19] In particular, the letter explained why in Project Co's view, the additional information provided by Acciona in its document of 19 November 2021 did not demonstrate that the alleged occurrences were the cause of Acciona's asserted inability to comply with its contractual obligations. In addition to the substantial and complex dispute regarding the cause of Acciona's inability, the letter also makes reference to the constructional disputes regarding the meaning of 'inability' and the proper construction under cl 36.11 of the requirement that the Force Majeure Event 'or its effects subsist for a period of 180 days'.
[19] Trial Bundle 14.
Consistent with its position in these proceedings, Project Co in its letter of 8 December 2021 maintained that the cause of Acciona's asserted inability was the 'key issue' and that the question of whether the relevant occurrences met the description in the first limb of the definition of a Force Majeure Event was not of itself productive. In that context, Project Co characterised the proceedings in the Supreme Court of New South Wales as 'no more than a stunt'. I digress to observe that were it not for that regrettable comment, I may have been left with the impression that the correspondence was written, or at least vetted, by lawyers. But I am unable to accept that lawyers (particularly a large and reputable international law firm) would have facilitated, less still authored, comments that advanced what is in substance, an allegation of unprofessional conduct in that manner. Those sorts of comments do nothing to advance the resolution of such disputes and reflect poorly on their authors. Bringing resolution to these very large, expensive, and complex disputes is notoriously difficult for all involved, including courts, with all its attendant consequences for the parties, the justice system, and the economy. That important objective is unnecessarily hindered by such provocative and unjustified characterisations.
By a separate letter dated 8 December 2021, Project Co responded to Acciona's claim for an extension of time under cl 28(b).[20] Project Co rejected the claim broadly on the same basis that it rejected Acciona's asserted right to terminate under cl 36.11; the occurrences did not meet the descriptions in the first limb, and in any event, they did not cause Acciona to be unable to comply with its obligations or preclude it from doing so. Project Co set out its reasons for adopting that position at some length. The letter further asserted that the requirements of cl 28 were not met because there were concurrent delays (cl 28(c)) and that Acciona had also failed to comply with the notice requirement under cl 28, which necessitates notification within 16 business days of the Force Majeure Event.
[20] Trial Bundle 15.
By letter dated 9 December 2021, Project Co issued its own notice of dispute under the EPC Contract.[21] It encompassed the other contentious issues referred to above, particularly the issue of whether Acciona had been unable by reason of the asserted occurrences, to comply with its obligations under the EPC Contract or a material part of them. Project Co explained its view that Acciona's delay was of its own making and was not caused by the occurrences. The occurrences therefore were not the cause of any inability of Acciona to comply with its own contractual obligations and therefore no Force Majeure Event had occurred.

Other disputes between the parties

[21] Trial Bundle 16.

In that same letter of 9 December 2021, under the heading 'Other Relevant Background', Project Co also referred to the other claims that Acciona had made against Project Co under the EPC Contract. They included claims for extension of time and associated delay costs, variation costs for Changes of Law and extensions of time for Force Majeure Events under cl 28. The letter included a table summarising the claims, which indicated that a total of 744 days' extension was sought, and total costs were claimed in excess of $318 million.
In addition, the letter from Project Co of 9 December 2021 alleged that by its failure to disclose the true cause of the delays (being allegedly Acciona's own conduct) and by asserting that the cause of delay is one or more Force Majeure Events, Acciona had engaged in misleading and deceptive conduct in contravention of s 18 within schedule 2 of the Competition and Consumer Act 2010 (Cth).[22] The letter is less than fulsome on the important matter of how such conduct of itself caused loss to Project Co.
[22] Competition and Consumer Act 2010 (Cth) sch 2 ('Australian Consumer Law').
Subsequently, the parties continued to make further claims against each other. Acciona made, and Project Co refused, further claims for extensions of time, including claims for extension of time under cl 28 based on asserted Force Majeure Events. Project Co also refused claims for delay costs and gave Acciona notice of the accrual of liquidated damages for delay. As at 22 April 2022, Project Co gave notice of its position that liquidated damages had accrued in excess of $27 million.[23]
[23] Trial Bundle 23.

It appears that by document dated 23 March 2022, Acciona made a claim for an extension of time (Claim #118) under cl 27 and a claim for consequential delay costs under cl 27.6. That document was not included by the parties in the trial bundle. However, the response to that claim from the Independent Certifier, dated 27 April 2022 was admitted into evidence.[24] The content of the response makes plain the nature of the claim. The claim was made under cl 27.3 for a delay allegedly caused by the conduct of a third party, namely the WA State Government, by its directions in respect of reduced restrictions on interstate and overseas travellers, the resultant increase in COVID‑19 infections and the consequential impact of isolation and limitations on activities. The claim was rejected in its entirety.
[24] Trial Bundle 26.
On 25 March 2022, Acciona sent a 'supplemental notification' under cl 28. The notice provided information of further impacts of the matters the subject of three previous notices of Force Majeure Events under cl 28 and associated claims for extensions of time. Two of the previous notifications dated back to January and February of 2020 and were not included in the trial bundle. The third was the notification of 22 November 2021 referred to at [72] above.
The notices from Acciona dated 23 and 25 March 2022 reflect the contrasting operation of cl 27 and cl 28. Both involved claims for extension of time emanating directly from circumstances of the pandemic and consequential WA State Government directions. The claim notification of 23 March 2022 was advanced under cl 27.3 for delay caused by the WA State Government's COVID‑related directions and included a claim for delay costs. In contrast, the claim of 22 November 2021 (one of the three bases of the letter of 25 March 2022) was advanced under cl 28 and proceeds on the basis that the directions (or 'directives') of the Commonwealth Government and the WA State Government caused delay. The cl 28 claim in the letters of 22 November 2021 and 25 March 2022 is founded on the asserted occurrence of a Force Majeure Event and, in accordance with cl 28, advances a claim for extension of time but does not advance a claim for delay costs.
The trial bundle admitted into evidence included Acciona's document titled Interim Payment Claim #43 (Claim #43).[25] It included a two‑page summary and accompanying supporting documentation of almost 300 pages. As this was a claim for payment, it did not include claims of a Force Majeure Event under cl 28. It appears to be an accumulated aggregate of all monetary claims then made by Acciona under the EPC Contract.
[25] Trial Bundle 25.
Before commenting briefly on aspects of Claim #43, I pause to reiterate that the documentation was not admitted into evidence as proof of the contentions contained in the claim. But the documents do constitute evidence of the nature and content of the claims advanced. Claim #43 includes claims for very significant sums of money, in the tens of millions, aggregating to hundreds of millions, of dollars.
The fulsome explanation accompanying payment Claim #43 discloses that (putting aside claims such as those for milestone achievements) the relevant claims are made variously as delay-costs claims under cl 27.6 or claims for variation (cl 22), including 'Change of Law' variations under cl 8.9. The claims for costs are not based upon the assertion of Force Majeure Events, evidently because, as explained, such a claim would not provide a basis for a costs claim.
It is also evident from the explanation accompanying Claim #43 that a very significant proportion of the claims emanate from the asserted impact of the global pandemic. These are framed in various ways, and it is unnecessary to describe them all. However, it is convenient to point to some particular aspects of components of the claims.
The 'third party', for the purposes of cl 27.3(d) causing the disruption and delay in a significant number of the claims is identified as a foreign government, or provincial governments within those countries or agencies of a foreign governments. They include the governments of India and the People's Republic of China (PRC). The directives of those governments or agencies in the management of the COVID‑19 pandemic are identified as measures that caused delay and/or disruption, for example, by mandated travel and transport restrictions or lockdowns.
Paragraph 2.22 states as follows:
The Certifier has accepted the Contractor's contention that the relevant PRC Government Authorities are Third Parties for the purposes of clause 27.3(d) and that delay caused by any of them would qualify as an 'Extension Event' for the purpose of clause 27.3. The Contractor reserves its position that Australian Border Force Restrictions and Commonwealth State bodies' Restrictions also contributed to the delay and to the claimed delay costs; however the Contractor's entitlement can be assessed by reference to the Third Party disruption caused by the PRC Directives alone.
(emphasis added)
It follows that while the claim is made under cl 27.3 and a claim for consequential delay costs is made under cl 27.6 on the basis of the conduct of third-party foreign government agencies, Acciona expressly reserved the right to advance the same claim or part of the same claim on the basis of the cost of delay and/or disruption caused by travel restrictions imposed by the directions of the WA State Government.
A claim for the costs of delay and/or disruption is made for the impact caused by covid-related 'lockdowns' in Perth and elsewhere in Western Australia imposed by directions promulgated by the WA State Government in response to the COVID‑19 pandemic.
For example, Claim #43 includes a claim for delay costs in excess of $4 million in relation to the 'Perth lockdown' of April 2021. The claim is made under cl 27.3 and cl 27.6. It is based upon the directions promulgated by the State Government. From par 8.8 ‑ 8.28, it is apparent that the directions said to have caused the delay and disruption included quarantine requirements for those travelling from New South Wales.
A significant portion of payment Claim #43 is contained in section 12 of the accompanying document. It includes a total claim for delay costs in excess of $246 million which includes a claim for the cost of prolongation in excess of $150 million. At par 12.41, the basis for at least a proportion of the claim is said to be a 'Change of Law' variation pursuant to cl 8.9 and cl 22. The relevant Changes of Law were said to include the directions of government restricting entry into Australia and Western Australia (12.41 ‑ 12.45).[26] Other parts of section 12 also referred to the travel restrictions applicable to Western Australia as having contributed to the claim, for example paragraph 12.148 states:
The travel restrictions in Western Australia, Spain, and Belgium made these travel arrangements impossible. The inability to arrange this travel (and any other travel that may have been judged to be necessary in particular circumstances) directly caused delays in the completion of engineering and design. It also caused delay and disruption at the Site because design issues that would otherwise have been identified and resolved quickly took longer. This has been the case particularly in relation to resolving issues with Keppel Seghers' and IDOM's engineering designs.
[26] These paragraphs rely on an annexure to the document, identifying various relevant travel directives. Those same travel directives are included in the trial bundle. See Trial Bundle 34, 71, 74, 76, 83-112, 114 ‑ 142, 145 ‑ 148, 151, 152, 154 ‑ 187, 193 and 199.
Paragraph 12.244 states:
When the borders were open a Christmas 2020, may staff took the opportunity to take leave to visit their family in different states and territories. However, just after Christmas, there were outbreaks in NSW and Victories which, the WA Government responded to by closing its borders to those states. This affected five staff members, including most notably the following three key personnel:
(a)George Huntley (boiler installation supervisor), who was due to return to work on 4 January 2021 but was unable to do so until 10 January 2021 (following quarantine). Mr Huntley is a supervisor in the Construction Manager's team who oversees a team working on the boiler. The Contractor ordinarily limits a supervisor to no more than 15 people to ensure productivity is maximised. When Mr Huntley was in quarantine, another supervisor was required to double the amount of people they were overseeing by looking after both teams.
(b)Similarly, Michael Barsha (boiler superintendent) who also did not return to work until 10 January 2021. His absence negatively impacted the Contractor's ability to manage the boiler installation works at an important juncture.
(c)Jeremiah Rice (site facilities coordinator) who had to self-isolate for 14 days and thus was not available to return to Site as planned. Mr Rice's role includes the day-to-day management of the Site. While his role is not directly connected with labour, it has a direct impact on Site as he plays a key role in ensuring that there are no industrial relations issues. While his role can be completed by others, the productivity of those replacement resources were disrupted because they were completing the role of two people.

Observations about the disputes

I have referred to aspects of Acciona's claim in some detail. It may be observed from that detail that the travel restrictions imposed by the WA State Government and Commonwealth Government are relied upon, at least in part, to advance Acciona's claims for costs under cl 27.3, cl 27.6 and cl 8.9 and cl 22. Those same travel restrictions, at least in part, are also relied upon by Acciona in advancing its claim that a blockade or embargo has occurred amounting to a Force Majeure Event. The same restrictions are also relied upon, at least in part, in respect of all the asserted Force Majeure Events as the cause of Acciona's inability to meet its obligations. For example, in support of its claim for costs and an extension of time pursuant to cl 8.9, Acciona lists various 'directions, restrictions and prohibitions'[27] that are also included in its aide memoire, including several Quarantine (Closing the Border Amendment Directions) made pursuant to the Emergency Management Act 2005 (WA).[28] The opacity of that overlap is all the more significant, as will be explained, in circumstances where Acciona has not initiated any proceeding in which it asserts and thereby clarifies which particular contractual rights, if any, it seeks to enforce under the EPC Contract.
[27] Trial Bundle 25, Annexure F.
[28] Plaintiffs' Amended Aide Memoire (23 June 2022), 4.
Project Co submitted that the various claims are 'radically in the alternative' because cl 28 provides no entitlement to costs, whereas claims under the other clauses do so provide.[29] In my view that is correct, but in a confined sense. As senior counsel explained, the remedies under cl 27 and cl 28 are not 'simultaneously available'.[30] Mutually exclusive choices may well need to be made about the factual and contractual basis for the claims that are advanced. However, it may well also be that the consequences and impacts of the COVID‑19 pandemic do indeed provide for a range of claims under different clauses, in respect of evolving circumstances over different time periods. It is possible that they may be advanced cumulatively or in the alternative. It will doubtless require a careful and complex analysis to identify the various claims and the relevant facts and circumstances that support those claims.
[29] ts 132.
[30] ts 147.
Although as noted above, Claim #43 does not include claims for Force Majeure Events there is one notable exception. Section 12 of Claim #43 includes a sub-section titled 'Force Majeure Events'.[31] That claim for costs is explained at 12.65 as a claim for contractual damages arising from Project Co's alleged breach of contract for failing to grant an extension of time to Acciona for one or more Force Majeure Events under cl 28. Section 12 then asserts and reserves Acciona's right of termination for a Force Majeure Event under cl 36.11. The claim of contractual damages for breach appears designed to overcome the obstacle presented by cl 28(g) precluding an entitlement to costs for a Force Majeure Event. Whether a claim framed in that manner commands the relief sought raises a number of points for possible consideration at another time.
[31] Trial Bundle 25.
I should also observe that other than this aspect of section 12 in Claim #43, there are a number of other references to force majeure. But these references are to various force majeure claims made by Acciona's own sub-contractors and are not claims made under the EPC Contract.
It is apparent from that overview of the correspondence between the parties and the claims made in the correspondence by Acciona under the EPC Contract, that the COVID‑19 pandemic has had far-reaching repercussions and has spawned multiple disputes between the parties under different clauses of the EPC Contract. There is without doubt a real and raging controversy, and whether or not the undisputed facts contained in the Agreed Statement of Facts amounted to occurrences that meet the first limb of the definition of Force Majeure Event is very much part of that controversy, albeit only one confined aspect of the matters in dispute.

Legal principles

It is plain from the overview of the dispute that the parties are engaged in a real controversy in respect of the matters the subject of the relief sought in this proceeding. The controversy is real in the sense that it is the subject of a notice of dispute under the dispute mechanisms in the EPC Contract and that the parties are furiously at odds in respect of the contractual consequences flowing from the matters set out in the Statement of Agreed Facts and, in particular, as to whether those facts establish the occurrences described in the first limb of the definition of Force Majeure Event on its proper construction. The grant of the relief sought in this proceeding will be effective to quell that aspect of the controversy in a final and determinative manner.
It is equally plain that the resolution of these proceedings will not determine any rights or entitlements between the parties at all. It can only go so far as determining that Acciona has, or has not, met one or more of the descriptions of specific occurrences set out in the first limb of the definition of Force Majeure Event.
In these circumstances it is necessary first to determine whether the court can, and ought, to consider the questions posed for determination. It is only once the court has concluded that it is possible and appropriate for it do so that the court can then turn its attention to the substantive declarations themselves.
Section 25(6) of the Supreme Court Act 1935 (WA) provides:
No action shall be open to objection on the ground that a merely declaratory judgment is sought thereby, and it shall be lawful for the Court to make binding declarations of right without granting consequential relief.
Order 18 r 16 of the Rules of the Supreme Court 1971 (WA) provides, in materially identical terms:
Declaratory judgment
No action or other proceeding shall be open to objection on the ground that a merely declaratory judgment or order is sought, and the Court may make binding declarations of right whether or not any consequential relief is or could be claimed.
Section 24(7) of the Supreme Court Act provides:
The Court, in the exercise of the jurisdiction vested in it by this Act, in every cause or matter pending before it, shall have power to grant, and shall grant, either absolutely or on such reasonable terms and conditions as shall seem just, all such remedies whatsoever as any of the parties thereto may appear to be entitled to in respect of any and every legal or equitable claim properly brought forward by them in such cause or matter; so that, as far as possible, all matters so in controversy between the parties may be completely and finally determined, and all multiplicity of legal proceedings concerning any of such matters avoided.
Notwithstanding the terms of s 24(7), it is tolerably clear that no objection can be advanced by Project Co (nor is it) that this court cannot, that is, does not have the power to grant the declaratory judgment sought because it will not be accompanied by consequential relief. Rather, Project Co objects to the declaratory judgment because the question it addresses is hypothetical in the sense that it will not resolve the controversy between the parties, and indeed, will leave very substantial aspects of the controversy yet to be resolved. Project Co accepts that this is not an issue of the court's power; the court has the relevant power. Rather, the issue is the proper exercise of the court's discretion to grant declaratory relief in the circumstances.
Many cases have grappled with the nature of the discretion and its exercise in various circumstances. The equivalent legislative provision in New South Wales was considered by the High Court in Forster v Jododex, where Gibbs J said:
The jurisdiction to make a declaration is a very wide one. Indeed, it has been said that, 'under OXXV, r 5, the power of the Court to make a declaration, where it is a question of defining the rights of two parties, is almost unlimited; I might say only limited by its own discretion'.[32]
[32] Forster v Jododex [1972] HCA 61; (1972) 127 CLR 421, 435.
In an oft-cited passage, Gibbs J continued:
It is neither possible nor desirable to fetter the broad discretion given by s 10 by laying down rules as to the manner of its exercise. It does, however, seem to me that the Scottish rules summarized by Lord Dunedin in Russian Commercial and Industrial Bank v British Bank for Foreign Trade Ltd (1921) 2 AC 438, at p 448, should in general be satisfied before the discretion is exercised in favour of making a declaration: "The question must be a real and not a theoretical question; the person raising it must have a real interest to raise it; he must be able to secure a proper contradictor, that is to say, someone presently existing who has a true interest to oppose the declaration sought." Beyond that, however, little guidance can be given. As Lord Radcliffe said in Ibeneweka v Egbuna (1964) 1 WLR, at p 225: 'After all, it is doubtful if there is more of principle involved than the undoubted truth that the power to grant a declaration should be exercised with a proper sense of responsibility and a full realisation that judicial pronouncements ought not to be issued unless there are circumstances that call for their making. Beyond that there is no legal restriction on the award of a declaration'.[33]
[33] Forster v Jododex, 437 - 438.
In Bass v Permanent Trustee Company Ltd, Gleeson CJ, Gaudron, McHugh, Gummow, Hayne and Callinan JJ observed:
The purpose of a judicial determination has been described in varying ways. But central to those descriptions is the notion that such a determination includes a conclusive or final decision based on a concrete and established or agreed situation which aims to quell a controversy. In R v Trade Practices Tribunal; Ex Parte Tasmanian Breweries Pty Ltd, Kitto J said:
"[J]udicial power involves, as a general rule, a decision settling for the future, as between defined persons or classes of persons, a question as to the existence of a right or obligation, so that an exercise of the power creates a new charter by reference to which that question is in future to be decided as between those persons or classes of persons... [T]he process to be followed must generally be an inquiry concerning the law as it is and the facts as they are, followed by an application of the law as determined to the facts as determined; and the end to be reached must be an act which ... entitles and obliges the persons between whom it intervenes, to observance of the rights and obligations that the application of law to facts has shown to exist".
Similarly, Professor Borchard in his pioneering work, Declaratory Judgments stated:
"A judgment of a court is an affirmation, by the authorized societal agent of the state ... of the legal consequences attending a proved or admitted state of facts. It is a conclusive adjudication that a legal relation does or does not exist. The power to render judgments, the so-called 'judicial power,' is the power to adjudicate upon contested or adverse legal rights or claims, to interpret the law, and to declare what the law is or has been. It is the final determination of the rights of the parties in an action which distinguishes the judgment from all other public procedural devices to give effect to legal rights". (footnotes omitted)
Because the object of the judicial process is the final determination of the rights of the parties to an action, courts have traditionally refused to provide answers to hypothetical questions or to give advisory opinions. The jurisdiction with respect to declaratory relief has developed with an awareness of that traditional attitude. In In Re F (Mental Patient: Sterilisation), Lord Goff of Chieveley said that:
"a declaration will not be granted where the question under consideration is not a real question, nor where the person seeking the declaration has no real interest in it, nor where the declaration is sought without proper argument, eg in default of defence or on admissions or by consent".
By 'not a real question', his Lordship was identifying what he called the 'hypothetical or academic'. The jurisdiction includes the power to declare that conduct which has not yet taken place will not be in breach of a contract or a law and such a declaration will not be hypothetical in the relevant sense. Barwick CJ pointed this out in The Commonwealth v Sterling Nicholas Duty Free Pty Ltd. However, that is not the present case.
It is true that some have seen the use of the declaratory judgment as little more than the giving of an advisory opinion. However, one crucial difference between an advisory opinion and a declaratory judgment is the fact that an advisory opinion is not based on a concrete situation and does not amount to a binding decision raising a res judicata between parties. Thus, the authors of one recent text on declaratory judgments emphasise that, where the dispute is divorced from the facts, it is considered hypothetical and not suitable for judicial resolution by way of declaration or otherwise. They say:
"If ... the dispute is not attached to specific facts, and the question is only whether the plaintiff is generally entitled to act in a certain way, the issue will still be considered theoretical. The main reason for this is that there may be no certainty that such a general declaration will settle the dispute finally. Subsequent to that declaration a person (the defendant himself or someone else) may be adversely affected by a particular act of the plaintiff. It may then be doubtful whether this act is covered by the declaration. In such a case the affected person will probably be entitled to raise the issue again on its special facts. Indeed, such a declaration will in effect be a mere advisory opinion".[34]
[34] Bass v Permanent Trustee Company Ltd [1999] HCA 9; (1999) 198 CLR 334 [45] - [48] (Bass).

In Aussie Airlines Pty Ltd v Australian Airlines Ltd, Lockhart J (with whom Spender and Cooper JJ agreed) summarised the applicable principles as follows (with citations omitted):
For a party to have sufficient standing to seek and obtain the grant of declaratory relief it must satisfy a number of tests which have been formulated by the courts, some in the alternative and some cumulative. I shall formulate them in summary form as follows:
The proceeding must involve the determination of a question that is not abstract or hypothetical. There must be a real question involved, and the declaratory relief must be directed to the determination of legal controversies. The answer to the question must produce some real consequences for the parties.
The applicant for declaratory relief will not have sufficient status if relief is "claimed in relation to circumstances that [have] not occurred and might never happen"; or if the court's declaration will produce no foreseeable consequences for the parties.
The party seeking declaratory relief must have a real interest to raise it.
Generally there must be a proper contradictor.
The relevant principles are laid down by the High Court in Ainsworth, in particular in the joint judgment of Mason CJ, Dawson, Toohey and Gaudron JJ at CLR 581-2. Their Honours made the point that "[i]t is now accepted that superior courts have inherent power to grant declaratory relief", and "[i]t is a discretionary power which `[i]t is neither possible nor desirable to fetter … by laying down rules as to the manner of its exercise' ".
These are the rules that should in general be satisfied before the court's discretion is exercised in favour of granting declaratory relief.[35]
[35] Aussie Airlines Pty Ltd v Australian Airlines Ltd[1996] FCA 813; (1996) 68 FCR 406, 414.
Turning to the criteria for the exercise of the discretion laid down in those cases, in this matter, Acciona has a real interest in raising the issues it agitates. There is also plainly a contradictor who has provided full and ample argument.
The more difficult question is whether the declarations sought are in substance 'real and not hypothetical'. The factual circumstances in respect of which the declarations are sought have occurred and are agreed; in that sense they are 'concrete'. The legal consequences in respect of those settled facts are hotly contested, in the sense that the parties are strongly at odds as to whether they meet the descriptions in the first limb of the definition of Force Majeure Event. A declaration one way or the other will quell that controversy insofar as it goes. Beyond those factors, the exercise of the discretion as to the distinction between a real and a hypothetical controversy is not enlightened by clear rules with bright lines.
In my respectful view, in considering whether a controversy is hypothetical, there is some significance to the references in the judgments above to the notion of rights and claims. Gibbs J referred to declaratory relief in the sense of 'a question of defining the rights of two parties'.[36] The High Court in Bassciting Kitto J referred to the making of a declaration as a power that settles a question 'as to the existence of a right or obligation'.[37] The passage from Professor Borchard quoted by the High Court in Bass also refers to the hallmark of judicial power, the adjudication of rights and claims. The High Court in Bass adopted that analysis to explain the court's disinclination to address the hypothetical.
[36] Forster v Jododex Australia Pty Ltd, 435.
[37] Bass [45].
A legal duty is, for present purposes, of the same ilk as rights and claims because the determination of the existence of a duty is likely to determine correlative rights or claims. In Mine Trades and Maintenance-Electrical Pty Ltd v Freo, Corboy J observed:
Generally, a court will not allow a claim for a declaration that the plaintiff was not under a duty to the defendant if the defendant had not asserted that a duty was owed. The question is whether there is a real dispute between the parties on the point raised. The mere possibility of a claim is insufficient and a real dispute will not be created by one party merely reserving its rights.[38]
[38] Mine Trades and Maintenance-Electrical Pty Ltd v Freo [2012] WASC 78 [15].
More recently in Hobart International Airport Pty Ltd v Clarence City Council, the High Court considered the permissibility of declaratory relief with respect to the proper construction of lease agreements at the suit of local councils who were not party to, but were significantly affected by, the terms of the leases the subject of the controversy. Having recited the criteria set out by Gibbs J in Forster v Jododex referred to above, the plurality (Kiefel CJ, Keane and Gordon JJ) then said:
The general principle is clear: an applicant for declaratory relief will have a 'sufficient' or 'real' interest in obtaining relief where it pertains to declaring the existence of legally enforceable rights or liabilities of the applicant, including statutory rights.[39]
[39] Hobart International Airport Pty Ltd v Clarence City Council [2022] HCA 5; (2022) 399 ALR 214 [34] (Hobart International Airport v Clarence City Council).
Although those comments were apparently directed to the factor of a party's interest rather than the factor of hypotheticality, in my view there is a conceptual overlap in the underlying relevance of those factors to the exercise of the court's discretion. In the result, the plurality held that although the local councils were not parties to the lease, they had a 'sufficient' and 'real' interest in seeking declaratory relief about the proper construction of the leases.
A similar issue was considered by Edelman J in Mineralogy Pty Ltd v Sino Iron Pty Ltd. In that matter, his Honour was required to determine the meaning of the word 'taken' in a contractual term which provided: 'pay to Mineralogy a royalty ... in respect of Magnetite Ore taken by [Sino Iron/Korean Steel] pursuant to the exercise of its Mining Right'. The meaning of the word 'taken' impacted the rights of the parties in relation to the payment of royalties. Having determined the proper construction of the word, in a subsequent decision, Edelman J gave consideration to the appropriate declaratory relief that followed. The parties disagreed on the extent of the declaration that ought to be made.
Edelman J explained:
[A] declaration should be made which is limited to the rights arising directly from the construction issue in dispute between the parties. I do not accept Mineralogy's submission that it should extend further than that.[40]
[40] Mineralogy Pty Ltd v Sino Iron Pty Ltd [2013] WASC 194 (S) [2].
Edelman J went on to observe:
Mineralogy submitted that it is necessary for par (1)(b) of the declaration above to be made in order 'to fulfil the authority of the Court' under O 58 r 10.  Mineralogy relied upon the decision of McLure J in Carlin v Hamersley Iron Pty Ltd, which was, in turn, quoting from an unreported decision of Olney J as follows:
The procedure contemplated by the rule is one appropriate to cases where there is no disputed question of fact and where the Court has before it an instrument the construction of which is capable of determination by reference to the instrument itself.  In my view, the authority of the Court is to make a declaration of right and not to declare the construction of the instrument.  If it were otherwise, the Court's order would be in the nature of an advisory opinion.  The rule contemplates that the Court will determine the construction of the instrument as a preliminary to it declaring the rights of the parties.
The point made in the quotation above is that declarations about contractual construction should not be made where the declaration does not concern the rights of a party.  Where questions of construction affect the rights of parties then declarations are frequently given about those questions of construction. A declaration about the proper construction of cl 8 of the MRSLAs does not concern a purely hypothetical matter.  The question of construction of cl 8 concerns a real and immediate dispute between the parties concerning whether the defendants, or either of them, was, and is, liable to pay royalties to Mineralogy for Magnetite Ore which had been stockpiled for the purposes of possible future processing or use.  And, in circumstances in which it was common ground that further Magnetite Ore had been stockpiled for future processing and use, the declaration also extends to future rights to payment which are not hypothetical.
In the language of Brennan J in Re Tooth & Co Ltd,'the plaintiff is seeking to establish a right which is denied by the defendant, and the declaration (if made) settles the right in controversy between the parties'.  In order that the terms of par (a) are sufficiently clear, and in order that the declaration is a self‑contained statement of the rights of the parties, an additional paragraph can be inserted…[41]
[41] Mineralogy Pty Ltd v Sino Iron Pty Ltd [6] – [8].
Although those remarks were made in the context of O 58 r 10, or what is commonly referred to as a construction summons, in my view, the underlying principles are equally applicable to the circumstances of this matter.
At the same time, it is tolerably clear that it is not necessary for the right or duty to have arisen or crystalised for declaratory relief to be available. That is clear from the reference above to Barwick CJ in The Commonwealth v Sterling Nicholas Duty Free Pty Ltd.[42]
[42] The Commonwealth v Sterling Nicholas Duty Free Pty Ltd [1972] HCA 19; (1972) 126 CLR 297.
In Edwards v Santos Ltd the High Court considered the permissibility of declaratory relief to clarify the rights of parties in negotiations for a new Indigenous Land Use Agreement under the Native Title Act 1993 (Cth).[43] The negotiations were mandated by a previous agreement. A disagreement arose between the parties in respect of certain valuable production licenses for which the respondent petroleum companies intended to apply under the applicable legislation. There was not 'any shadow of a doubt about their willingness to apply or their capacity to satisfy the conditions'.[44] In relation to the negotiations, the petroleum companies asserted that the future licenses would have a particular status under the Native Title Act that would effectively quarantine them from the negotiations. The native title claimants sought declaratory relief that the licenses would not have the legal status asserted by the petroleum companies.
[43] Edwards v Santos Ltd [2011] HCA 8; (2011) 242 CLR 421 (Edwards v Santos).
[44] Edwards v Santos, 431.
Heydon J, with whom the other members of the court relevantly agreed, said:
The jurisdiction to grant a declaration 'includes the power to declare that conduct which has not yet taken place will not be in breach of … a law.' The jurisdiction also includes the power to declare that conduct which has not yet taken place will be a nullity in law. …
The plaintiffs have a sufficient interest to make those claims, because success in those claims would advance their interests in the negotiations which the parties were contractually obliged to conduct…..
The questions which the plaintiffs wished to agitate were not hypothetical. The first defendant's letter of 4 November 2005 had sufficiently indicated the intention of the petroleum defendants to make an application to the Minister under s 40 of the Petroleum Act and it had predicted that success would be "automatic". If so, the plaintiffs would be seriously disadvantaged because their negotiating position would be gravely weakened; if not, the plaintiffs would be correspondingly better off. If the plaintiffs obtained the first declaration sought, it would produce foreseeable consequences for the plaintiffs and the petroleum defendants by allowing them to continue the process of negotiating the new ILUA armed with knowledge of the correct legal position in relation to the ATP.
….
Hence the first declaration which the plaintiffs seek about the petroleum defendants' rights is one which a court of equity has jurisdiction to grant; the plaintiffs have standing to seek it; the question they raise is not hypothetical, but concrete and real; and the opinion they seek is not merely advisory.[45]
[45] Edwards v Santos, 436.
Edwards v Santos establishes that the availability of declaratory relief need not be limited to the clarification of existing rights and duties in the context of extant curial proceedings. The relief may be available to clarify the correctness or otherwise of rights or duties pursued or asserted in a negotiation, or at least in a contractually or statutorily mandated negotiation, in respect of circumstances that are confidently anticipated but that have not yet occurred.
Following Edwards v Santos, in Hobart International Airport v Clarence City Council, the plurality concluded:
In Santos, Heydon J regarded it as significant that the plaintiffs' success in obtaining the declaratory relief sought in the case "would advance their interests in the negotiations which the parties were contractually obliged to conduct". The same is true here. If the construction of [the leases] is determined in favour of the Councils, that would advance their interests for the purposes of future negotiations contemplated and required by [the leases].[46]
[46] Hobart International Airport v Clarence City Council [40].
In National Australia Bank Ltd v Nautilus Insurance Pte Ltd (No 2), the National Australia Bank made a claim on its insurer for some hundreds of millions of pounds.[47] Correspondence ensued between the bank and insurer in respect of the bank's claim. The insurer claimed in that correspondence that there were preliminary matters that constituted a fundamental bar to coverage and denied the whole of the claim. Beyond those issues said to constitute a fundamental bar, there were many other issues in dispute. The threshold issue in controversy turned on questions of construction of the insurance policy. The bank sought declaratory relief as to the proper construction of the relevant clauses of the insurance policy. No other relief was sought in the proceedings. The insurer sought the dismissal of the proceedings on the basis, inter alia, that the proceedings lacked utility and were hypothetical. That was said to be so because the declaratory relief sought by the proceedings declaration would not resolve the majority of issues in dispute, and further proceedings would in any event, be necessary.
[47] National Australia Bank Ltd v Nautilus Insurance Pte Ltd (No 2) [2019] FCA 1543; 377 ALR 627 (National Australia Bank v Nautilus).
Allsop CJ considered the history of cases dealing with the exercise of the court's discretion, noting the various factors in the assessment of hypotheticality. Allsop CJ observed that in Ainsworth v Criminal Justice Commission, the High Court looked to the practical potential of amelioration of reputational harm in concluding that the proceeding did not involve a hypothetical issue.[48] Referring to the judgement of Heydon J in Edwards v Santos, Allsop CJ observed:
Thus, in circumstances where a real controversy existed the declaration would enable the parties to negotiate an indigenous land use agreement on the correct legal foundation. That was a practical and real consequence about the future course of affairs between parties to a controversy that gave a real interest to seeking a legal answer by declaratory relief.[49]
[48] Ainsworth v Criminal Justice Commission [1992] HCA 10; 175 CLR 564.
[49] National Australia Bank v Nautilus Insurance [105].
Allsop CJ went on to say:
[B]ut foreseeable consequences are to be assessed by the place of the declaration in the controversy that otherwise exists or existed, and the practical and real effect that it may have on the controversy or the consequences of the controversy. In Ainsworth it was that there may be amelioration of reputational harm. In Edwards v Santos it was establishing a legal certainty in the operation of the legislation which was relevant to the respective bargaining positions of the parties in a wider controversy.[50]
[50] National Australia Bank v Nautilus Insurance [106].
Allsop CJ then explained that whether the whole controversy may be settled by the declaratory relief is not the point. The more important issues are whether the relief is grounded in concrete facts, because if it is not the same question may need to be relitigated;[51] and whether the declaratory relief will have foreseeable consequences including practical consequences.[52]
[51] National Australia Bank v Nautilus Insurance [108].
[52] National Australia Bank v Nautilus Insurance [115].
Allsop CJ also referred to rights, duties and liabilities and concluded that the relief related to a real and not a hypothetical issue. His Honour explained:
It was submitted that there is no immediate right, duty or liability raised for determination. In Commonwealth v BIS Cleanaway Ltd [2007] NSWSC 1075; 214 FLR 271 a claim for declarations that a licence had been novated and that the defendant had obligations under it was held to be a matter. It was submitted that the declarations here would not be as to rights and duties, but only the meaning of a contract. That, with respect, is artificial and unhelpful as a distinction. The applicant here seeks to resolve one aspect of an overall dispute, to clarify the context of its legal rights and the content of the legal obligation of the insurer and reinsurers. That is a matter; it is a contested issue, important to the resolution of the overall controversy. It is a declaration of right as to the meaning of part of a contract and the rights that flow from such.
The proceeding discloses a matter, being the resolution of one aspect of the overall controversy. There are foreseeable consequences in that NAB (and all parties) will have the content of its (and their) rights and obligations under the policies clarified for the making of choices as to the conduct of litigation. There is nothing theoretical or hypothetical whatsoever about the claim. The declaration will be given by reference to the agreed or found facts relevant to the relief claimed. The answer to the questions involved in the declaration have been said by the reinsurers' solicitors to be important in the language that I have already quoted.[53]
(emphasis added)
[53] National Australia Bank v Nautilus Insurance [119] - [120].
From the foregoing discission, it may be concluded that relief may not be hypothetical if it relates to a controversy in respect of which there are settled or 'concrete' facts and the relief has foreseeable and practical consequences, even if the relief falls well short of settling the entire dispute. Those consequences may relate to clarification of a party's position in respect of rights it asserts in a negotiation, even in respect of matters which are not yet the subject of curial proceedings and matters which may be expected to occur but have not yet occurred.
Particular considerations have arisen in applications for declaratory relief as to the entitlement to terminate a contract. In Sanderson Computers Pty Ltd v Urica Library Systems BV, Sheller JA (with whom Mason P and Powell JA agreed) said:
[T]here will always be a problem where a claimant which has not terminated an agreement, seeks a declaration that it is entitled to do so.
The declaration speaks from the time that it is made. Before a notice of termination is given or expires, events may overtake its validity. It is undesirable that questions such as waiver, and even more undesirable that questions about relief against forfeiture, be dealt with at all before there is a completed termination.
Even if the respondent presently intends to give a notice of termination, it may delay it and fresh questions about election and waiver may arise.[54]
[54] Sanderson Computers Pty Ltd v Urica Library Systems BV (1998) 44 NSWLR 73, 80 (Sanderson Computers).

Consideration

Acciona has made a very wide and complex range of claims under the EPC Contract, as it is entitled to do. It may be unsuccessful; it may well be successful in some, many or perhaps all of those claims. Acciona has thus come before the court while embroiled in a real and raging controversy about the many claims it has made in notices and correspondence under the EPC Contract. There is no doubt that the controversy includes the matters the subject of the relief sought. The facts relevant to the particular relief sought are agreed. The relief will settle that aspect of the controversy that is the subject of the relief.
Project Co argues with some force that on its proper construction, the second limb of the definition of Force Majeure Event is integral to the relevant enquiry and is not an adjunct that can be conveniently sliced off for separate enquiry. Acciona for its part seeks to make a virtue of that contractual emphasis. It says that identifying which, if any, events come within the first limb of the definition of Force Majeure Event will assist by circumscribing the causation enquiry. If the parties know which event meets the first limb, they will be in a position to proceed with a more focussed and limited enquiry to identify whether particular contractual obligations have been rendered unable to be performed. The same may be said for the complexity of the factually dense causation enquiry. It may be accepted that it is likely to be a substantial forensic enquiry. But that may be all the more reason to adopt measures to confine its scope.
Project Co asserts the proceedings are 'carefully and deliberately contrived' and impermissibly seek relief that is, in substance, unripe for resolution and therefore hypothetical.[55] There is no doubt that the issues as framed by Acciona are in substance in the nature of a preliminary question, and that the proceeding has been consciously crafted in that limited way. Acciona does not and cannot escape the characterisation of the proceedings as 'careful and deliberate'. But it rejects the pejorative descriptor of contrivance.[56] Acciona asserts it is entitled to craft the proceedings in that circumscribed manner and that the relief it seeks is usefully advanced as a means of quelling a real controversy and confining the scope of any further litigation.[57]
[55] First Defendant's Outline of Submissions (13 June 2022) [2].
[56] Plaintiffs' Submissions in Reply (17 June 2022) [25].
[57] Plaintiffs' Submissions in Reply [10].
The suggestion that the future prosecution of Acciona's claims might be more confined and efficiently progressed if it could know now which, if any, of the occurrences meet the first limb of the definition of Force Majeure Event, has an alluring attraction as a sensible and pragmatic approach to what threatens to be unwieldy litigation with ever‑spreading, spiked and expensive tentacles.
However, I have come to the conclusion that the determination of the declaratory relief sought in these proceedings is not an appropriate exercise of the court's jurisdiction for the reasons set out below.
First, as noted, the legal principles discussed above indicate that a declaration ought to be directed to the elucidation of a party's rights. Acciona does not seek to advance any of its claims in this, or any other proceeding. It has not brought a single one of its many claims before the court. In reality, Acciona does not bring before the court the enforcement, or indeed even the assertion, of any contractual right that it has resolved to advance or enforce.
Acciona might for example, have taken a limited approach to the prosecution of its asserted rights, and sued for declaratory relief that it is entitled to a particular and single extension of time for a Force Majeure Event under cl 28 in respect of particular circumstances. That would be the assertion of a contractual right or entitlement in respect of which there may be utility in the determination of a preliminary issue along the lines sought in this proceeding.
Putting to one side whether such an approach might raise other obstacles, Acciona has not endeavoured to adopt a course attended by even that degree of minimalism. What Acciona seeks in this proceeding is a declaration in respect of whether one part of a definition has been satisfied by a particular set of agreed facts without so much as asserting in that proceeding that it is otherwise entitled to anything at all. It seeks the court's clarification of whether certain aspects of a definition have been met before it asserts its rights in a curial proceeding. In my respectful opinion, that in substance amounts to the seeking of an advisory opinion.
Acciona is correct in my view that the analysis of Allsop CJ in National Australia Bank v Nautilus provides some support for its position. The proceedings before Allsop CJ did not advance any substantive claim. They concerned only declaratory relief in respect of a constructional issue which would resolve a threshold but otherwise relatively confined aspect of a much broader dispute. The relief was granted as it was held to have the practical and foreseeable consequence of clarifying the parties' rights for making choices in the conduct of litigation. Moreover, the legal principles discussed above indicate that the rights the subject of the relief sought need not have crystallised. They may relate to conduct that has not yet occurred and cannot be said to be entirely certain.
However, in my view there is an important distinction between this matter and the circumstances considered by Allsop CJ. In the matter before Allsop CJ, the position of the claimant bank was clear and settled in respect of the claim it advanced and the legal rights that it asserted and sought to advance and enforce. Allsop CJ therefore perceived there to be a real utility in the conduct of any possible further litigation by clarifying the correctness of the respective rights and duties contended for by the parties. That would permit the parties to make efficient and sensible choices about the conduct of the litigation in respect of those rights and duties which they asserted.
Here however, it is not at all clear which of the various rights and claims, some of which may be mutually exclusive or at least not simultaneously available, Acciona intends to advance in respect of the given facts. Clarifying whether the agreed facts constitute any one of the defined occurrences will provide very little, if any, assistance to the parties in clarifying the claims and rights, if any, which Acciona intends to pursue.
Allsop CJ referred to the practical consequence of enabling choices to be made in litigation. In my view, that cannot mean choices about which claims to advance on the basis of clarification provided by the court, so as to permit a claimant to hold back prosecuting any claim at all until the court has resolved a threshold definitional dispute.
It may be accepted that the courts have perceived there to be utility in advising the parties of their rights prior to the curial prosecution of those rights, such as in order to assist with negotiations. In my view however, it must be appreciated that the negotiation context in which the courts have perceived that utility, is where at least one party asserts and expresses an unambiguous intention to pursue a clearly articulated right or claim. The declaratory relief is directed to clarifying which party is correct in respect of the clearly defined right or claim which is positively and unequivocally asserted and pursued. There is therefore utility in clarifying the correctness or otherwise of the asserted right or claim in order to facilitate a negotiation, or if negotiations fail, to make sensible choices about the conduct of the ensuing litigation. Here however, the plaintiff has lodged through correspondence many claims, some of which may or may not overlap or might possibly be partially inconsistent. In that context it brings these proceedings, where it is not asserting any right other than the right to have clarity about whether something has occurred which may give it a right, which it may or may not seek to pursue and enforce.
Secondly, the significance of a Force Majeure Event under the EPC Contract as noted above, relates to both the suspension of obligation and commensurate extension of time under cl 28, and to the right to terminate under cl 36.11. As is apparent from correspondence embodying the disputes between the parties set out above, both aspects are raised by Acciona within its manifold claims. It may be observed however, that the context in which the declaratory relief is sought as to the existence of an occurrence that meets the first limb of a Force Majeure Event, is limited to the right of termination under cl 36.11. No substantive relief is sought in respect of either cl 36.11 or cl 28. However, the right of termination under cl 36.11 and its assertion in Acciona's letter of 1 October 2021 is expressly pleaded in the context of the claim for declaratory relief. In contrast, an extension of time under cl 28 is not so much as pleaded, nor is there any reference to correspondence claiming an extension of time. The only reference to cl 28 in the pleading is in the context of the debate as to whether it presents a barrier to Acciona's right to terminate under cl 36.11. Acciona's written submissions confirm that the relief sought pertains to the rights under cl 36.11.[58] There can be no doubt that the relief is sought in aid of clarifying Acciona's position for the purposes of cl 36.11.
[58] Plaintiffs' Outline of Opening Submissions (13 June 2022) [72].
In those circumstances, it is necessary to have regard to the particular considerations raised by an application for declaratory relief in respect of a party's right to terminate a contract. As the discussion of the legal principles above indicates, declaratory relief in advance of a termination is problematic. That is because the declaration operates from the time it is made and the declaration may not be appropriate for the circumstances that prevail at the subsequent time that the right of termination is exercised.
Project Co points out that in addition to the usual obstacles that beset declaratory relief when it is sought regarding the rights of a future termination election, here, arguments about Acciona's conduct, and specifically conduct that may have amounted to an election to affirm the EPC Contract, loom large. As the NSW Court of Appeal observed in Sanderson Computers, that consideration may render the declaration sought hypothetical.[59] Until there is a termination, the court cannot know the circumstances that prevailed at the time of termination. It is therefore not possible to evaluate matters that may bear upon the right to terminate, such as election.
[59] Sanderson Computers, 80.
Here, the problem is further compounded because Acciona has at this stage, not so much as resolved whether to terminate the EPC Contract. It has not stated that it does or does not intend to do so, and it has not given notice under cl 5 of the Consent Deed seeking the consent of the Security Trustee for that course.
I observe that the position here is somewhat different from the ordinary circumstances in which declaratory relief is sought regarding a party's right to terminate. Acciona does not seek relief as to its right to terminate. The relief it seeks is at least one step removed from, or anterior to, any right to terminate. It wishes to know whether it meets the first limb of a definition which will take it some way, but still far from all the way to clarity about its right to terminate.
To my mind that makes the position all the more hypothetical. If, generally speaking, declaratory relief about the right to terminate sometime in the future is to be regarded as hypothetical, then the issue cannot be rendered more 'real' on the basis that the issue clarifies only one aspect of the right to terminate. On the contrary, that makes the relief more removed from reality and shifts it more deeply into the realm of the hypothetical.
For those reasons, where the relief is sought in aid of the right to terminate under cl 36.11, the absence of any firm indication of Acciona's intention to terminate and the absence of any notice under cl 5 of the Consent Deed, militates against the grant of relief.
Thirdly, it was accepted by the parties, correctly in my view, that if the factual matrix underlying the declaratory relief will need to be revisited in the forensic enquiry that arises in the balance of the dispute, then it would not be appropriate to grant the relief. The parties were divided however, on whether that would be necessary. Acciona submitted that the facts that ground the proposed declarations were self-contained and would be insulated from any further factual enquiry. Project Co pressed the opposite point of view. It pointed to correspondence from Acciona (set out above) in which Acciona contended that its inability to perform its obligations under the EPC Contract had been caused by the travel restrictions imposed by the governments of the State and the Commonwealth. Project Co submitted that it will therefore be necessary in any further proceedings about any of the contended Force Majeure Events to scrutinise the content and impact of those restrictions. Any such further litigation would confront an unavoidable overlap with the factual matrix underlying the claim for declaratory relief in these proceedings which also concerned the content of the governmental travel restrictions.
In my view, there would appear to be, at least potentially, an evidentiary overlap in respect of the declaration sought of a Force Majeure Event arising by reason of a 'blockade or embargo'. For the purposes of that declaratory relief, it would be necessary for the court at this stage to examine the detail of the various directions that imposed the travel restrictions. That is exemplified by the granular detail provided in the aide memoire prepared for these proceedings by Acciona's lawyers. If and when, a court was required to address the second limb of the definition of Force Majeure Event, it would again need to examine the detail of those directions in order to assess their impact on Acciona's ability to perform its contractual obligations. Acciona appeared to contend that for the declaratory relief sought in these proceedings one needs to look only at the legal content and effect of the directions that created the restrictions. The determination of their legal effects and whether those effects constituted a 'trade or embargo' may be conclusively and finally determined. Any further proceedings concerning the second limb would be solely directed to the factual question of the causal effect of the directions. The two enquiries are thus distinct.
Acciona's position has some theoretical attraction and force. I am concerned however that in practice the two enquires will not necessarily be as distinct and mutually exclusive as Acciona contends. In my view, in the doubtless complex, messy and factually intense enquiry about the causal effect of the directions, it is almost inevitable that there will be some attempt or even some necessity to revisit the content of the directions themselves in light of the factual circumstances as they emerge. The scars that mar the battle fields of construction litigation suggest that in that fluid and volatile environment, it would be naive and imprudent to proceed upon the purist analysis urged by Acciona.
Acciona's contention has more force in relation to the proposed declarations regarding the other 'occurrences' within the first limb of the definition; declared national emergency and biological contamination. Project Co is correct to point out that the second limb of those occurrences must also pass through the forensic enquiry in relation to the travel restrictions and the directions that lay behind them. However, in my view, it would be possible to undertake that enquiry without the risk of revisiting the factual matrix that would ground the first limb in respect of those occurrences.
That would leave open the possibility that the court might be persuaded to consider the proposed declaratory relief solely in respect of those two occurrences. That would mean, at best for Acciona, that the court might make the declarations it seeks in relation to two of its contended Force Majeure Events but not the third. The court would only consider the issue of whether a Force Majeure Event arose by reason of a blockade or embargo when it undertook the broader and more complex factual enquiry in relation to the second limb of the definition for all of the Force Majeure Events. Such a course would reduce the utility of the course proposed by Acciona. I accept nevertheless, that in isolation, such a course may have some utility. However, in light of the other matters that I have set out above that militate against the granting of declaratory relief I am not persuaded that granting the relief in respect of a declared national emergency and a biological contamination would be an appropriate exercise of the court's discretion.
Fourthly, the fourth declaration sought by Acciona concerning cl 28 and cl 36.11 is necessarily and solely concerned with the right of termination. The hypothetical nature of the relief in circumstances where Acciona has not resolved to exercise that right and has not issued a notice under cl 5 of the Consent Deed is therefore more acute. Further, for the reasons explained above, there is some ambiguity or lack of precision about the debate that lies behind that particular relief. It is not entirely clear to me whether the debate is purely a matter of contractual construction, or fact, or perhaps both. That aspect of the dispute is therefore not sufficiently matured in my view to render declaratory relief appropriate.
For the reasons I have given, in my respectful assessment, it is not appropriate for the court to give Acciona the relief it seeks, and the proceedings must therefore be dismissed.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
IS
Associate to the Honourable Justice Solomon
14 NOVEMBER 2022