A builder’s attempt to keep retention money out of a developer’s hands has failed after a court found the construction contract allowed the developer to hold it pending resolution of the developer’s claim for “consequential loss” arising from the builder’s delay in completing the works.
The issue arose from a residential apartment project at Coolangatta. Rawcorp Pty Ltd had contracted with developer MDP in August 2020 to design and construct the building for $25.2 million.
Like many major construction contracts, this one required security. Retention money was withheld from payments to Rawcorp, up to 10 per cent of the contract sum, to protect the principal if disputes emerged.
The works progressed slowly. The parties later varied the contract, extending the date for practical completion to mid-May 2024 and increasing the daily liquidated-damages rate to $10,000.
Practical completion was eventually achieved on 23 October 2024.
In October 2025, MDP gave Rawcorp notice that it intended to have recourse to the retained security, then called on it.
MDP’s notice referred to a $900,000 liquidated-damages certification and claimed a further $2.26 mil in alleged consequential loss. That claimed loss included additional loan interest and fees, estimated wasted overheads, rates, land tax, and utility charges.
Rawcorp urgently sought an interlocutory injunction. It wanted Queensland’s Supreme Court to stop MDP spending or distributing the retention proceeds until the parties’ broader dispute was resolved.
Rawcorp advanced several arguments. It contended that liquidated damages were the exclusive remedy for delay, that issues surrounding the superintendent affected the claim, and that MDP’s recourse notice was ineffective under the relevant building payments legislation because the notice had come too late.
The dispute came before Justice Elizabeth Wilson who held that MDP’s claim for consequential loss was an unliquidated damages claim to which the notice given was inapplicable.
The contract’s security clause nevertheless allowed MDP to have recourse to security for any “claim to payment (liquidated or otherwise)” that it “may have or claims to have”, provided it gave seven days’ written notice.
The judge concluded that such wording was deliberately broad allowing the developer’s claim only to be arguable rather than “specious, fanciful, or untenable”.
The court upheld the builder’s right to recourse from the security for both the liquidated and unliquidated elements of its claim but did not decide whether MDP will ultimately establish the claimed consequential loss.
That remains a matter for the substantive dispute. The security clause though determined who would hold the money while that dispute continued.
Because the clause gave MDP an unfettered right to call on the security after seven days’ notice, and because no fraud or unconscionability issue arose, the court refused to intervene. Rawcorp’s application was dismissed.
Rawcorp Pty Ltd v MDP No 15 Pty Ltd [2026] QSC 38, Wilson J, 19 March 2026
