Masters in Building Training Pty Limited v State of New South Wales (No 2)

1. [1]

   Before the Court is an application for interlocutory relief consequent upon an earlier granted injunction. The plaintiff seeks an order, the effect of which would be to compel the defendant to pay moneys claimed by the plaintiff under a contract between the parties.

2. [2]

   The context for the parties' dispute is a vocational education and training subsidy program administered by the defendant, the State of New South Wales. The program is administered by the State through an organisation called Training Services NSW, which is part of the NSW Department of Education. In the remainder of this judgment I will refer to the defendant as “the Department”.

3. [3]

   The vocational education and training program in question operates in the building industry and is called the “Smart and Skilled” program. The actual education and training is provided by registered training organisations (“RTOs”). The cost of the program to the trainees is subsidised under the subsidy program. Each RTO which provides subsidised training enters into a written contract with the Department, known as a Smart and Skilled contract.

4. [4]

   The plaintiff, to which I will refer as “Masters”, is an RTO which has been providing subsidised education and training under the Smart and Skilled program since late 2014 or early 2015. Over that time, the contract has been renewed on several occasions. The most recent renewal was signed in May last year. It took effect on 1 July and was to continue until 30 June this year.

5. [5]

   Under the program, the RTO (referred to as a “Provider”) is entitled to a specified subsidy for each training program delivered. Certain types of trainees (for example, long-term unemployed or trainees located in remote areas) attract an additional loading.

6. [6]

   Clause 2 of the contract deals with its purposes and objectives. Subclause (a) provides:

7. [7]

   Clause 14 requires the Provider to submit regular reports showing its trainees' progress. The information is referred to in the contract as the “Training Activity Data”.

8. [8]

   Clause 17 deals with the payment of subsidies and loadings. Subclauses 17.1 to 17.3 deal with the calculation of the amounts payable. Clause 17.4 then deals with the invoice and payment process. In effect, the submission by the Provider of Training Activity Data is treated as the Provider's claim for payment. The obligation to pay is linked to the Department's acceptance of that Data. The Department may make inquiries about the Data, request supporting information or reject it. However, once Data is accepted, payment is required to follow after 28 days.

9. [9]

   There is no specified time within which the Department is obliged to decide whether to accept the Training Activity Data which has been lodged. It was common ground between the parties that there would be an obligation on the Department to do so within a reasonable time: see Donau Pty Ltd v ASC AWD Shipbuilder Pty Ltd (2019) 101 NSWLR 679 at 702 [99]-[100].

10. [10]

    Clause 21 provides for termination of the contract. Clause 21.2 gives the Department rights of termination where there has been a breach of the contract by the Provider. The clause sets out a list of specified events of default. The occurrence of an event of default gives the Department the right to suspend the Provider's rights under the contract, or to vary or terminate it.

11. [11]

    There is also an express power to “withhold, in whole or in part, any subsidies and loadings payable to the Provider”. The Department's rights in this regard depend upon the existence of an event of default, but no notice is required. However, the contract provides that if the Department believes that an event of default has occurred, it may, but is not obliged to, invoke a formal termination procedure.

12. [12]

    Under the termination procedure, the Department gives notice requiring the Provider to show that no event of default has actually occurred, or to rectify any event of default which has occurred and is capable of rectification. If the Department is thereafter satisfied that there has been a failure to comply with the notice, the Department may terminate the contract.

Background and procedural history

1. [13]

   The present application follows an earlier contested application by Masters for an interlocutory injunction which was heard by Kunc J. His Honour made orders on 12 April and delivered reasons for those orders on 30 April: Masters in Building Training Pty Ltd v State of New South Wales [2021] NSWSC 454. At [19]-[60], his Honour set out the factual background and procedural history to that point. A summary of what his Honour said, and an account of subsequent events, is set out below.

2. [14]

   The dispute between the parties goes back at least as far as 13 December 2019. On that date, the Department, acting under the previous contract (which it seems was relevantly the same in its terms as the current contract), issued a notice of suspension to Masters based on alleged events of default.

3. [15]

   This notice was followed by negotiations between the parties and a notice partially relaxing the suspension. This took place over a period of several months. The contract was then renewed, as I have stated, in May last year.

4. [16]

   On 13 July the Department issued a further notice of suspension with respect to four of the qualifications which were the subject of courses offered by Masters to its trainees. This was based on a suspension which had been issued by the federal regulator, the Australian Skills Quality Authority (“ASQA”). Later, in October, ASQA lifted the suspension, although it asserted that Masters remained non-compliant.

5. [17]

   Meanwhile, on 11 September, the Department had issued a suspension with respect to all of the course qualifications offered by Masters. The notice of suspension resulted in representations by Masters and extensive further debate which took place over the ensuing months. In the meantime, it seems that Masters continued to conduct its courses and the trainees continued to receive training covered by the subsidy program. Payments also appear to continue to have been made over this period.

6. [18]

   Then, on 4 March 2021, the Department issued Masters with a formal notification of events of default. This notice referred to the defaults identified in the notice of 13 December 2019, but added further alleged events of default. Further discussions took place, but on 25 March the Department issued a formal termination notice.

7. [19]

   The notice, as well as formally purporting to bring the contract to an end, referred to the Department's powers to withhold subsidies and loadings. The letter purported to invoke the power to suspend in the following terms:

8. [20]

   Masters reacted to the termination notice by commencing these proceedings. Masters' summons was filed urgently on 31 March and, as I have indicated, an application for an interlocutory injunction was made to Kunc J as Duty Judge.

9. [21]

   Following a hearing on 12 April, his Honour made orders in favour of Masters. The principal order was:

10. [22]

    His Honour also made consequential orders for the notification of trainees and their employers. I will refer to those orders in more detail below.

11. [23]

    On the day after these orders were made, Masters’ solicitors wrote to the Department’s solicitors. Masters’ solicitors stated that the Department had approved subsidies and loadings totalling $326,000, of which $180,000 were beyond the 28 days. It seems that as a matter of practice the Department did not formally notify acceptance of Training Data, and the assertion in the letter that the Data had been approved was presumably based on the Department not having raised any query about it. The letter sought immediate payment of the $180,000 and confirmation that the remainder of the $326,000 would follow in due course.

12. [24]

    The Department's solicitors responded on 21 April. Their letter asserted an entitlement to withhold the $326,000 on the basis that there were amounts owing from Masters to the Department. By way of explanation it stated:

13. [25]

    The Department followed up this letter by notice of motion which was filed on 11 May. The application in the notice of motion was expressed to be made pursuant to the liberty to apply granted by Kunc J on 13 April, or alternatively, “the Court's jurisdiction to supervise orders for specific performance”. The Department sought an “order” that it was entitled to withhold subsidies and loadings under the contract, either accruing up to 25 March, or accruing up to 30 June. Alternatively, the Department sought an order that it be permitted to pay the $326,000 into court.

14. [26]

    In support of its application, the Department identified two separate bases for repayment by Masters. The first was an obligation to repay amounts that had been paid to Masters pursuant to what is described as the payment continuity strategy. This was a program adopted by the Department during the COVID-19 emergency under which it appears moneys were advanced to Providers. That program has now been terminated and arrangements put in place requiring repayment. It does not appear to be disputed that the sum of $413,000 is repayable or that Masters has not been repaying it in accordance with the timetable imposed by the Department.

15. [27]

    Secondly, the Department alleged that there had been overpayments made to Masters for amounts by way of training to which it was not entitled. According to counsel, this involved “ghost” trainees, the suggestion being that Masters had claimed for payments for trainees who were not actually undertaking training or perhaps did not even exist. These overpayments are the subject of a police investigation which is known as “Operation Fish”. The Department had quantified its alleged entitlement to repayment as $107,000. Of that, $60,000 was acknowledged as correct by Masters.

16. [28]

    Kunc J dealt with the application on 27 May. He did so by adopting the Department's alternative proposal of paying money into court (on the basis that legal entitlement to it would be decided at the final hearing). By the time his Honour dealt with the application, the amount being claimed by Masters had increased to $459,000. His Honour relevantly made the following orders:

17. [29]

    As I will describe in more detail below, in the course of the hearing counsel for Masters complained that no payments had been made since March and suggested that this was contrary to his Honour's order of 12 April. His Honour was not able to deal with this and, as foreshadowed at the hearing, on the following day Masters filed the notice of motion with which I am concerned.

Application for interlocutory relief

1. [30]

   Prayer 1 of Masters' notice of motion seeks the following order:

2. [31]

   Counsel for Masters presented the application as a working out of the orders already made by Kunc J on 12 April. Counsel submitted that the payment of subsidies and loadings was an essential (actually, the essential) obligation of the Department under the contract. Counsel submitted that an order was necessary requiring the Department to make payments so as to give effect to that order.

3. [32]

   Counsel acknowledged that the orders of 27 May had qualified the position somewhat. But, in counsel's submission, the qualification was limited to recognising an entitlement on the part of the Department to withhold moneys up to the amount claimed (or perhaps acknowledged by Masters) to be due from Masters back to the Department.

4. [33]

   The evidence in support of the application contained updated accounting figures from Masters. According to those figures, claims totalling more than $1.5 million are now outstanding, of which $809,000 is beyond the 28 day period. Counsel submitted that even if the amount paid into court was fully allowed, together with another $60,000 representing the limit of the amount currently claimed by the Department, there was still approximately $300,000 which should be paid now, and further large amounts could be expected to be payable over the next few weeks.

5. [34]

   Counsel for the Department resisted the making of any order, although he did make an open offer to which I will refer in due course.

6. [35]

   Counsel's first point was that Masters’ application was effectively an application for summary judgment. Counsel pointed out that the test for establishing an entitlement to summary judgment is difficult to satisfy and would require the plaintiff to demonstrate that there was no viable ground of defence.

7. [36]

   Counsel submitted that Masters could not possibly satisfy this test. In particular, counsel pointed to the fact that on the Department's case it has not even reviewed many of the claims by Masters. Furthermore, the investigation under Operation Fish is said to be ongoing. Although the Department has currently quantified a claim of only $107,000, it may be that that figure will increase. Counsel submitted that there was no way in which the Court could conclude that Masters was currently entitled to any particular amount by way of payment.

8. [37]

   I agree that it is not possible at present to place any figure on the amount claimed by Masters from the Department, and it would be inappropriate to enter summary judgment. But I do not accept the premise of counsel's submissions.

9. [38]

   The orders sought in this application are prohibitory in form, but mandatory in substance. For practical purposes the grant of relief is akin to the grant of specific performance. In such circumstances, the Court may need to be satisfied that the plaintiff has a strong claim for final relief: see the classic exposition of McLelland J in Kolback Securities Ltd v Epoch Mining NL (1987) 8 NSWLR 533 at 535-536, quoted by Kunc J at [96] (in particular, the final quoted paragraph).

10. [39]

    But this does not mean that the grant of relief is actually, in law, an order in the nature of specific performance or for summary judgment. If I make the order sought by Masters, no judgment will have been given and no rights will have been determined. If Masters is not entitled to any moneys which are paid over pursuant to any interlocutory order the Court may make, the Department will be entitled to restitution in due course. The fact that it may then be difficult to recover those moneys does not alter the nature of the jurisdiction which Masters seeks to have the Court exercise. It remains an interlocutory jurisdiction.

11. [40]

    Counsel's next point relied upon the principle that the Court will not, unless the circumstances are exceptional, permit the re-litigation of an interlocutory decision. The principle was stated by McLelland J in Brimaud v Honeysett Instant Print Pty Ltd (1988) 217 ALR 44 at 46:

12. [41]

    Counsel for the Department characterised the present application as an infringement of this principle. Counsel argued that it had been decided by Kunc J on 27 May that the Department was not obliged to make any payments by way of subsidy or loading (beyond, of course, the payments into court). In his submission, Masters was now trying to re-contest that point.

13. [42]

    On the other hand, as I have already indicated, counsel for Masters presented the application as giving effect to the orders made by Kunc J on 12 April. On that view, the principle against re-litigation of interlocutory decisions would operate in Masters' favour rather than against it.

14. [43]

    Resolution of this issue is critical for the outcome of this particular application. Already there have been two hearings before Kunc J. The considerations of public policy to which McLelland J referred mean that I must refuse to be drawn into arguments which were, or should have been, raised before his Honour. I therefore see myself in this application as being required to identify what his Honour has decided and to resolve the application in a way consistent with what I discern to have been his Honour's original intentions, subject to any subsequent events which might lead to a different outcome.

15. [44]

    The starting point is, therefore, his Honour's order of 12 April as quoted above (see [21]). The text of the order is broad. It requires the Department, until further order, to comply with the terms of the contract. Strictly speaking, if the Department's view is ultimately sustained and it is successful in upholding the notice of termination, then the contract will have ceased to bind either party on 21 March. But I think the intent of his Honour's order is quite clear; both parties are required to conduct themselves as if the notice of termination was ineffective and they remained subject to the obligations imposed on them under the contract.

16. [45]

    In my view, counsel for Masters is correct to submit that a critical, if not the critical, obligation of the Department under the contract was the payment of subsidies and loadings. It is true that the Department was required to administer the program and for that purpose to receive and analyse data presented by Masters. But the point of the program was the training of trainees and this was done by Masters. The Department's essential obligation was to pay Masters the amounts to which it was entitled under the subsidy program for conducting that training. This was reflected in clause 2(a) of the contract which I have already quoted (see [6] above).

17. [46]

    This conclusion is supported also, in my view, by the ancillary orders made by Kunc J. His Honour ordered:

18. [47]

    Further explanation of what his Honour contemplated is found in [7] of his judgment, where he summarised his conclusions:

19. [48]

    In the body of his judgment, his Honour expanded on the point. At [65]-[67] his Honour set out the submissions by counsel for Masters:

20. [49]

    His Honour returned to these submissions when analysing the balance of convenience. His Honour said at [99]-[100]:

21. [50]

    In my view, it is clear from these parts of his Honour's decision that his Honour was proceeding on the basis that if the Department did not pay the amounts of subsidies and loadings to which Masters was contractually entitled, then Masters would terminate its courses, to the disadvantage of the trainees. His Honour referred repeatedly, and in particular in [7], to the need to ensure the provision of "funding" so as to avoid that consequence. The ancillary orders for notification leave me in no doubt that his Honour contemplated that the order he had made would ensure that such funding would be made available.

22. [51]

    In my view therefore, the position at the time his Honour made the orders of 12 April was clear. It now becomes necessary to consider the effect of his Honour's later decision on 27 May.

23. [52]

    His Honour did not deliver formal reasons for the orders he made. I was taken to correspondence between the parties setting out their positions in advance of the hearing and their rival contentions as to the form of the orders which should be made. I was also taken to passages in the transcript.

24. [53]

    In my view, it is tolerably clear from the prior correspondence that, in this application, the Department was not attempting to launch a frontal assault on his Honour's decision of 12 April. Rather, the Department was raising an issue which it seems had not been raised, or at least had not been fully dealt with, on 12 April; namely, its entitlement to receive moneys back from Masters.

25. [54]

    While his Honour accepted that the Department should not have to pay amounts that were claimed to be due from Masters (or at least amounts that were acknowledged as such), nothing in his Honour's orders purported to disturb Masters' own entitlement to be paid subsidies and loadings by way of "funding". In effect, I see the Department's application as a successful assertion of a right of set-off. But there is a possible qualification to this.

26. [55]

    In the course of debate, his Honour was pressed by counsel for Masters with an argument that, in its letter of 21 April (quoted at [24] above), the Department had repudiated any obligation to pay subsidies and loadings at all. Counsel asserted that the Department had failed to comply with the orders of 12 April. Counsel foreshadowed a motion to seek unspecified "declaratory relief" as a result. It was also foreshadowed as a possibility that the motion might involve an application to pay out moneys paid into court by the Department.

27. [56]

    In response, his Honour said:

28. [57]

    I have been troubled by this passage. Taken on its own, it does lend some support for the Department's contention that the effect of the orders of 12 April was limited to reinstating the contract and that payment obligations were separate.

29. [58]

    In the end, however, I do not think that the passage is sufficiently clear and unequivocal to disturb the conclusion which I have reached based on his Honour's reasons for judgment in support of the 12 April orders. I think that the passage must be understood in the light of two contextual matters. First, the suggestion that some application for further orders was made came from counsel, not his Honour. Counsel also suggested that the order might involve a payout of moneys in Court which would undoubtedly involve a challenge to the set-off. Secondly, as his Honour pointed out, the only application before him was the application by the Department which, I consider, related to a separate issue, namely set-off.

30. [59]

    For these reasons, I have concluded that the orders on 27 May did not alter the overall intention behind his Honour’s decision of 12 April, namely to reinstate the Department’s payment obligations. It was that decision which, in my view, was the relevant interlocutory decision for the purposes of the principle stated by McLelland J in Brimaud. With that in mind, I now turn to the other arguments presented by counsel for the Department.

31. [60]

    The first of those other arguments was that there was insufficient strength to Masters' claim for payment to establish a prima facie case. Counsel advanced four arguments in support of this contention. I will deal with them in turn.

32. [61]

    First, counsel observed that the Department’s letter of 25 March both terminated the contract and, separately, purported to invoke the right to suspend the payment of subsidies and loadings. Moreover, counsel contended that the earlier suspensions from July and September last year remained in place. Counsel argued that this was sufficient to support the Department's refusal to pay subsidies and loadings, even if the Department was not entitled to rely on its purported termination of the contract.

33. [62]

    There are some technical difficulties with the notice of 25 March considered as a notice of suspension of subsidies and loadings. The first is that it is clumsily expressed. It refers to suspension in whole or in part, without specifying (if the suspension is a partial one) what part is being suspended. More importantly, it is difficult to read it as anything other than the suspension of payments accrued up to the date of the letter since, on the Department's view of the world, the contract ended at that point and, accordingly, no rights could accrue after that date. But I will pass over these difficulties and assume that the notice indicated a clear intention not to pay subsidies and loadings, which is distinct from the consequences of the purported termination notice.

34. [63]

    I accept that, technically, the right to suspend payments of subsidies and loadings is a different thing legally from the termination of the whole contract. But in my view, this is an argument which, if it was to be advanced, should have been advanced before Kunc J. Indeed, insofar as the argument relied upon earlier alleged rights of suspension, it was part of the background which his Honour considered in making the order which he made. For reasons which I have given, I consider that his Honour must be taken to have rejected the argument.

35. [64]

    Counsel's second submission was based on the overpayments arising from the alleged "ghost trainees" and the COVID-19 advances. Counsel relied on clause 22 of the contract, which provided:

36. [65]

    As I understood it, counsel for Masters did not contest that the Department had an effective right of set-off for the amounts repayable by way of COVID-19 advances ($413,000), and for the conceded amount for overpayment for non-existent trainees ($60,000). Therefore, there would be no obligation to pay subsidies and loadings until the Department had withheld or set aside that amount.

37. [66]

    For reasons I have already given, this right of set-off is quite independent of the right to withhold subsidies and loadings because of alleged breaches. Although the amount of the set-off will need to be acknowledged in any order which I make, it is not of itself a bar to the making of such an order.

38. [67]

    Counsel's third point concerned the allocation of risk. Counsel relied on clause 27 of the contract which provides:

39. [68]

    Initially counsel relied on one of the subparagraphs, but this was not pressed. Counsel, however, pressed the contention based on the final paragraph of the clause that the making of this claim by Masters disturbed the contractual risk allocation.

40. [69]

    I do not accept this submission. The “risk” of the Department not paying the subsidies and loadings was not referred to in any of the specified subparagraphs. Those subparagraphs were concerned with aspects of Masters’ business which it was able to control. The receipt of subsidies and loadings was quite different. It formed part of (indeed the critical part of) the Department's obligations.

41. [70]

    To accept counsel's argument would be to accept that it would be open to the Department simply to refuse to pay for any of the training subsidies. This would deprive the contract of its whole point and render it completely illusory. The last sentence of the clause indicates that that cannot have been the intention. Rather, it reinforces the idea that the Department is obliged to pay subsidies and loadings as they fall due, subject of course to other specific rights under the contract.

42. [71]

    Fourth and finally, counsel relied on a letter sent on 1 June by Masters to its trainees. In that letter, Masters complained about the Department's failure to pay moneys and urged the trainees to contact the Department's solicitors if they were concerned about completing their training. It appears that a number of trainees in fact did so.

43. [72]

    However frustrated Masters may have been by the Department's approach, it was deplorable for Masters to try to enlist their trainees in putting pressure on the Department and, still more, on the Department's legal advisors. However, the letter was withdrawn three days later. In the letter Masters had suggested that the trainees may have to pay their own fees, but no fees were in fact paid. In the circumstances, I consider the letter to be insufficiently substantial to deprive Masters of a prima facie entitlement to the subsidy payments it had earned by providing training services.

44. [73]

    Accordingly, I reject the submission that Masters has failed to establish a prima facie case. Indeed to put the proposition in those terms may be too favourable to the Department. In my view it is sufficient that Masters satisfied the requirements of a prima face case, so far as Kunc J was concerned. I do not consider that anything that has happened since his Honour gave his decision has been such as to call the ongoing validity of that decision into question.

45. [74]

    The next group of arguments from counsel for the Department centred on unclean hands on the part of Masters. Unclean hands was argued before Kunc J based on the prior conduct of Masters, but that was rejected by his Honour and there was no attempt to challenge his Honour's reasoning.

46. [75]

    Counsel instead relied on two subsequent events. The first was the filing of the notice of motion itself, which was said to be an act contrary to the agreed contractual allocation of risk. I have already rejected that argument as a matter of construction, at least for the purposes of this application. In any event, I find it hard to accept that the making of any court application (unless, perhaps, lacking in good faith, which was not suggested here) could ever be considered by the Court to be a form of unclean hands.

47. [76]

    The second alleged act of unclean hands concerned the overpayments. As I have indicated, the principle that Masters must give credit for overpayments is not in dispute. I do not consider that this gives rise to any proper defence of unclean hands either.

48. [77]

    Next counsel addressed the balance of convenience. Counsel submitted, based on evidence from Masters itself, that Masters’ financial position was now precarious and it lacked, or potentially lacked, the means of repayment of moneys which might be due to the Department. A related point was that damages would be an adequate remedy. It was said that Masters’ claim is simply one for money (in fact, as counsel for Masters confirmed, it is in substance a liquidated claim for subsidies and loadings ultimately found to be due and after allowing for any proper set-off).

49. [78]

    Counsel observed that there were only eight days left to run on the contract. Therefore, counsel submitted, there was little if any ongoing concern, as a matter of the balance of convenience, for the position of Masters’ trainees.

50. [79]

    It may be accepted that the contract now has only a short time to run and the services provided for the trainees are now almost complete. But to my mind it simply reinforces the undesirability of moving the goalposts after Kunc J's decision of 12 April.

51. [80]

    As already indicated, I think that his Honour's judgment reflects a contemplation that, unless leave was granted, Masters would terminate its contract with the trainees and their training would be interrupted. I think Masters would have reasonably concluded from his Honour’s decision that its position was protected and it need not proceed with terminating its training arrangements. Furthermore, the evidence shows that Masters has entered into a deferral arrangement with the trainers who it employs to conduct the training and that those trainers are waiting for payment from the Department.

52. [81]

    In my view, to accept counsel's argument would give rise to a justified sense of grievance on the part of Masters, as well as its trainers. Furthermore, there is apparently a little more chargeable training to be undertaken. The contract (or the parties acting as if bound by the contract) will continue and that will mean that the Department will have to pay for the training which has already been done. But this is subject to the set-off and it is unclear to me what further detriment the Department is likely to suffer. I think that in effect this is acknowledged by the open offer which was made, to which I now turn.

53. [82]

    The background to the open offer was said by counsel to be that the Department had verified, by reference to Training Data supplied, that Masters was entitled to $205,000 by way of subsidies and loadings. The further $646,000 of the Data Claim had been queried, with the balance (approximately $1 million) still to be reviewed.

54. [83]

    On this basis, an open offer was made to pay the sum of $205,000. I suggested that this could be the basis of an agreed resolution between the parties, if it was accompanied by some sort of agreed regime under which the Department would review the further claims (to the extent contractually permissible) and pay the amounts found due. However, this was not acceptable to Masters.

Conclusions and orders

1. [84]

   For the reasons which I have given, I reject the Department's defences to Masters' application. Accordingly, I will make an order broadly along the lines of the orders sought by Masters, but some variation of the wording will be required.

2. [85]

   First, it must be clear that the restraint imposed will be one which relates to the exercise, or purported exercise, of contractual rights concerning subsidies and loadings. It will not affect the Department's rights under clause 22 with respect to repayment, either by repayment, set-off, or imposition of some other arrangement (see sub-clause 22(c)). I should say that I regard the orders for payment into court as being, in effect, an alternative arrangement of that kind.

3. [86]

   It is also clear that I cannot, at this stage, specify any particular amount. All that the Department has conceded is $205,000, which is less than the amount of the accepted set-off. Of course, under the orders made on 12 April, the Department's obligations continue and that includes the obligation to consider the claims for payment made by Masters, and if those claims are justified, to make payment accordingly (subject of course to any set-off).

4. [87]

   On the evidence, I am in no position to make any assessment of whether the Department's position on the amount outstanding, or Masters', is correct. Indeed, as I have said, the Department is under an implied obligation to decide whether to accept the claims within a reasonable time, and that reasonable time may already have passed for some of the claims which the Department says are still under review. I also have no verification of the statement by counsel for the Department (and this is not a criticism) that queries have been made for as much as $646,000. The working out of the parties' rights in this regard will simply have to proceed in accordance with the order made by Kunc J on 12 April and the further order which I will now make.

5. [88]

   The orders of the Court are:

   1. (1)

      Upon provision by the Plaintiff of the usual undertaking as to damages, an order that until further order of the Court, the Defendant be restrained from exercising or purporting to exercise the right to withhold payment of Subsidies and Loadings due to the Plaintiff in accordance with the terms of the agreement between the Defendant and the Plaintiff entered into on or about 15 May 2020 and effective 1 July 2020 (Agreement).

   2. (2)

      The order above is not intended to disentitle the Defendant from withholding or requiring monies to be paid back to it in accordance with clause 22 of the Agreement.

   3. (3)

      The money paid into Court by the Defendant on 3 June 2021, namely the sum of $459,038.85 is to be released to the Defendant.

   4. (4)

      The costs of the Plaintiff’s motion filed 28 May 2021 be the Plaintiff’s costs in the cause.

   5. (5)

      The matter be listed before the Expedition List Judge on 20 August 2021.

   6. (6)

      The parties have liberty to apply on 3 days’ notice.