Apache Finance Pty Ltd v Quadrant Energy Pty Ltd [No 3] - [2025] WASC 461

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION:   APACHE FINANCE PTY LTD -v- QUADRANT ENERGY PTY LTD [No 3] [2025] WASC 461
CORAM:   GETHING J
HEARD:   27 OCTOBER 2025
DELIVERED          :   5 NOVEMBER 2025
FILE NO/S:   CIV 2602 of 2017
BETWEEN:   APACHE FINANCE PTY LTD
First Plaintiff
APACHE INTERNATIONAL FINANCE II SARL
Second Plaintiff
APACHE RAVENSWORTH CORPORATION LDC
Third Plaintiff
APACHE UK LTD
Fourth Plaintiff
APACHE OVERSEAS LLC
Fifth Plaintiff
ONYX ACQUISITION CORPORATION LDC
Sixth Plaintiff
AND
QUADRANT ENERGY PTY LTD
First Defendant
QUADRANT ENERGY AUSTRALIA LTD
Second Defendant
QUADRANT ENERGY PTY LTD
First Plaintiff by Counterclaim
QUADRANT ENERGY AUSTRALIA LTD
Second Plaintiff by Counterclaim
AND
APACHE FINANCE PTY LTD
First Defendant by Counterclaim
APACHE INTERNATIONAL FINANCE II SARL
Second Defendant by Counterclaim
APACHE RAVENSWORTH CORPORATION LDC
Third Defendant by Counterclaim
APACHE UK LTD
Fourth Defendant by Counterclaim
APACHE OVERSEAS LLC
Fifth Defendant by Counterclaim
ONYX ACQUISITION CORPORATION LDC
Sixth Defendant by Counterclaim

Catchwords:

Practice and procedure - Pleadings - Whether leave required to withdraw an admission - Whether withdrawal of an admission should be struck out - Turns on own facts

Legislation:

Rules of the Supreme Court 1971 (WA) O 4 r 1A, r 1B, O 21 r 3

Result:

Application to strike out pleadings dismissed

Category: B

Representation:

Original Action

Counsel:

First Plaintiff	:	Mr B Luscombe
Second Plaintiff	:	Mr B Luscombe
Third Plaintiff	:	Mr B Luscombe
Fourth Plaintiff	:	Mr B Luscombe
Fifth Plaintiff	:	Mr B Luscombe
Sixth Plaintiff	:	Mr B Luscombe
First Defendant	:	Ms J K Taylor SC and Mr N L Pham
Second Defendant	:	Ms J K Taylor SC and Mr N L Pham

Solicitors:

First Plaintiff	:	Clyde & Co
Second Plaintiff	:	Clyde & Co
Third Plaintiff	:	Clyde & Co
Fourth Plaintiff	:	Clyde & Co
Fifth Plaintiff	:	Clyde & Co
Sixth Plaintiff	:	Clyde & Co
First Defendant	:	Herbert Smith Freehills Kramer
Second Defendant	:	Herbert Smith Freehills Kramer

Counterclaim

Counsel:

First Plaintiff by Counterclaim	:	Mr B Luscombe
Second Plaintiff by Counterclaim	:	Mr B Luscombe
First Defendant by Counterclaim	:	Ms J K Taylor SC and Mr N L Pham
Second Defendant by Counterclaim	:	Ms J K Taylor SC and Mr N L Pham
Third Defendant by Counterclaim	:	Ms J K Taylor SC and Mr N L Pham
Fourth Defendant by Counterclaim	:	Ms J K Taylor SC and Mr N L Pham
Fifth Defendant by Counterclaim	:	Ms J K Taylor SC and Mr N L Pham
Sixth Defendant by Counterclaim	:	Ms J K Taylor SC and Mr N L Pham

Solicitors:

First Plaintiff by Counterclaim	:	Clyde & Co
Second Plaintiff by Counterclaim	:	Clyde & Co
First Defendant by Counterclaim	:	Herbert Smith Freehills Kramer
Second Defendant by Counterclaim	:	Herbert Smith Freehills Kramer
Third Defendant by Counterclaim	:	Herbert Smith Freehills Kramer
Fourth Defendant by Counterclaim	:	Herbert Smith Freehills Kramer
Fifth Defendant by Counterclaim	:	Herbert Smith Freehills Kramer
Sixth Defendant by Counterclaim	:	Herbert Smith Freehills Kramer

Case(s) referred to in decision(s):

Apache Finance Pty Ltd v Quadrant Energy Pty Ltd [2018] WASC 68
Apache Finance Pty Ltd v Santos WA Asset Holdings Pty Ltd [No 2] [2019] WASC 101
Bernard Henricus Lamers as trustee for the Ben and Debra Lamers Family Trust v Arvind Pty Ltd [2018] WASC 347
Black Box Control Pty Ltd v TerraVision Pty Ltd [2016] WASCA 219
Chevron (TAPL) Pty Ltd v Pilbara Iron Company (Services) Pty Ltd [2021] WASCA 193
De Kauwe v Cohen [No 2] [2021] WASC 248
Donyette Pty Ltd v Toplodge Nominees Pty Ltd [2010] WASC 38
EC Dawson Investments Pty Ltd v Crystal Finance Pty Ltd [No 2] [2011] WASC 8
Electricity Generation Corporation trading as Verve Energy v Woodside Energy Ltd [2014] HCA 7; (2014) 251 CLR 640
Hutton v Meston [2004] WASCA 178
Lamers as trustee for The Ben and Debra Lamers Family Trust v Arvind Pty Ltd [2018] WASC 347
Mann v Bankwest - A division of Commonwealth Bank of Australia [2020] WASCA 35
Mirabela Nickel Ltd (in liquidation) (receivers and managers appointed) v Mining Standards International Pty Ltd [2025] WASCA 82
Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd [2015] HCA 37; (2015) 256 CLR 104
Recce Pharmaceuticals Ltd v Ian David Brown [2022] WASCA 66
Rural Bank (A Division of Bendigo and Adelaide Bank Limited (ACN 068 049 178) v Mammoth Investments Pty Ltd [2019] WASC 409
The PMI Group, Inc v QBE Holdings (AAP) Pty Limited [2016] NSWSC 673
Water Corporation v Cardno BSD Pty Ltd [2009] WASCA 212
Westgem Investments Pty Ltd in its own right as trustee for Hossean Pourzand and Jenny Maria Pourzand atf The Helen Trust v Commonwealth Bank of Australia Ltd [No 5] [2015] WASC 310

GETHING J:

Introduction

The plaintiffs in this action, (whom I will refer to as the Apache Parties), have applied for an order that paragraphs 19 and 21 (Contested Paragraphs) of the Defendants’ (whom I will refer to as the Santos Parties) Consolidated and Substituted Defence and Counterclaim (Consolidated Defence) filed 4 June 2025 be struck out (Pleadings Application). The Pleadings Application was heard on 27 October 2025.
The Apache Parties had applied for a stay of the action, which was also dealt with at the hearing on 27 October 2025. However, without opposition from either counsel, I adjourned the stay application to no earlier than 30 June 2026 with costs reserved. The intent is that at any time after 30 June 2026, counsel for the Apache Parties can inform the court that the Apache Parties wish to press their stay application. I will then list the action for a directions hearing at which the hearing of the stay application can be programmed. In the meantime, the intent is that the parties will progress with their pre-trial preparation.
In relation the Pleadings Application, counsel for the Apache Parties read and relied on two affidavits in support:
(a)Ernest van Buuren, a partner with the lawyers for the Apache Parties, affirmed 30 September 2025 (van Buuren Affidavit); and
(b)Amy Siegfried, the Managing Director of Tax at Apache Corporation, affirmed 30 September 2025 (Siegfreid Affidavit).
Counsel for the Santos Parties read and relied on an affidavit by Richard Heggart, a partner of the lawyers for the Santos Parties, affirmed 17 October 2025 (Heggart Affidavit).
The Apache Parties filed written submissions on 3 October 2025 (Apache Submissions). The Santos Parties filed written submissions on 17 October 2025 (Santos Submissions).
For the reasons which follow, I decline to strike out the Contested Paragraphs.

Background

The proceedings concern a sale and purchase agreement dated 9 April 2015 (SPA).[1] By the SPA, the first defendant in the Proceedings, then known as Viraciti Energy Pty Ltd, acquired (amongst other assets) all the shares in Apache Energy Limited who is the second defendant in the Proceedings. The first defendant and the second defendant subsequently came under the indirect ownership of Santos Limited. Viraciti Energy Pty Ltd was renamed Santos WA Asset Holdings Pty Ltd (with a short time in between being named Quadrant Energy Pty Ltd (Quadrant Energy)). The second defendant was renamed Santos WA Energy Limited (with a short time in between being named Quadrant Energy Australia Limited (QEAL)).
[1] A copy of which is Attachment RNH-1 to the Heggart Affidavit.
Pursuant to the SPA, the Apache Parties sold their Australian oil and gas extraction business, excluding certain assets which were sold separately to different purchasers. By these sales, the Apache Parties exited their involvement in the oil and gas industry in Australia. The base purchase price was just in excess of US$2 billion which, after adjustments, became in the order of US$2.5 billion.
The clause of the SPA in issue for present purposes is SPA s 9.16(a). It provides for the purchaser (now effectively the Santos Parties) to pay to the vendor (effectively the Apache Parties) certain moneys received from the Australian Taxation Office (ATO). This payment was over and above the base price. Specifically:[2]
9.16Franking Account Related Adjustments.
For the avoidance of doubt and notwithstanding anything to the contrary in this Agreement:
(a)Any refund of income Tax received by the head company of the AEL Consolidated Group or the Purchaser's Consolidated Group in respect of the income year ended 31 December 20 I 4 must be applied to the fullest extent against any franking deficit tax liability arising after the Economic Transfer Date as a result of the payment (if any) of fully franked dividends by the AEL Consolidated Group between 30 September 2014 and the Closing Time. To the extent there is any surplus of such refund remaining after fully satisfying the said franking deficit tax liability, Purchaser will promptly pay an amount equal to that surplus to the Vendors (in proportion to their respective entitlement to the Purchase Price); …
[2] Heggart Affidavit, page 106.
It is also necessary to refer to the definition of 'Taxes' in SPA cl 1.1, which is in the following terms: [3]
'Taxes' means taxes of any kind; royalties; levies or other like assessments; and customs, duties (other than Duty), imposts, charges or fees, deductions, withholdings, compulsory loan, in each case, assessed, levied, imposed by or payable to or collected by any Governmental Authority, including:
(a)income, goods and services, gross receipts, ad valorem, value added, excise, real or personal property, asset, GST, sales, use, license, payroll, transaction, capital, net worth, franchise, withholding, employment, social security, workers' compensation, utility, severance, production, unemployment compensation, occupation, premium, windfall profits, PRRT, tax related to the franking of dividends, and transfer and gains taxes;
(b)fees or penalties payable to a Governmental Authority in respect of insurance premiums, other governmental taxes or required instalments thereof; and
(c)any interest, penalties, or additions to tax attributable to any such Tax.
[3] Heggart Affidavit, page 37.
The Apache Parties claim that the Santos Parties received over $80 million from the ATO which they are liable to pay to the Apache Parties pursuant to SPA s 9.16(a). This claim is part of a wider series of claims and counterclaims which it is not necessary for me to summarise for the purposes of determining the Pleadings Application.
Running in parallel to these proceedings are a series of taxation objections lodged by the second defendant (Santos WA Energy Limited). These are described in some detail in the Siegfreid Affidavit and the Heggart Affidavit. The objections relate to the 2014 and 2015 taxation years, and arise after the ATO took issue with the tax returns filed by the second defendant for those years. For present purposes, it is sufficient to note Ms Siegfreid believes that the Santos Parties' claim for damages for alleged breach of the SPA is not able to be quantified until these objections have been dealt with.[4] This is because the SPA contains a tax indemnity granted against the Apache Parties, in favour of the Santos Parties, in relation to tax or duty liabilities not provided for in the accounts upon which the sale price was based.
[4] Siegfried Affidavit, par 62.
The objections are in effect being pursued by the Santos Parties at the direction of the Apache Parties.[5] This followed a determination of a trial of a separate issue in the proceedings by Justice Chaney in 2018.[6] The effect of this decision was that the SPA required the defendants (then named Quadrant Energy and QEAL) to take 'disputing action' at the direction of the Apache Parties in relation to the positions taken by the ATO. Mr Heggart informs the court that the resolution of the taxation issues, including any appeals, may take up to a further three years.[7]
[5] Heggart Affidavit, par 35.
[6] Apache Finance Pty Ltd v Quadrant Energy Pty Ltd [2018] WASC 68 (Apache 2018). See also: Heggart Affidavit, par 28.
[7] Heggart Affidavit, par 46.
There was a second significant interlocutory decision in 2019. This was a decision by Justice Smith to decline an application by the Apache Parties for a second separate trial of issues.[8] However, on 9 August 2019, her Honour made orders, by consent, staying the proceedings until 30 September 2020 or further order. The stay was extended by further consent orders until 25 October 2024. The purpose of the stay was to give the parties an opportunity to settle the disputes by negotiation.[9] It was extended in the hope that the ATO would have completed its reviews.[10] On 30 October 2024 orders were made, by consent, setting out a timetable for the filing of amended pleadings.
[8] Apache Finance Pty Ltd v Santos WA Asset Holdings Pty Ltd [No 2] [2019] WASC 101 (Apache 2019).
[9] Heggart Affidavit, par 10, attachment RNH-2.
[10] Heggart Affidavit, pars 11 to 14, attachments RNH-3 and RNH-4.
These proceedings now comprise three separate actions:
(a)CIV 2602 of 2017, commenced in September 2017 by the Apache Parties;
(b)CIV 2796 of 2018, commenced in October 2018 by the Santos Parties, and consolidated with CIV 2602 of 2017 pursuant to Orders of Justice Smith on 6 December 2018; and
(c)CIV 1225 of 2025, commenced in March 2025 by the Santos Parties, consolidated with CIV 2602 of 2017 (Consolidated Action) pursuant to orders which I made on 8 May 2025 (May 2025 Orders).
The May 2025 Orders also resolved certain third party proceedings and another counterclaim, and adjusted the parties to the Consolidated Action. The May 2025 Orders also provided for the parties to file substituted and consolidated pleadings in the Consolidated Action.
Pursuant to the May 2025 Orders, on 16 May 2025 the Apache Parties filed a Substituted Statement of Claim filed 16 May 2025 (Consolidated Claim). The Santos Parties also filed an amended writ of summons dated 15 July 2025, with the amendment taking effect from 4 March 2025.[11]
[11] Pursuant to paragraph 5 of the orders made on 4 August 2025.
The Consolidated Defence containing the Contested Paragraphs was filed on 4 June 2025.

Pleadings

As mentioned, the Contested Paragraphs are paragraphs 19 and 21 of the Consolidated Defence. The pleadings to which these paragraphs respond are paragraphs 18 to 26 of the Consolidated Claim:
18.On 17 August 2016, the second defendant received a credit to its running balance account with the Australian Taxation Office (RBA) in respect of the 2014 Tax Year in the amount of A$80,463,566.00 (Tax Refund).
19.The credit of the Tax Refund to the second defendant's RBA constituted a 'refund of income Tax', within the meaning of section 9.16(a) of the SPA, in the amount of A$80,463,566.00 that the second defendant 'received' within the meaning of section 9.16(a) of the SPA.
20On the following dates, the second defendant received a further two credits to its RBA in the following amounts in respect of the 2014 Tax Year:
(a)on 21 October 2016, A$2,432,217.55;
(b)on 25 October 2016, A$3,869.29, (together the Interest).
21.The credit of the Interest to the second defendant's RBA constituted a 'refund of income Tax', within the meaning of section 9.16(a) of the SPA, in the total amount of A$2,436,086.84 that the second defendant 'received' within the meaning of section 9.16(a) of the SPA.
22.There is not, and has not been, any Relevant Franking Deficit Liability.
Breach of contract
…
24.Further or alternatively, pursuant to Section 9.16(a) of the SPA (referred to in paragraph 10(h) above), the defendants, alternatively one or other of them, was required to pay to the plaintiffs, in proportion to their respective entitlement to the Purchase Price under the SPA:
(a)promptly upon receipt from the Australian Taxation Office of the Tax Refund, an amount equal to the surplus of the Tax Refund after first applying the Tax Refund to the satisfaction of any Relevant Franking Deficit Liability; and
(b)promptly upon receipt from the Australian Taxation Office, an amount equal to the surplus of the Interest after first applying the Interest amount to the satisfaction of any Relevant Franking Deficit Liability remaining at the time the Interest was so received.
…
26.Further or alternatively, in the premises of paragraph 22 above and in breach of Section 9.16(a) of the SPA, the defendants, alternatively one or the other of them, have failed to pay promptly to the plaintiffs, in proportion to the plaintiffs' respective entitlement under the SPA to the Purchase Price or at all, an amount equal to the Tax Refund and the Interest.
Paragraphs 19 and 21 of the Consolidated Defence, then provide, again in context:
18.As to paragraph 18 of the SoC, the defendants:
(a)admit the paragraph; and
(b)refer to the matters pleaded in paragraphs 62 to 73 below.
19.As to paragraph 19 of the SoC, the defendants:
(a)deny the allegations in the paragraph;
(b)say that:
(i)for the purposes of the SPA (including Section 9.16(a)), 'Taxes' means taxes of any kind; royalties; levies or other like assessments; and customs, duties (other than 'Duty'), imposts, charges or fees, deductions, withholdings, compulsory loan, in each case, assessed, levied, imposed by or payable to or collected by any 'Governmental Authority' (Section 1.1 [definition of 'Taxes']); and
(ii)'pay-as-you-go' (PAYG) instalments paid to the ATO in respect of estimated and anticipated income were not 'Taxes' as defined in the SPA;
(c)say that credits applied by the Australian Taxation Office (ATO) to the second defendant's running balance account with the ATO (RBA) as a result of a difference between:
(i)the amount of the PAYG instalment payments made by the second defendant for an income year; and
(ii)the second defendant's liability for income tax for that income year, were not a 'refund of income Tax' received by the second defendant within the meaning of Section 9.16(a) of the SPA.
20The defendants admit paragraph 20 of the SoC.
21 As to paragraph 21 of the SoC, the defendants repeat paragraph 19 above and deny the allegations in the paragraph.
22.The defendants admit paragraph 22 of the SoC.
D. ALLEGED BREACH OF CONTRACT
…
24.The defendants do not admit the allegations in paragraph 24 of the SoC.
…
26.The defendants deny the allegations in paragraph 26 of the SoC.
The version of the statement of claim which immediately preceded the Consolidated Claim was the Further Amended Statement of Claim filed 30 October 2018 (FASOC). Paragraphs 20, 20A, 21, 21AA are in substantively the same terms as paragraphs 18, 19, 20 and 21 of the Consolidated Claim.
The version of the defence which preceded the Consolidated Defence was the Fourth Further Amended Defence and Counterclaim filed 4 March 2025 (Fourth Defence). Paragraph 20A of the FASOC (corresponding to paragraph 19 of the Consolidated Claim) was admitted in paragraph 20A of the Fourth Defence. Paragraph 21AA of the FASOC (corresponding to paragraph 21 of the Consolidated Claim) was admitted in paragraph 21AA of the Fourth Defence. It is the withdrawal of these admissions which the Apache Parties now take issue with.

Construction issues

The issue raised by the Santos Parties in the Contested Paragraphs is one of the proper construction of SPA s 9.16(a).
The position of the Apache Parties is that the interpretation of SPA s 9.16(a) which is advanced in Consolidated Claim paragraph 19 is clear on the face of the words in s 9.16(a): the credit of the tax refund to the second defendant's RBA constituted a 'refund of income Tax' within the meaning of s 9.16(a) which the second defendant 'received' within the meaning of s 9.16(a). Likewise, in paragraph 21: the credit of interest to the second defendant's RBA constituted a 'refund of income Tax' within the meaning of s 9.16(a) which the second defendant 'received' within the meaning of s 9.16(a).

The construction advanced by the Santos Parties is that, on the proper construction of the SPA, the credits applied to the second defendants running balance account were not a 'refund of income Tax' that was 'received' by the second defendant for the purposes of SPA s 9.16(a).
Counsel for the Santos Parties informs me that an argument of this kind was considered and accepted by Justice Ball in The PMI Group, Inc v QBE Holdings (AAP) Pty Limited.[12] It is instructive to consider this case in some detail.
[12] The PMI Group, Inc v QBE Holdings (AAP) Pty Limited [2016] NSWSC 673 (PMI Group).
The facts of PMIGroup were that by a Share Sale Agreement dated 14 August 2008 (SSA) between the second plaintiff, PMI Mortgage Insurance Co (PMI), and the defendant, QBE Holdings (AAP) Pty Limited (QBE), acquired from PMI all of the shares in a company then known as PMI Mortgage Insurance Australia (Holdings) Pty Limited (PMI Holdings) for just under US$1 billion. PMI Holdings through a subsidiary known as PMI Mortgage Insurance Limited (PMI Mortgage) and a related company known as Permanent LMI Pty Limited, carried on in Australia and New Zealand as a mortgage insurance business. PMI and the companies through which it carried on business are together referred to in the SSA as 'the Consolidated Companies'. PMI Mortgage had both Australian and New Zealand operations. The Australian operations comprised the bulk of the operations of the Consolidated Companies. The trial judge, Justice Ball, referred to the relevant plaintiff companies as PMI Australia.
Pursuant to SSA cl 16.19, QBE was required to pay an amount 'in addition to' the purchase price where it received a credit, rebate or refund in respect of 'Tax' (as defined in the SSA) that had either been paid relevantly to the ATO prior to 30 June 2008 or had been provided for as at that date in the 'Unaudited Financial Statements' for the six month period ending 30 June 2008 which were annexed to the SSA.
PMI Holdings received a refund from the ATO in the amount of just over A$22 million, which was more or less the total of two PAYG instalments paid on 21 April 2008 and 21 July 2008. The issue in dispute was whether QBE had to pay PMI an amount equal to the refund pursuant to SSA cl 16.19. Justice Ball held that QBE was not liable to pay PMI any amount under this clause and dismissed the action with costs.[13] It is worthwhile noting the finding of his Honour that between 30 June 2008 and the date of completion PMI Australia suffered substantial losses. Those losses were not anticipated at the time of sale and arose largely from events connected to the global financial crisis.[14]
[13] PMI Group [60] (Ball J).
[14] PMI Group [31].
It is instructive for present purposes to quote both SSA s 16.19 and the definition of 'Tax':[15]
[15] PMI Group [10] - [11].
Tax Relief
The Purchaser must pay to the Vendor an amount equal to any credit, refund, rebate, reimbursement or other form of relief allowed by or received from a Taxation Authority in respect of:
(a)any Tax or Duty paid by the Company or the Company Subsidiary before the Effective Date or provided for in the Unaudited Financial Statements except to the extent that the credit, refund, rebate, reimbursement or other form of relief is already provided for (to the extent such provision exists); or
(b)any Tax or Duty paid by the Company or the Company Subsidiary after Completion to the extent the Purchaser has received an amount under a Tax Warranty for such Tax or Duty, in which case, account must be taken of the amount by which the Purchaser was subject to Tax or Duty in respect of the amount received under a Tax Warranty.
Any amount paid by the Purchaser to the Vendor under this clause 16.19 will be in addition to and an increase in the Purchase Price.
…
Tax:
(a)means a tax, levy, impost, fee, deduction, compulsory loan, charge, withholding or duty of any nature, including, without limitation, any Income Tax, value added, consumption or goods and services tax (including GST), gross receipts, franchise, withholding, unemployment insurance, social security, sales, use, excise, real and personal property, municipal, payroll or workers' compensation tax, or any liability for any of the foregoing (including all fines, additional tax, interest or penalties) which is assessed, levied, imposed or collected by a Governmental Entity under the Tax Act or any other statute, ordinance or law, in Australia or elsewhere;
(b)includes any Liability for the payment of any amounts of the kind described in paragraph (a) as a result of being a transferee or successor or a party to any agreement or any express or implied obligation to indemnify another person;
(c)excludes Duty.
The position advanced by PMI Australia reflects that of the Apache Parties in the present case. The refund received by PMI Australia in January 2009 was said to be a refund from a Taxation Authority 'in respect of' the PAYG instalment amounts paid in April and July 2008. The April instalment was paid before 30 June 2008. There was a provision in the accounts for the July instalment. Consequently, under SSA cl 16.19, QBE was required to pay PMI an amount equal to the amount of the refund plus interest (under another clause of the SSA).[16]
[16] PMI Group [25].
QBE's position was first that there are available interpretations of the clause or characterisation of the events that have happened which, if accepted, lead to the conclusion that SSA cl 16.19 does not apply. Second, QBE contended that one or more of those interpretations or characterisations should be preferred to the one advanced by PMI because the result for which PMI contends lacks commercial logic and is so at odds with the commercial purpose and object of the SSA that it could not have been intended by the parties.[17]
[17] PMI Group [27].
Ball J considered the second argument first. His Honour made the following observation about the effect of the construction contended for by PMI Australia:[18]
Leaving cl 16.19 to one side, two points may be made about that outcome. First, from the point of view of PMI, it obtained the benefit of the income earned during the period 1 January 2008 to 30 June 2008 but bore the burden of the tax referable to that income. Second, from the point of QBE, it (subject to a minor adjustment under the SSA arising from a diminution in the value of PMI Australia's investment portfolio) bore the full amount of the loss suffered during the period 1 July 2008 to 22 October 2008 but obtained the full amount of the tax benefit associated with that loss, partly as a result of having carried forward tax losses and partly as a result of a return of tax that had been paid provisionally by PMI Australia. QBE submits that those results are entirely consistent with the allocation of risk under the SSA. However, if it is required to pay PMI an amount equal to the tax refund received by PMI Australia, PMI will receive both the benefit of the profits earned between 1 January 2008 and 30 June 2008 and the tax referable to those profits. On the other hand, QBE will have to bear the loss incurred between 1 July 2008 and 22 October 2008 but will not receive any tax benefit in respect of that part of those losses which are set off against income earned prior to 30 June 2008. Moreover, it is only because PMI Australia suffered a loss which must be borne by QBE that PMI is entitled in effect to a refund of tax. QBE submits that that is not what the parties could have intended and that it produces a result which is perverse in the context of the bargain they struck.
[18] PMI Group [33].
His Honour did not accept the arguments of PMI Australia to the contrary, observing, among other things:[19]
It makes no commercial sense for PMI to receive more because and only because the value of what it sold declines between the date of sale and the date of settlement, which is the effect of cl 16.19 on the interpretation for which it contends.
…
[H]ere the parties have specifically chosen to base the purchase price on the value of the net tangible assets of the company being sold and to include a mechanism for adjusting that price in the event that a tax refund is received. On the interpretation contended for by PMI, that mechanism produces a windfall because PMI receives both the benefit of the profits earned and the tax payable on those profits. Moreover, it only receives that windfall because the value of what it sold went down. In my opinion, cl 16.19 should only be given that interpretation if the words used admit no other.
[19] PMI Group [35].
One of the interpretations advanced by QBE turned on what had been provided for in the 'Unaudited Financial Statements' (as referred to in cl 16.19). These had been prepared in accordance with USGAAP. Consequently, the parties adduced expert evidence on the application of USGAAP. As this issue turned on the particular wording of cl 16.19, I do not need to consider it further for present purposes. I observe that there is no issue in the present case (like the application of USGAAP) which would require the parties to adduce expert evidence.
Relevant for present purposes, Ball J ultimately concluded that a PAYG instalment was not a 'Tax' as defined, providing detailed reasons.[20] This is essentially the submission which the Santos Parties want to make in the present case. For present purposes, it is sufficient for me to find that the submission which the Santos Parties want to make is reasonably arguable.[21]
[20] PMI Group [44] - [53].
[21] Water Corporation v Cardno BSD Pty Ltd [2009] WASCA 212 [30] (judgment of the court) (Cardno).

Withdrawal of an admission

The Consolidated Defence was filed pursuant to the May 2025 Orders consolidating the actions. There is no specific power in the Rules of the Supreme Court 1971 (WA) (RSC) to the effect that a party may not amend a pleading to withdraw an admission without the leave of the court. In Donyette Pty Ltd v Toplodge Nominees Pty Ltd Corboy J left open the issue as to whether the power to amend in RSC O 21 r 3(1) without leave permits admissions to be withdrawn without leave.[22] In the present case, the amendment was pursuant to an order giving the Santos Parties general liberty to file a substituted and consolidated pleading. It could perhaps be inferred from the context of the order that the leave was limited to the amendments required to consolidate the actions, and did not extend to leave to make substantive changes. That would bring us back to the power in RSC O 21 r 3(1) to amend without leave (no trial dates having been fixed and no order requiring the parties to obtain leave to amend having been made). To add an exception to O 21 r 3(1) 'unless the amendment seeks to withdraw an admission' adds words to the rule that are not there. For this reason, in my view, RSC O 21 r 3(1) permits an amendment to withdraw an admission. The Pleadings Application can be viewed as an application by the Apache Parties pursuant to RSC O 21 r 3(3) to strike out the amendment. The Contested Paragraphs stand unless stuck out by the court pursuant to RSC O 20 r 19. This is the same approach as that adopted by Beech J in EC Dawson Investments Pty Ltd v Crystal Finance Pty Ltd [No 2].[23]
[22] Donyette Pty Ltd v Toplodge Nominees Pty Ltd [2010] WASC 388 [42] - [43] (Corboy J) (Donyette). As did Kenneth Martin J in Rural Bank (A Division of Bendigo and Adelaide Bank Limited (ACN 068 049 178) v Mammoth Investments Pty Ltd [2019] WASC 409 [42] (Rural Bank).
[23] EC Dawson Investments Pty Ltd v Crystal Finance Pty Ltd [No 2] [2011] WASC 8 [1], [4] (Beech J) (Dawson).
Where it is necessary for a party to seek leave to amend their pleading to withdraw an admission, the principles to be applied were summarised by the Court of Appeal in Cardno in the following terms:[24]
[24] Cardno [19]. Adopted in Rural Bank [32] (Kenneth Martin J); Bernard Henricus Lamers as trustee for the Ben and Debra Lamers Family Trust v Arvind Pty Ltd [2018] WASC 347 [14] - [15], [64] (Principal Registrar Strk).
1.The court has a broad discretion to permit or refuse an amendment which has the effect of withdrawing an admission; the ultimate question must always be what is in the interests of justice in the circumstances of the case.
2.But it is a serious matter to make an admission in a pleading and ordinarily a party should not be permitted to withdraw an admission in a pleading without good cause.
3.In determining whether or not to permit an amendment to withdraw an admission, relevant considerations will generally include:
(a)the circumstances in which the admission was made;
(b)the reason it is sought to be withdrawn;
(c)the significance of the admission;
(d)the time for which it has stood on the record; and
(e)any prejudice that is likely to be suffered by the other side that cannot appropriately be compensated by an order for costs.
In De Kauwe v Cohen [No 2] Le Miere J added:[25]
An amendment to withdraw an admission will not be permitted where it would cause irremediable prejudice to the other party. The party applying for the amendment bears the burden of persuasion that the amendment will not cause such prejudice, while the party opposing the amendment bears an evidential onus of adducing evidence on the question of prejudice.
Those comments were again made in the context of an application for leave to amend a pleading pursuant to RSC O 21 r 5(2).[26]
[25] De Kauwe v Cohen [No 2] [2021] WASC 248 [37] (Le Miere J) (De Kauwe).
[26] De Kauwe [22]. See also: Westgem Investments Pty Ltd in its own right as trustee for Hossean Pourzand and Jenny Maria Pourzand atf The Helen Trust v Commonwealth Bank of Australia Ltd [No 5] [2015] WASC 310[95] - [98] (Tottle J); Lamers as trustee for The Ben and Debra Lamers Family Trust v Arvind Pty Ltd [2018] WASC 347 [1], [64] - [65] (Strk PR).
However, the principles set out in Cardno will inform the exercise by the court of its powers in RSC O 20 r 19(1) to strike out a pleading, at least on the basis that the pleading may prejudice, embarrass or delay the fair trial of the action or is otherwise an abuse of the process of the court.[27]
[27] Dawson [29], [48]; Donyette [16] - [31].
The principles in Cardno were given before RSC O 1 r 4B was amended to its current form (though the rule was broadly similar). That rule now provides:
4B. Case flow management, use and objects of
(1) Actions, causes and matters in the Court will, to the extent that the resources of the Court permit, be managed and supervised in accordance with a system of positive case flow management with the objects of —
(a)promoting the just determination of litigation; and
(b)disposing efficiently of the business of the Court; and
(c)maximising the efficient use of available judicial and administrative resources; and
(d)facilitating the timely disposal of business; and
(e)ensuring the procedure applicable, and the costs of the procedure to the parties and the State, are proportionate to the value, importance and complexity of the subject matter in dispute; and
(f)that the procedure applicable, and the costs of the procedure to the parties, are proportionate to the financial position of each party.
RSC O 1 r 4A is also relevant (which was in force in these terms when Cardno was handed down):
4A.Delays, elimination of
The practice, procedure and interlocutory processes of the Court shall have as their goal the elimination of any lapse of time from the date of initiation of proceedings to their final determination beyond that reasonably required for interlocutory activities essential to the fair and just determination of the issues bona fide in contention between the parties and the preparation of the case for trial.
Given the centrality given by the Court of Appeal in Cardno to 'what is in the interests of justice in the circumstances of the case', the guidance given in that decision is entirely consistent with RSC O 1 r 4A and r 4B. The Cardno factors provide guidance as to the relevant considerations. What RSC O 1 r 4A and r 4B do is to make it clear that the interests of justice comprise both the interests of the parties and the wider public interest in the due administration of justice by the court as a whole.
The interaction between the principles in Cardno and RSC O 1 r 4A and r 4B was considered in Rural Bank by Kenneth Martin J. The situation in that case is not dissimilar to the present case as the withdrawal of what was said to be an admission was done in a substituted pleading filed in accordance with a timetable set by the court.[28] His Honour was of the view that, in the circumstances of the orders made in that case, leave was required to withdraw the admission.[29] His Honour approached the issue primarily from a case flow management perspective: [30]
In any event, I prefer to approach the whole issue of changed plea on the basis of modern case flow management principles enshrined for the Supreme Court under RSC O 1 r 4A and 4B. Irrespective of an exercise in disputed legal characterisation of admission or otherwise, the force and significance of the change in plea is such that, applying principles articulated by the High Court in Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27; (2009) 239 CLR 175 which were recently re‑emphasised in UBS AG v Tyne [2018] HCA 45; (2018) 360 ALR 184 [80] - [83] (Gageler J), as regards case management and the importance of an explanation for a change and the public interest in litigation being conducted efficiently as well as fairly, I would as a matter of discretion evaluate this changed plea as being so late and so significant in its forensic implications for the trial that an explanation is required before it can be allowed: see Attorney‑General of Botswana v Aussie Diamond Products Pty Ltd [No 2] [2009] WASC 301 [70] (Murphy J, as his Honour then was).
Leave to amend was given.[31]
[28] Rural Bank [11] - [15].
[29] Rural Bank [31].
[30] Rural Bank [47].
[31] Rural Bank [31].
I propose to deal first with the factors set out in Cardno (in what I regard as a logical order for the purposes of this case). I will then address whether the Contested Paragraphs should be struck out on the basis that they may prejudice, embarrass or delay the fair trial of the action or are otherwise an abuse of the process of the court. In doing so, I will have regard to caseflow management considerations.
As to the circumstances in which the admissions were made and the time which they have stood on the record, the allegations now paragraphs 19 and 21 of the Consolidated Claim were first made in the FASOC filed 30 October 2018. The admissions were first made in the Third Further Amended Defence and Counterclaim filed on 3 December 2018. The admissions were in place when the decision in Apache 2019 was handed down.[32] However, as I have set out at [14], for most of the intervening period the action was stayed. I can discern no step that was taken by the Apache Parties in the action in particular reliance on the Contested Admissions. In this regard, I observe that discovery has not yet been undertaken.
[32] Apache 2019 [19] (e) and (g) (Smith J).
As to the reason why the admissions are sought to be withdrawn, this rises no higher than there has been a change of lawyers and counsel.[33] There is no suggestion that the admissions were made in the first place because of some error or misunderstanding.[34] The admissions do not relate to an issue of fact to which new or different evidence has come to light. Nor is it a case in which the factual issues were complex and the point may not have been immediately obvious.[35] Rather, those representing the Santos Parties simply appear to have changed their minds about the manner in which they now wish to put the case.[36] In this regard, in Donyette Corboy J noted the following of the decision in Cardno:[37]
In Water Corporation v Cardno, the Court of Appeal indicated that it was a serious matter to make an admission in a pleading and so ordinarily, a party will not be permitted to withdraw an admission without good cause. Generally, a change in counsel and the difference in forensic perspective that almost inevitably follows would not be a sufficient cause to justify, by itself, the withdrawal of an admission. Indeed, I note in Water Corporation v Cardno the Court of Appeal stated in the course of analysing the evidence of the applicant for leave that there was nothing 'to suggest that the admission of the BSD contract was a tactical move on behalf of the respondent or that the respondent had changed its mind about the manner in which it wishes to put its case' [27].
The import of that last comment is obvious. It would defeat entirely the principles on which case management in this Court operates if parties could simply make and withdraw admissions on forensic whims.
[33] Santos Submissions, par 39(c).
[34] Cardno [27].
[35] Cardno [27].
[36] Cardno [27].
[37] Donyette [30] - [31].

The major argument advanced by the Apache Parties is that the Santos Parties should not be able to withdraw the admissions due to the prejudice which they will suffer if they are required to deal with the case now being put in relation to the construction of SPA s 9.16(a).
The van Buuren Affidavit sets out the numerous and varied tasks which the Apache Parties say they will have to undertake in order to locate potential evidence relevant to the issues raised by the withdrawal of the admissions. Specifically:
32.First, it will be necessary to locate and review the files of documents held by the Apache Parties in connection with the negotiation of the SPA at and prior to April 2015 (the date of execution of the SPA) specifically relevant to the provenance of the words used in section 9.16(a) and also the provenance of the definition of 'Taxes' used in section 1.1 of the SPA. Because these allegations were previously admitted and these issues were not in issue, that work has not yet been undertaken by the Apache Parties.
33.Secondly, it will be necessary to locate and review the documents held by the Apache Parties regarding the second defendant's payments to the ATO of PAYG instalment tax made in the period January to August 2014. This will include documents relevant to the internal treatment of those PAYG instalment payments and also correspondence to and from the ATO in 2014 regarding those PAYG instalment payments. Because the allegations were previously admitted, and the dates and times of the second defendant's PAYG payments were also admitted these issues were not in issue and therefore that work has not yet been undertaken by the Apache Parties.
34.Thirdly, it will be necessary to locate and speak to present and former Apache employees involved in the SPA transaction and in particular, involved in the negotiation and drafting of the words used in section 9.16(a) and also the definition of 'Taxes' used in section 1. 1 of the SPA. If these paragraphs had not been admitted by the Santos Parties, then that work would have been undertaken already. As these allegations were admitted and these matters were not in issue, that work has not yet been undertaken by the Apache Parties.
35.Fourthly, it will be necessary to locate and speak to present and former Apache employees involved in the second defendant's payment of the PAYG instalments of tax to the ATO. If these paragraphs had not been admitted by the Santos Parties, then that work would have been undertaken already. As these allegations were admitted and these matters were not in issue, that work has not yet been undertaken by the Apache Parties.
36.Fifthly, it will be necessary to seek production of documents held by the counterparties to the SPA transaction relevant to the negotiation and drafting of the words used in section 9.16(a) and also the definition of 'Taxes' used in section 1.1 of the SPA. These counterparties were a consortium of private equity owners which acquired the second defendant from the Apache group of companies in 2015, and which consortium subsequently sold the second defendant to the Santos group in 2018. In light of the consortium's sale in 2018 and the time that has elapsed since the SPA transaction in 2015, they may not have retained the documents. If these paragraphs had not been admitted, then that work would have been undertaken already. As these allegations were admitted and these matters were not in issue, that work has not yet been undertaken by the Apache Parties.
37.Sixthly, it will be necessary to research the legal meaning of 'Taxes' under the laws of Western Australia, which are the governing laws of the SPA (see in that regard section 1.2(e) of the SPA), including whether or not PA YG instalment payments of tax made in 2014 were then considered taxes. If these paragraphs had not been admitted, then that work would have been undertaken already. As these allegations were admitted and these matters were not in issue, that work has not as yet been undertaken by the Apache Parties.
38.Seventhly, it may be necessary to obtain expert accounting evidence regarding the meaning and effect of the credits and debits applied by the ATO to the second defendant's running balance account with the ATO over 9 years ago (when the Quadrant Parties controlled the second defendant). In this regard, I have attached to this affidavit and marked 'EVB-1', a copy of the second defendant's running balance account summary provided by the Santos Parties to the Apache Parties in these proceedings, which, by way of some examples, shows the following various credits and debits that will require expert evidence:
(a)a credit of $80,463,566 processed on 17 August 2016, with an effective date of 1 June 2016, and with the transaction description 'Tax return Companies - Income Tax - Consolidated Group for the period from 01 Jan 14 to 31 Dec 14';
(b)a debit of $21,146,975.60 processed on 17 August 2016, with an effective date of 1 June 2016, and with the transaction description 'Tax Return Companies-Income Tax-Consolidated Group for the period from 01 Jan 15 to 31 Dec 15';
(c)a credit of $2,432,217.55 processed on 21 October 2016, with an effective date of 21 October 2016, and with the transaction description 'Interest on overpayment for Income Tax - Consolidated Group for the period from 01 Jan 14 to 31 Dec 14';
(d)a credit of $3,869.29 processed on 25 October 2016, and an effective date of 25 October 2016, and with the transaction description 'Amendment to interest on overpayment for Income Tax - Consolidated Group for the period from 01 Jan 14 to 31 Dec 14'; and
(e)a debit of $59,077,591.24 processed on 25 October 2015, with an effective date of 28 October 2016, and with the transaction description 'EFT refund for Income Tax - Consolidated Group for the period from 01 Jan 14 to 31 Dec 14'.
Mr van Buuren goes on to depose as to the practical difficulties which undertaking these tasks will entail. This includes difficulties in locating ex-employees who may be potential witnesses.
In my assessment, the difficulties outlined by Mr van Buuren are significantly overstated.
The issue raised by the Contested Paragraphs is one of the proper construction of SPA s 9.16(a). The principles by which a court construes a contract were recently summarised by the Court of Appeal in Mirabela Nickel Ltd (in liquidation) (receivers and managers appointed) v Mining Standards International Pty Ltd:[38]
[38] Mirabela Nickel Ltd (in liquidation) (receivers and managers appointed) v Mining Standards International Pty Ltd [2025] WASCA 82 at [114] - [116] (judgment of the court). Referring to: Electricity Generation Corporation trading as Verve Energy v Woodside Energy Ltd [2014] HCA 7; (2014) 251 CLR 640 [35] (French CJ, Hayne, Crennan & Kiefel JJ); Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd [2015] HCA 37; (2015) 256 CLR 104 [46] ‑ [52] (French CJ, Nettle & Gordon JJ).
There was no issue between the parties concerning the applicable principles of contractual construction. There have been many recent decisions in this court outlining the general principles for the construction of commercial instruments… often by reference to Electricity Generation Corporation v Woodside Energy Ltd … and Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd . Nothing useful would be gained by yet another exposition of those principles. It suffices to adopt what has been stated in those recent decisions.
In summary:
1.The construction of a contractual clause involves an objective determination of the meaning of the words of the contract by reference to text, context (the entire text of the contract) and purpose.
2.The starting point for the proper construction of a contractual clause is the language used in the clause - one must identify the possible meanings that the words chosen by the parties can bear.
3.In determining the meaning of the terms of a commercial contract it is necessary to ask what a reasonable business person would have understood the terms to mean. That inquiry will require consideration of the language used by the parties in the contract, the circumstances addressed by the contract and the commercial purpose or objects to be secured by the contract. The instrument must be read as a whole.
4.Absent a contrary intention in the contract, the court approaches the task of giving a commercial contract an interpretation on the assumption that the parties intended to produce a commercial result - one that makes commercial sense. This requires that the construction be consistent with the commercial object of the agreement. Similarly, a commercial contract should be construed so as to avoid it making commercial nonsense or working commercial inconvenience. However, it must be recognised that business common sense is a topic on which reasonable minds may differ.
5.If the words used are unambiguous the court must give effect to them. The court has no power to remake or amend a contract for the purpose of avoiding a result that is considered to be inconvenient or unjust.
Finally, a contract should be construed practically so as to give better effect to its commercial purpose. The law seeks to uphold commercial contractual obligations and the expectations that derive from them. The court should not adopt a narrow or pedantic approach to construction, particularly in the case of commercial arrangements…
In Black Box Control Pty Ltd v TerraVision Pty Ltd the Court of Appeal provided a slightly more expansive summary which is instructive for present purposes:[39]
[39] Black Box Control Pty Ltd v TerraVision Pty Ltd [2016] WASCA 219 [42] (reasons of the court) (Black Box) (references omitted).
(1)The process of construction is objective. The meaning of the terms of an instrument is to be determined by what a reasonable person would have understood the terms to mean.
(2)The construction of a contract involves determination of the meaning of the words of the contract by reference to its text, context and purpose.
(3)The commercial purpose or objects sought to be secured by the contract will often be apparent from a consideration of the provisions of the contract read as a whole. Extrinsic evidence may nevertheless assist in identifying the commercial purpose or objects of the contract where that task is facilitated by an understanding of the genesis of the transaction, its background, the context and the market in which the parties are operating.
(4)Extrinsic evidence may also assist in determining the proper construction where there is a constructional choice, although … the question of whether matters external to a contract can be resorted to in order to identify the existence of the constructional choice … [has not been determined].
(5)If an expression in a contract is unambiguous and susceptible of only one meaning, evidence of surrounding circumstances cannot be adduced to contradict its plain meaning.
(6)To the extent that a contract, document or statutory provision is referred to, expressly or impliedly, in an instrument, that contract, document or statutory provision can be considered in construing the instrument, without any need for ambiguity or uncertainty of meaning.
(7)There are important limits on the extent to which evidence of surrounding circumstances (when admissible) can influence the proper construction of an instrument. Reliance on surrounding circumstances must be tempered by loyalty to the text of the instrument. Reference to background facts is not a licence to ignore or rewrite the text.The search is for the meaning of what the parties said in the instrument, not what the parties meant to say.
(8)There are also limits on the kind of evidence which is admissible as background to the construction of a contract, and the purposes for which it is admissible. Insofar as such evidence establishes objective background facts known to the parties or the genesis, purpose or objective of the relevant transaction, it is admissible. Insofar as it consists of statements and actions of the parties reflecting their actual intentions and expectations it is inadmissible. Such statements reveal the terms of the contract which the parties intended or hoped to make, and which are superseded by, or merged into, the contract.
(9)An instrument should be construed so as to avoid it making commercial nonsense or giving rise to commercial inconvenience.However, it must be borne in mind that business common sense may be a topic on which minds may differ.
(10)An instrument should be construed as a whole. A construction that makes the various parts of an instrument harmonious is preferable. If possible, each part of an instrument should be construed so as to have some operation.
(11)Definitions do not have substantive effect. A definition is not to be construed in isolation from the operative provision(s) in which the defined term is used. Rather, the operative provision is ordinarily to be read by inserting the definition into it.

This summary has been adopted by the Court of Appeal on multiple occasions.[40]
[40] See for example: Recce Pharmaceuticals Ltd v Ian David Brown [2022] WASCA 66 [57] (judgment of the court); Chevron (TAPL) Pty Ltd v Pilbara Iron Company (Services) Pty Ltd [2021] WASCA 193 [37] (judgment of the court).

These statements of principle limit the scope of the evidence that would be allowed to be adduced if the Contested Paragraphs are allowed to remain. As the Court of Appeal makes clear in Black Box, evidence of statements and actions of the parties reflecting their actual intentions and expectations is inadmissible. The issues in dispute more generally will already require a detailed consideration of the circumstances addressed by the SPA and the commercial purpose or objects to be secured by the contract. The construction issues in relation to SPA s 9.16(a) will not, in my view, materially add to this evidence.
The inquiry as to whether the interpretation proposed by the Santos Parties does not make commercial sense or works a commercial inconvenience can readily be the subject of submissions. With one significant exception the issues at trial will be similar to those dealt with by Ball J in PMI Group. The significant exception is that I can discern no issue on which expert evidence will be required. Significantly, the analysis by Ball J of QBE's argument that the construction for which PMI Australia contended 'lacked commercial logic'[41] is based on what appears to me to be the objective consequences of uncontested facts.
[41] PMI Group [28] - [35].
The prejudice to the Apache Parties is limited to having to address another reasonably arguable legal issue. It is difficult to see any prejudice to the Apache Parties which even requires compensation by way of an adverse costs order.
As to caseflow management considerations, allowing the Contested Paragraphs to remain will not require dates set down for trial to be vacated. Rather, the action is far from being ready for trial.[42] The lengthy delays in the action to date have largely been the result of the agreed position of the parties to try and negotiate a resolution of the action. The parties have not yet undertaken discovery. The withdrawal of the admissions will not, of itself, add to the delay until the action can be listed for trial. Nor will it materially add to the costs of preparing the action for trial[43] or undermine the efficiency or timeliness with which the court can dispose of this action. I recognise that:[44]
The point may be reached where a party has had a sufficient opportunity to plead his or her case such that it is too late for further amendment so as to do justice to the other party and other litigants.
We are far from this point in the present case.
[42] Dawson [48].
[43] Hutton v Meston [2004] WASCA 178 [24] (McLure J, with whom Murray and Templman JJ agreed).
[44] Mann v Bankwest - A division of Commonwealth Bank of Australia [2020] WASCA 35 [79] (judgment of the court) (references omitted).
On balance, in my view, the interests of justice in the circumstances of this case require the Contested Paragraphs to remain. The Santos Parties should be given the opportunity to make a submission, which I regard as reasonably arguable, as to the proper construction of SPA s 9.16(a). This is necessary to promote the just determination of the issues in dispute in the action. The Apache Parties have not identified any, or any sufficient, prejudice that should prevent the Santos Parties from having this opportunity. I am not persuaded that the Contested Paragraphs may prejudice, embarrass or delay the fair trial of the action or that they are otherwise an abuse of the process of the court.
I will hear from the parties as to costs.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
OB
Associate to the Hon Justice Gething
4 NOVEMBER 2025