Alliance Craton Explorer Pty Ltd v Quasar Resources Pty Ltd and Anor

[2013] HCATrans 215

[2013] HCATrans 215

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Adelaide   No A10 of 2013

B e t w e e n -

ALLIANCE CRATON EXPLORER PTY LTD

Applicant

and

QUASAR RESOURCES PTY LTD

First Respondent

HEATHGATE RESOURCES PTY LTD

Second Respondent

Application for special leave to appeal

FRENCH CJ
GAGELER J
KEANE J

TRANSCRIPT OF PROCEEDINGS

FROM PERTH BY VIDEO LINK TO ADELAIDE

ON WEDNESDAY, 11 SEPTEMBER 2013, AT 11.00 AM

Copyright in the High Court of Australia

MR A.C. ARCHIBALD, QC:   May it please the Court, I appear with my learned friend, MR B.C. ROBERTS, for the applicant. (instructed by Finlaysons Lawyers)

MR A.J. MYERS, QC:   May it please the Court, I appear with my learned friend, MR M.C.J. HOFFMAN, QC, for the first respondent.  (instructed by Minter Ellison Lawyers)

MR J.C. SHEAHAN, SC:   May it please the Court, I appear with my learned friend, MS R.C.A. HIGGINS, for the second respondent.  (instructed by Herbert Smith Freehills)

FRENCH CJ:   Yes, Mr Archibald.

MR ARCHIBALD:   If the Court please, the Full Court addressed and commenced to address the agency issue at paragraph 51 of its reasons on page 49 of the application book.  At line 39, the court said that:

Heathgate (and after the assignment, Quasar) was to act in the capacity of manager and not as agent for the –

joint venture.  The court there seems to be expressing some conclusion that there is an antithetical quality between the role of manager and the role of an agent.  Whether that is the case or not we submit that the role of the manager or operator in an unincorporated joint venture in the resource area is quintessentially representative.  That must be so because the joint venturers hold the tenement – hold the exploration licence – which makes lawful that which is otherwise unlawful, namely, to go on to territory and explore, then in course the venturers hold the mining lease which makes lawful the performance of the mining function which would otherwise be unlawful.

The manager who explores, the manager who mines, acts representatively exercising the right which resides alone in the joint venturers and it is this representative quality – standing in the place of the principal, acting in the right of the principal – which marks the difference – as Sir Owen Dixon expresses it in Colonial Mutual Life – between the party who acts as agent, representatively, and the party who acts as an independent contractor as principal.

FRENCH CJ:   Are you asserting any more than that this is a relationship, however designated, which gives rise to a fiduciary – of a fiduciary character?

MR ARCHIBALD:   We are not really concerned with the fiduciary character for the moment, but ‑ ‑ ‑

FRENCH CJ:   I am just looking at paragraph 7 of the ‑ ‑ ‑

MR ARCHIBALD:   Well, yes, but it follows from the position of the party who is an agent that the party will be in a fiduciary relationship with the principal.  Whether the conduct that is complained of is breach of that which is a fiduciary duty or a non‑fiduciary duty owed by the fiduciary really does not matter here.  But it was accepted – as the Full Court itself explains – that were the relationship between the manager and the venturers to have been that of principal and agent then it followed that the documents that were prepared by the manager for the purposes of the joint venture were accessible by the principal.  Now, whether the withholding of those documents is a breach by an agent of a fiduciary duty or a non‑fiduciary duty really does not matter for our purposes here.

GAGELER J:   Mr Archibald, are you accepting the International Harvester definition of “agency” for the purpose of this submission?

MR ARCHIBALD:   We accept that that is a feature, a central feature in most cases, of the role of agent but it is not an exhaustive statement and should not be taken to be an exhaustive statement of the position – of the test for agency.  We set out at paragraph 37 of our written outline reference to some of the discordant views on this topic and one can see - if one wants to find other expressions of differences of view on the matter one can see that in what Justice Finn expounded in the South Sydney Case at paragraph [136].

His Honour there set out the Restatement definition from which there is absent a requirement that the agent inexorably have the capability of binding the principal to a third party.  His Honour set out the Bowstead definition, or paragraph 1 as it is of the Bowstead definition, which does have that quality in it.  Paragraph 4 of the Bowstead definition is not set out but does not have that quality in it. 

Justice Finn, at the end of paragraph [136], made observations which convey that his Honour would not include in the necessary elements of agency the capability of binding third parties – capable of binding the principal to third parties.  That issue in itself, in our submission, is one worthy of examination by this Court.  So that it is part but by no means the whole of the argument upon which the resolution of this case turns. 

But what I was putting to the Court was the representative quality demonstrates – of course, there can be differences in particular cases – but demonstrates that at the heart of this notion there is a relationship that would qualify for categorisation as an agency.  In the absence of judicial decision on the topic it appears from the materials that the learned writers – those participating in this sphere of endeavour – have expressed a consistent view that the relationship between the manager and the joint venturer is that of principal and agent.  One sees that, for example, in Mr Barrymore’s paper under tab 4 of our authorities at page 87.

FRENCH CJ:   What aspects of agency – in the broad sense that you advance – support the proprietary claim?

MR ARCHIBALD:   Because – and whether one characterises that as proprietary, stricto sensu or something else – because the function which the agent performs in gathering material and recording it is a function performed by the manager as agent.

KEANE J:   Why is it not performed by the manager as manager with obligations to the joint venturers and why is not the nature and extent of those obligations dependent on the terms of the agreement?

MR ARCHIBALD:   Well, an agreement may influence the characterisation of whether the manager is agent or is not agent.  It was accepted, as I indicated to the Court a few moments ago, that if the proper characterisation was that the manager was agent, then these documents were to be made available to the joint venturers.  The reason that one looks to the performance by the manager of the functions that it has under the joint venture agreement is to see what is the content and what are the incidents of that relationship. 

When one finds in the content and in those incidents the representative character, then the proper conclusion to reach, in our submission, principle and authority is that the manager acts as agent and, in that aspect of its functions in which it collects material, it is performing the role of agent and, therefore, must make them available to the venturers if the venturers have a requirement for the purposes of the joint venture.

It seems to be the proposition in this case that the manager can arrange for a geologist’s report to be prepared.  The manager can receive the report and provide to the venturers only the manager’s summary of the report and withhold the report itself from the venturers.

GAGELER J:   Does the manager put the geologist in contractual relations with the joint venturers?

MR ARCHIBALD:   Ordinarily, yes.  There can be cases in which the hiring, the outsourcing of some of the activity that requires to be done by the manager will be outsourcing where the manager – it is all in the contracting question.  But the circumstance that it is the manager that hires in its own right the geologist, if that is how it occurs, does not answer the question whether the work product of that engagement is capable of being withheld from the joint venturers.

KEANE J:   It does cast a light on the representative character that you speak of, though.

MR ARCHIBALD:   Yes, but whether it be the relationship with the geologist, if that function is outsourced, or whether it be the result of the outsourcing, in either event, in our submission, the fruit of that activity must be subject matter accessible by the joint venturers for their own purposes – the manager having performed the function of obtaining the geological report for the purposes of exploration or for the purposes of mining.  

GAGELER J:   How do you deal with clause 13.6 of the joint venture agreement?

MR ARCHIBALD:   We deal with it in this way.  The Full Court rightly said at paragraph 54, that the existence of agency depends upon consent.  The court then immediately said, wrongly in this respect, in our submission, that the parties expressly agreed that they were not in any relationship of principal and agent and that is why there was no consent.  That, in our submission, fundamentally misunderstands the task that is to be performed when an inquiry is made as to the presence, or absence, of consent.

GAGELER J:   They said that in paragraph 54, adopting the definition of “agency” in paragraph 53.  It is not clear to me whether or not you are content, for the purposes of your argument, to adopt the same definition.

MR ARCHIBALD:   It ultimately matters not for purposes of our argument for if the matter turns on the presence or absence of consent our answer to the Federal Court’s characterisation of the matter is that in order to determine the presence or absence of consent one must have regard to the content and incidents of the relationship and not simply to the disclaimer, for the disclaimer may be a false label as the cases on occasion say.  Here, the error of the Full Court was to treat the disclaimer as conclusive and decisive without ever examining the content and the incidents of the relationship.  Had the Court ‑ ‑ ‑

FRENCH CJ:   Does the taxonomy of the content and incidents of the relationship matter?

MR ARCHIBALD:   Yes, it is critical.

FRENCH CJ:   In the sense of the label of agency.  It seems to me you are saying that the content and incidents of the relationship are such that they give rise to your client’s rights to access the documents.

MR ARCHIBALD:   They do, but in determining whether the disclaimer is efficacious or inefficacious one needs to understand what it is that is being disclaimed.  The Full Court never looked at the question as to what it was that was being disclaimed.

FRENCH CJ:   I suppose what I am putting to you is, is it an aspect of your argument that, in a sense, the disclaimer does not matter if one goes to the content and incidents of the relationship, in terms of your proprietary claim?

MR ARCHIBALD:   We say the correct view is that if one looks at the content and incidents of the relationship, as Lord Pearson said one must, one finds this representative feature which would tell one that the relationship is that of principal and agent.  What the Full Court failed to address and to understand, in our respectful submission, was that the subject matter in respect of which one must find consent, is consent to the relationship which in fact exists by reason of the incidents of it, rather than the disclaimer.  If one goes to paragraph [140] in the South Sydney Case the passage which is extracted there from Lord Pearson’s speech clearly identifies that that is what must occur, for what Lord Pearson said was that:

The relationship of principal and agent can only be established by the consent of the principal and agent.  They will be held to have consented if they have agreed to what amounts in law to such a relationship, even if they do not recognise it themselves and even if they have professed to disclaim it.

The Full Court went only to the disclaimer.  The court said that if the disclaimer is not a sham, appropriate weight must be given to it, but then the court moved, at paragraph 56, page 51 of the application book, to the proposition that because there was:

no evidence to suggest that the express disclaimer is a sham –

full weight must be given to it and that meant, treat it as conclusive.  So the court applied clause 13.6 as destroying agency because it was to be given conclusive weight without the court ever looking to the substance of the relationship itself.

FRENCH CJ:   They did look at other provisions of the JVA, did they not?

MR ARCHIBALD:   They eventually did, and I will go to that in a minute, if I may, but to presage what we want to submit in that regard is that in going to the further provisions, the court was considering the extent of control to be found in those provisions – control, or lack of control – and can use that as a basis for concluding that because there was carte blanche, as the court put it, therefore, there could not be agency.  But the court was not looking at those provisions to identify the substance of a relationship and never addressed itself to whether there was, or was not, a representative capacity to be found.

So when the court again cited the South Sydney Case as the basis for its proposition in paragraph 54 that appropriate weight was to be given to the disclaimer, the court omitted to give attention to the balance of the observations in South Sydney at that paragraph that one gives it appropriate weight in relation to the rest of the agreement.  When one does that, one might either give no effect to the disclaimer or effect to it and that matter itself depends – as the court said – on the content and incidents of the relationship.  It is that critical function which the Full Court never performed.

There is a further point, of course, in relation to clause 13.6.  It presents as a boilerplate clause.  It does not, in our submission, correctly construe the ply at all.  It is the vertical relationship between joint venturers on the one hand and the manager on the other.  It applies only to the horizontal relationship between joint venturers inter se.  The perennial and proper concern of joint venturers is to ensure that they, in their venture, do not find themselves partners with one another.  So one commonly finds clauses directed to endeavouring to dispel any suggestion of partnership.

Were they to be partners, two corollaries would follow.  One, that each partner would be an agent of the other.  The partnership legislation entrenches the common law principles that each partner is the agent for the other – mutual agency.  The second corollary of partnership is that where there is specific authority, one partner can pledge the credit of the others.  A clause of the kind of clause 13.6 is plainly, in our submission, directed to eliminating the risks in the horizontal relationship partnership and, as the clause then addresses, agency and pledging of credit.  The clause does not, in our submission, apply at all to disclaim agency between the venturers on the one hand and the manager on the other.  So if one looks at the position of the manager without a disclaimer clause at all, the inexorable conclusion, in our contention, is that the relationship is that of principal and agent.

FRENCH CJ:   I think your alternative position is there was an implied term.

MR ARCHIBALD:   Yes, as a backstop, for if it be the case that we cannot get at the documents through the agency proposition we must, to make things workable, get it through an implied term.

FRENCH CJ:   Your draft notice of appeal has some 11 grounds ‑ ‑ ‑

MR ARCHIBALD:   Yes.

FRENCH CJ:   ‑ ‑ ‑ some of which seem to be, with respect, argumentative or overlapping.

MR ARCHIBALD:   Yes.

FRENCH CJ:   In particular, I have regard provisionally at least to 4, 6, 8 and 10.

MR ARCHIBALD:   Yes.  They can and should be cut back if we were to get special leave.  If the Court pleases.

FRENCH CJ:   All right, thank you.  Yes, Mr Myers.

MR MYERS:   The relationship between the parties before your Honour is created by and defined by the terms of the joint venture agreement.  Would your Honours be good enough to go to page 81 of the application book - it is a little way in to the joint venture agreement - and look at clause 4:

4.1With effect on the Commencement Date the parties establish between themselves a contractual joint venture governed by the terms of this Agreement.

Very clear.

Heathgate will farm‑into and may earn a 75% beneficial interest in the tenement by expending the Minimum Expenditure during the Earn‑In Period.

Then there is provision for a payment.

4.3The purpose of the joint venture is to explore the Tenement for Minerals and to determine whether a viable resource or resources exist therein for Minerals and, if so, developing and mining the relevant part or parts of the Tenement.

4.4During the Free Carry Period –

and that is defined on page 78, up to the time of the relevant mine decision date, and the mine decision date is the date upon which Heathgate, or for our purposes, Quasar, makes a decision to mine in accordance with 10.1.  Clause 4.4 on page 81:

During the Free Carry Period Heathgate shall:

(a)manage the exploration (and development if any) on the Tenement and be solely responsible for programs and budgets relating to such exploration and/or development -

solely responsible.  Then:

(b)provide quarterly progress reports to Alliance in respect of the Tenement in a timely manner and in sufficient detail to allow Alliance to comply with its obligations under ASX listing rules;

(c)at its cost keep the Tenement in good standing –

et cetera, and (d) – this is an agency created:

be authorised to apply for any substitute or successor title to the Tenement;

(e)inform Alliance immediately of any material discovery made on the Tenements –

Then the tenement is referred to.  Clause 6 deals with management, Heathgate is the first manager - 6.3, it limits its liability in a way which one would not expect to find in the case of an agency relationship; 6.4:

The parties acknowledge that the conduct of any exploration operations on the Tenement is subject to the requirements of the Mining Act concerning the conduct of such operations on native title land.  Heathgate, as Manager is authorised by Alliance to enter into such agreements and or make such other arrangements with Native Title claimants, as Heathgate deems appropriate or necessary in order to comply with Part 9B of the Mining Act.

Then there is provision for assignment and that happened.  Then 9 deals with withdrawal; 10 is headed “Feasibility Studies and Mine Development” - this is important. 

10.1Heathgate may in its sole discretion, make a decision to mine by giving not less than 30 days written notice to Alliance to that effect –

Now, it did make such a decision after extensive exploration, as the evidence shows and as appears from the judgment, at a cost to it of some $42 million, it being solely responsible for the judgments.  So Mr Archibald’s client did not have to put in any of that $42 million.  That was entirely the responsibility of my client.

10.2If Heathgate decides to proceed to develop a commercial mining operation, the development and operation of the mine shall be regulated under a separate joint venture agreement and the Mine Development Area will be made subject to that joint venture.

So the agreement contemplates that when the mine decision has been made, then there will be another joint venture agreement which will deal with that.  Then:

10.3While development shall proceed by way of an unincorporated joint venture –

This is this mine development –

the parties may incorporate a separate management company to manage mining operations.

10.4As from the Mine Decision Date, the parties shall pay all Mining Joint Venture Costs (including the Net Smelter Returns) in proportion to their respective Joint Venture Interests.

So that is making good the proposition that I just put to your Honours.

FRENCH CJ:   So the anterior question of principle which is asserted by Mr Archibald is, in effect, what is necessary to characterise the relationship as, in some sense, principal and agent in a way that supports his proprietary claim in connection with the documents, and the secondary question is what is the proper characterisation in this case?  Now, is your argument simply that the proper characterisation is apparent from the terms of the documentation?

MR MYERS:   It is. 

FRENCH CJ:   Do you say the question of principle does not arise?

MR MYERS:   It does not arise.  The relationship between the parties is governed by the terms of this instrument and it does not matter whether there is an agency or there is not, but if it does, 13.6 says – and your Honours have referred to it:

Except as otherwise specifically provided in this Agreement, nothing . . . shall constitute the parties as partners or any party as the agent for or legal representative of another -

There are three provisions which are adverted to by those words “Except as otherwise specifically provided”.  I have referred to two of them; 4.4(d), 6.4 and 10.11, which I was just about to ask your Honours to look at on page 87, and it deals with what happens if there is a mining operation and minerals are received and there is an authority created to sell the separate minerals.  So that is a third instance of an agency.  But except for those three instances, there is no agency. 

But quite apart from that, the nature of this agreement and the relationship of the parties as appears from the agreement does not require that my learned friend’s client should be entitled to look at every document.  What this agreement is primarily dealing with is the exploration phase until there is a new joint venture agreement and there it is my client that has an unfettered and sole discretion to determine how much it spends for exploration and whether it will make a decision to mine.

GAGELER J:   Is there any reporting requirement that is express or implied in the agreement?

MR MYERS:   Yes, there is the reporting requirement that I have adverted to, your Honour, in 4.4:

(b)provide quarterly progress reports –

and (e) – that is on page 82, I am sorry, of the application book, (b) and:

(e)inform Alliance immediately of any material discovery –

Then until the new agreement is prepared to deal with the mining phase, clause 11 is perhaps relevant - that is on page 88 - and it provides for a management committee to be established and the management committee, one would infer, would be entitled to information.  But that is not a matter that this Court is concerned with for the purpose of this special leave application.

KEANE J:   Mr Myers, your opponent’s point seems to be that Heathgate is conducting the business of his client.  Your point is simply that under the terms of the agreement it is conducting its own business.

MR MYERS:   Well, in substance up to the mine decision date and then after the mine decision date will be whatever agreement the parties can determine to replace this, and if they do not, then this agreement will continue to govern but with the difference that there is a committee and that seems to flow naturally from the fact that they are both responsible, pro rata, according to their interests, for the expenditure.  This is a contractual joint venture, the terms and extent of which are determined by the contract.

We do not want to say anything about the implied term.  Our friends did not say anything about it below and they have not said anything about it today.  We rely on the written submissions.  This case, we say, raises no issue of general importance.  It is primarily – perhaps exclusively concerned with the construction of a private document.  Furthermore, it is a document that is sui generis.  There has been some attempt to say that this is very important for joint venture arrangements.  It is a document of a different kind.  It is certainly a joint venture in the mining industry but it is a very preliminary document dealing with particular circumstances that the parties deal with at the exploration phase.

The relief that is sought – we want to draw attention to that – if I could ask your Honours to look at pages 117 to 118 of the application book.  We deal with some questions about the declarations that are sought under two headings.  The declarations themselves are at page 64 and I want to say a few words about paragraphs 13, 14 and 16.  The declaration sought in paragraph 13 was never sought below.  There has been no evidence or argument below to support any such declaration.

The declaration in paragraph 14 is different from the declaration that was sought below, which one can see in a number of places that if one looks at paragraph 112 of the book, paragraph 14, the declaration that was sought below is there set out and it has the qualification, except for documents or records created or obtained solely for the benefit of the first respondent or second respondent of such delegate.  So that qualification has been removed, it is significant.  Paragraph 16 really gives the game away in a sense here.  It provides that:

The matter be remitted to the primary judge for the purpose of directions as to the manner in which the Appellant is to have access to the documents and records.

Well, one asks rhetorically, what documents and records?  There has been no attempt to identify what it is any writs will apply to.  This is very much

like the Bass Case in this Court where a declaration is sought which is extremely broad, more or less of an advisory character, but the working out of the declaration will require another trial.  There has never been any attempt to identify in these proceedings exactly what documents we are talking about.  My learned friend did not attempt to do that when he was on his feet.  He began by saying “the documents”.  What are the documents?  If your Honours please, they are the submissions on behalf of the first respondent. 

FRENCH CJ:   Thank you.  Yes, Mr Sheahan.

MR SHEAHAN:   Your Honours, the first two questions that have been identified as worthy of special appeal suffer this problem.  The applicant’s focus is and has been throughout on the incidents of a joint venture in the mining industry and on the role of a manager to a joint venturer or a joint venture, as if those were terms of legal art.  They are plainly not.  They are terms of commerce.  They have a meaning dependent simply on the particular words and deeds of the parties to the transaction at the time their relationship was formed.  In short, the application does not engage with the problem that was identified by this Court in the John Alexander’s Clubs Case 241 CLR 1 which is in the Quasar bundle at page 74, at paragraph 44:

The Court of Appeal, however, correctly said –

referring to the judgment below –

“Describing the arrangements as a ‘joint venture’ does not however have any particular legal consequences.  The rights and obligations of the parties remain to be determined by examination of the detail of what they have agreed and done.”

This makes it difficult to understand why references to “joint venture” were so frequent in the Court of Appeal’s statement of the nature of the case –

and the applicant’s case suffers the same deficiency.  The third special leave question as identified by the applicants is of a different character and that is the question as to whether the International Harvester description of an agent is definitive and limits the concept in some way.  The problem with that ground ‑ ‑ ‑

GAGELER J:   Well, a problem with that ground is that it is said on behalf of the applicant that it clearly does not matter to the argument.

MR SHEAHAN:   It may not matter to the argument as they have put it orally today.  That is so.  One of the things that has changed today is that our learned friends have shifted their ground from relying upon other definitions of agency to this notion of representation.  That is very important, we think, because it goes in a descriptive not a functional way to the heart of the concept of agency.  One sees that in the judgment of Sir Owen Dixon in the Colonial Mutual Life Case which is in our bundle of authorities.

It might be useful to go to that very quickly.  It is in our folder behind tab 2.  This was a case dealing with the liability of the insurance company in slander for the conduct of its agent.  The agent had no authority to make a contract of insurance but it was authorised to go and encourage people to put proposals in. 

At page 48 at the bottom over the top at page 50 Sir Owen Dixon distinguishes the position of a contractor who does not act as a representative – and that word is used three times in these passages – from the case where a contractor does act as a representative, even though with no authority to contract as such in a narrow International Harvester sense.  Then importantly Sir Owen Dixon comes back to this subject at the top of page 50.  He emphasises the difficulties of the subject arising from the many uses in which the expression is used, and goes on in the last sentence to say:

Unfortunately, too, the expressions “for”, “on behalf of”, “for the benefit of” and even “authorize” are often used in relation to services which, although done for the advantage of a person who requests them, involve no representation.

The fundamental difficulty for the applicant, even on their new formulation of their case, is that that wider definition is not engaged here.  Nothing that they can point to goes beyond identifying the role of the manager as someone who does things for the advantage of the joint venturers as opposed to doing so as the representative of the joint venturers. 

To take the example that was emphasised, obtaining geological assay information about the resource, that is not a representative function.  The manager going out and drilling holes and doing assays is not standing between – is not representing the principal, so called, and someone else.

FRENCH CJ:   Well, like Mr Myers you say this is all about the terms of the JVA?

MR SHEAHAN:   We do, and we say the question of the characterisation of the relationships of these parties and their duties, inter se, are defined perfectly adequately by this contract.  Can I say this?  These parties, by the terms of their contract, made it perfectly plain that they knew how make provision for information that will be generated by the joint venture.  They do so in adequate terms in clause 13.1 which deals with obligations of confidentiality. 

By virtue of the reporting mechanisms that Mr Myers took the Court to joint venturers are going to get information about this joint venture and feasibility studies and programs and budgets and there is an express, very wide provision as to confidentiality.  There is no equivalent provision giving a right to information or a duty on a manager to provide information in the broad terms that are engaged there. 

Now, there are also here, as my learned friend, Mr Myers, rightly emphasised, express exceptional representative roles for the manager - express, exceptional.  I say that because clause 13.6 begins with the words “Except as otherwise specifically provided in this Agreement”.  There is other provision in the agreement, but the most notable is 10.11 which provides that the manager will become the marketing agent, a vital function if this mine goes ahead and becomes productive.

Now, can I say something briefly about the relevance of the disclaimer?  It is an express negation of consent to there being a relationship of principal and agent.  Now, is it determinative in all cases?  No, but it is an express negation of their intention to be principal and agent.  What follows is that if you are going to find agency nevertheless you would have to be driven to that conclusion by the necessary incidents of what the parties have otherwise provided for. 

To give an example, if clause 13.6 had not commenced with the words “Except as otherwise specifically provided” you would read clause 10.11, which provides for an agency is respect of marketing, and you would say they cannot stand together.  The more particular clause obviously makes provision for an agency relationship.  It prevails.  If generally the document provided for a power on the part of the manager to commit the credit of the joint venturers, then clause 13.6 would have no operation at all so far as the manager was concerned. 

The second thing about the disclaimer - we make the point in our submissions in paragraph 27, amongst other things, that the language used in clause 13.6 in identifying those who are affected by the clause is different from the language used in many other provisions of the agreement.  It talks about…..whereas elsewhere in the agreement in numerous provisions there is reference to the joint venturers or parties to the joint venture.  This language is wider, advisedly.

The third point is that the risks that our learned friend identified as being the sort of risks likely to be front of mind in composing a clause like this, partnership, credit risk and so on, are just as great as between the joint venturers and the manager, that is, vertically, as they are horizontally. 

Now, I wanted to say something briefly about whether this is a suitable vehicle for examining any question that might be thought to be raised by it.  The Full Court observes, accurately, that the proprietary claim that is now the subject of this application received little attention from the applicant at trial.  It seems in truth to have been added as an afterthought because the allegation of agency was made in the pleading only by leave granted at the trial.  The trial was concerned primarily with an application for preliminary discovery that failed. 

Critically, for present purposes, despite a number of different attempts in the course of this proceeding today the applicant has not succeeded, in our submission, in formulating relief that a court would actually grant.  Although the emphasis is on declaratory relief, the point of that relief is to create a springboard for substantive remedy in cognate terms.  The substantive remedy, if one has to categorise it, would be a final mandatory injunction for access to documents. 

Now, in its original form we can see it in the documents in Quasar’s bundle at pages 1 and 2.  Paragraph 3.1 has the declaration that is sought and 3.2 has the substantive order predicated on the declaration.  The obvious problem with the substantive relief is that it leaves for determination in contempt proceedings the underlying substantive question whether a document is a document that the respondent was obliged to produce because that question is not resolved by the declaration.  That is contrary to principle.

In the current version of the relief sought the problem is partly concealed and partly accentuated.  It is concealed in the respect that Mr Myers took the Court to at page 64 of the application book.  It is concealed by omitting the substantive relief and substituting paragraph 16.  So what has happened is that a claim for a final mandatory injunction to indicate proprietary rights has been dressed up as if it were a case management question. 

What has happened in this case is that what started in truth as an application for preliminary discovery, something purely adjectival, morphed into a substantive claim to vindicate proprietary rights and is now morphing back into something adjectival.  I said it accentuates a problem and that is because in the form that the relief took in the Full Court there was a proviso, rightly, that accepted - I think my learned friend, Mr Myers, took your Honours to it - documents brought into existence by the manager for the purposes of its own management.  That proviso has disappeared. 

There has been no finding that the second respondent is the delegate of Quasar.  You will see the word “delegate” in the release order, paragraph 14 at page 64 of the bundle.  The reason there has been no finding that the second respondent was Quasar’s delegate was that at trial counsel for the applicant invited the court not to deal with questions.  One sees that in the excerpts from the transcript in Quasar’s folder at pages 12 to 13.

There may have been good reason in then counsel for the applicant’s…..proceeding in that way.  The evidence showed that Heathgate, my client, and Mr Myers’ client, dealt with each other on the basis of express written terms which provided that Heathgate provided services as an independent contractor and not as agent.

FRENCH CJ:   You will under common control, were you not?

MR SHEAHAN:   Common control.

FRENCH CJ:   There is one common director, I think.

MR SHEAHAN:   I think there is a common director, yes, but they had a contract.  There is reference to that in our folder at page 103.  The proposed declaration simply glosses over that entire question as if it has been asked and it has not.  It also glosses over the qualification that I mentioned earlier as to documents that are properly documents of ours, even if we are an agent. 

The result is that the declaration that is sought is nothing more than an advisory opinion.  If it is found that you are a delegate…..Heathgate or a delegate, if it is found that you have documents created in the course of performing a delegation and if it is found that those documents are not personal to you, if all of that, then the applicant has a right to access those documents.  That is not how litigation is meant to proceed.  Those are our submissions, your Honour.

FRENCH CJ:   Thank you, Mr Sheahan.  Yes, Mr Archibald.

MR ARCHIBALD:   The finding of the Full Court that Heathgate was the delegate of Quasar is in paragraph 11 of the reasons at page 40 of the application book, lines 30 and 31.  The formulation of the orders sought ought to have retained the qualification which would exclude documents or records created or obtained solely for the benefit of Quasar and Heathgate as delegate.  That was the form sought in the Full Court.  It appears at pages 30 to 31 of the application book in paragraph 1 and that should be reinstated.  I am not sure why it disappeared.

The relief sought is not by way of advisory opinion.  The issue has crystallised.  We have sought documents and we have been refused them.  We cannot, of course, identify the documents because we are deprived of knowledge of exactly what it is that they consist of.  So none of the complaints in relation to the form of relief are reasons, in our submission, for the Court denying special leave. 

In relation to the other arguments, a theme, in our submission, was that in the earn‑in and free‑carry period Quasar and/or Heathgate were carrying on their own business.  In substance, they could not have been, in our submission.  What they were doing was expending moneys on exploration as the means of them earning‑in and as a means of furthering exploration when we had the free‑carry right. 

Nothing in the earn‑in concept or the free‑carry in any way alters the circumstance that the functions of exploration were being performed by Quasar and/or Heathgate as manager.  The earn‑in and free‑carry, of course, is as joint venturer and when the exploration activity was occurring we, Alliance, were the holder of the tenement.  They must have been doing work on the exploration on our behalf on our tenement.  They were incapable, lawfully, of doing anything other than on our behalf during that period.

When the decision to mine was made then there were under the joint venture agreements to be some further steps to be taken.  Some of them have been referred to.  There was to be, as Mr Myers observed, under clause 10.2 at page 85 a new joint venture agreement but what my friend did not refer to was that until agreement emerged the existing joint venture agreement continued and it continues to this day.

It is further the case that under clause 11 at page 88 under 11.2 a management committee is established and it, under 11.2(c), has a veto right over anything and everything that the manager seeks to do because the manager needs to submit a program and budget to the management committee for approval and if approval is refused then there is nothing the manager can do.  The manager needs the approval, be it absolute, conditional or otherwise, in order to carry out its functions.

Insofar as reference was made to the John Alexander Case and notions of joint venture here the parties by their own provisions in clause 4 describe themselves as entering into a contractual joint venture.  The fact that it is the product of contract does not alter the relationship that emerges between the parties and their manager and this venture has the hallmarks of the joint venture.  There are two:  one is several liability not joint and, two, sharing in product, not sharing the profits.  Sharing in product is evident at clause 10.11.  After the decision to mine was taken one was immediately

into the mining phase where any product was for the account of the joint venturers that must answer the description, in our submission, of joint venture.  If the Court pleases.

FRENCH CJ:   Thank you, Mr Archibald.

This application for special leave arises out of the dismissal by a judge of the Federal Court of the applicant’s claim for a declaration that it has a proprietary right to access and retain copies of documents, including records, maintained by the respondents, the first an assignee of the second, acting successively as manager of the uranium mining joint venture to which the applicant is a party.

The primary judge, in dismissing the claim for a declaration, rejected a contention that all documents brought into existence by the first respondent as manager of the joint venture could be accessed by the applicant because the first respondent was its agent.  His Honour referred to clause 13.6 of the joint venture agreement which expressly provided, inter alia, that the relationship between the parties was not one of principal and agent.

The question whether the relationship between the joint venturers and the respondents was one of principal and agent in a sense sufficient to support the claim for declaratory relief was a question upon which the appeal to the Full Court turned.  The Full Court concluded that the relationship was not one of principal and agent and ultimately relied upon the express disclaimer in clause 13.6 and a number of other provisions of the joint venture agreement.  The application for special leave challenges that finding of the Full Court.

In our opinion, having regard to the provisions of the joint venture agreement to which the Full Court referred, and to which this Court was taken, the prospects of ultimate success are not sufficient to warrant the grant of special leave.  Special leave will be refused with costs.

The Court will now adjourn briefly to reconstitute.

AT 11.58 AM THE MATTER WAS CONCLUDED