BGP Geoexplorer Pte Ltd v Mineralogy Pty Ltd

[2018] QCA 230

SUPREME COURT OF QUEENSLAND

CITATION:

BGP Geoexplorer Pte Ltd v Mineralogy Pty Ltd [2018] QCA 230

PARTIES:

BGP GEOEXPLORER PTE LTD
(respondent/applicant)
v
MINERALOGY PTY LTD
ACN 010 582 680
(appellant/respondent)

FILE NO/S:

Appeal No 11186 of 2017
SC No 3482 of 2016

DIVISION:

Court of Appeal

PROCEEDING:

Miscellaneous Application – Civil

ORIGINATING COURT:

Supreme Court at Brisbane – [2017] QSC 219

DELIVERED ON:

21 September 2018

DELIVERED AT:

Brisbane

HEARING DATE:

16 August 2018

JUDGES:

McMurdo JA

ORDERS:

1.   The application by the respondent filed on 3 August 2018 be refused.

2.   The costs of this application be reserved pending the outcome of the application in the High Court.

CATCHWORDS:

PROCEDURE – STATE AND TERRITORY COURTS: JURISDICTION, POWERS AND GENERALLY – INHERENT AND GENERAL STATUTORY POWERS – TO STAY OR DISMISS ORDERS OR PROCEEDINGS GENERALLY – where the appellant applied for a stay of a judgment pending the appeal against that judgment to this Court – where the judge who heard that application refused a stay upon the basis that the respondents had given an undertaking to hold all monies recovered from the appellant under the judgment on trust pending further order of the Court – where the appellant’s appeal was dismissed – where the appellant has applied for special leave to appeal to the High Court – where the respondent’s application is for an order that it and its solicitors be discharged from the undertaking – whether the appellant’s prospects for obtaining special leave to appeal and the balance of convenience favour the position remaining as it is until the outcome of the appellant’s application for special leave to appeal is known

Jennings Construction Ltd v Burgundy Royale Investments Pty Ltd [No 1] (1986) 161 CLR 681; [1986] HCA 84, applied
Mineralogy Pty Ltd v BGP Geoexplorer Pte Ltd [2017] QCA 275, related
Mineralogy Pty Ltd v BGP Geoexplorer Pte Ltd [2018] QCA 174, related
R v Shambayati[2016] QCA 121, applied

COUNSEL:

J Bell QC, with T Pincus, for the applicant
J Kennedy for the respondent

SOLICITORS:

GRT Lawyers for the applicant
Alexander Law for the respondent

1. McMURDO JA:  On 31 July 2018 this Court dismissed an appeal by Mineralogy Pty Ltd by which it challenged a judgment that it pay to the respondent an amount of US$17,629,673.68.[1]  Ahead of the appeal, the appellant applied for a stay of the judgment upon the basis of evidence that there was a risk that if the judgment debt was paid, the money might not be able to be recovered from the respondent.  There was evidence that the respondent was incorporated in Singapore and was not registered in Australia, had no assets or operations in Australia and liabilities which exceeded its assets by an amount exceeding US$117 million.

   [1]Mineralogy Pty Ltd v BGP Geoexplorer Pte Ltd [2018] QCA 174.

2. The judge who heard that application (Fraser JA) accepted that although there was evidence that the respondent would be financially supported by other companies within its group, the respondent’s financial position was such as to reveal the risk which was alleged by the appellant.[2]  However a stay was refused because of an undertaking given by the respondent and its solicitors that all monies recovered from the appellant under the judgment would be held on trust in an interest bearing account in an Australian bank “pending further order of the Court”.  The amount of the judgment debt was then paid to the respondent’s solicitors and the money is still held by them under that undertaking.

   [2]Mineralogy Pty Ltd v BGP Geoexplorer Pte Ltd [2017] QCA 275.

3. The present application is for an order that the respondent and its solicitors be discharged from the undertaking, the appeal to this Court having been dismissed.  But the appellant is applying for special leave to appeal to the High Court and says that the undertaking ought not to be discharged until that application is determined.

4. It is common ground that the present application should be determined in the same way as if the appellant was applying for a stay of the judgment pending the outcome of the special leave application.  Therefore it is for the appellant to show that this is an exceptional case, because an appeal, or an application for leave to appeal, of itself does not operate as a stay of the judgment.  The relevant considerations are the appellant’s prospects of obtaining special leave to appeal and the balance of convenience.

5. At the time at which the present application was heard, the appellant was yet to file its application for special leave to appeal.  But the respondent accepted that the appellant would do so and the proposed special leave questions and grounds of appeal were set out in the appellant’s material.  It is unnecessary to canvass those grounds in any detail, or indeed to say anything about them save for the ground which would challenge this Court’s judgment on what I would describe as the creditor’s breach point.  The appellant’s argument in that respect is that there is a point of general importance in Australia as to whether a guarantee of a party’s performance of a contract is discharged by the breach by the other party to that contract.  The reasons for this Court’s rejection of that argument are set out in the judgment of Gotterson JA at [83] to [94].  Gotterson JA there said that none of the authorities upon which the appellant relied for this proposition provided cogent support for it and by a term of the guarantee in this case, the parties had excluded any scope for the operation of that principle.[3]  The appellant says that this was an erroneous construction of the guarantee and that the principle ought to have been accepted and applied with the consequence of discharging the appellant from its guarantee.

   [3]Mineralogy Pty Ltd v BGP Geoexplorer Pte Ltd [2018] QCA 174 at [92] – [93].

6. The appellant must show more than an arguable case that there was an error in this Court’s judgment.  It must show whether, as Brennan J said in Jennings Construction Ltd v Burgundy Royale Investments Pty Ltd [No 1],[4] there is a substantial prospect that special leave to appeal will be granted.  In R v Shambayati,[5] this Court (Fraser and Morrison JJA and Henry J) granted a stay upon the basis that “[t]he prospects of a successful application for special leave to the High Court could not be regarded as necessarily being so limited as to justify not [granting the stay]”.  I adopt that formulation as an appropriate description of the appellant’s prospects of obtaining special leave to appeal.

   [4](1986) 161 CLR 681 at 685.

   [5][2016] QCA 121.

7. The balance of convenience strongly favours the position remaining as it is until the outcome of the application for leave to appeal is known.  The risk described by Fraser JA is no less than it was then.  The judgment sum is in an interest bearing account.  Beyond its arguments that there is no substantial prospect of special leave to appeal being granted, the respondent offered effectively no submissions as to why the undertakings should now be discharged.

8. Therefore it will be ordered that the application by the respondent filed on 3 August 2018 be refused.  The costs of this application should be reserved pending the outcome of the application in the High Court.