RCR O'Donnell Griffin Pty Ltd v Forge Group Power Pty Ltd

[2016] QCA 179

COURT OF APPEAL

MORRISON JA
PHILIP McMURDO JA
APPLEGARTH J

Appeal No 9125 of 2015
SC No 5173 of 2014

RCR O’DONNELL GRIFFIN PTY LTD Appellant
ACN 003 905 093

FORGE GROUP POWER PTY LTD First Respondent
ACN 103 678 324

MARK FRANCIS XAVIER MENTHA Second Respondent

SCOTT DAVID HARRY LANGDON Third Respondent

BRISBANE

FRIDAY, 24 JUNE 2016

PHILIP McMURDO JA: This appeal was heard on 10 May 2016 by Justices Morrison and Applegarth and me. The appeal involved the entitlement of the respondents to make demand for payment under two bank guarantees. The respondents are presently restrained from doing so by their own undertaking, which is in terms which would expire on 10 July 2016. Because of that circumstance of urgency, the orders disposing of this appeal will be made now for reasons which will be published on a later date.

The orders are:

1.Allow the appeal.
2.Set aside the orders made on 17 August 2015.
3.Each of the questions referred to in paragraph 1 of the application filed 8 October 2014, and ordered to be determined as separate questions by the order of 13 October 2014, be answered in the negative.
4.Declare that from and after 22 April 2014, the first respondent has not been and is not entitled to call upon or seek to have recourse to the 2014 Guarantee or the 2016 Guarantee, as those instruments are identified in the statement of claim and either in their original terms or as amended from time to time.
5.Remit the balance of the claim to the Trial Division.
6.The respondents to pay the appellant’s costs of the proceeding to date in the Trial Division and of this appeal.

CaseChat Overview and Summary

The appeal in RCR O’Donnell Griffin Pty Ltd v Forge Group Power Pty Ltd involved the entitlement of the respondents to demand payment under two bank guarantees. The appeal was heard by Justices Morrison, Applegarth and McMurdo on 10 May 2016. The respondents were restrained from making demands for payment by their own undertaking, which was set to expire on 10 July 2016. This urgency led to the orders being made immediately, with reasons to be published later.

The court was required to decide whether the respondents were entitled to call upon the bank guarantees and if the first respondent was entitled to seek recourse to the guarantees. These legal issues were central to the appeal, given the restraint on the respondents' actions by their own undertaking. The court had to determine whether the respondents' entitlement to demand payment was valid and if the first respondent's right to recourse was justified.

The Court of Appeal found in favour of the appellant, RCR O'Donnell Griffin Pty Ltd. The court answered the referred questions in the negative, meaning that the respondents were not entitled to call upon or seek recourse to the guarantees. The court set aside the previous orders made on 17 August 2015 and declared that from 22 April 2014, the first respondent had not been and was not entitled to call upon or seek recourse to the guarantees. The balance of the claim was remitted to the Trial Division for further consideration. The respondents were also ordered to pay the appellant's costs of the proceeding to date in the Trial Division and of this appeal.

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established