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Siemens v Bulgana

Siemens v Bulgana

Case [2019] VSC 771 27 November 2019

Injunction

Serious Issue to be Tried

Balance of Convenience

Civil Litigation & Procedure

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IN THE SUPREME COURT OF VICTORIA
AT MELBOURNE
COMMERCIAL COURT

Not Restricted

S ECI 2019 4613

BETWEEN:

SIEMENS GAMESA RENEWABLE ENERGY PTY LTD (ACN 614 784 575)	Plaintiff
v
BULGANA WIND FARM PTY LTD (ACN 162 201 569) and NEOEN AUSTRALIA PTY LTD (ACN 160 905 706)	Defendants

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JUDGE:	Digby J
WHERE HELD:	Melbourne
DATE OF HEARING:	17 October 2019
DATE OF JUDGMENT:	27 November 2019
CASE MAY BE CITED AS:	Siemens v Bulgana
MEDIUM NEUTRAL CITATION:	[2019] VSC 771

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PRACTICE AND PROCEDURE – Injunctive relief – Building and Engineering Contract – Application to restrain beneficiary of performance guarantee from calling on two unconditional bank guarantees – Serious issue to be tried – Consideration of whether appropriate to decide contract interpretation question as if on a final basis – Proper approach – Balance of convenience – Application for injunction dismissed.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr M Darke SC with Ms C Van Proctor	Clayton Utz
For the Defendants	Mr H Foxcroft QC with Mr J Gurr	White & Case

HIS HONOUR:

Outline of SGRE’s Application

The plaintiff, Siemens Gamesa Renewable Energy Pty Ltd (SGRE) applies to restrain the first defendant, Bulgana Wind Farm Pty Ltd (BWF), from calling upon two unconditional bank guarantees (Performance Securities) issued in favour of BWF, in connection with an Engineering, Procurement and Construction Contract (EPC Contract) between the parties, pursuant to which SGRE is constructing a large wind farm for BWF in Victoria.

By Amended Originating Motion and Amended Summons, both dated 18 October 2019, SGRE seeks:

(a) an interlocutory injunction restraining BWF from making any demand under or pursuant to the Performance Securities pending any arbitral reference or until further order; and

(b) an order pursuant to s 8 of the Commercial Arbitration Act 2011 (Vic) that so much of these proceedings as involves the determination of a claim for final relief be stayed pending any arbitral reference between the parties.

Further, by its Amended Originating Motion, SGRE also claims alternative relief in the nature of a permanent injunction restraining BWF, via its employees, agents or otherwise, from making any demand, in relation to a disputed claim to Delay Liquidated Damages (DLDs) under the EPC Contract, under or pursuant to the Performance Securities.

SGRE has not pressed its claim for an order pursuant to s 8 of the Commercial Arbitration Act 2011 (Vic) save to argue that such relief remains available, even if no arbitral tribunal is relevantly in place[1] and has in relation to SGRE’s claim for an interlocutory injunction, taken the position that SGRE’s application should be tested on the basis of the identification of a serious question to be tried, and not finally determined as to the contract interpretation questions in issue on the basis that the court moves to make a determination, ‘as if’ on a final basis, in relation to the contract construction issues.
[1]Disposal of ancillary matters relating to ‘circularity’ (T54.1-15) and an order under s 8 of the Commercial Arbitration Act 2011

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.

Continue reading Siemens v Bulgana

Details

AGLC: Siemens v Bulgana [2019] VSC 771
Case: [2019] VSC 771
Decision Date: 27 November 2019

CaseChat Overview and Summary

Siemens, the applicant, filed an application against Bulgana, the respondent, seeking injunctive relief to prevent Bulgana from calling on two unconditional bank guarantees provided under a building and engineering contract. The case was heard by the Supreme Court of Queensland. The central issue before the court was whether it was appropriate to decide a contract interpretation question on an interlocutory basis as if it were a final decision, and whether the balance of convenience favoured granting the injunction. The court considered whether the applicant had demonstrated a serious issue to be tried and whether it was appropriate to decide the contract interpretation question on an interlocutory basis.

The court found that it was not appropriate to decide the contract interpretation question on an interlocutory basis as if it were a final decision. The court held that it was necessary to consider the balance of convenience, which weighed in favour of the respondent, as there was a significant risk of prejudice to the respondent if the injunction were granted. The court noted that the proper approach required a careful consideration of the contract terms and the circumstances surrounding the provision of the bank guarantees. The court concluded that the balance of convenience did not favour granting the injunction.

The application for injunctive relief was dismissed. The court found that the applicant had not demonstrated a serious issue to be tried and that the balance of convenience did not favour the granting of the injunction. The court also held that it was not appropriate to decide the contract interpretation question on an interlocutory basis as if it were a final decision. This decision highlights the importance of considering the balance of convenience and the proper approach when deciding whether to grant injunctive relief in cases involving building and engineering contracts.

Orders