Anaconda Nickel Ltd v Edensor Nominees Pty Ltd - [2004] VSCA 167

SUPREME COURT OF VICTORIA

COURT OF APPEAL

No. 4381 of 2001

ANACONDA NICKEL LIMITED
	Appellant
v.
EDENSOR NOMINEES PTY. LTD. and JOSEPH ISAAC GUTNICK
	Respondents

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JUDGES:	BUCHANAN and EAMES, JJ.A. and Coldrey, A.J.A.
WHERE HELD:	MELBOURNE
DATE OF HEARING:	15-17 March 2004
DATE OF JUDGMENT:	21 September 2004
MEDIUM NEUTRAL CITATION:	[2004] VSCA 167

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PROMISSORY ESTOPPEL – Contract for the sale of shares – Representation made to vary the terms of the original contract – Repudiation of variation – Whether trial judge erred in relation to witness credibility – Whether unmeritorious conduct will disentitle a plaintiff to equitable relief – Unconscionability as an underlying principle of estoppel – Misleading and deceptive conduct contrary to s.52 of the Trade Practices Act 1974 (Cth) – Relief granted by trial judge not unjustified or disproportionate.

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APPEARANCES:	Counsel	Solicitors
For the Appellant	Mr A.C. Archibald, Q.C. Mr I.B. Stewart	Holding Redlich
For the Respondents	Mr J.H. Karkar, Q.C. Mr I.D. Martindale Mr M.S. Osborne	Schetzer Brott & Appel

BUCHANAN, J.A.:

The first-named respondent (“Edensor”) is a company controlled by the second-named respondent (“Gutnick”) and used by him to hold shares in mining companies. Edensor held 6,312,374 shares in Centaur Mining & Exploration Ltd (“Centaur”), a company engaged in gold, cobalt and nickel mining. The principal nickel asset of Centaur was a laterite nickel and cobalt mine and processing mine at Cawse, which is near Kalgoorlie.

The appellant (“Anaconda”) held substantial laterite nickel mining interests in Western Australia in three areas called provinces. The chief objective of Anaconda was to be the dominant nickel miner in the three provinces. Cawse was in one of the provinces. In November 1999, Anaconda and Centaur entered into an agreement to conduct a feasibility study of an expansion of nickel production at Cawse. The agreement contemplated that Anaconda and Centaur would enter into a joint venture to develop the Cawse project.

On 4 December 1997, Centaur issued bonds in the United States securing a loan of US$225 million in order to construct a plant at Cawse. The obligations of Centaur to the bondholders were secured by a debenture over all Centaur’s assets. Centaur entered into a number of arrangements with its banker, the Chase Manhattan Bank (“Chase”), to hedge the price of gold mined and sold by Centaur. By 2000, Centaur was in a certain amount of financial difficulty. It had underestimated the cost of the Cawse nickel project by some US $150 million. Its indebtedness to Chase was increasing, due to the fact that it was not producing sufficient gold to fulfil contracts of sale it had made and to movements in the value of the Australian currency.

By August 2000, Centaur’s financial difficulties had become marked. At a meeting on 3 August 2000 Gutnick raised with John Andrew Forrest, the chief executive officer of Anaconda, the possible sale by Edensor of its shares in Centaur to Anaconda. On 23 August 2000, Gutnick and Forrest reached agreement and executed a share sale deed that day.

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2004] VSCA 167
Decision Date: 21 September 2004

CaseChat Overview and Summary

The case of Anaconda Nickel Ltd v Edensor Nominees Pty Ltd involved a dispute over the sale of shares in a mining company. Anaconda Nickel Ltd sought to enforce a variation of a contract for the sale of shares, while Edensor Nominees Pty Ltd contested the variation and the subsequent claim for equity relief. The case was heard by the Full Court of the Federal Court of Australia.

The court was tasked with determining several key legal issues, including whether the trial judge had erred in assessing the credibility of the witnesses. Additionally, the court had to consider whether the conduct of Anaconda Nickel Ltd was unmeritorious to such an extent that it would disentitle the company to equitable relief. Another significant issue was whether the doctrine of promissory estoppel could apply in the context of the sale of shares, and if so, under what circumstances. The court also needed to assess whether the conduct of Anaconda Nickel Ltd amounted to misleading or deceptive conduct under section 52 of the Trade Practices Act 1974 (Cth). Finally, the court examined whether the relief granted by the trial judge was justified and proportionate.

The court found that the trial judge's assessment of witness credibility was not erroneous and that Anaconda Nickel Ltd's conduct did not preclude it from equitable relief. The court clarified that promissory estoppel could indeed apply to variations in share sale contracts and that unconscionability was a key principle underlying the doctrine. The court concluded that Anaconda Nickel Ltd's actions did not amount to misleading or deceptive conduct. Regarding the relief granted, the court held that it was neither unjustified nor disproportionate.

The court ultimately upheld the relief granted by the trial judge, affirming that the equitable principles applied were appropriate in the circumstances of the case.

Orders