Rawcorp Pty Ltd v MDP No 15 Pty Ltd [2026] QSC 38

Michael Creedon | Megan Sharkey | Lois Min

Key takeouts

Section 67J of the Queensland Building and Construction Commission Act 1991 (Qld) (QBCC Act) does not apply to unliquidated claims.  There is no obligation to provide a 28-day notice with respect to unliquidated consequential loss claims.

Section 67J continues to apply to liquidated claims. Strict compliance with its notice requirements remains essential, regardless of how broadly the contract’s recourse provisions are drafted.

Where a contract allows recourse to security on the basis of a ‘claim’, the mere assertion of a claim is sufficient, provided the claim is not specious, fanciful or untenable.

Facts

Background

In August 2020, Rawcorp Pty Ltd (Rawcorp), a builder, and MDP No 15 Pty Ltd (MDP), a developer, entered into a contract to design and construct a residential apartment complex for $25.2 million (contract).

Under the contract, Rawcorp was required to provide security in the form of retention monies equal to 10% of the total contract sum.

A dispute arose about Rawcorp’s lack of progress. The parties entered into a deed that extended the date for practical completion to 16 May 2024 and increased the rate of liquidated damages from $5,000 to $10,000 per day. The Superintendent awarded several extensions of time to Rawcorp, which further extended the date for practical completion to 25 July 2024. Practical completion was achieved on or about 23 October 2024, which was approximately 90 days late. The Superintendent certified liquidated damages in the value of $900,000 on 27 March 2025.

On 14 October 2025, MDP gave Rawcorp notice that it was having recourse to the security (notice).

The notice identified two entitlements:

• $900,000 in liquidated damages; and
• $2,257,683 in consequential loss arising from late completion, primarily comprising additional interest and fees under loan agreements, wasted overheads, rates, land tax and utility charges.

On 22 October 2025, MDP proceeded to have recourse to the security.

Application for interlocutory injunction

On 23 October 2025, Rawcorp sought an urgent interlocutory injunction to restrain MDP from dealing with the proceeds of the security on the following grounds:

MDP contested all grounds. evidence on the basis that it referred to things said or done during the adjudication, rendering it inadmissible under section 55(4) of the SOP Act. Additional objections were raised on hearsay and opinion grounds.

Any entitlement to liquidated or consequential damages depended on the involvement of a properly appointed Superintendent, which was absent.

MDP’s notice under section 67J of the QBCC Act was given out of time.

Liquidated damages had already been accounted for through contractual abatements and adjudication under the Building Industry Fairness (Security of Payment) Act 2017 (Qld).

The notice requirements under clause 5 of the Contract and the QBCC Act had not been satisfied.

Decision

Wilson J dismissed Rawcorp’s application for an interlocutory injunction.

The drafting of the security clause decided the case

The case turned on clause 5.2(b) of the contract, which provided MDP with a broad and unfettered right to access security ‘in respect of any claim to payment (liquidated or otherwise)’ that MDP ‘may have or claims to have’ against Rawcorp, on 7 days’ written notice.

Wilson J held that this language only required the assertion of a claim to engage the right of recourse. The only contractual precondition was 7 days’ notice, which was not in dispute. In the absence of fraud or unconscionability, the only question was whether the claim was specious, fanciful or untenable. MDP’s consequential loss claim cleared this threshold.

Section 67J of the QBCC Act does not apply to unliquidated claims

Wilson J held that section 67J of the QBCC Act does not apply to unliquidated claims. Section 67J provides that ‘the contracting party may use a security or retention amount, in whole or in part, to obtain an amount owed under the contract,’ but only if written notice is given within 28 days of becoming aware of the right to that amount.

Wilson J held the issue about section 67J was relatively settled. The clear words of section 67J indicate that its notice requirement is engaged only when a party seeks to have recourse to security to obtain liquidated amounts owed. An unliquidated claim, such as MDP’s claim for consequential loss, falls outside the scope of section 67J entirely. Accordingly, there was no need for MDP to have issued any earlier notice under the statutory timeframe.

Allocation of risk

Wilson J observed that where security provisions are designed to allocate risk of holding security funds in the favour of the Principal until the dispute is resolved, the balance of convenience will generally favour refusing an injunction.

Wilson J found that due to the unfettered nature of the right to have recourse to security under clause 5.2(b) of the contract, the security under the contract was provided to allocate that risk in favour of the Principal, and accordingly, the Court will not interfere by issuing an injunction.