Federal Court of Australia

Rimfire Energy Pty Ltd v BSF Co Pty Ltd (No 2) [2025] FCA 384

ORDERS

THE COURT ORDERS THAT:

1.    The parties file a minute of draft orders to give effect to these reasons.

2.    If the parties cannot agree on the question of costs:

(a)    the applicant file written submissions not exceeding three pages within 7 days of the date of these orders; and

(b)    the respondents file written submissions not exceeding three pages 7 days thereafter.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011 (Cth).

REASONS FOR JUDGMENT

O’CALLAGHAN J

Introduction

1    The dispositive question the subject of this proceeding turns on the proper construction of two Power Purchase Agreements (PPAs), namely the “Power Purchase Agreement – Batchelor Solar Farm” dated 27 February 2020 (the Batchelor PPA) and the “Power Purchase Agreement – Hudson Creek Power Station” dated 18 February 2020 (the Hudson Creek PPA).

2    The applicant, Rimfire Energy Pty Ltd, is the “Buyer” under both PPAs.  It is a licensed electricity provider in the Northern Territory and purchases wholesale electricity primarily from Power Generation Corporation (or PWC), which is owned by the Northern Territory government.

3    The first respondent and the second respondent are the “Owners” under the PPAs.

4    The first respondent, BSF Co Pty Ltd, is the Owner under the Batchelor PPA and is licensed to generate electricity.  Pursuant to the Batchelor PPA, the first respondent agreed to develop and construct a 10MW solar farm near Batchelor, approximately 100 km south of Darwin, and the applicant agreed to purchase all electricity there generated.  The Batchelor PPA set the “Target Commercial Operation Date” for the solar farm as 30 June 2021, “[s]ubject to an extension of time”.

5    The second respondent, HCPS Co Pty Ltd, is the Owner under the Hudson Creek PPA and is also licensed to generate electricity.  Pursuant to the Hudson Creek PPA, the second respondent agreed to develop and construct a 12MW gas fired power station close to the Hudson Creek Terminal Station in Darwin, and the applicant agreed to purchase all electricity generated by that power station.  The Hudson Creek PPA set the Target Commercial Operation Date as 1 July 2021, again “[s]ubject to an extension of time”.

6    As at the date of this judgment, neither the Batchelor solar farm nor the Hudson Creek power station has commenced operating.

7    On 21 November 2022, the applicant issued to each of the respondents an invoice for liquidated damages on the basis that the respondents had failed to achieve the “Commercial Operation Date” by the Target Commercial Operation Date under each PPA.

8    The invoice in respect of the Batchelor solar farm was for $365,000.

9    The invoice in respect of the Hudson Creek power station was for $1,035,000.

10    Following my judgment in Rimfire Energy Pty Ltd v BSF Co Pty Ltd [2024] FCA 602 (Rimfire No 1), the respondents paid 50% of those invoices on the interim basis that I ruled was contemplated by the PPAs.

11    More recently, the applicant submitted that it is entitled to retain that amount and that the respondents are liable to pay the other 50%, plus interest calculated under the PPAs.  It also faintly pressed an alternative unconscionability claim under the Australian Consumer Law (ACL), being Schedule 2 of the Competition and Consumer Act 2010 (Cth).

12    The respondents disputed the invoices and submitted that the applicant must repay the sums already paid to it, on the basis that the respondents are not liable to pay any sum under the invoices because the respondents had validly extended the Target Commercial Operation Date pursuant to three extension of time notices (EOTs or EOT claims) issued pursuant to cl 5 of the PPAs.

13    The applicant contended that the EOTs were invalid, that the respondents are not entitled to the claimed extension of time to the Target Commercial Operation Date and that the respondents are thus liable to pay the maximum amount of liquidated damages provided for in the PPAs (being the sums claimed in the invoices).

14    As I have already said, the resolution of the dispute involves the proper construction of the relevant terms of the PPAs and the EOTs purportedly issued under them.

15    For the reasons set out below, the applicant’s construction of cl 5 of the PPAs and the EOTs is correct, and it is entitled to the amount of liquidated damages it seeks, together with interest at the rate contemplated by the PPAs.

16    I turn first to the relevant terms of the PPAs.  The PPAs are, for relevant purposes, substantially identical, although I note below the instances in which the terms must be treated separately.

Relevant provisions of the PPAs

17    Pursuant to cl 4.1 of each PPA, the Owner is, “[e]xcept to the extent set out in this document, … solely responsible for the economic and technical feasibility, operational capability and reliability of the Facility”.

18    Clause 4.2 provides:

Construction of Facility

(a)    The Owner must complete or cause the completion of the Construction of the Facility:

(i)    to achieve the Commercial Operation Date by the Target Commercial Operation Date;

(ii)    in accordance with Good Design and Construction Practice; and

(iii)    in accordance with all applicable Laws and Authorisations.

(b)    Without limiting clause 4.2(a), the Owner must diligently pursue the completion of the Construction of the Facility.

19    Clause 5 is the critical provision, dealing with extensions of time.

20    Clause 5.1 provides as follows:

Claims for extensions of time

(a)    If the Owner encounters events or circumstances which might reasonably be expected to result in any delay to the progress of the Construction, the Owner must:

(i)    notify the Buyer of such event or circumstance as soon as reasonably practicable after the Owner becomes aware of the occurrence of the event or circumstance; and

(ii)    provide such other information as reasonably required by the Buyer to allow the Buyer to assess the relevant event or circumstance notified and the implications of the event or circumstance on each party’s respective rights and obligations under this document.

(b)    If:

(i)    an Extension Event occurs;

(ii)    the Owner can demonstrate that it has been delayed, or is likely to be delayed, in achieving Commercial Operation as a result of that Extension Event; and

(iii)    within 10 Business Days after the full effects of the Extension Event are determined by the Owner, the Owner submits a written claim to the Buyer for an extension of time,

the Owner will be entitled to an extension of time to the Target Commercial Operation Date.

(c)    A claim made by the Owner under clause 5.1(b) must:

(i)    contain detailed particulars of the Extension Event causing, or that is likely to cause, the delay;

(ii)    contain detailed particulars of the consequences or the likely consequences of the delay, including details of how the Owner will be delayed in achieving Commercial Operation by the Target Commercial Operation Date as a result of the Extension Event; and

(iii)    state the period for which an extension of time is claimed, together with the basis of calculating the total number of days claimed.

21    It is necessary to look at the defined terms with care.

22    “Extension Event” is defined, relevantly, to include a “Connection Works Delay”.

23    The Batchelor PPA in turn defines “Connection Works Delay” to mean:

A delay to achieving Commercial Operation as a result of any delays in PWC constructing and connecting the Facility to the NT Grid and commencing the provision of the connection services under the PWC Connection Agreement, but only to the extent such delay is not caused by the EPC Contractor or the Owner.

(Emphasis added.)

24    To avoid any unnecessary repetition, I will use the definition of “Connection Works Delay” contained in the Batchelor PPA for the purposes of explaining my reasons.

25    Each of the words I have emphasised further above in paragraph 23 is defined, as follows.

26    “Commercial Operation” means:

That stage in the progress of the Construction when:

(a)    the certificate has been issued under the EPC Contract stating that the Facility has reached ‘practical completion’ or relevant equivalent; and

(b)    the Facility is ready to operate and capable of generating Electricity in accordance with this document …

27    “PWC” means the Power and Water Corporation established by s 4 of the Power and Water Corporation Act 1987 (NT).  It is the operator of the Northern Territory electricity network and a trader of electricity.  See Power and Water Corporation’s “Network Technical Code and Network Planning Criteria” (version 4) dated 30 March 2020 at page 5.

28    In their written submissions, the respondents explained (and the applicant did not dispute) that PWC owns the transmission and distribution networks which cover the major centres of the Northern Territory.  This includes the Darwin-Katherine Interconnected System (the System), which is the electricity distribution network relevant to the Batchelor solar farm project and the Hudson Creek power station project.  In order for operators such as the respondents to transmit electricity through the System, an agreement with PWC is required.  Recipients of electricity through the System also require an agreement with PWC.

29    “PWC Connection Agreement” means, in the case of the Batchelor solar farm facility:

The Generator User Agreement (comprising the Formal Instrument of Agreement dated 24 July 2018 and General Conditions) originally entered into between Batchelor Solar Farm Pty Ltd (ABN 11 625 359 159) and PWC in relation to the connection of the Facility to the NT Grid, to be amended and novated to the Owner after the date of this document as a pre-condition to completion under the Asset Purchase Agreement.

30    “PWC Connection Agreement” means, in the case of the Hudson Creek power station facility:

The Generator User Agreement (comprising the Formal Instrument of Agreement dated 11 September 2018 and General Conditions) originally entered into between Trutinor NT Pty Ltd (ABN 17 625 359 186) and PWC in relation to the connection of the Facility to the NT Grid to be amended and novated to the Owner on or about the date of this document as a precondition to completion under the Asset Purchase Agreement.

31    The Generator User Agreements set out the terms on which PWC will provide “network access services” to the “Generator User” (being Batchelor Solar Farm Pty Ltd in the case of the Batchelor facility, and Trutinor NT Pty Ltd in the case of the Hudson Creek facility) “to enable the Generation Facilities to be and remain Connected to PWC’s electricity network”.  See, in the case of the Batchelor facility, cl 1.1(a) of the Formal Instrument of Agreement dated 24 July 2018; and, in the case of the Hudson Creek facility, cl 1.1(a) of the Formal Instrument of Agreement dated 11 September 2018 (collectively, the FIAs).

32    Each Generator User has obligations to “ensure that the Generation Facilities are built to the Schedule 1 technical parameters, observe the specified procedures for amending those parameters, and ensure that the Generation Facilities do not import or export electricity in excess of the specified limits …”.  See cl 2.1(a) of the FIAs.

33    The “EPC Contractor” in the case of the Batchelor facility is BSR EPC Pty Ltd.  The equivalent “Contractor” in the case of the Hudson Creek facility is Energy Power Systems Australia Pty Ltd.  For convenience, I will use the term “EPC Contractors” to refer to both of these entities.

34    The Target Commercial Operation Date provided for in the PPAs was:

(a)    30 June 2021 in the case of the Bachelor PPA; and

(b)    1 July 2021 in the case of the Hudson Creek PPA.

35    Clause 5.2 of the Batchelor PPA (which is substantively identical to cl 5.2 of the Hudson Creek PPA) relevantly provides:

Disputes relating to an extension of time

(a)     If:

(i)    the Owner submits a claim in accordance with clauses 5.1(b) and 5.1(c) for an extension of time to the Target Commercial Operation Date; and

(ii)    the Buyer does not agree with the period by which the Owner proposes to extend the Target Commercial Operation Date as a result of such Extension Event,

then, the Buyer may, within 10 Business Days of receiving the claim under clause 5.1(b)(iii) refer the matter to be determined by an Expert appointed under clause 28.3(a)(i). Any matter referred for determination by an Expert under this clause 5.2(a) is deemed to be a Dispute purely of a technical nature for the purposes of clause 28.3(a).

36    Clause 6 of both PPAs is headed “Failure to achieve Target Commercial Operation Date”.  Clause 6.2 of the Batchelor PPA (which is substantively identical to cl 6.2 of the Hudson Creek PPA) deals with liquidated damages payable, relevantly as follows:

Liquidated damages payable

(a)    If the Owner fails to achieve the Commercial Operation Date by the Target Commercial Operation Date, the Owner must pay to the Buyer, the liquidated damages amount calculated in accordance with schedule 4.

(b)    The Buyer may invoice the Owner, on an interim basis, any amount owed by the Owner to the Buyer under clause 6.2(a) at the end of each Billing Period.

…

37    The parties agreed that:

(a)    the maximum liquidated damages amount payable under each PPA is capped at six months after the Target Commercial Operation Date; and

(b)    the invoices issued by the applicant to the respondents on 21 November 2022 were for the six-month maximum liquidated damages amounts payable under each PPA.

38    As for the submitting of invoices, cl 12.2 of the Bachelor PPA and cl 11.2 of the Hudson Creek PPA provide:

Invoices

(a)    The Owner (Invoicing Party) must prepare and submit to the Buyer (Paying Party), within fifteen Business Days after the end of each Billing Period, an invoice setting out each Charge due from the Buyer to the Owner and details of how such Charges are calculated (Invoice).

(b)    In respect of any other amount payable by one party (Invoicing Party) to the other party (Paying Party) under this document, the Invoicing Party must deliver to the Paying Party as soon as practicable an invoice (Invoice) for the amount payable under this document.

39    As for payment and disputes, cl 12.4 of the Bachelor PPA and cl 11.4 of the Hudson Creek PPA relevantly provide:

Payment and disputes

(a)    On or before 30 days after the end of each Billing Period, the Paying Party must either:

(i)    pay to the Invoicing Party the amount of the Invoice; or

(ii)     if the Paying Party bona fide disputes any part of the Invoice:

(A)    give to the Invoicing Party a notice stating the part disputed and the reason for the dispute; and

(B)    pay to the Invoicing Party the undisputed amount of the Invoice plus 50% of the disputed amount.

The EOTs and relevant correspondence

40    The respondents contended that they issued the following EOTs pursuant to cl 5.1 of the Batchelor PPA to extend the relevant Target Commercial Operation Date:

(a)    notice dated 20 April 2021, notifying the applicant of a Connection Works Delay and claiming an extension of time from 30 June 2021 to 15 November 2021 (Batchelor EOT 1);

(b)    notice dated 15 December 2021, notifying further delays and claiming an extension of time from 15 November 2021 to 1 October 2022 (Batchelor EOT 2); and

(c)    notice dated 5 August 2022, notifying continued delays and claiming an extension of time from 1 October 2022 to 17 February 2023 (Batchelor EOT 3).

41    The respondents further contended that they issued the following EOTs pursuant to cl 5.1 of the Hudson Creek PPA to extend the relevant Target Commercial Operation Date:

(a)    notice dated 20 April 2021, notifying the applicant of a Connection Works Delay and claiming an extension of time from 1 July 2021 to 31 August 2021 (Hudson Creek EOT 1);

(b)    notice dated 15 December 2021, notifying further delays and claiming an extension of time from 31 August 2021 to 1 August 2022 (Hudson Creek EOT 2); and

(c)    notice dated 5 August 2022, notifying continued delays and claiming an extension of time from 31 August 2021 (which, in light of Hudson Creek EOT 2, was presumably supposed to be a reference to 1 August 2022) to 28 February 2023 (Hudson Creek EOT 3).

42    As I said above, the applicant contended that by the service of each purported EOT, the relevant respondent failed to satisfy the preconditions to an entitlement to an extension of time set out in cl 5 of the PPA. (The applicant also contended that, as a matter of fact, no “Extension Event” had occurred under cl 5.1(b)(i) of the PPA, but it was agreed that that question could only arise if it lost its case on the principal issue.  As a result, it was agreed that that question would be determined at a further hearing, which in the view I take of the dispositive issue will not occur.)

43    In order to address those contentions, it is necessary to set out the terms of each EOT.

44    The respondents contended that the relevant officers of the applicant to whom the EOTs were sent would have read them in light of certain other contemporaneous written communications, so I will set out those communications too.

Batchelor EOT 1 and Hudson Creek EOT 1

45    Batchelor EOT 1 and Hudson Creek EOT 1 were in the following terms:

20 April 2021

Rimfire Energy Pty Ltd

Level 1, 48-50 Smith Street

Darwin, NT, 0800

Attention: Michael Allen

Dear Michael,

Subject:     Power Purchase Agreement … (PPA)

Extension of Time to Target Commercial Operation Date

References to clauses and defined terms in this letter are identical to those in the PPA.

We are writing to advise of a delay to the Target Commercial Operation Date for the Batchelor Solar Farm [or Hudson Creek Power Station, as applicable] due to a Connection Works Delay.

PWC’s most recent works program for its connection activities includes an energisation date of 2 July 2021 [16 July 2021, in the case of the Hudson Creek Power Station]. Consequently, the EPC Contractor has issued a works program for commissioning and testing, including hold point testing, which provides for Practical Completion being achieved by 4 November 2021 [29 August 2021, in the case of the Hudson Creek Power Station].

The Owner, the EPC Contractor and the Owner’s advisors have worked diligently with PWC to accelerate PWC’s connection activities. However, recent discussions with senior management of PWC have led the Owner to conclude it unlikely PWC will alter their program. Further, PWC have advised there is a risk the timeline outlined in its current program may not be achieved by them, which may result in further delays to Practical Completion.

Please also note PWC may unilaterally extend its connection works program. The Owner will advise you of any such alterations and will continue to work with PWC to compress the PWC timetable.

In accordance with Clause 5 of the PPA (Extensions of Time), the Owner claims an extension of time to the Target Commercial Operation Date from 30 June 2021 to 15 November 2021 [from 1 July 2021 to 31 August 2021, in the case of the Hudson Creek Power Station].

Should you have any questions, please do not hesitate to contact the undersigned.

Sincerely,

Warren Bennett

Investment Manager – MC Power

46    Batchelor EOT 1 and Hudson Creek EOT 1 were attached to an email dated 20 April 2021, sent by Mr Bennett to Mr Allen (the sole director and secretary of the applicant) and Mr Howlett (the general manager of development of the applicant).  That email stated as follows (formal parts omitted):

We have recently been provided with updated commissioning timetables by PWC in relation to both Hudson Creek Power Station and Batchelor Solar Farm. As a result, and pursuant to clause 5 of the relevant PPAs, please find attached a letter for each project claiming an extension of time to the relevant Target Commercial Operation Date.

In summary, the Target Commercial Operation Date for each project is now:

*    Hudson Creek Power Station – 31 August 2021

*    Batchelor Solar Farm – 15 November 2021

The reasons provided by PWC for the delays include a combination of delays in procuring design and equipment, availability of specific PWC testing and commissioning resources and in the case of Hudson Creek Power Station the additional issue of scheduling an outage with System Control.

We continue to work closely with PWC and engage with senior management in an effort to accelerate these dates. However, our most recent discussions have led us to conclude acceleration is unlikely.

47    Later that day, Mr Howlett replied to Mr Bennett’s email as follows (formal parts omitted):

That is disappointing news given your previous correspondence indicated PC of HCPS in mid-June.

As you would recognise, the delay of HCPS into the next contract year will cause significant challenges in managing customer contracts that will incur T-Gen pricing as opposed to HCPS pricing that we have used for FY22 planning on the basis of your last correspondence as mentioned above.

Pursuant to clause 5, can you please provide some further information to allow us to assess the relevant event/s:

1.    Detailed works programmes (Gannt chart format) as follows for each project:

a.    EPC works programme, as dated just prior to 16 February 2021;

b.    EPC works programme as referenced in your letter dated 20 April 2021;

c.    PWC works programme, as dated just prior to 16 February 2021; and

d.    PWC works programme as referenced in your letter dated 20 April 2021.

2.    The relevant correspondence from PWC detailed [sic] reasons for the delay in their works programme for each project:

a.    HCPS; and

b.    BSF.

48    Mr Bennett responded to Mr Howlett later that evening, as follows (formal parts omitted):

We wholeheartedly agree the further delay at HCPS is disappointing. In fact, I would go well beyond that word in describing our reaction.

By way of background, Adrian Redlich and our Managing Director of Investments (Andrew Torrington) had a phone call with Djuna Pollard and others on 18 March 21. I was not on the call but my understanding is that Adrian and Andrew were reassured the timing that had previously been communicated to us by PWC remained valid. These were the schedules we communicated to you and Michael in my email of 16 Feb.

Post that phone call, PWC provided an updated schedule for Hudson Creek which pushed out PWC’s timing by about 7 or 8 weeks. After a series of discussions over the course of the next couple of weeks, PWC issued another schedule to us which pushed out the timing a further 3 weeks. Essentially, PWC’s program now indicates that they will have completed their testing and commissioning by 16 July 21, which will then allow Level 4 and 5 commissioning to follow. EPSA have updated their construction program accordingly which now indicates PC will be achieved by 29 August.

There has been no change to the timing of Batchelor since my email to you on 16 Feb. PWC’s schedule shows they will have completed energisation of the solar farm by 2 July 21. BSR EPC’s program (based on its experiences and understanding of PWC’s processes learned through commissioning Katherine) has PC being achieved by 4 November (essentially a three month process from the point of energisation).

As requested, I have attached programs for each project which form part of our month end reporting from each contractor (end of Jan 21 and end of Mar 21), as well as the relevant PWC programs. I’ve tried to label them clearly so you can follow.

I have also asked the team to provide me with any correspondence from PWC explaining the rationale behind the delays. We may not have any. Typically, PWC plays its cards pretty close to its chest during weekly / bi-weekly project meetings and then after much pushing from our side, issues a program which does not match the regular meeting rhetoric. In the absence of any correspondence from PWC, perhaps the best idea would be for us to talk you through the evolution and interaction with PWC? I am not directly involved at the technical team level so am not the best placed to provide granular detail.

With respect to the level of confidence we have that PWC will meet these current timelines, the answer is that experience has probably jaded us to some degree. It is probably fair to say we have a reasonable level of confidence around Hudson Creek timing save any unforeseen events, but I don’t think any of us would be prepared to bet our houses on it.

49    The “programs for each project” attached to that email were in evidence and appear at pages 6136–6177 of the court book.

Batchelor EOT 2 and Hudson Creek EOT 2

50    Batchelor EOT 2 was in the following terms:

15 December 2021

Rimfire Energy Pty Ltd

Level 1, 48-50 Smith Street

Darwin, NT, 0800

Attention: Michael Allen

Dear Michael,

Subject:     Power Purchase Agreement – Batchelor Solar Farm dated 27 February 2020 (PPA)

Extension of Time to Target Commercial Operation Date

References to clauses and defined terms in this letter are identical to those in the PPA.

Further to our letter dated 20 April 2021 and subsequent correspondence, we are writing to advise of a further delay to the Target Commercial Operation Date for the Batchelor Solar Farm due to a Connection Works Delay.

As previously advised, PWC have introduced a lengthy model and connection studies due diligence program concluding with PWC’s approval in late March 2022 and ultimately connection in September 2022. This date is however subject to change given the fluidity of PWC’s processes.

The Owner will advise you of any such alterations and will continue to work with PWC to compress the PWC timetable.

In accordance with Clause 5 of the PPA (Extensions of Time), the Owner claims an extension of time to the Target Commercial Operation Date from 15 November 2021 to 1 October 2022.

Should you have any questions, please do not hesitate to contact the undersigned.

Sincerely,

Warren Bennett

Investment Manager – MC Power

51    Hudson Creek EOT 2 was in the following terms:

15 December 2021

Rimfire Energy Pty Ltd

Level 1, 48-50 Smith Street

Darwin, NT, 0800

Attention: Michael Allen

Dear Michael,

Subject:     Power Purchase Agreement – Hudson Creek Power Station dated 18 February 2020 (PPA)

Extension of Time to Target Commercial Operation Date

References to clauses and defined terms in this letter are identical to those in the PPA.

Further to our letter dated 20 April 2021 and subsequent correspondence, we are writing to advise of a further delay to the Target Commercial Operation Date for the Hudson Creek Power Station due to a Connection Works Delay.

As previously advised, PWC have introduced a lengthy model and connection studies due diligence program concluding with PWC’s approval in mid-April 2022. Compliance testing is not able to commence until that approval is received. On this basis, we currently anticipate achieving practical completion and commencing commercial operations in July 2022. This date is however subject to change given the fluidity of PWC’s processes.

The Owner will advise you of any such alterations and will continue to work with PWC to compress the PWC timetable.

In accordance with Clause 5 of the PPA (Extensions of Time), the Owner claims an extension of time to the Target Commercial Operation Date from 31 August 2021 to 1 August 2022.

Should you have any questions, please do not hesitate to contact the undersigned.

Sincerely,

Warren Bennett

Investment Manager – MC Power

52    Batchelor EOT 2 and Hudson Creek EOT 2 were attached to an email dated 15 December 2021, sent by Mr Bennett to Mr Allen (with Mr Howlett copied).  That email stated as follows (formal parts omitted):

As previously foreshadowed, please find attached formal advice as to the extension of time to the Target Commercial Operation Date for each of Batchelor Solar Farm (1 October 2022) and Hudson Creek Power Station (1 August 2022). I have attached the most recent programs from PWC. They remain works in progress and rest assured we continue to pursue accelerated timeframes for both projects.

53    The “most recent programs” for each project attached to that email were in evidence and appear at pages 864–872 of the court book.

10 May 2022 email

54    The respondents also relied on a 10 May 2022 email sent by Mr Bennett to Mr Howlett (with Mr Allen copied), which stated as follows (formal parts omitted):

Firstly, re meeting in Darwin next week. I’m in Darwin from Monday afternoon through to Friday afternoon. Adrian, Nick Brown and Sandra Chui (Merricks CFO) arrive early Wednesday afternoon and depart Friday afternoon. We have a number of meetings scheduled but have general availability late Wednesday afternoon (from 4:30pm) and Thursday afternoon (from 1pm) at this stage. I was trying to arrange meetings with CM Gunner and Minister Lawler but I suspect given today’s events they will be nigh on impossible to secure. I’m seeing a number of NAIF related contacts earlier in the week but could find time to meet late Monday or Tuesday afternoon. Let me know what would suit and we can schedule.

Regarding a construction update. I’m waiting on the April monthly construction reports before I can provide any definitive updates to program. I should have these in hand by the end of this week. In the meantime, I can advise there are further anticipated delays in the expected target commercial operation dates for both projects, due to the ongoing PWC model and connection studies process introduced by PWC. The completion of the model and connection studies is the critical path for both projects. While dates are continually shifting, our current expectations are shown below.

Some added context:

*    Batchelor:

*    PWC have in the last couple of weeks formally advised we will be permitted to dispatch on an interim basis while we complete the compliance testing and reliability run stages of commissioning. We’ve been pursuing this approval for some time, as have Eni and other proponents trying to connect to the DKIS. PWC issued the same “approval” to all proponents at the same time.

*    There are a number of conditions which we must meet in order to dispatch on an interim basis (including agreeing with PWC how we must handle any negative impacts identified in the Preliminary Impact Assessment findings). These have only just been advised and we are working through them to see how readily they can be met.

*    If we follow the normal procedure and complete PWC’s due diligence before commencing compliance testing, we expect to be in a position to export up to Hold Point 2 (50% capacity) by mid to late October 2022. We are however exploring an alternative where we commence compliance testing “at risk” before PWC’s DD is complete. We may shave up to 2 months off if we follow this path and be in a position to export by mid to late August. The “at risk” element means that we may be forced to retest (which would result in added time and cost) if PWC’s DD process results in test parameters / procedures being changed from the tests we have completed. We are working with BSR EPC to understand where this risk/reward trade-off is optimised.

*    PWC have made it clear any dispatch will be subject to grid security concerns.

*    PWC have also advised they now consider a full impact assessment is required for all of the solar farms connecting to the grid. This is a change of course. While PWC is carrying out that process we don’t expect it to be complete until mid-2023. Formal commercial operation (in PWC’s eyes) will not occur until that process is completed. As mentioned, interim dispatch protocols (yet to be agreed) will apply until that time.

*    You may be aware of the existence of PWC’s forecasting standards contained in the Network Technical Code. It appears the combination of the accuracy standards set out in the NTC, and the penalties for non-compliance, result in solar generators being forced to operate as dispatchable generators at a materially reduced capacity. We will talk to you in greater detail next week and discuss how yourself and Michael may wish to engage in a resolution to this emerging issue given the arrangements that apply under the PPA.

*    Hudson Creek Power Station

*    There does appear to us to be some room for optimising the contractor’s compliance testing program. The current focus of the team is on completion of the model and connection studies due diligence process. Once that is achieved attention will turn to any potential time savings that can be achieved. It would be weeks not months.

26 July 2022 email

55    The respondents also relied on a 26 July 2022 email sent by Mr Bennett to Mr Allen and Mr Howlett, which stated as follows (formal parts omitted):

Apologies for the delay in providing an update. Michael, I know I owe you a call and I will try to reach you tomorrow.

While progress is being made (major milestones in the connection process such as the complete R1 package has been submitted for Batchelor, model studies have been submitted for Hudson Creek and Connection studies are due on 22/8), I regret to advise there are further anticipated delays in the expected target commercial operation dates for both projects. The causes of the revised timings are all related to PWC’s model and connection studies process, and include ongoing revisions to existing testing requirements and processes, introduction of new requirements and the continuing development of PWC’s thinking and approach as they progress through the process.

We have been back and forth with the contractors in recent weeks to agree a program to completion. I expect to have these programs by next week and will provide details along with the requisite paperwork for extension claims under the PPA. I’m sure you will have questions and we will work through these with you in the coming weeks no doubt.

Below is our current expected timing for both projects. As advised previously, the completion of the model and connection studies is the critical path for both projects.

Notes:

1.     Generation at HCPS is expected to commence in early February. A Reliability Run is required before final acceptance by PWC. We expect to be exporting at full capacity (subject to any PWC system control constraints placed on the power station) throughout the Reliability Run.

2.    PWC have advised we will be able to generate from hold point 2 in the compliance testing phase which represents 50% capacity.

3.    The solar farm will be capable of generating at full capacity from March 2023. However, PWC have yet to advise whether they will place any operational restrictions on the solar farm while they undertake a Full Impact Assessment.

A few further explanatory notes:

*    Batchelor:

*    The requirements prescribed by PWC for “interim” dispatch (ie hold point 2) are quite rigorous and have added about 5 weeks to the commencement date.

*    Due to unexpected reaction of the Katherine Solar Farm to certain grid events and conditions, PWC have now decided that we are not able to commence compliance testing ahead of the connection studies due diligence approvals. This has removed the option of earlier generation and added about 2 months to our earliest commencement.

*    As you may be aware PWC have also decided they now require a Full Impact Assessment to be carried out on all of the solar farms attempting to connect to the DKIS. The FIA on Batchelor will follow FIA’s on each of Eni’s solar farms and commence in mid-2023. We have requested that PWC advise as to whether they intend on imposing any operational conditions on the solar farm until that FIA is complete. To date, PWC have said they are finalising their position with respect to Katherine and will let us know when they have done that.

*    As advised previously, PWC have made it clear any dispatch will be subject to grid security concerns.

*    The issue of the forecasting standards remains unresolved.

*    Hudson Creek Power Station

*    A number of technical issues arising from model studies report were needed to be dealt with before approval was given by PWC to proceed to the connection studies report. In addition, PWC suggested that we investigate whether an available Power System Stabiliser would improve certain characteristics of the power plant. A number of weeks were spent assessing this before proceeding to the commencement of the connection studies report.

I am of course aware of the unsatisfactory nature of the seemingly endless road to completion. I have instigated a fortnightly meeting with PWC which includes myself, the EGM of Power Systems and the EGM of System Control in an attempt to quickly escalate any issues not being resolved at the technical team level.

Batchelor EOT 3 and Hudson Creek EOT 3

56    Batchelor EOT 3 was in the following terms:

5 August 2022

Rimfire Energy Pty Ltd

Level 1, 48-50 Smith Street

Darwin, NT, 0800

Attention: Michael Allen

Dear Michael,

Subject:     Power Purchase Agreement – Batchelor Solar Farm dated 27 February 2020 (PPA)

Extension of Time to Target Commercial Operation Date

References to clauses and defined terms in this letter are identical to those in the PPA.

We advise of a further delay to the Target Commercial Operation Date for the Batchelor Solar Farm due to a Connection Works Delay.

As previously advised, PWC have introduced a lengthy model and connection studies due diligence program concluding with PWC’s approval in late September 2022. On this basis, we currently anticipate achieving practical completion on or around 17 February 2023. This date is however subject to change given the fluidity of PWC’s processes. We do however anticipate being able to export to the grid from early December 2022 at partial capacity (maximum 50%) and we will keep you closely informed as we draw nearer to this date.

In accordance with Clause 5 of the PPA (Extensions of Time), the Owner claims an extension of time to the Target Commercial Operation Date from 1 October 2022 to 17 February 2023.

Should you have any questions, please do not hesitate to contact the undersigned.

Sincerely,

Warren Bennett

Director, Private Infrastructure Investment

57    Hudson Creek EOT 3 was in the following terms:

5 August 2022

Rimfire Energy Pty Ltd

Level 1, 48-50 Smith Street

Darwin, NT, 0800

Attention: Michael Allen

Dear Michael,

Subject:     Power Purchase Agreement – Hudson Creek Power Station dated 18 February 2020 (PPA)

Extension of Time to Target Commercial Operation Date

References to clauses and defined terms in this letter are identical to those in the PPA.

We advise of a further delay to the Target Commercial Operation Date for the Hudson Creek Power Station due to a Connection Works Delay.

As previously advised, PWC have introduced a lengthy model and connection studies due diligence program concluding with PWC’s approval in early October 2022. Compliance testing is not able to commence until that approval is received. On this basis, we currently anticipate achieving practical completion in late February 2023. This date is however subject to change given the fluidity of PWC’s processes. We do however expect to be exporting energy to the grid from the beginning of February 2023 and will keep you informed as we draw closer to this time.

In accordance with Clause 5 of the PPA (Extensions of Time), the Owner claims an extension of time to the Target Commercial Operation Date from 31 August 2021 to 28 February 2023.

Should you have any questions, please do not hesitate to contact the undersigned.

Sincerely,

Warren Bennett

Investment Manager – MC Power

58    Batchelor EOT 3 and Hudson Creek EOT 3 were attached to an email dated 5 August 2022, sent by Mr Bennett to Mr Howlett and Mr Allen.  That email stated as follows (formal parts omitted):

The most recent project programs are attached in both PDF and native formats as requested. Also attached are formal EOT claims in accordance with the PPAs.

Below is our current expected timing for both projects. As advised previously, the completion of the model and connection studies is the critical path for both projects.

With regards to Batchelor, and further to previous advice, PWC have not yet formally responded as to whether any operating conditions will be imposed on the solar farm while they complete a Full Impact Assessment. We’ve had a verbal indication that it is not likely but I’m reticent to take this as set. Generation capacity is also subject to any resolution with regard to compliance with the forecasting requirements.

Once you have had the opportunity to review, I would be happy to organise a meeting to discuss any queries.

59    The “most recent project programs” referred to in the first paragraph of that email were in evidence and appear at pages 918–921 of the court book.

Are the EOTs valid?

The critical issue identified

60    The case was “pleaded” by way of concise statements.  That was unfortunate, because the discursive and far-from-concise nature of them did not identify with sufficient precision the true issues in dispute.

61    The court book occupied well in excess of 8,000 pages.  I do not profess to understand why.  In the end, the case proceeded on the basis that it could be decided based on a small number of documents, the relevant parts of which I have set out above.

62    In any event, putting the concise statements to one side, the hearing was ultimately conducted on the basis that the critical issue to be decided was whether the EOTs, taken collectively or individually, were validly issued under cl 5 of the PPAs.

Applicable principles of construction

63    There was no dispute about the applicable principles of construction of the EOTs.  I summarised them in Rimfire No 1 at [17]–[19], as follows:

The meaning of the terms of a commercial contract is to be determined by what a reasonable businessperson would have understood those terms to mean, construed by reference to the language used by the parties, the entire text of the contract, the surrounding circumstances, and the commercial purpose or objects to be secured by the contract.  See Electricity Generation Corporation v Woodside Energy Ltd (2014) 251 CLR 640 at 656–657 [35] (French CJ, Hayne, Crennan and Kiefel JJ); Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104 at [46] (French CJ, Nettle and Gordon JJ).  See also Rinehart v Hancock Prospecting Pty Ltd (2019) 267 CLR 514 at [44] (Kiefel CJ, Gageler, Nettle and Gordon JJ).

Appreciation of the commercial purpose or objects of the contract is facilitated by an understanding of the genesis of the transaction, the background, the context and the market in which the parties are operating.  Unless a contrary intention is indicated, a court is entitled to assume that the parties intended to produce a commercial result.  A commercial contract is to be construed so as to avoid it making commercial nonsense or working commercial inconvenience.  See Woodside Energy at 656–657 [35] (French CJ, Hayne, Crennan and Kiefel JJ).

Ordinarily, this process of construction is possible by reference to the contract alone. If an expression in a contract is unambiguous or susceptible of only one meaning, evidence of surrounding events, circumstances and things external to the contract cannot be adduced to contradict its plain meaning.  See Mount Bruce Mining at [48] (French CJ, Nettle and Gordon JJ).

64    Notice provisions of the type contained in cl 5 of the PPAs are commonplace and have been considered in a number of cases.

65    In Jennings Construction Ltd v QH & M Birt Pty Ltd (1986) 8 NSWLR 18, Smart J said at 24:

The purpose of cl 47 is to ensure that notice is given at an early stage so that the contractor can inspect and investigate promptly the events or circumstances and consider his position. He may wish to issue a variation. ...

Unless notice is given the contractor may not be alerted to the proposed claim and given the opportunity to investigate and check. The requirement of written notice, which is so common in construction contracts, puts the matter on a formal and readily identifiable basis.

66    In Australian Development Corporation Pty Ltd v White Constructions (ACT) Pty Ltd (1996) 12 BCL 317 at 339, Giles CJ Comm D said:

ADC submitted that the reasoning in [the] decisions, and in particular that in Opat Decorating Service (Aust) Pty Ltd v Hansen Yuncken (SA) Pty Ltd in relation to extensions of time, applied to the notification requirement in article 4.4.1 of the contract. It is, of course, necessary to consider cl 4.4.1 itself and its operation within the contract, but in my opinion ADC’s submission should be accepted. The contract called for practical completion by particular dates subject to extensions of time. Any extension of time was for specified cause, cause which had to be beyond the control of ACT, and for a period equal to the delay to ACT. The time by which the date for practical completion should be extended was to be determined by ADC, and it was therefore necessary that ADC be in a position rationally to assess the existence of a cause of delay, whether it was a cause of delay of one of the specified kinds, whether it was beyond the control of ACT, and what the extent of the delay to ACT was. Imposing the notification requirement upon ACT was a deliberate and important part of the mechanism for determining the time by which the date for practical completion should be extended. It was in mandatory terms (“shall notify”) equivalent to the mandatory terms imposed on ADC (“shall determine the time”), and as in Wormald Engineering Pty Ltd v Resources Conservations Co International to give ADC no more than an action for damages if timely notification was not given would not be satisfactory – it would leave difficulties of proving what ADC would or might have done had timely notification been received and quantifying the damage suffered, which the parties are unlikely to have intended. Although, as ACT pointed out, article 4.4.1 did not state that the date for practical completion would not be extended unless timely notification was given, nor did cl 40.2 in Wormald Engineering Pty Ltd v Resources Conservations Co International or cl 31 in Opat Decorating Service (Aust) Pty Ltd v Hansen Yuncken (SA) Pty Ltd expressly state a condition precedent and the statement of a condition precedent in cl 47 in Opat Decorating Service (Aust) Pty Ltd v Hansen Yuncken (SA) Pty Ltd was regarded as no more than a reminder.

In my opinion, therefore, in the absence of timely notification as required by article 4.4.1 ACT was not entitled to extension of the date for practical completion.

67    It was also not disputed that the burden of proving that notice has been given in accordance with a given contract rests on the party required to give that notice.  See, for example, Lucas Earthmovers Pty Limited v Anglogold Ashanti Australia Limited [2019] FCA 1049 at [497], where White J said:

The parties did not address any submissions to the issue of onus of proof with respect to the time bar imposed by cl 30. However, I proceed on the basis that Lucas carried the burden of showing that it had given notice of the kind required by cl 30(c). That is because cl 30, properly construed, makes the giving of the notice an element of the entitlement to claim, rather than a defence which AGA can invoke at its discretion. See in this respect Jennings Construction v Birt at 24; Wormald Engineering Pty Ltd v Resources Conservations Co International (1988) 8 BCL 158 at 162-163; and Opat Decorating Service (Aust) Pty Ltd v Hansen Yuncken (SA) Pty Ltd (1994) 11 BCL 360 at 364.

Consideration

68    It is obvious that, under cl 5 of the PPAs, the entitlement to claim an extension of time only arises if notice has been provided in a way that satisfies the preconditions specified in that clause.

69    Clause 5.1(b) uses the language of entitlement.  It provides that “the Owner will be entitled to an extension of time to the Target Commercial Operation Date” “if” (and it might be added: only if) three things happen:

(1)    an “Extension Event” occurs;

(2)    the Owner can demonstrate that it has been delayed, or is likely to be delayed, in achieving Commercial Operation as a result of that Extension Event; and

(3)    within 10 business days after the full effects of the Extension Event are determined by the Owner, the Owner submits a written claim to the Buyer for an extension of time.

70    Critically for present purposes, “Extension Event” is defined to include a “Connection Works Delay”, which in turn is defined to mean a delay “as a result of any delays in PWC constructing and connecting the Facility to the NT Grid … under the PWC Connection Agreement, but only to the extent such delay is not caused by the EPC Contractor or the Owner” (emphasis added).

71    Reading cl 5.1(c) of the PPAs consistently with the above definitions, it follows that any EOT claim that is based on a Connection Works Delay must provide detailed particulars of the extent to which the claimed delay was not caused by the “EPC Contractor” in the case of the Batchelor solar farm (i.e. BSR EPC Pty Ltd), the “Contractor” in the case of the Hudson Creek power station (i.e. Energy Power Systems Australia Pty Ltd) or the “Owner” in either case (i.e. the first respondent in the case of the Batchelor solar farm, and the second respondent in the case of the Hudson Creek power station).

72    Any failure to do so means that the notice is invalid.

73    One can readily understand the commercial sense of such a provision; the actions of the EPC Contractors and the Owners (or their agents) are matters that in the ordinary course of things would be within the Owners’ power or control and knowledge, whereas the actions of PWC (a third party with whom the Owners have no relevant relationship) would not be.

74    The simple fact of the matter is that one looks in vain for evidence, anywhere in the EOTs or in any of the correspondence that accompanied or surrounded them, of the extent to which the delay claimed was not caused by the EPC Contractor or the Owner. The mere fact that the EOTs and surrounding correspondence mentioned delays by PWC was not sufficient to satisfy (or obviate) the further requirement to explain how or why those delays were not in turn caused by the relevant EPC Contractor or Owner.  In cases such as the present, where the parties to an infrastructure project must coordinate between themselves to progress a significant number of iterative tasks in parallel, there is a clear need to identify precisely how or why a delay by one party is not ultimately attributable to, or caused by, the failures of another party.

75    In my view, that alone is sufficient to render each of the EOTs invalid.

76    Even if that were not so, the respondent Owners have failed to meet their burden of proving that they submitted the EOTs “within 10 Business Days after the full effects of the Extension Event [were] determined by [them]”.  The respondents read Mr Bennett’s affidavit dated 2 February 2024, but it made no mention of when the full effects of the Extension Event were determined.  As Giles CJ in Comm D said in White Constructions at 339, imposing a notification requirement is a deliberate and important part of the mechanism for determining the time by which a given date should be extended – so much so that the absence of timely notification in that case meant that the issuer of the notice was not entitled to the extension sought.

77    The EOTs did not identify any “Extension Event”.  Remarkably, it was not until the respondents’ oral closing submissions at the hearing that they articulated their case about the “Extension Event” relied upon, namely, the issue of the works program by PWC.  In that regard, I refer to this exchange with counsel for the respondents in the course of his closing submissions (see transcript at pages 121 and 125):

MR DI PASQUALE: The applicant’s primary case is the payment of invoices. Our response to the payment of invoices is no, we had extensions of time. So the battleground is around these extensions of time – were they valid – and that’s what we’re deciding here without looking at the connection works delay. However, even without looking as to whether what happened was in fact a connections works delay, it still requires delving into the nuts and bolts a little bit, in that the connection works  delay here is, as defined under the contract, a delay in PWC either performing their works under the GUA or connecting the respondents to the grid in accordance with the GUA.

HIS HONOUR: The difficulty with that proposition is that clause 5 is about the giving of notice.

MR DI PASQUALE: Yes, your Honour.

HIS HONOUR: The underlying factual position is neither here nor there unless, by way of example:

... within 10 business days of the full effects of an extension event being determined by the owner, the owner submits a written claim.

MR DI PASQUALE: Yes.

HIS HONOUR: And, assuming that that’s done, that claim in writing contains the particulars contemplated by 5(c)(i) and (ii).

MR DI PASQUALE: Yes, your Honour.

HIS HONOUR: So you could have the strongest case for an extension imaginable, but, if you don’t do it within the 10 days of the owner making the relevant determination, and if the particulars of that strongest case imaginable aren’t contained in the written notice, the notice is no good. The underlying facts are neither here nor there.

…

HIS HONOUR: Okay. Tell me this, then. What do you define as the extension event?

MR DI PASQUALE: The issuing of this program by PWC saying that, “This is when I’m going to finish my work”. That’s the extension event, and it’s referred to as such. The covering email to the EOT notice says they’ve recently given us a new program, and it says that this is when they’re going to be finished, and this is the program. Your Honour, it has been put that these EOTs consist of, essentially, a letter saying, “We’re late, and here’s the program”, but what has been lost in that analysis is that we’re not talking about our programs. Our programs are included as well. We’re talking about the program of somebody that we are not responsible for their works because it’s a connection works delay.

HIS HONOUR: So you say, the PWC critical path document shows that it won’t be connected till August ’21. Merricks says, “We got this from PWC. The PWC change of circumstance, as it were, is the extension event. It says it will be connected in August ’21, so therefore, we say August ’21 is the new date”. Is that what it amounts to?

MR DI PASQUALE: Sorry. There’s a little bit more than that, but yes, that’s what it amounts to. …

78    The difficulty with that submission (namely, that the relevant Extension Event in each of the EOTs was the issuing of the programs by PWC effectively saying “[t]his is when I’m going to finish my work”) is that it is a precondition to the validity of each EOT that the delay be a delay of PWC and not a delay caused by the EPC Contractor or the Owner.  The absence of any explanation, supported by evidence, that the delay claimed was not a delay caused by the EPC Contractor or the Owner is fatal to the respondents’ submission and to the validity of the EOTs.

79    If it were necessary to decide the question, I would also accept the applicant’s submission that, on the proper construction of cl 5.1, the relevant respondent was only entitled to make a written claim for an extension of time under cl 5.1(b) if it had first performed (or, upon issuing the claim, also performed) its obligations in cl 5.1(a) to: (i) notify the applicant of events or circumstances which might reasonably be expected to result in delays as soon as reasonably practicable after the relevant respondent became aware of such; and (ii) provide such information as reasonably required by the applicant to give the applicant an opportunity to assess the relevant events or circumstances notified.  None of the EOTs was issued in circumstances where the requirements in cl 5.1(a) had been met, and none of the EOTs meets those requirements.

80    The respondents also contended that, “on a proper construction of the PPAs, or as an implied term”, the applicant has no entitlement to liquidated damages where the respondents are impacted by an Extension Event in such a way that “the final Target Commercial Operation Date cannot be calculated”.

81    That is a far-fetched and wholly uncommercial construction of cl 5.

82    First, the PPAs do not impose any obligation on the Owner to calculate a “final” Target Commercial Operation Date.  The Target Commercial Operation Date is already stated in the PPAs and will only be extended in circumstances where the requirements for an extension of time under cl 5 are met.  The PPAs do not require that the delay be precisely calculable, but rather require that the extension of time which the Owner nominates be stipulated.  (Clause 5.1 contains multiple references which account for unknown elements in the context of delays.  For example, cl 5.1(a) refers to events or circumstances “which might reasonably be expected” to result in a delay; cl 5.1(b)(ii) contemplates a situation where the Owner “has been delayed, or is likely to be delayed”; cl 5.1(c)(i) refers to the particulars of an Extension Event “causing, or that is likely to cause, the delay”; and cl 5.1(c)(ii) mentions the “consequences or the likely consequences” of the delay.)

83    Secondly, even if the PPAs could be construed in such an uncommercial way, the respondents did not adduce any evidence in support of the factual proposition that it was impossible to calculate the “final” Target Commercial Operation Date.  As the applicant submitted at [93] of its written opening submissions: “[t]he evidence establishes nothing more than that the Respondents have struggled – for reasons that remain unexplained – in their performance of the PPAs …”.

84    Finally, it is necessary to deal with the respondents’ separate contention that, in accordance with the terms of cl 5.2, the applicant is precluded from initially choosing not to dispute an EOT claim in accordance with cl 5.2 and then subsequently disputing that EOT claim in a proceeding such as this.  The respondents submitted that, where an EOT claim is made and the applicant fails to dispute it as required by cl 5.2, the applicant is taken to have accepted the EOT claim and the Target Commercial Operation Date is deemed to have been extended to the date claimed by the respondents. Again, that seems to me a most unlikely thing for the parties to have agreed, and it is not what cl 5.2 says.  On any view, cl 5.2(a) assumes that the EOT claim satisfies the conditions contained in cl 5.1 and deems any matter referred for determination by an expert to be a dispute “purely of a technical nature”.  Moreover, the dispute mechanism process in cl 5.2(a) is at the Buyer’s election: if the Buyer “does not agree with the period [of the proposed extension] … the Buyer may … refer the matter to be determined by an Expert ...” (emphasis added).

85    It follows that the applicant is not precluded from disputing the EOT claims in this proceeding by virtue of its decision not to dispute those claims under the process outlined in cl 5.2 of the PPAs.

86    In those circumstances, it is not necessary to deal with the applicant’s alternative submission (at paragraphs [86]–[87] of its written opening submissions) that, even if the EOTs validly extended the Target Commercial Operation Date to 17 February 2023 (in the case of the Batchelor solar farm project) and 28 February 2023 (in the case of the Hudson Creek power station project), the projects were still not operational by 19 August 2023 and 27 August 2023 respectively, such that the full amount of liquidated damages was payable in any event.

The ACL claim

87    The applicant also contended, in the alternative, that the respondents have engaged in conduct, in trade or commerce, and in connection with the supply to the applicant of goods and services, that was unconscionable for the purposes of s 21 of the ACL.

88    The applicant contended at [99] of its written opening submissions that the following constituted unconscionable conduct by the respondents pursuant to s 21 of the ACL:

(a)    disputing their obligation to pay the invoices and failing to pay the applicant the liquidated damages owing under cl 6.2 of the PPAs in circumstances where their dispute was not bona fide;

(b)    disputing their obligation to pay 50% of the invoices and failing to pay the applicant 50% of the invoices pending resolution of the dispute (until ordered to do so by the court following the hearing on separate questions);

(c)    proposing a construction of the PPAs in paragraph 22 of their concise statement in response that has no basis in the PPAs and is so hopeless as to be unarguable;

(d)    continuing to refuse to pay the applicant the liquidated damages which remained payable from August 2023 even if all of the respondents’ contentions in its concise statement in reply were accepted (except the contention concerning the unarguable construction of the PPAs set out in paragraph 22); and

(e)    continuing to require the applicant to prosecute these proceedings in order to have recourse to its contractual right to liquidated damages in circumstances where the respondents have admitted in open court that they have no defence in respect of the pleaded claims.

89    As I said earlier, the ACL claim was only faintly pressed.  It was included because the applicant asserted that the interest rate applicable under the ACL to any damages recoverable (being the amount of the invoices) would be marginally higher than the interest rate otherwise calculated under the PPAs on the amount of the invoices.  Counsel for the respondents doubted that assertion, but then no party provided me with any guidance as to what the difference, if any, would be.  In those circumstances, I decline to deal with the ACL claim because the applicant has not demonstrated that there would be any utility in doing so.

Disposition

90    For the reasons above, the applicant is entitled:

(a)    to retain the sums already paid by the respondents by way of interim payments as a consequence of my orders dated 7 June 2024;

(b)    to be paid by the first respondent the remaining 50% of the liquidated damages owing under the invoice addressed to the first respondent dated 21 November 2022, plus interest calculated under the Batchelor PPA; and

(c)    to be paid by the second respondent the remaining 50% of the liquidated damages owing under the invoice addressed to the second respondent dated 21 November 2022, plus interest calculated under the Hudson Creek PPA.

91    I will ask the parties to agree on an order to that effect.  If the parties cannot agree on the question of costs, I will direct that they file submissions about it.

Associate:

Dated:    22 April 2025