Rawcorp Pty Ltd v MDP No 15 Pty Ltd [2026] QSC 38 – Wilson J, Supreme Court of Queensland, 19 March 2026
Earlier today, the Supreme Court of Queensland dismissed an application by a Contractor seeking to restrain a call on $740,779 in retention monies. The decision turned substantially on the construction of a bespoke security clause that provided the Principal with broad recourse rights. The Court also reinforced a now long-standing line of authority: s 67J of the Queensland Building and Construction Commission Act 1991 (Qld) does not apply to unliquidated damages claims.
Background
The Principal (MDP No 15 Pty Ltd) engaged the Contractor (Rawcorp Pty Ltd) to design and construct a residential apartment complex at Coolangatta for a contract price of $25.2 million, with the Contractor required to provide 10% retention monies.
Practical Completion was certified on 23 October 2024 – 90 days after the Date for Practical Completion. On 14 October 2025, the Principal gave seven days’ written notice of its intention to call on the security, citing a consequential loss claim of approximately $2.26 million. On 22 October 2025, the Principal drew down the security.
The Contractor sought an urgent injunction to freeze the funds relying on four grounds:
- The Principal had no entitlement to liquidated or consequential damages by reason of the Superintendent’s lack of licence;
- The s 67J notice was out of time;
- The liquidated damages claim had already been accounted for; and
- The notice requirements under clause 5 and the QBCC Act had not been satisfied. The Principal resisted on all grounds.
Wilson J dismissed the application.
The Security Clause: Why drafting was Decisive
The outcome turned primarily on the construction of clause 5.2(b), which provided that the Principal could have recourse to security:
“…in respect of any claim to payment (liquidated or otherwise), the Principal may have or claims to have against the Contractor under the Contract or otherwise, on the giving of 7 days written notice to the Contractor.”
The clause was modified from the standard AS-form to provide the Principal with broad and largely unfettered recourse rights, requiring only the assertion of a “claim” – not a proven entitlement – and the provision of seven days’ notice. The use of “liquidated or otherwise” and “under the Contract or otherwise” was central to the Court’s reasoning.
Wilson J held that the provision operated as both a security mechanism and a risk-allocation device: i.e. who holds the money while the underlying dispute is resolved. Where that dual purpose is established, the balance of convenience in an injunction application will ordinarily favour the party entitled to call on the security.
Key Legal issues
Does a “claim” require a proven entitlement?
No. The Court confirmed that clause 5.2(b) required only an arguable, non-fraudulent assertion. The test is whether the claim is “specious, fanciful or untenable.” The Principal’s consequential loss claim cleared that bar. The underlying disputes about the Superintendent’s licence and the availability of consequential damages remained for trial.
Does s 67J of the QBCC Act apply to unliquidated damages?
No. Section 67J requires written notice within 28 days of a party becoming aware of its right to use a security or retention amount to obtain “an amount owed under the contract.” Wilson J followed earlier decisions in concluding that s 67J applies only to debts – liquidated amounts owed – and not to unliquidated damages.
Wilson J noted that three of the four decisions on this point now conclude that s 67J does not extend to unliquidated damages, describing the position as “relatively settled.”
What this means in practice
The decision carries different implications, depending on which side of the contract you are on.
For Principals | For Contractors |
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A clause that is broadly framed in a principal’s favour will be construed. Equally, a contractor who has not scrutinised that clause before execution may find that the statutory protections they assumed – including s 67J of the QBCC Act – do not apply in the way they expected.
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