Santos Limited v BNP Paribas - [2018] QSC 105

SUPREME COURT OF QUEENSLAND

CITATION:

Santos Limited v BNP Paribas [2018] QSC 105

PARTIES:

SANTOS LIMITED ABN 80 007 550 923

(plaintiff)

v
BNP PARIBAS ABN 23 000 000 117

(defendant)
and
FLUOR AUSTRALIA PTY LTD ABN 28 004 511 942
(first third party)
FLUOR CORPORATION

(second third party)

FILE NO/S:

BS No 11743 of 2017

DIVISION:

Trial Division

PROCEEDING:

Application

ORIGINATING COURT:

Supreme Court at Brisbane

DELIVERED ON:

21 May 2018

DELIVERED AT:

Brisbane

HEARING DATE:

30 April 2018

JUDGE:

Jackson J

ORDER:

The order of the Court is that:

1.   The plaintiff’s claim is dismissed.

2.   The plaintiff pay the defendant’s costs of the proceeding.

3.   The third party proceeding is dismissed.

CATCHWORDS:

INTERPRETATION – GENERAL RULES OF CONSTRUCTION OF INSTRUMENTS – COMMERCIAL AND BUSINESS TRANSACTIONS – PARTICULAR TRANSACTIONS – BANKING AND FINANCE – INSTRUMENTS – MISCELLANEOUS – where defendant issued to plaintiff a “bank guarantee” in the nature of an unconditional bond to pay money on demand up to a stated maximum amount – where bond requires demand to be “purporting to be signed by an authorised representative” of plaintiff – where bond requires demand to be in form of letter annexed to demand which states under signature line “authorised signatory of Santos Limited” – where letter of demand stated above signature “Santos Limited – GLNG Upstream Project” and under signature a name and “General Manager Development” – where principle of strict compliance to be applied intelligently, not mechanically – whether demand was “purporting to be signed by an authorised representative” – whether demand complied with bond

CONTRACTS – BUILDING, ENGINEERING AND RELATED CONTRACTS – THE CONTRACT – CONSTRUCTION OF PARTICULAR CONTRACTS AND IMPLIED CONDITIONS – SECURITY AND RETENTION FUNDS – where bank guarantee issued in relation to EPC contract – where demand made – whether demand complies with terms of bank guarantee

PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – ENDING PROCEEDINGS EARLY – SUMMARY DISPOSAL – SUMMARY JUDGMENT FOR DEFENDANT OR RESPONDENT: STAY OR DISMISSAL OF PROCEEDINGS – where cross-applications by plaintiff and defendant for summary judgment – whether no real prospect of succeeding on plaintiff’s claim

Uniform Civil Procedure Rules 1999 (Qld), r 293

Barns v Queensland National Bank Ltd (1906) 3 CLR 925, cited
Bulgrains & Co Ltd v Shinhan Bank [2013] EWHC 2498 (QB), cited
Bunbury Foods Pty Ltd v National Bank of Australasia Ltd (1984) 153 CLR 491, cited
Ecosse Property Holdings Pty Ltd v Gee Dee Nominees Pty Ltd (2017) 343 ALR 58, applied
Fortis Bank SA/NV & Anor v Indian Overseas Bank [2011] EWCA Civ 58, cited
Sea-Cargo Skips AS v State Bank of India [2013] EWHC 177 (Comm), cited
Seaconsar Far East Ltd v Bank Markazi Jomhouri Islami Iran [1993] 1 Lloyd’s LR 236, cited
Simic v New South Wales Land and Housing Corporation (2016) 260 CLR 85, applied

Wood Hall Limited v Pipeline Authority (1979) 141 CLR 443, cited

COUNSEL:

M Stewart QC, with S Cooper for the plaintiff

P…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2018] QSC 105
Decision Date: 21 May 2018

CaseChat Overview and Summary

Santos Limited brought an action against BNP Paribas regarding a bank guarantee issued by the latter. The guarantee was intended to secure Santos’ obligations under an engineering, procurement and construction (EPC) contract. Santos sought payment under the guarantee after BNP Paribas declined to honour a demand made by Santos, contending the demand did not comply with the terms of the guarantee. The court was required to determine whether the demand complied with the guarantee and whether there was a real prospect that Santos’ claim would succeed.

The guarantee required a demand "purporting to be signed by an authorised representative" of Santos and to be in a form of a letter annexed to the guarantee. The demand letter was signed by a General Manager Development, with the title "Santos Limited – GLNG Upstream Project" appearing above the signature. The court considered whether the demand was sufficiently compliant with the guarantee, applying the principle of strict compliance intelligently rather than mechanically. The court held that the demand was not compliant because the signatory was not an authorised representative of Santos as defined by the guarantee, and the demand did not comply with the form specified in the guarantee.

The court dismissed Santos’ claim, finding that there was no real prospect that the claim would succeed. The court also dismissed a third-party proceeding and ordered Santos to pay BNP Paribas’ costs of the proceeding. The court's reasoning was based on the strict interpretation of the guarantee's terms, which Santos did not meet. The court found that the requirement for the demand to be signed by an authorised representative and to be in the specific form was not met, and therefore, BNP Paribas was not obligated to pay under the guarantee.

Orders

Orders of the court

The order of the Court is that:

1. The plaintiff’s claim is dismissed.

2. The plaintiff pay the defendant’s costs of the proceeding.

3. The third party proceeding is dismissed.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.

CITATION:	Santos Limited v BNP Paribas [2018] QSC 105
PARTIES:	SANTOS LIMITED ABN 80 007 550 923 (plaintiff) v BNP PARIBAS ABN 23 000 000 117 (defendant) and FLUOR AUSTRALIA PTY LTD ABN 28 004 511 942 (first third party) FLUOR CORPORATION (second third party)
FILE NO/S:	BS No 11743 of 2017
DIVISION:	Trial Division
PROCEEDING:	Application
ORIGINATING COURT:	Supreme Court at Brisbane
DELIVERED ON:	21 May 2018
DELIVERED AT:	Brisbane
HEARING DATE:	30 April 2018
JUDGE:	Jackson J
ORDER:	The order of the Court is that: 1. The plaintiff’s claim is dismissed. 2. The plaintiff pay the defendant’s costs of the proceeding. 3. The third party proceeding is dismissed.
CATCHWORDS:	INTERPRETATION – GENERAL RULES OF CONSTRUCTION OF INSTRUMENTS – COMMERCIAL AND BUSINESS TRANSACTIONS – PARTICULAR TRANSACTIONS – BANKING AND FINANCE – INSTRUMENTS – MISCELLANEOUS – where defendant issued to plaintiff a “bank guarantee” in the nature of an unconditional bond to pay money on demand up to a stated maximum amount – where bond requires demand to be “purporting to be signed by an authorised representative” of plaintiff – where bond requires demand to be in form of letter annexed to demand which states under signature line “authorised signatory of Santos Limited” – where letter of demand stated above signature “Santos Limited – GLNG Upstream Project” and under signature a name and “General Manager Development” – where principle of strict compliance to be applied intelligently, not mechanically – whether demand was “purporting to be signed by an authorised representative” – whether demand complied with bond CONTRACTS – BUILDING, ENGINEERING AND RELATED CONTRACTS – THE CONTRACT – CONSTRUCTION OF PARTICULAR CONTRACTS AND IMPLIED CONDITIONS – SECURITY AND RETENTION FUNDS – where bank guarantee issued in relation to EPC contract – where demand made – whether demand complies with terms of bank guarantee PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – ENDING PROCEEDINGS EARLY – SUMMARY DISPOSAL – SUMMARY JUDGMENT FOR DEFENDANT OR RESPONDENT: STAY OR DISMISSAL OF PROCEEDINGS – where cross-applications by plaintiff and defendant for summary judgment – whether no real prospect of succeeding on plaintiff’s claim Uniform Civil Procedure Rules 1999 (Qld), r 293 Barns v Queensland National Bank Ltd (1906) 3 CLR 925, cited Bulgrains & Co Ltd v Shinhan Bank [2013] EWHC 2498 (QB), cited Bunbury Foods Pty Ltd v National Bank of Australasia Ltd (1984) 153 CLR 491, cited Ecosse Property Holdings Pty Ltd v Gee Dee Nominees Pty Ltd (2017) 343 ALR 58, applied Fortis Bank SA/NV & Anor v Indian Overseas Bank [2011] EWCA Civ 58, cited Sea-Cargo Skips AS v State Bank of India [2013] EWHC 177 (Comm), cited Seaconsar Far East Ltd v Bank Markazi Jomhouri Islami Iran [1993] 1 Lloyd’s LR 236, cited Simic v New South Wales Land and Housing Corporation (2016) 260 CLR 85, applied Wood Hall Limited v Pipeline Authority (1979) 141 CLR 443, cited
COUNSEL:	M Stewart QC, with S Cooper for the plaintiff P…