Security provisions upheld and injunction refused in construction dispute

In Rawcorp Pty Ltd v MDP No 15 Pty Ltd [2026] QSC 38, Wilson J dismissed an application by Rawcorp to restrain MDP from dealing with the proceeds of security called upon under a contract finding that the balance of convenience favoured MDP as the security provisions served a risk allocation function, and s 67J of the QBCC Act (which require notice to be given before having recourse to security) did not apply to unliquidated damages.

Case background

In August 2020 Rawcorp and MDP entered into a contract to construct a residential apartment complex in Coolangatta. Rawcorp was the builder and MDP was the developer and original owner. The contract price was $25.2m. The contract required Rawcorp to provide security in the form of retention equal to 10% of the contract price. In October 2024 practical completion was achieved.

In October 2025 MDP gave Notice that it was having recourse to the security under the contract, which it then did. The next day Rawcorp commenced proceedings seeking an interlocutory injunction to restrain MDP from dealing with the proceeds of security under the contract.

Rawcorp raised four arguments:

1. First, it argued that LDs were intended to be the exclusive remedy for late completion.
2. Second, it argued that the effect of the superintendent losing its licence was that its administration was invalid.
3. Third, MDP has already received an accounting for LDs under the Contract and an adjudication under the BIF Act.
4. Fourth, because the claim was linked to late completion the right to claim security expired per s 67J of the QBCC Act, which also barred claims on security for unliquidated amounts.

The outcome

Her Honour dismissed the application. The Notice related to a claim for unliquidated damages and consequential loss because the contract did not provide a mechanism for calculating or ascertaining specific amounts due and payable as consequential loss. The contract clause dealing with security and allocating risk for expenses pending resolution of a dispute was broad in various ways, including the definition of claim which encompassed the contents of the Notice which was no "specious, fanciful, or untenable". As to s 67J of the QBCC Act, her Honour set out recent authorities and held that the issue of it not applying to unliquidated damages was "relatively settled" so no notice was required.

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