Dexus Sahmri2 Pty Ltd v South Australian Health and Medical Research Institute Ltd

SUPREME COURT OF SOUTH AUSTRALIA
(Civil: Application)
DEXUS SAHMRI2 PTY LTD v SOUTH AUSTRALIAN HEALTH AND MEDICAL RESEARCH INSTITUTE LTD & ANOR
[2025] SASC 61
Decision of the Honourable Justice B Doyle
PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - MOTIONS, INTERLOCUTORY APPLICATIONS AND OTHER PRE-TRIAL MATTERS
PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - ENDING PROCEEDINGS EARLY - ALTERNATIVE DISPUTE RESOLUTION
The applicant (‘Dexus’) and the respondents (‘SAHMRI’ and ‘ABC’) are parties to a Project Deed relating to the construction and occupation of a building on North Terrace designed to house a proton therapy facility (the ‘Building’).
Dexus has instituted a proceeding in this Court seeking specific performance or mandatory injunctive relief in aid of what it contends are the respondents’ obligations under the Project Deed to execute and deliver up leases in respect of portions of the Building.
By interlocutory application, the respondents seek a stay of the proceeding until further order, contending that Dexus commenced the proceeding without the processes required by a dispute resolution clause (cl 26.1) in the Project Deed having been undertaken, and in contravention of cl 26.1(k). The respondents contend that the matter must be referred to expert determination.
Dexus contends that when it instituted the proceeding there was no relevant ‘dispute’ within the meaning of cl 26.1. It further contends that that clause would not confer on an expert the power to grant compulsive relief akin to specific performance or an injunction, and, if the expert were to decide that such relief was appropriate, resort may nevertheless be necessary to a court which would exercise an independent discretion before enforcing the determination.
The respondents contend that although they only articulated grounds for disputing their obligation to execute and deliver up the leases in the manner contended for by Dexus after the proceeding was instituted, there was nevertheless an extant dispute relating to execution and delivery of the leases when the proceeding was commenced, and the contentions they now raise fall within its scope. They contend that although there is a risk that the expert’s determination may not be binding in all respects or in all circumstances, the expert determination process has utility and that Dexus should be held to its agreement.
Held, dismissing the application for a stay:
1.at the time the proceeding was commenced there was a dispute which cl 26.1 required to be referred for expert determination, and the preclusion in cl 26.1(k) was applicable;
2.however, at the time the proceeding was commenced there were no matters in issue between the parties that were particularly suited for expert determination;
3.the matters that have subsequently been raised by way of defence to the claim are equally if not better suited to determination by the Court than by an expert;
4.by reason of uncertainty about the scope of the expert’s power, the likelihood of independent consideration by a court of whether the relief sought is appropriate to be granted, and the prospect that the parties may contend that the determination is not binding on grounds of 'manifest error', there is a material prospect of duplication, delay and wasted cost associated with requiring the parties to participate in expert determination;
5.weighing all the relevant considerations, and in circumstances where the ultimate question of relief may only be definitively resolved by a court, it would be unjust to deprive Dexus of the right to have the entirety of the dispute determined judicially;
6.the usual and presumed advantages that may be seen to have informed the parties’ agreement to expert determination are not likely to be enjoyed in the event the proceeding is stayed.

Uniform Civil Rules 2020 (SA) r 12.1; Commercial Arbitration Act 2011 (SA) s 33A, referred to.
Badgin Nominees Pty Ltd v Oneida Ltd [1998] VSC 188; Zeke Services Pty Ltd v Traffic Technologies Ltd [2005] 2 Qd R 563; Onslow Salt Pty Ltd v Buurabalayji Thalanyji Aboriginal Corporation [2018] FCAFC 118; Strategic Publishing Group Pty Ltd v John Fairfax Publications Pty Ltd [2003] NSWSC 1134; Savcor Pty Ltd v State of New South Wales (2001) 52 NSWLR 587; Ipoh v TPS Property No 2 Pty Ltd [2004] NSWSC 289; Huddart Parker Ltd v The Ship Mill Hill (1950) 81 CLR 502; Orica Investments Pty Ltd v Aurelius Marvel One Ltd [2023] VSC 18; Dowsett v Reid (1912) 15 CLR 695; John Nelson Developments Pty Ltd v Focus National Developments Pty Ltd [2010] NSWSC 150; Legal & General Life of Australia Ltd v A Hudson Pty Ltd (1985) 1 NSWLR 314; Koompahtoo Local Aboriginal Land Council v Sanpine Pty Ltd (2007) 233 CLR 115; Secured Income Real Estate (Australia) Ltd v St Martins Investments Pty Ltd (1979) 144 CLR 596; Peters (WA) Ltd v Petersville Ltd (2001) 205 CLR 126; Mackay v Dick (1881) 6 App Cas 251; State of South Australia v Goldstein [2016] SASC 202; Strike Australia Pty Ltd v Data Base Corporate Pty Ltd [2019] NSWCA 205, discussed.

DEXUS SAHMRI2 PTY LTD v SOUTH AUSTRALIAN HEALTH AND MEDICAL RESEARCH INSTITUTE LTD & ANOR
[2025] SASC 61
Civil: Application

B DOYLE J: By a Claim filed on 21 March 2025, the applicant (‘Dexus’) seeks relief by way of specific performance or mandatory injunctive relief requiring the first respondent (‘SAHMRI’) and its subsidiary, the second respondent (‘ABC’), to execute copies of three memoranda of lease and to deliver them to Dexus, so as to facilitate their registration. That relief is sought to compel compliance by the respondents with obligations said to be owed by them under an agreement dated 5 June 2020 (‘Project Deed’). The respondents seek that the proceeding be stayed on the basis of asserted non-compliance by Dexus with an expert determination clause contained in the Project Deed.
Background
The Project Deed, and the leases contemplated by it, relate to premises on North Terrace in Adelaide’s health and biomedical precinct known colloquially as ‘SAHMRI2’ which is to house the Australian Bragg Centre for Proton Therapy.
Under and subject to the terms of the Project Deed, Dexus (as ‘Owner’) was to procure the ‘Owner’s Works’ (defined and given content by a series of cascading definitions that relate to the project requirements in respect of the ‘Building’). It was to do this by procuring that the ‘Developer’ enter into the ‘Building Contract’ which was required to contain sufficient provisions to enable the Owner to procure the Owner’s Works. SAHMRI was to procure ProTom International Holding Corporation (‘ProTom’) to carry out works under an agreement in order to install a proton therapy unit in the Building (‘PTE Works’, in turn defined by reference to a ‘PTE Purchase Agreement’ between SAHMRI and ProTom).
Upon the ‘SAHMRI Lease Commencement Date’ and the ‘PTU Lease Commencement Date’, Dexus was then to grant to SAHMRI two leases (the ‘SAHMRI Leases’) in respect of the ‘SAHMRI Premises’ (the part of the Building including the ‘SAHMRI Fitout’ comprising levels 4, 5 and 6 plus part of level 3 as depicted in a schedule), and was to grant to ABC a lease (the ‘PTU Lease’) in respect of the ‘PTU Premises’ (the part of the Building including the ‘PTU Fitout’ comprising levels 0, 1 and 3M).
The commencement dates just mentioned are defined by reference to the concept of ‘SAHMRI Premises Completion’ and ‘PTU Premises Completion’ respectively. Under the Project Deed, SAHMRI Premises Completion and the PTU Premises Completion occur when, in respect of the relevant premises:
·it is determined under the Building Contract that the Owner’s Works are completed in accordance with identified project requirements except for minor omissions and defects (which are further defined);
·it is determined under the Building Contract that tests required under project requirements or legislation before the premises is reasonably capable of being occupied are carried out and passed and the ‘Superintendent’ or ‘relevant Authority’ (as applicable) has agreed the results are acceptable; and
·a ‘Certificate of Occupancy’ for the premises is obtained and provided to SAHMRI or ABC, as the case may be.
The Project Deed also makes provision for a process of liaison between Dexus and SAHMRI or ABC (as the case may be) in anticipation of the relevant completion date. In particular, cl 14.1(f) provides that once Dexus receives notice that the Builder considers that the relevant Owner’s Works have reached the relevant completion requirements, Dexus’ representative is to give the relevant tenant’s representative at least two business days’ notice of a reasonable time for the tenant’s representative to inspect the premises with a view to being satisfied that completion has been achieved. If, following the inspection, the relevant tenant is not satisfied (acting reasonably) that the relevant Owner’s Works have reached completion under the Deed they may deliver to Dexus within seven days of the inspection an ‘Objection Notice’ under cl 14.1(g), detailing the outstanding ‘Final Works’. Under cl 14.1(h), Dexus must then procure the Developer and Builder to promptly attend to the Final Works to the extent that the Superintendent determines that they are required to achieve practical completion under the Building Contract. However, if the relevant tenant does not inspect or deliver an Objection Notice, the relevant Owner’s Works will be deemed, under cl 14.1(i), to have achieved Practical Completion.
Not more than 60 business days after SAHMRI Premises Completion or PTU Premises Completion (as the case may be), Dexus was obliged to arrange for three copies of the SAHMRI Leases or the PTU Lease to be prepared and delivered to SAHMRI or ABC for execution. Provided that those leases are in order, SAHMRI and ABC were then required to execute three copies and deliver them to the Owner within five business days. Dexus was then to promptly execute and cause the leases to be registered.
Notwithstanding these provisions directed towards registration of the leases, it is apparent from the provisions of the clauses dealing with these matters that, independently of the execution and registration of the lease documentation, Dexus and SAHMRI or ABC (as the case may be) are (or were) ‘bound by the terms and conditions and the covenants’ set out in the relevant lease ‘as if the same had been duly executed’ by the relevant parties (cll 21(f) and 22(f)).
As well, cll 21(g) and 22(g) of the Project Deed required that Dexus establish accounts with a financial institution into which it was required to pay, from the relevant commencement date (and thus independently of whether the lease in question was yet executed or registered) the ‘SAHMRI Lease Incentive Amount’ and the ‘PTU Lease Incentive Amount’. On and from commencement, if there was a positive balance in those accounts at the relevant time, the monthly rent under the relevant lease was to be paid from that account. The initial total balance of these reserve accounts exceeded $27 million.
In the Statement of Claim accompanying its Claim, Dexus contends that on 15 September 2023, a Certificate of Occupancy was issued for the Building and that, on 16 September 2023, the Superintendent appointed under the Building Contract certified that the Contractor had achieved the requirements of ‘Practical Completion’.
Dexus’ case is that both SAHMRI Premises Completion and PTU Premises Completion occurred by that date.
Dexus further alleges that despite it subsequently providing lease documentation to the respondents, they have each failed, in breach of cll 21(d) and 22(d) of the Project Deed, to execute and deliver the leases to Dexus so as to permit the leases to be executed by Dexus and registered.
When it commenced the proceeding, Dexus also made an interlocutory application seeking directions that the proceeding be listed for an urgent trial or, alternatively, seeking summary judgment.
By interlocutory application filed on 10 April 2025, the respondents sought an order pursuant to r 12.1 of the Uniform Civil Rules 2020 (SA) (‘UCRs’) and the inherent jurisdiction of the Court, staying the proceeding until further order.
On the same day, the matter was referred by Bampton J to the ‘special classification’ list and allocated to me. I determined that the stay application should be heard before dealing with Dexus’ application for an urgent trial or summary judgment.
The respondents contend that the subject matter of the proceeding comprises a dispute which is required to be, but has not been, submitted for determination by an expert pursuant to cl 26.1 of the Project Deed.
That clause provides as follows:
26.1 Determination
(a)If a dispute arises between the parties (including between the representative of each party) under a provision of this deed or in relation to any aspect of or issue concerning the Project or the Development Costs then:
(i)    in the first instance, each of the parties' representatives (and such other persons or parties as the representatives may jointly invite) shall meet and endeavour to resolve the dispute, each acting genuinely and in good faith. Such discussions shall be on a without prejudice basis;
(ii)     if a dispute is not resolved by the representatives within 10 Business Days of the parties notifying the other parties of the existence of a dispute under this clause 26, the dispute must be referred to a panel for resolution. The panel must consist of a Chief Executive Officer or equivalent (or their nominee) from the relevant party's organisation. All discussions of the executive panel shall be on a without prejudice basis; and
(iii)    if a dispute is not resolved by the panel within 10 Business Days of such referral, then the dispute will be referred to expert determination in accordance with the remainder of this clause 26.
(b)A dispute being dealt with under this clause 26 or otherwise in respect of this deed does not relieve a party of their obligation to continue to punctually perform their obligations under this deed.
(c)The expert is to be appointed by agreement between the parties but failing agreement will be the person appointed under clause 26.1(d) or 26.1(e) (as the case may be) (Expert). The Expert acts as an expert and not as an arbitrator, and the Expert's determination is final and binding on all parties in the absence of manifest error, unless:
(i)    either:
(A)the dispute relates to a monetary Claim that is in excess of $1,000,000.00; or
(B)the Expert's decision requires a party to pay in excess of $1,000,000.00; and
(ii)     the party seeking to contest the determination of the Expert initiates and serves proceedings in a Court of competent jurisdiction on the other party (or parties as the case may be) within 60 days of the Expert's determination.
(d)The Expert must have at least 5 years' current and continuous standing in the Expert's profession at the date of appointment and must be:
(i)    for a matter of law, a practising barrister or solicitor appointed by the President of the Law Society of South Australia;
(ii)     for a financial or accountancy matter, a practising chartered accountant appointed by CPA Australia;
(iii)    for a matter connected with the Building Contract, or any other matter, a qualified person appointed by the senior officer of an appropriate association, institute, society or board, or, if appropriate and the parties agree, the dispute may be referred to a panel of experts representing more than one of the appropriate skills. A resolution of a dispute at the first instance or a second instance is conclusive and binds all parties.
(e)If the parties cannot agree on the category of Expert to be appointed pursuant to clause 26.1(a) within 5 Business Days after a dispute arises, either party can request the President of the Law Society of South Australia to appoint an expert who is appropriate for the resolution of that type of dispute having regard to the requirements set out in clause 26.1(d).
(f)Except as otherwise determined by the Expert, the Expert's fees and expenses will be Development Costs for the purposes of this deed irrespective of the result of the determination except where the Expert determines that a party has breached this deed and then the defaulting party will pay all of the Expert's fees and expenses.
(g)The parties must comply with all reasonable requests and produce all necessary documentation to the Expert to enable the Expert to make the determination and the parties may make submissions which the Expert must take into account when making the determination.
(h)The Expert shall be required to provide his/her determination within 20 Business Days of the appointment of the Expert (or such earlier period as the parties may agree if a more urgent determination is required given the nature of the dispute) and otherwise shall determine its own procedure for determining the dispute and the parties must comply with that procedure.
(i)The Expert must be required to use its best endeavours to provide its determination of the dispute to the parties, in writing, with reasons for the determination, as soon as possible and in any event within 3 Business Days of conclusion of such determination.
(j)If the Expert fails to make a determination within the time or becomes incapacitated or resigns or dies then another Expert shall be appointed in accordance with this clause 26.
(k)No party shall commence legal proceedings unless the parties have undertaken the process set out in this clause 26.1(a), and those processes have failed to resolve the dispute, or in accordance with clause 26.1(c)(ii).
(l)No determination of the Expert in excess of $1,000,000.00 (within the meaning of clause 26.1(c)(i)) shall be enforced by a party unless in accordance with clause 26.1(c).
(m)Despite the provisions of this clause 26, in a case of genuine urgency, a party may seek immediate interlocutory relief or interim remedy.
Stay in aid of agreed expert determination procedure
A court which is otherwise regularly seized of jurisdiction to determine a civil dispute may stay the proceeding where the parties to it have agreed to resolve the dispute by an alternative dispute resolution process and where the institution or maintenance of the proceeding involves a breach of an obligation either to participate in that process or to defer litigating until the completion of the process. The stay is a means by which the court effectively restrains the instituting party’s breach of contract.[1]
[1] Badgin Nominees Pty Ltd v Oneida Ltd [1998] VSC 188 at [36] (Gillard J).
In such a case, the court is not bound to stay its proceedings. The agreement of the parties cannot oust the jurisdiction of the courts. There is a discretion to be exercised, and it is wide.[2] A number of factors are relevant.[3]
[2] Onslow Salt Pty Ltd v Buurabalayji Thalanyji Aboriginal Corporation [2018] FCAFC 118 at [15] (Besanko, Barker and Colvin JJ).
[3] Strategic Publishing Group Pty Ltd v John Fairfax Publications Pty Ltd [2003] NSWSC 1134 at [14]-[15] (Einstein J).
However, it has been said that the court starts with the proposition that the parties should be held to their agreement unless the party wishing to abandon that obligation can show good reason for that course.[4] As Dixon J said in Huddart Parker Ltd v The Ship Mill Hill,[5] there is a strong bias in favour of maintaining a special bargain of this kind. Or, as the Full Federal Court put it, in Onslow Salt Pty Ltd v Buurabalayji Thalanyji Aboriginal Corporation[6] (‘Onslow’), the consideration that parties should be held to their bargain is a ‘weighty consideration against refusal of a stay’.[7]
[4] Savcor Pty Ltd v State of New South Wales (2001) 52 NSWLR 587 at [42] (Barrett J), Ipoh v TPS Property No 2 Pty Ltd [2004] NSWSC 289 at [30] (McDougall J).
[5] (1950) 81 CLR 502 at 508-509.
[6] [2018] FCAFC 118.
[7] [2018] FCAFC 118 at [19] (Besanko, Barker and Colvin JJ).

In Onslow, Besanko, Barker and Colvin JJ said that:[8]
A stay will be refused if it would be unjust to deprive a party of its right to have its claim determined judicially. Matters that have been identified as reasons that may, in the particular circumstances, cause the Court to refuse to grant a stay include:
(1)the agreed process would deal with only part of the dispute;
(2)there would be duplication of effort if the agreed process was to be followed in the particular case;
(3)the refusal of a stay would result in a multiplicity of proceedings;
(4)in the case of an expert determination, the dispute is inapt for determination by an expert because it does not involve the application of specialist knowledge to matters to be observed or investigated by the expert or its outside the expert’s field of expertise; and
(5)the agreed procedures are inappropriate or inadequate for the nature of the dispute.
[8] [2018] FCAFC 118 at [16].
A stay will be refused if the particular dispute is not amenable to resolution by the mechanism the parties have chosen. The parties are presumed not to have intended that their dispute should be resolved by someone not qualified for the task, or in some inappropriate manner, and if the mechanism does not provide for procedural fairness or natural justice, that may render it inappropriate for the resolution of some disputes.[9]
[9] Zeke Services Pty Ltd v Traffic Technologies Ltd [2005] 2 Qd R 563 at [22], [32] (Chesterman J). See also Orica Investments Pty Ltd v Aurelius Marvel One Ltd [2023] VSC 18 at [39] (Lyons J).
When considering the related questions whether a dispute is apt to be determined by an expert determination regime and whether expert determination may result in duplication, and, in turn, undue delay and cost, it may be necessary to focus not only on the nature of the issues dividing the parties (and the extent to which an expert appointed under the contract is likely to be well-placed to resolve them) but also upon the precise nature of the relief claimed by the parties, because there may be limits on the extent to which the expert can, without the further substantive involvement of a court, grant that relief.
In the proceeding, Dexus seeks specific performance of alleged contractual obligations to execute and deliver up leases for registration. In the alternative it seeks mandatory injunctive relief (on a final basis) directed to that end. By a further alternative it seeks that the Court direct the Registrar General to register the relevant leases.
To the extent that Dexus seeks relief which, on the proper construction of the dispute resolution clause, is beyond the power contractually conferred upon an expert, or which, if conferred on the expert, would require further steps to be taken in order for the expert’s determination to be given real effect, this may militate against the grant of a stay. The remedies of specific performance and injunction are awarded by courts in the exercise of equity’s auxiliary jurisdiction. The grant of relief of that kind is always discretionary.[10] For that reason, even where a contract states that an obligation should be specifically performed, this may not bind the court in its consideration of that question.[11]
[10] Dowsett v Reid (1912) 15 CLR 695 at 705-706 (Griffith CJ).
[11] Seddon and Bigwood, Cheshire and Fifoot: Law of Contract (LexisNexis, 11th ed, 2017) at [24.1].
In the present case, if an expert were to determine that the respondents must execute and deliver up the leases in a particular form, Dexus may, in order to enforce that determination, be required to seek the assistance of the Court. If so, a question arises whether the Court would give independent consideration to factors that may bear on the discretion whether to give relief of that kind. If so, the expert process may not offer the finality and efficiency that it would have in the case of a dispute about the quantum of a payment required under the contract, or about the amount of compensation that should be paid for breach of a contractual specification. In those cases, absent a qualifying error, the amount determined by the expert would be a contractual debt, enforceable in a summary fashion before a court, or by other means such as by the making of a statutory demand.
In John Nelson Developments Pty Ltd v Focus National Developments Pty Ltd[12] (‘John Nelson Developments’) referring to observations made by McHugh JA in Legal & General Life of Australia Ltd v A Hudson Pty Ltd,[13] Ward J said that:[14]
However, relevantly, for present purposes, in Legal & General, McHugh JA noted (at p 336) the distinction between cases where a party sought an equitable remedy to enforce an agreement to abide by an expert determination (in which case reliance on a defence based on mistake could be made) and a case seeking a common law remedy (where a defence of mistake would only lie if the express or implied terms of the contract permitted). Hence, his Honour recognised that it would be open to a court in equity to decline to enforce an expert determination even though it might be binding on the parties as a matter of contract between them.
[12] [2010] NSWSC 150.
[13] (1985) 1 NSWLR 314.
[14] [2010] NSWSC 150 at [205].
The parties’ contentions
There is no real dispute between the parties as to the relevant principles. The rival contentions concern their application in this case.
There is also a dispute about whether the institution of the proceeding did in fact involve a contravention of cl 26.1(k) of the Project Deed.
As to that question, the main propositions advanced by Dexus were that:
·clause 26.1(k) of the Project Deed is not an embargo upon continuing legal proceedings where an issue raised in them might be amenable to expert determination. It is concerned with the commencement of legal proceedings;
·Dexus could only have contravened cl 26.1(k) if, at the time it commenced the proceeding, there was a relevant ‘dispute’ that was required to be subjected to the processes described in cl 26.1(a), and those processes had not been undertaken;
·construed in context, a ‘dispute’ which must be referred for (or is capable of) expert determination under cl 26.1 (as contemplated by cl 26.1(a)(iii)) is one which concerns legal rights or obligations. The parties did not contemplate that the expert could determine and bind the parties about a dispute which consists only in the parties having different views about what, on some commercial or other (non-legal) basis, should happen;
·put another way, or alternatively, a party is only required to refer a disagreement for expert determination if there is a ‘genuine’ or ‘bona fide’ dispute, meaning that both parties actually have and assert reasons for contesting their legal rights or obligations;
·at the time it instituted the proceedings, there was no ‘dispute’ that the events which triggered the respondents’ obligations to execute and deliver up appropriate leases had occurred. It was conceded by the respondents that there were equitable leases in effect, a concession which may be taken to reflect an underlying but unperformed obligation to enter into legal (registered) leases;
·put another way, the disagreement that existed was that the respondents wanted, but Dexus was not prepared to agree, a delay in the performance of their obligations. That is, the respondents wanted a stand-still, in the nature of an indulgence – but they were not asserting a right to it;
·for that reason, there was nothing that Dexus was required to refer for expert determination under cl 26.1 before it was permitted to seek to enforce its rights by litigation.
Dexus also advances a contention that, properly construed, cl 26.1 does not confer upon the expert the function of determining that a contractual obligation must be specifically performed. Part of the basis for that submission is that an expert appointed under contract has no power to enforce such a requirement without one of the parties invoking the assistance of a court in seeking to effectuate such a determination by an order for specific performance or by injunctive relief. Unlike where an arbitral tribunal makes an order for specific performance,[15] a court would retain a discretion whether to grant relief of that kind notwithstanding the expert’s determination.
[15] Commercial Arbitration Act 2011 (SA), s 33A. An award of that kind is enforceable by the Court subject to quite limited qualifications as described in ss 35 and 36.
Since the contract should be construed in light of the legal context in which it would operate,[16] and in a way which gives it commercial efficacy, the parties should not be taken to have conferred on an expert a function which, without more, would not be effective to achieve the apparent purpose.
[16] Koompahtoo Local Aboriginal Land Council v Sanpine Pty Ltd (2007) 233 CLR 115 at [32] (Gleeson CJ, Gummow, Heydon and Crennan JJ).
The respondents, by contrast, contend that:
·whilst not defined, the concept of a ‘dispute’, which is the basis for cl 26.1, should not be given a narrow meaning;
·prior to the institution of the proceedings, there was a dispute within the meaning of the cl 26.1, concerning or inhering in the respondents’ failure to comply with Dexus’ demand that they execute and deliver up the leases;
·the dispute that (subject to the grant of a stay) would be litigated in the proceeding overlaps with the dispute notified by Dexus for the purposes of commencing the cl 26.1 process;
·the mere fact that the respondents now advance contentions that they had not previously articulated as to why they were or are not required to execute the leases (at all, or bearing the commencement dates proposed by Dexus) does not mean that those contentions are not part of a, or the, dispute that had arisen before the proceedings were instituted. The respondents also contended that a ‘dispute’ for the purposes of cl 26.1 can evolve.
As to the scope of the function or power conferred on the expert, the respondents contend that the dispute that had arisen, and which ought to be referred for expert determination, was the failure of the respondents to perform their asserted obligations under specified clauses in the Project Deed.
The respondents submitted that whilst it was true that an expert cannot, in the same way that the Court can, order specific performance in respect of such clauses, that was not what the clause required, and it was not what Dexus was claiming when it identified the dispute.
In the respondents’ submission, the expert would not order specific performance; they would simply determine whether or not the respondents have an obligation to perform under the relevant clauses in the Project Deed. It was submitted that specific performance would only arise for consideration when the matter comes before the Court if Dexus, having succeeded on the determination, it asks the Court to compel the respondents specifically to perform in accordance with the expert determination.
In further submissions, however, the respondents clarified that their contention is that the expert might determine not only whether the Project Deed required the respondents to execute the leases, but whether in the circumstances prevailing they should execute and deliver up the leases. It was submitted that if the expert has given consideration to the kind of matters that a court would consider in deciding whether a compulsive remedy is appropriate, that would relieve the Court (on a subsequent enforcement application) of addressing those discretionary considerations afresh.
It may be observed, at this juncture, that depending on how far, on the proper construction of cl 26.1, an expert might go in purporting to resolve whether to compel a party to perform an obligation (in a way akin to specific performance or injunctive relief), there is the prospect of either incompleteness or duplication.
That is to say, if the expert determines only what the parties’ contractual obligations were, and whether they have not been complied with, the determination is incomplete. It remains for a Court to consider (if there is a contest) whether compulsive relief should be granted or withheld for discretionary reasons,[17] or perhaps because damages are considered to be adequate.
[17] Hypothetically that might involve considering whether conduct on the part of the applicant amounts to a want of clean hands, third party rights have intervened, or practical impediments now preclude actual compliance.
If, however, the expert determines, having regard to all the considerations to which a court might have regard, that the respondents must take particular steps in compliance with the Project Deed, there may be an element of duplication if it is accepted that the Court retains a discretion (or perhaps even an obligation) to consider whether equitable or injunctive relief is appropriately to be awarded, on pain of contempt.
On the assumption that, by instituting the proceeding, Dexus was in breach of cl 26.1(k), the respondents contended that:
·the fact that Dexus itself commenced the cl 26.1 process is a discretionary factor in favour of requiring it to complete that process;
·to the extent that a significant issue in the dispute is whether practical completion was achieved, expert determination is a suitable forum for considering that issue because an expert with expertise in building contracts and the law ought to be readily identifiable;
·the dispute is one which would be resolved quickly if referred for expert determination given the relatively short time frames for determination contemplated by the clause;
·although it is reasonably arguable that any determination about whether the respondents must execute and deliver the leases may not be final and binding, this possibility does not render the process futile. The respondents as not‑for‑profit entities with highly respected board members can be expected to pay serious heed to any determination reached by an expert;
·even if, ultimately, it is necessary subsequently to ventilate arguments before the Court, that potential delay should not be given significant weight. First, Dexus has itself taken some time to bring the dispute to a head, and had brought about some delays itself by circulating erroneous versions of the leases and failing promptly to respond to some correspondence. Secondly, the dispute is not inherently in need of urgent resolution, for reason that there is a reserve account available from which rent can continue to be deducted;
·the various substantive contentions raised by the respondents are not lacking in merit. The strength or weakness of their case is relevantly a neutral factor in the exercise of discretion. The contentions may not have been articulated prior to the institution of the proceedings, but that does not entail that they ought not be able to be relied upon, and the delay in articulating them does not suggest they are not raised genuinely nor otherwise militate against the grant of a stay.
Dexus submitted that if, which it contests, there was a dispute as to the respondents’ obligation to execute and deliver up the leases which was required by cl 26.1 to be referred for expert determination:
·for reasons canvassed above, the determination (if favourable to Dexus) may be incomplete or non‑binding in effect, given the Court’s residual discretion whether to grant relief of the kind it seeks, resulting in duplication and potential delay;
·the respondents’ contention that they might heed a non-binding determination of the question whether they must execute and deliver up leases is to be viewed against a background of having previously been prepared, without an articulated justification, to decline to perform their contractual obligations;
·this is not a case of a kind adverted to and contrasted in Onslow,[18] where the contract itself contemplates a kind of engagement between the parties after the expert determination;
·the perceived advantages of expedition and efficiency often associated with expert determination are undermined in the present case where the matters raised by the respondents include questions of contractual construction and the operation of independent legal doctrines which, if incorrectly decided by an expert, may involve ‘manifest error’ with the consequence that the determination is not final and binding;
·in circumstances where there is now an urgent need to resolve the issues between the parties, it would be unjust to deprive Dexus of its right to have its claim for relief determined judicially.
[18] [2018] FCAFC 118 at [37] (Besanko, Barker and Colvin JJ).
In written submissions, Dexus had contended that the matters now relied upon by the respondents, as reasons why they are not or were not obliged to execute and deliver up leases with the proposed commencement date, are not raised in good faith, and are in any event meritless.
However, in oral submissions, Dexus’ counsel did not suggest that the arguments proposed to be raised by the respondents were so hopeless that they could not have given rise to a ‘genuine dispute’. As I apprehended the position, Dexus instead contended that they were not in fact reasons why the respondents had previously refrained from executing and delivering the leases. In raising them now as matters that require referral for expert determination, the respondents are delaying, or further delaying, performance of their obligations. In the meantime, they have had access to the premises (at least in part). Whilst rent has been deducted from the reserve accounts, since those amounts were financed by Dexus (whose obligation to do so only arose on the hypothesis that completion had been achieved and leasehold obligations had come into existence), the respondents have been spared any direct financial impost.
Before resolving such of these contentions as may be necessary to decide whether a stay should be granted, it is necessary briefly to consider the factual context and to canvass the contentions that are now sought to be raised by the respondents about the disputed obligation to execute and deliver up leases in the form demanded by Dexus.
The salient facts
Without objection or any application to cross-examine deponents, the respondents[19] and Dexus[20] each relied upon a significant body of affidavit and other material[21] on the application. Whilst there is a difference between the parties about the significance of them and, perhaps, some inferences that might be drawn from them, the underlying facts are not in dispute.
[19] The respondents tendered the Affidavit of Heather Croucher dated 9 April 2025 (FDN 11), Affidavit of Anthony Sherbon dated 9 April 2025 (FDN 12), Affidavit of Jamie Scott Watts dated 9 April 2025 (FDN 15), Affidavit of Scott Penfold dated 23 April 2025 (FDN 18), Second Affidavit of Heather Croucher dated 23 April 2025 (FDN 19), Second Affidavit of Jamie Scott Watts dated 23 April 2025 (FDN 20), Third Affidavit of Jamie Scott Watts dated 29 April 2025 (FDN 21), Affidavit of Simon Jackson dated 30 April 2025 (FDN 23), Fourth Affidavit of Jamie Scott Watts dated 30 April 2025 (FDN 24), Fifth Affidavit of Jamie Scott Watts dated 1 May 2025 (FDN 27).
[20] Dexus tendered the Affidavit of Amy Kate Munro dated 20 March 2025 (FDN 2), Affidavit of Soo Khim Chiam dated 21 March 2025 (FDN 3), Second Affidavit of Amy Kate Munro dated 20 March 2025 (FDN 5), Second Affidavit of Soo Khim Chiam dated 14 April 2025 (FDN 16), Third Affidavit of Soo Khim Chiam dated 29 April 2025 (FDN 22).
[21] Dexus separately tendered four documents comprising annexures to its written submissions (FDN 28), being an Equipment Building Interface Document (Annexure 1), Notice of change of Superintendent’s Representative dated 3 February 2021 (Annexure 2), Aconex transmittal dated 3 February 2021 (C&G-CONNOTICE-000020) (Annexure 3) and Aconex transmittal (C&G-GCOR-004104) (Annexure 4).
The project

Commencing in or around 2017, the State Government, SAHMRI and commercial entities entered into arrangements designed to facilitate the construction of SAHMRI2.
SAHMRI is a public company limited by guarantee, focusing on health and medical research. It operates on a not-for-profit basis. Its founding members are Ministers of the State Crown and each of South Australia’s three universities. SAHMRI is funded by State and Federal Government grants, commercial research and services agreements and philanthropic donations.
ABC is a wholly owned subsidiary of SAHMRI which was formed for the purpose of developing and operating a proton therapy unit in the Building. It is to be the research arm of the Proton Therapy Centre to be located in the ‘Australian Bragg Centre for Proton Therapy’ (the ‘Centre’).
In mid-2020, at around the same time the parties entered into the Project Deed, the relevant Minister entered into an amended ground lease of the land on which the Building has now been constructed, and an agreement for lease with respect to the office tower to be constructed, with C&G Health No 2 Pty Ltd as trustee for the C&G Health Trust No 2 (‘CGH2’). Under those arrangements, CGH2 was to pay rent in the amount of $2.6 million in one lump sum and was obliged to construct or procure the construction of a ‘Facility’ and only use it for the Permitted Use. The lower levels were to include a purpose designed Proton Therapy Unit, as part of the PTU Premises.
Under the Project Deed entered into on 5 June 2020, CGH2 (the then ‘Owner’), C&G Health Development Pty Ltd as trustee for the C&G Health Development Trust (‘Developer’), SAHMRI and ABC undertook various obligations, as set out earlier in these reasons.
Contemporaneously with the parties’ entry into the Project Deed, the Developer (as ‘Principal’) entered into a building contract with Lendlease Building Contractors Pty Ltd (‘Lendlease’) (as ‘Contractor’) for the construction of the Centre. This is the ‘Building Contract’ within the meaning of the Project Deed. There were two deeds of variation to that contract. The Building Contract contained provisions relating to the achievement of ‘practical completion’.
In October 2020, Dexus became the Owner by acquiring among other things the units in the trust of which CGH2 had been trustee.
Practical completion and the leases
It is common ground that construction was nearing completion in September 2023, although, as will be explained, there is a dispute about whether, in point of fact or law, PTU Premises Completion and SAHMRI Premises Completion were reached at that time. Dexus contends that completion for the purposes of the Project Deed was achieved by mid-September 2023. As earlier explained, Dexus contends that:
·completion was achieved under the Building Contract by 16 September 2023, when a Certificate of Practical Completion under that contract was issued;
·on 21 September 2023, Mr Sims, Project Director of the Developer, provided to the respondents a Certificate of Occupancy dated 15 September 2023.
The respondents now dispute that completion was in fact achieved at that time, for reasons to which I return below.
SAHMRI began a staged occupation of levels 3 and 4 of the Building in December 2023. ABC has not entered into occupation. Dexus has invoiced SAHMRI and ABC for payment of rent and outgoings since September 2023.
Payment has been effected by deducting these amounts from the reserve accounts described earlier in these reasons, which operate as the means by which lease incentives are facilitated. The respondents have not, prior to and other than in the context of the recent disputation about these proceedings and the question whether they should be stayed, articulated an objection to paying rent or disputed their liability to do so.
In late February 2024, Dexus sent execution copies of three leases to SAHMRI, albeit Dexus mistakenly provided two copies of one of the SAHMRI Leases rather than one lease relating to level 6 and another relating to levels, 3, 4 and 5. The error was pointed out in mid-March 2024. On 1 May 2024, three leases were sent to the respondents for execution. A follow-up email regarding execution was sent on 14 May 2024.
Non-execution and delivery up of the leases
By letter dated 9 August 2024, Dexus wrote to the respondents. The letter stated that the ABC Lease and the SAHMRI Lease had commenced on 16 September 2023, pursuant to cll 21(f) and 22(f) of the Project Deed. It referred to the provision of lease documentation and correspondence in relation to execution. The letter then required ABC and SAHMRI to comply with their obligations without further delay, and to deliver up executed leases by 26 August 2024.
It is apparent from the correspondence that Dexus was aware that the respondents had, for some time, been in dispute with ProTom. Dexus sought information about the status of the dispute.
Again, on 22 October 2024, Dexus wrote to the respondents requiring that they execute and deliver up the leases by 25 October 2024.
On 6 November 2024, the respondents’ solicitors (Cowell Clarke) wrote to Dexus notifying it that the PTE Purchase Agreement with ProTom had been terminated. The letter did not refer to the status of the leases.
After this time, correspondence between the parties occurred including through their solicitors. The correspondence included:
·the letter from Dexus’ solicitors, King & Wood Mallesons (‘KWM’) of 12 November 2024, acknowledging receipt of the Cowell Clarke letter of 6 November 2024, requesting that they advise how they intend to fulfil their obligations under the Project Deed in relation to the procurement and delivery of the PTE Works, stating that these matters did not affect the respondents’ obligations under the Project Deed to execute the leases and noting that no reasoning had been given for the respondents’ claim that they were not in a position to execute;
·Cowell Clarke’s letter of 9 December 2024, by which the respondents requested Dexus to ‘agree to a stand-still arrangement until the end of the PTU Lease Incentive Period and the SAHMRI Lease Incentive Period which our clients calculate to be 30 June 2025’. The articulated rationale for the request included that ‘funds are available … to cover rent and outgoings until the expiry of the Lease Incentive Periods and your client is therefore not suffering any direct financial loss during the proposed standstill period’. The letter stated that ‘[t]hese funds include Contingency Accounts and amounts in respect of Level 6 ‘cold shell’ conversion and Additional Works. Additionally funds are deposited in the Lease Reserve Accounts which by our clients’ calculation are sufficient to pay the whole of the rent in respect of both the PTU Remises and the SAHMRI Premises until June 2025’. The letter stated that significant complexities had arisen due to the termination of the agreement with ProTom which the respondents were ‘working through as expeditiously as possible, but which may take some time to fully resolve’;
·KWM’s letter of 9 December 2024, observing that implicit in Cowell Clarke’s response was that the respondents were ‘continuing to refuse to execute’ the leases, and seeking confirmation of the position and a substantive response to earlier correspondence;
·Cowell Clarke’s letter of 12 December 2024, repeating the request for a stand-still arrangement, and adding, by way of elaboration of the rationale, that:
Pursuant to clauses 21(f) and 22(f) of the Project Deed, the leases are deemed to be binding and effective, on and from the respective Lease Commencement Date, whether the formal memoranda of lease are signed or not […]
and reiterating that the requested stand-still would entail Dexus agreeing not to take any action against the respondents (including action to compel either company to sign the respective leases) until the expiry of the respective Lease Incentive Periods;
·KWM’s letter of 13 December 2024, communicating that Dexus declined to agree to the proposed stand-still agreement, continuing to press for delivery of the executed leases by 16 December 2024, and noting that the registration of leases was an important part of the Project Deed which the respondents’ refusal to facilitate undermined. The letter stated:
It does not appear to be in contention that ABC and SAHMRI have a contractual obligation to execute the leases and are in continuing default of their respective obligation to have executed the PTU Lease and the SAHMRI Lease. You client has once again not provided their reasons for refusing to fulfill their obligations to execute their respective leases.
·KWM’s letter dated 20 December 2024, serving a pre-action claim notice and draft statement of claim pursuant to r 61.7 of the UCRs;
·an email dated 23 December 2024 from Mr Jacka, SAHMRI’s Chief Financial Officer to Dexus’ Portfolio Manager with responsibility for the project (Ms Chiam), by which Mr Jacka requested that Dexus return the ‘construction contingency’ to the respondents;
·Dexus’ provision, by email and Aconex on 23 December 2024, of a notice of dispute to the respondents under cl 26.1 of the Project Deed (‘Dispute Notice’). The notice proposed a meeting on 9 January 2025. It recited a number of background matters and items of correspondence before articulating the dispute in this way:
The dispute concerns ABC and SAHMRI’s failure to comply with their obligations under clauses 21(d) and 22(d) of the Project Deed respectively, to execute, certify and deliver the PTU Lease and the SAHMRI Leases to Dexus (Dispute). As at the date of this notice, ABC and SAHMRI have refused to execute, certify and deliver the PTU Lease and the SAHMRI Leases, as indicated within [Cowell Clarke’s letters of 9 and 12 December 2024].
On or about 5 January 2025, the Bragg Centre was broken into and an unauthorised person set off several fire systems, resulting in flooding and significant damage to the Bragg Centre, with particular damage to the below‑ground areas intended for ABC’s tenancy. Remediation works are underway and SAHMRI is awaiting confirmation when it can reoccupy any part of the Bragg Centre.
The parties’ representatives met on 9 January 2025. It is common ground the meeting constituted, to the extent necessary, the first meeting contemplated by cl 26.1(a)(i) of the Project Deed. Evidently, no satisfactory resolution was reached.
On 14 January 2025, Dexus wrote to the respondents stating that ‘the Dispute will now be escalated to the second stage of the dispute resolution process outlined at clause 26.1(a)(ii) of the Project Deed, which states that if the dispute is not resolved by the representatives within 10 business days of being notified, it must be referred to a panel for resolution’.
By letter dated 20 January 2025, Cowell Clarke contended that the pre-action letter involved a breach of cl 26.1(k) of the Project Deed. On 21 January 2025, the respondents served a notice of dispute on Dexus relating to the return of the amounts in the ‘Contingency Accounts’. In that notice, they asserted that ‘Final Completion’ had been reached. This was a necessary contention, having regard to the requirements of cl 20(c) of the Project Deed.
It is common ground that a ‘panel’ of representatives of the parties met on 24 January 2025, satisfying, to the extent necessary, the requirements of cl 26.1(a)(ii) of the Project. No satisfactory resolution was reached.
KWM responded to the 20 January 2025 letter on 31 January 2025, contending that there was no reason why the pre-action notice could not be given whilst the parties were simultaneously engaged in the contractual dispute resolution process. In that letter, KWM contended:
On any view, the expert’s determination will not be binding to a dispute of this nature.
Furthermore, it is now evident that: (1) the negotiation process under clause 26 has failed, (2) your clients have failed to provide a response to the pre-action notice, and are not intending to provide one, and (3) your clients have, despite repeated opportunities, failed to ever identify a defence to the claim much less the nature of any such defence. We note in this latter regard that no defence has been identified to date despite extensive correspondence having passed on the topic of execution of the leases over a prolonged period.
Our client expressly reserves its rights to commence proceedings in conformity with the draft proceedings provided to you.
There were further meetings held between high level representatives of the State Government and Dexus on 4 February 2025, 7 February 2025 and 25 February 2025. Evidently, no resolution satisfactory to Dexus was reached at these or any other of the numerous meetings that have been held.
On 21 March 2025, Dexus commenced the proceeding in this Court.
The rival contentions about completion
On the hearing of the stay application, and in written materials exchanged for the purposes of it, the respondents have identified a number of factual and legal contentions which are relevant to whether, and if so when, on the proper construction of the Project Deed, they were obliged to execute and deliver up the leases.
Incomplete works or certification
As has been explained, whether completion has been achieved for the purposes of the Project Deed requires consideration of whether it has been determined under the Project Deed that relevant works and contractual and statutory requirements have been met.
The respondents contend that under the Building Contract, completion of the relevant works entails completion of the Owner’s Works referable both to the SAHMRI Premises and the PTU Premises. The Building Contract contains a process which may culminate in the Superintendent issuing a ‘Certificate of Practical Completion’ (cl 34.8).
The respondents contend that the issue by the Superintendent of a certificate of practical completion in this case was in error and void.
First, the respondents contend that some of the required ‘Works’ had not been satisfactorily completed. In this regard, they rely upon:
·a report of Mr Simon Jackson of Ionic Consulting dated 31 August 2023, which was to the effect that work at the site of the Bragg Centre was not near completion as at 29 August 2023;
·an ‘issues notice’ sent by the respondents to Mr Sims on 2 September 2023 raising their concerns about the state of the works and identifying that significant works had to be undertaken before the works could be considered complete;
·a further inspection held on 15 September 2023, following which Dr Penfold had raised further concerns about the completion of the works in two separate ‘Aconexes’ to Mr Sims sent on 15 September 2023;
·a further report prepared by Mr Jackson dated 25 September 2023, detailing significant outstanding works to be completed, following him having returned to the site on 18 September 2023;
·Mr Jackson’s affidavit dated 30 April 2025, deposing that a number of items were outstanding and that until they were addressed and completed, the areas he inspected were not suitable for occupation, particularly given the disruptive nature of the works that would be required to fix those issues.
In response, Dexus contends that the issues in the Jackson reports and the issues notice relate only to the PTU Premises, and particular levels within them. It contends that Mr Sims advised that the matters raised in the first Jackson report and the issues listed were minor in nature and typical as the area was under construction and finishing at the time of inspection. It contends that the Builder rectified whatever needed to be done to achieve practical completion.
It further contends that on 15 September 2023, the respondents’ Dr Scott Penfold and Ms Heather Croucher sent an email to Mr Sims which noted that ‘Scott agrees that floors 00 and 01 probably meet the contractual definition of ‘practically complete’, noting a number of defects are to be rectified’.[22]
[22] I observe that as Dr Penfold has explained in his affidavit, he went on to say that in his view it was ‘very apparent’ that levels 3 and 3M were not practically complete, and that understood that the Developer would be inspecting the PTU Premises again with Lendlease on 16 September 2023.
In respect of subsequent matters, Dexus’ response is that Mr Sims has advised that everything from 1 to 16 September 2023 was minor in nature and that significant work occurred right up to the last moment. He states he was satisfied at 4 pm on 16 September 2023 when he certified practical completion that the Contractor had completed the works to the standard required by the Building Contract and that anything outstanding was of a nature that could be rectified or completed after that certification.
Secondly, the respondents contend that the concept of ‘practical completion’ is defined by the achievement of matters set out in the Building Contact definition. These included a ‘certificate of RFE Standard’ having been issued by the Superintendent to the Principal, the Contractor and SAHMRI (para (u) of the definition located in cl 1) of the Building Contract.
That certificate is defined by cross-reference to cl 62(h)(i) of the Building Contract which contemplates the Superintendent, within 10 business days after an inspection, forming the reasonable opinion that the ‘RFE Standard’ has been achieved, and issuing a certificate accordingly. That expression is defined by reference to the stage in the carrying out and completion of the works when the requirements of the ‘EBI Checklist’ in respect of the works relating to the ‘RFE Area’ has been achieved and allowing for paperwork/certification to be provided by practical completion. The respondents contend that by a Deed of Variation, ‘EBI Checklist’ became the checklist set out in Annexure 2 to that deed (being an ‘RFE Checklist Revision 3.3’ dated 15 March 2023).
The respondents contend that whilst on 15 September 2023, Ms Courtney Procter issued to the Superintendent a document in similar form (albeit being a different revision, RFE Checklist Revision 3.4, dated 11 September 2023), and said by the Developer to be ‘signed by ProTom … to evidence acceptance of the RFE Standard’, this was not the ‘certificate of RFE Standard’ as it was not issued by the Superintendent as a certification that the RFE Standard was achieved.
In response, Dexus contends that the document of 15 September 2023 was sent by the respondents’ own representative. It further points to a document sent on 16 September 2023 in which Mr Sims stated that ‘for completeness, the Superintendent confirms that the Contractor has achieved the RFE Standard as required under Clause 62 of the Building Contract’.
In respect of this issue and the complaint of incomplete works, Dexus also relies on the absence of an Objection Notice under cl 14.1(g) of the Project Deed, the effect of which clause was summarised earlier in these reasons. It is contended that cl 14.1(i) therefore deems Practical Completion to have occurred within the meaning of the Project Deed. The respondents, however, say that the 15 September 2023 communications by Dr Penfold did amount to Objection Notices or, alternatively, they contend that Dexus had failed to give a compliant notice pursuant to cl 14.1(b) of the Project Deed, meaning that the regime that may result in a deeming of Practical Completion was not adhered to by Dexus.
Delay in provision of certificate of occupancy
The respondents submit that although a ‘Certificate of Occupancy’ was executed by the private certifier Katnich Dodd on 15 September 2023, it was not provided to the respondents until 13 December 2023, when it was requested by Dr Penfold.
The consequence, submit the respondents, is that the completion dates for the commencement of the leases could not have arisen prior to 13 December 2023.
Appointment of Superintendent

The respondents raised a question as to the validity of the appointment of Mr Sims as ‘Superintendent’. They pointed to a lack of documentary evidence for the appointment in compliance with the Building Contract. Dexus has subsequently pointed to evidence directed to that issue. Whilst the respondents were not in a position to concede this issue during the argument, it may well be that this particular issue falls away.
Broader questions of waiver, acquiescence or estoppel
The respondents contend that it is open to challenge the correctness of the Superintendent’s Certificate of Practical Completion for the reasons they have identified. Dexus submits that if it is wrong in its answers to those contentions, the respondents are now precluded from contending that practical completion was not reached in mid-September 2023.
Apart from the issue about the absence of an Objection Notice, they contend that the parties proceeded on an assumption and common understanding that the relevant process had been attended to and completed. Further, they rely upon:
·SAHMRI having entered into occupation since at least December 2023;
·the respondents having at no time prior to the proceedings challenged the rental invoices or Dexus’ entitlement to deduct rent from the reserve accounts;
·the respondents having entertained and responded to requests for access to the site;
·the respondents having advanced a claim for release of the ‘Contingency Amount’. Under the Project Deed, this only occurs where ‘Final Completion’ has been reached;
·the respondents having made representations to the effect that the ‘Defects Liability Period’ was about to expire.
Dexus also points to assertations made by the respondents, when requesting a stand-still period, that Dexus would not be prejudiced by delay in provision of executed leases because the effect of the Project Deed is that leases are taken to be on foot.
The respondents contend that whilst they have advanced a claim to the Contingency Amount, unless and until they seek to enforce (or perhaps receive) payment, this is not conduct that is relevantly inconsistent with a denial, in the present context, that completion was relevantly achieved. They generally dispute that there is an operative ‘waiver’ in the present case, including because the payment by them of rent does not amount to an inconsistent assertion or exercise of rights. Against this, Dexus contends that by taking advantage of the facility to have rent paid from the reserve accounts – something that could only properly be done if the lease incentive obligations had crystallised on Dexus’ part – the respondents have elected to accept, or are otherwise now precluded from denying, that completion has relevantly been achieved.
Summary
It suffices for present purposes to say that the resolution of the competing contentions I have summarised above will involve some questions of fact and evidence but also, and perhaps more importantly, it will likely entail:
·questions of the proper construction of provisions of the Project Deed and the Building Contract;
·the proper characterisation of the parties’ conduct and their communications;
·consideration and application of principles of waiver and estoppel.
Approach to the determination of the stay application
Dexus contends that the question whether the respondents should be required to deliver up executed leases is attended by some urgency. Whilst the respondents suggest that Dexus’ claim of urgency is exaggerated and inconsistent with its conduct, the respondents themselves rely upon the expeditious regime contemplated by cl 26.1 as a virtue. Both parties made submissions about efficiency and avoiding duplication. In those circumstances, there is a need, and it is appropriate, to resolve the question whether the proceeding should be stayed promptly. With that in mind, I do not consider it necessary or appropriate to resolve every question thrown up by the parties’ competing submissions.
Save for the question whether there was in fact any contravention of cl 26.1(k), which is foundational to any discretion I may exercise to stay the proceeding, I do not consider it necessary for me to form other than high level and, in some cases impressionistic, conclusions about the issues that bear on the exercise of the discretion.
Whether the preclusion in cl 26.1(k) was engaged
Notwithstanding the force in Dexus’ submissions to the contrary, I consider that the preclusion in cl 26.1(k) was engaged. My reasons for that conclusion follow.
I accept that an expert appointed under cl 26.1 must only make determinations referable to the view they reach as to the parties’ contractual rights and obligations. This is implicit from the text and structure of cl 26.1, including the reference to ‘manifest error’, a concept which pre-supposes that the determination is expected to reflect rights and obligations by reference to an external standard. However, it does not follow from that proposition that where one party demands that another do something in connection with the Project Deed, and the other does not accede to the demand, there is no relevant dispute unless that party asserts or at least has in mind a contention about their rights and obligations. If that remains the position when the matter is referred to an expert for determination, the expert’s task may be simple, but it remains to be performed.
Dexus submitted that its approach to the construction of the expert determination clause was consistent with the proposition that a party to a commercial contract is not to act in such a way as to deprive to the other party of the benefit of the agreement or deprive it of its efficacy.[23]
[23] See, eg, Secured Income Real Estate (Australia) Ltd v St Martins Investments Pty Ltd (1979) 144 CLR 596 at 607-608 (Mason J), Peters (WA) Ltd v Petersville Ltd (2001) 205 CLR 126 at [36] (Gleeson CJ, Gummow, Kirby and Hayne JJ), Mackay v Dick (1881) 6 App Cas 251 at 263 (Lord Blackburn).
The contention was that to delay or shut out a party from litigating a matter where the party cannot point to any reason relative to their rights or obligations for doing so would be to enable them to act contrary to those implied obligations. A difficulty with the contention is that, framed as it is – as giving rise to an implied limitation on the meaning of ‘dispute’ for the purposes of cl 26.1 – its consequence would also be to deprive a party who does wish to avail itself of an expeditious expert determination of the capacity to do so on the basis that no contention to the contrary of their position has been raised. It cannot be assumed that a party with an apparently incontestable legal position would not wish to avail itself of such a determination. In the case of a monetary issue, it might, coupled with a statutory demand, for instance, be a very convenient way of enforcing an entitlement against a recalcitrant counter-party. Further, to introduce into the meaning of ‘dispute’ a requirement that turns on the actual (subjective) reasons for the other party’s refusal to act as requested would be to introduce uncertainty in the operation of cl 26.1.
In my view, there was a dispute as articulated by Dexus in its Dispute Notice sent on 23 December 2024. It arose simply by virtue that Dexus asserted a legal entitlement, and the respondents did not accede to the demand. The dispute did not cease to exist when the parties set out about complying with the processes in cl 26.1(a)(i) and (ii), nor dissipate upon the respondent’s failure to assert legal contentions in defence of their conduct.
I would accept, as a matter of inference from the facts earlier described, that the respondents were not, at that time, relying on the matters upon which they now rely, as a reason for not acceding to the demand. They were framing their position as a request for an indulgence. Implicitly, that may or may not have involved an acceptance of an underlying obligation. Be that as it may, in my view, the essential character of the dispute arises from the asserted non-compliance with obligations under the Project Deed, and the absence or otherwise of good grounds for having failed to accede to those obligations does not result in the dispute falling away. Nor is its ambit curtailed solely by reason that, in the first two negotiation phases of the dispute, the respondents did not investigate, resort to, or articulate, arguments going to their underlying obligations.
I conclude that the proceeding was commenced in contravention of cl 26.1(k) of the Project Deed.
Having said this, the absence, prior to the commencement of the proceeding, of any contention by the respondents as to any principled (as distinct from commercial) reason why they should not be required to execute and deliver up the leases, is a matter which I consider is relevant to the exercise of discretion.
That is because, at the time when it decided to institute the proceedings, it was reasonable for Dexus to consider that there was no need for the resolution of any technical or other factual matter of a kind that might be particularly apt for determination by a specialist expert. It was reasonable for Dexus to anticipate that if the proceeding were to be resisted, it might be on broader, discretionary grounds, and that those were matters that were uniquely suited, or at least apt to be determined by, the Court. Further, given the absence of any contention by that stage about the underlying obligations, Dexus was entitled to have a concern that expert determination may not in and of itself force the respondents’ hand. These considerations are by no means decisive, and consideration must also be given to the merits or demerits of the dispute as now articulated being resolved by an expert or in this Court. But they are not irrelevant to the ultimate question whether it would be unjust to deprive Dexus of the capacity to have its claim determined judicially.
Discretionary considerations
I turn to the further matters that I consider bear on the discretion.
Whether the expert’s function extends to compelling execution and delivery
As has been noted, Dexus submits that the parties should not be taken to have conferred on the expert a power he or she could not exercise in a truly effective way, because, if not complied with, a Court asked to lend its powers in aid of enforcing the determination would be entitled to decide not to do so, for discretionary reasons.
Whilst there is some attraction in that submission, it may go beyond the attribution to the parties of an obviously intended limitation upon the words they have used, and stray into the territory of a limitation implied merely because it accords with the court’s view of what would have been desirable or sensible. Even attributing to the parties an understanding that a Court which is asked to enforce a determination in a way that involves equitable or injunctive remedies may exercise an independent discretion, the parties might nevertheless have intended to give an expert power to make that determination for whatever that might be worth. I acknowledge that, on that view, difficult questions might arise as to whether and to what extent any anterior findings by the expert might amount to part of the determination by which the Court may be bound (operating almost as a contractual form of issue estoppel).
In my view it is sufficient, for present purposes, to identify that there is material uncertainty about whether, as a matter of the construction of cl 26.1, as part of determining the dispute I have described, it is within the expert’s remit to require (if he or she considers that there are good grounds) that the leases now be executed and delivered to Dexus.
To the extent that the expert’s role is, properly construed, more limited, a referral of the matter to expert determination will leave unresolved questions about whether specific performance or injunctive relief is appropriate. To the extent that it is not so limited, there is at least a prospect that significant matters going to the appropriateness of such relief may need to be reconsidered by a Court, thus involving a degree of duplication. The uncertainty about the issue adds another unattractive prospect: viz, that the proper construction of the expert’s remit under cl 26.1 itself becomes an independent issue in any proceedings to give effect to the expert’s determination.
It was open to the respondents to undertake that, in the event that the expert determined that the leases were to be executed and delivered up, no contention would be made against the grant of such relief by the Court. They did not do so. They are not to be criticised for failing to do so, but the fact is that because this is a dispute in which Dexus wants action, and not just a monetary award, there is a material prospect that expert determination would only be a first step in deciding whether Dexus should succeed, with the parties reserving to themselves the right to contend that it was a misstep.
Prospect of independent consideration by Court of appropriateness of relief
Quite apart from the question whether the expert would be acting properly in deciding to require performance of the obligations to execute and deliver the leases, if such a determination is made but not complied with, resort to the Court will be necessary and, for the reason identified by Ward J in John Nelson Developments, that may entail independent consideration of matters that go to the appropriateness of such relief.
I do not overlook the prospect that, if the determination is adverse to the respondents, they may nevertheless act in accordance with it, and I bear in mind the composition and non-profit objectives of SAHMRI and ABC. However, having regard to the history of the matter, I cannot assume that the parties would not remain in dispute following an expert determination.
The nature of the dispute as now articulated
The issues now raised by the dispute have been summarised. They may evolve. However, at present, and apart from any questions going to the appropriateness of relief (which are better suited to curial disposition, if indeed they are not with the exclusive domain of a court), the issues concern the state of the works at particular times, the proper construction of the contractual provisions, the characterisation of parties’ conduct, and, likely, principles of waiver and estoppel.
The questions about the state of the works might involve or benefit from some specialist experience in technical matters, but that is not entirely clear. At all events, the respondents’ submission was that the determination is one that could be decided by a person with experience both in building contracts and the law (not a non-lawyer such as an engineer or architect). Undoubtedly persons with that experience exist in this State and elsewhere, but, equally, the Court may be taken to have an appropriate level of experience of those matters. Insofar as broader legal doctrines such as waiver or estoppel may be concerned, the Court may be expected to have equal if not greater experience and expertise than a person who has specialised in building disputes.
Broadly speaking, it may be said that the Court has available to it greater procedural powers (such as subpoena powers) and fact finding facilities (such as taking evidence on oath) than does an expert. That may be of some assistance in resolving the dispute as now articulated.
Against that, the expert determination process contemplates a determination within a short period of time after appointment, and which eclipses what is normally experienced in a curial determination, reflecting both the more intricate procedures that tend to be adopted by courts and the competing demands on their resources.
However, given the breadth of the issues now raised, it is not unreasonable to doubt whether an expert may encounter some difficulty in meeting that deadline. If they do not, that may have unfortunate consequences. If they do, there is at least the risk that it may have involved a failure to give procedural fairness of a kind that befits a dispute of the commercial significance of this dispute, or will have otherwise involved material error on a matter of substance. In this respect, the fact that where monetary disputes are concerned, the clause does not contemplate that claims above a certain level ($1,000,000) will be binding, appears to be an implicit recognition that whilst an informal process is generally suitable for the conclusive determination of smaller monetary claims, when the stakes become higher, other values and priorities assume priority.
Even where an expert determination is agreed by the parties to be final and binding, a departure from the contractual requirements will render it non-binding.[24] A misconstruction of their contractual task may render it a nullity.[25] Here, the clause goes further and implicitly recognises that if a determination involves ‘manifest error’ is not final and binding on the parties.
[24] State of South Australia v Goldstein [2016] SASC 202 at [128] (Blue J).
[25] Strike Australia Pty Ltd v Data Base Corporate Pty Ltd [2019] NSWCA 205 at [49] (Basten JA), at [106] (Ward JA).
That exception is not limited to error of law, but an error of law apparent from the written determination may well amount to a manifest error. The nature of the dispute is such that it is likely to involve deciding a number of matters of law, or mixed fact of law.
The prospect that a party may credibly contend that an expert determination involves manifest error tends to undermine the aptness of the process because it threatens to deprive the process of the savings of time and cost that are typically understood to be reasons for adopting informal dispute resolution regimes.
Urgency, delay and the parties’ conduct
The respondents pointed to the passage of time between the provision of draft leases in early 2024 and the commencement of the proceedings. They said that this undermined the claim of urgency.
To some extent, the point is well made, but there is another perspective. It was only in late 2024 that Dexus would have come to appreciate that the respondents were distinctly declining to accede to the request made of them, and were doing so without at that time articulating a legal (as distinct from commercial) reason for doing so. From that point Dexus was active in progressing the matter. It is fair to say that the longer that the impasse remained unresolved, the more urgent its resolution becomes. If, as now appears to be the case, there is a genuine dispute about whether the leases are required to be executed and delivered up, it is important, given the physical and financial scale of the project, that it be resolved promptly.
I accept that there is an element of commercial urgency here, albeit not one that, standing alone, would require the refusal of a stay. It is a factor to be considered along with others, including the material prospect that referral to expert determination may not offer a truly final resolution.
When considering delay, and the parties’ conduct, I also consider it is a matter of some, but not great, significance, that the respondents did not themselves refer the dispute to expert determination. I accept that since the proceedings were instituted, the proper course was first to seek a stay. But to the extent that the respondents rely upon the aptness of expert determination for the resolution of the dispute, or the virtues of expert determination more generally, the observation can be made that they did not take steps to set it in motion in the period between early February and 21 March 2025. Again, this is scarcely a decisive consideration, but nor is it irrelevant to the ultimate evaluation that I must make.
I have not considered it necessary to form or express any views as to the merits of the substantive arguments about completion now relied upon by the respondents, save to conclude that I have not formed the view that they obviously lack merit in a way that itself is a reason not to indulge the respondents’ desire for referral of the dispute for expert determination.

As mentioned earlier, the failure of the respondents to raise their substantive contentions prior to the institution of the proceedings has some, albeit limited, relevance to my consideration of whether Dexus should now be restrained from prosecuting proceedings instituted by them at a time when they were not on notice of a defence to them. But I otherwise consider the merits of the arguments to be a neutral factor on this application.
Conclusion and disposition
The failure by the respondents to accede to Dexus’ demand that they execute and deliver the leases meant that the parties were in dispute. Prima facie, that dispute was required to be referred for expert determination before legal proceedings were to be instituted in respect of the subject matter of the dispute.
Neither party in fact referred the dispute for expert determination. There is material uncertainty about whether, as a matter of the proper construction of cl 26.1, the expert would have been tasked with deciding whether to require the relevant obligations to be performed, as distinct from deciding whether the obligations had crystallised or were extant. Assuming the expert was to decide that question, it was on the cards that their determination, if adverse to the respondents, would require curial enforcement of a kind that might entail independent discretionary consideration, in a way that would not be required in relation to a monetary award.
At the time Dexus instituted the proceeding, without the process just described having been undertaken, it was not apparent that there were any factual or legal questions relating to the respondents’ underlying obligations in contest. Its failure to abide the preclusion in cl 26.1(k) is to be seen in that context.
As the dispute has evolved, the respondents now advance a number of propositions in relation to their underlying obligations which are likely to involve questions of law. Viewed in the broad, those matters are likely to be equally if not better suited to determination by the Court than by an expert. Given that any ultimate question of relief may require independent consideration by a court, there would appear to be an efficiency in the Court dealing with all issues. That is particularly so given that the expert’s determination will not be binding if affected by ‘material error’, and where the expert would be expected to resolve the dispute in a short time frame, without the procedural armoury available to a court.
The dispute is therefore not one in respect of which expert determination is likely to offer any particular advantage, and it is affected by potential disadvantages of duplication and therefore delay (and wasted cost).
The significance of the dispute, and the fact it is attended by a degree of urgency, militates against requiring the parties to participate in a process that is liable not to result in finality, for the reasons that have been canvassed. Whilst the prospect that the determination might, even if not binding, cause the parties to reach agreement is not to be overlooked, it is, in the circumstances of this case, outweighed by other considerations.
It is difficult to perceive any substantial disadvantage to the respondents in having the matter resolved in court. Even if in fact a trial proves more costly than an expert determination, the scale and size of the project, and the financial parameters of the leases are of a significance which renders that cost saving less weighty than would be the case in a dispute about a defect or a discrete monetary claim.
Weighing those considerations, and in circumstances where the ultimate question of relief may only be definitively resolved by a court, I conclude that it would be unjust to deprive Dexus of the right to have the entirety of the dispute determined judicially. The usual and presumed advantages that may be seen to have informed the parties’ agreement to expert determination in cl 26.1 are not likely to be enjoyed in the event that the proceeding is stayed.
Acknowledging the bias which the authorities recognise operates in favour of granting a stay of a proceeding inconsistently with the requirements of a dispute resolution clause, I am nevertheless satisfied that I should decline to stay the proceeding.
The application for a stay of the proceeding is dismissed. I will hear the parties as to costs and the future conduct of the matter.

[2025] SASC 61

13 May 2025