MP Water Pty Ltd in its capacity as Trustee for the MP Water Trust v Veolia Water Australia Pty Ltd

MP Water Pty Ltd, as trustee for the MP Water Trust (the appellant), appealed to the New South Wales Court of Appeal against a decision of the primary judge concerning a contract for the provision of services in relation to a water treatment facility. The dispute centred on the interpretation of a "step-in" clause within the Services Provider Agreement (SPA) between the appellant and Veolia Water Australia Pty Ltd (the respondent).

The primary legal issues before the Court of Appeal were whether the "step-in" clause, which required the respondent to "assist" the appellant, authorised the appellant to direct the respondent to operate the facility and provide the services, and consequently, whether the respondent was obliged to comply with such a direction. A further issue was whether the definition of "Facility" within the contract had been satisfied, thereby triggering the appellant's step-in rights.

The Court of Appeal allowed the appeal, setting aside the primary judge's orders. The Court declared that clause 44 of the SPA conferred on the appellant a power to direct the respondent regarding the actions necessary to operate the Facility and provide the Services. This power was exercisable in response to a Services Provider Default, which had occurred and was the subject of a notice given by the appellant to the respondent. The Court found that the clause imposed a correlative obligation on the respondent to undertake the directed actions. The matter was remitted for costs to be determined by the trial judge, and the respondent was ordered to pay the appellant's costs of the appeal.