Callide Energy Pty Ltd v Park - [2025] FCA 37

FEDERAL COURT OF AUSTRALIA
Callide Energy Pty Ltd v Park [2025] FCA 37

File number: QUD 701 of 2024

Judgment of: SHARIFF J

Date of judgment: 3 February 2025

Catchwords:
CONTRACTS – contractual construction and interpretation – joint venture agreement – pre-emptive rights clauses – where a pre-emptive right is exercisable upon a change in control – privity of contract – agency – where a clause purports to impose obligations on a non-party company in a corporate group – whether a subsidiary is obliged to use reasonable endeavours to procure its parent companies to perform contractual obligations – where a joint venture participant ceases to be a subsidiary of its ultimate holding company – whether a defined term must yield to the wider context of the agreement – whether a defined term results in absurdity or inconsistency – “woodenly literal” approach

COURTS AND JUDGES – judicial comity – whether Court bound to follow earlier decision involving construction of same contractual provisions unless persuaded earlier decision “plainly wrong” – where earlier decision involved making of judicial directions under s 90-15 of the Insolvency Practice Schedule (Corporations)

Legislation:
Corporations Act 2001 (Cth) Sch 2 (Insolvency Practice Schedule (Corporations)), s 90-15

Corporations Act 1989 (Cth) Part 13 (Corporations Law), s 82 (repealed)

Federal Court (Corporations) Rules 2000 (Cth) r 2.13

Cases cited:
Angas Securities Ltd v Small Business Consortium Lloyds Consortium No 9056 [2016] NSWCA 182
Australian Broadcasting Commission v Australasian Performing Right Association Ltd [1973] HCA 36; (1973) 129 CLR 99
Australian Securities Commission v Melbourne Asset Management Nominees Pty Ltd [1994] FCA 1031; (1994) 49 FCR 334
Beaufort Developments (NI) Ltd v Gilbert-Ash (NI) Ltd [1999] 1 AC 266
BHP Petroleum (Australia) Pty Ltd v Sagasco South East Inc [2001] WASCA 159
Bitannia Pty Ltd v Parkline Constructions Pty Ltd [2009] NSWSC 1302
Bligh Consulting Pty Ltd v Ausgrid [2017] NSWCA 95
BP Refinery (Westernport) Pty Ltd v Shire of Hastings [1977] UKPC 13; (1977) 180 CLR 266
Byland Holdings Pty Ltd v Pineland Property Holdings Pty Ltd [2009] NSWSC 1159
Chartbrook v Persimmon Homes Ltd [2009] 1 AC 1101
Cirrus Real Time Processing Systems Pty Ltd v Hawker Pacific Pty Ltd [2024] FCA 763
Cirrus Real Time Processing Systems Pty Ltd v Jet Aviation Australia Pty Ltd [2023] NSWCA 280; (2023) 113 NSWLR 80
Clark v Johnson [1967] SASR 279
Codelfa Constructions Pty Ltd v State Rail Authority of New South Wales [1982] HCA 24; (1982) 149 CLR 337
Colbran, in the matter of Balsub Pty Ltd (in liquidation) [2023] FCA 1635
Commissioner of Taxation v Sara Lee Household & Body Care (Australia) Pty Ltd [2000] HCA 35; (2000) 201 CLR 520
Current Images Pty Ltd v Dupack Pty Ltd [2012] NSWCA 99
Dockside Holdings Pty Ltd v Rakio Pty Ltd [2001] SASC 78; (2001) 79 SASR 374
Donau Pty Ltd v ASC AWD Shipbuilder Pty Ltd [2019] NSWCA 185; (2019) 101 NSWLR 679
Elisha v Vision Australia Limited [2024] HCA 50
Energy World Corporation Ltd v Maurice Hayes and Associates Pty Ltd [2007] FCAFC 34; (2007) 239 ALR 457
Equiticorp Finance Ltd (in liq) v Bank of New Zealand (1993) 32 NSWLR 50
Esso Australia Ltd v Air Ride Transportation Pty Ltd (unreported, VSC, 28 September 1988, Marks J)
Freeman & Lockyer (a firm) v Buckhurst Park Properties (Mangal) Ltd [1964] 2 QB 480
Halford v Price [1960] HCA 38; (1960) 105 CLR 23
HDI Global Specialty SE v Wonkana No 3 Pty Ltd [2020] NSWCA 296; (2020) 104 NSWLR 634
In the matter of Hawden Property Group Pty Ltd (in liq) (ACN 003 528 345) [2018] NSWSC 481; (2018) 125 ACSR 355
In the Matter of ICS Real Estate Pty Ltd (in liq) [2014] NSWSC 479
James Adam Pty Ltd v Fobeza Pty Ltd (2020) 103 NSWLR 850
Jones v Dunkel [1959] HCA 8; (1959) 101 CLR 298
Maggbury Pty Ltd v Hafele Australia Pty Ltd [2001] HCA 70; (2001) 210 CLR 181
Mainteck Services Pty Ltd v Stein Heurtey SA [2014] NSWCA 184; (2014) 89 NSWLR 633
McCann v Switzerland Insurance Australia Ltd [2000] HCA 65; (2000) 203 CLR 579
McLellan v Australian Stock Exchange Ltd [2005] FCA 585; (2005) 144 FCR 327
Meadow Springs Fairway Resort Ltd (in liq) v Balance Securities Ltd [2007] FCA 1443
Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs v FAK19 [2021] FCAFC 153; (2021) 287 FCR 181
Mitchell v Cullingral Pty Ltd [2012] NSWCA 389
Miwa Pty Ltd v Siantan Properties Pte Ltd [2011] NSWCA 297; 15 BPR 29,545
Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd [2015] HCA 37; (2015) 256 CLR 104
MSW Property Pty Ltd v Law Mortgages Queensland Pty Ltd [2003] QCA 487
New South Wales v Banabelle Electrical Pty Ltd [2002] NSWSC 178; (2002) 54 NSWLR 503
Newey v Westpac Banking Corporation [2014] NSWCA 319
Noranda Australia Ltd v Lachlan Resources NL (1988) 14 NSWLR 1
One T Development Pty Ltd v Peter Krejci in his capacity as liquidator of ENA Development Pty Ltd [2023] NSWCA 120
Park, in the matter of IG Power (Callide) Ltd (Administrators Appointed) (No 4) [2024] FCA 1316
Park, in the matter of Queensland Nickel Pty Ltd (in liq) (No 3) [2022] FCA 1301
Pauls Trading Pty Ltd v Norco Co-operative Ltd [2006] QCA 128
Perpetual Custodians Ltd as Custodian for Tamoran Pty Ltd as trustee for Michael Crivelli v IOOF Investment Management Ltd [2013] NSWCA 231
Quikfund (Aust) Pty Ltd v Prosperity Group International Pty Ltd (in liq) [2013] FCAFC 5; (2013) 209 FCR 368
Re McCabe (in their capacity as joint and several deed administrators of the companies listed in Sch 1) [2023] FCA 1415; (2023) 169 ACSR 631
Re Willmott Forests Ltd (No 2) [2012] VSC 125; (2012) 88 ACSR 18
Reardon Smith Line Ltd v Hansen-Tangen [1976] 1 WLR 989
Rinehart v Hancock Prospecting Pty Ltd [2019] HCA 13; (2019) 267 CLR 514
Sev.en Gamma a.s. v IG Power (Callide) Pty Ltd (Administrators Appointed) [2024] FCA 30
Seymour Whyte Constructions Pty Ltd v Ostwald Bros Pty Ltd [2019] NSWCA 11; (2019) 99 NSWLR 317
Singh v Lynch [2020] NSWCA 152; (2020) 103 NSWLR 568
Sino Iron Pty Ltd v Mineralogy Pty Ltd [2019] WASCA 80; (2019) 55 WAR 89
THL Robina Pty Ltd v The Glades Golf Club Pty Ltd [2004] QSC 461; [2005] 2 Qd R 186
Watson v Scott [2016] 2 Qd R 484
Wilkie v Gordian Runoff Ltd [2005] HCA 17; (2005) 221 CLR 522
Wyllie v Tarrison Pty Ltd [2007] NSWCA 184
Yasuda Fire & Marine Insurance Co of Europe Ltd v Orion Marin Insurance Underwriting Agency Ltd [1995] QB 174
Herzfeld P and Prince T, Interpretation (2nd ed, Lawbook Co, 2020)

Division: General Division

Registry: Queensland

National Practice Area: Commercial and Corporations

Sub-area: Commercial Contracts, Banking, Finance and Insurance

Number of paragraphs: 158

Date of last submission: 28 January 2025

Date of hearing: 17 December 2024

Counsel for the Applicant/First Cross-Respondent: Mr M Hodge KC, Mr S Webster KC and Mr A Psaltis

Solicitor for the Applicant/First Cross-Respondent: Clayton Utz

Counsel for the First, Second and Third Respondents/First, Second and Third Cross-Claimants: Mr D R Sulan SC and Mr R Jameson

Solicitor for the First, Second and Third Respondents/First, Second and Third Cross-Claimants: White & Case

Counsel for the Fourth Respondent/Second Cross-Respondent: Ms V Whittaker SC and Mr B W Smith

Solicitor for the Fourth Respondent/Second Cross-Respondent: Quinn Emanuel Urquhart & Sullivan

ORDERS

QUD 701 of 2024

BETWEEN:
CALLIDE ENERGY PTY LTD ACN 082 468 746

Applicant/First Cross-Respondent

AND:
JOHN RICHARD PARK AND BENJAMIN PETER CAMPBELL IN THEIR CAPACITY AS ADMINISTRATORS OF THE SECOND AND THIRD RESPONDENTS

First Respondent/First Cross-Claimant

IG ENERGY HOLDINGS (AUSTRALIA) PTY LTD (ADMINISTRATORS APPOINTED) ACN 090 996 142

Second Respondent/Second Cross-Claimant

IG POWER (CALLIDE) LTD (ADMINISTRATORS APPOINTED) ACN 082 413 885 (and another named in the Schedule)

Third Respondent/Third Cross-Claimant

ORDER MADE BY:

SHARIFF J

DATE OF ORDER:

3 FEBRUARY 2025

THE COURT ORDERS THAT:
1.The Amended Originating Application be dismissed.
2.The parties provide by email to the Associate to Shariff J short minutes of order reflecting the orders that should be made to dispose of the Cross-Claim in line with these reasons by 4pm on 5 February 2025 and, if they cannot agree, the matter be listed at 9.30am on 6 February 2025.
3.The Applicant pay the Respondents’ costs of the Amended Originating Application and the Cross-Claim as taxed or agreed.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT
SHARIFF J:
1. INTRODUCTION

By way of an Amended Originating Application, the applicant, Callide Energy Pty Ltd (CEPL), seeks declaratory and injunctive relief relating to certain rights it claims arise under a Joint Venture Agreement (JVA) between it and the third respondent, IG Power (Callide) Ltd (IGPC). The JVA relates to the “Callide Power Project Joint Venture” between CEPL and IGPC to construct and operate the Callide C Power Station located in Biloela, Queensland (CPP JV). The other party to the JVA is Callide Power Management Pty Ltd (CPM), which is owned in equal shares by CEPL and IGPC. CPM is the Manager of the Callide C Power Station.
CEPL is a wholly-owned subsidiary of CS Energy Ltd (CSE) and is owned by two Queensland Government Ministers for and on behalf of the State of Queensland.
As it presently stands, all the shares in IGPC are held by IG Power Holdings Limited (IGPH). In turn, since 2003, all the shares in IGPH have been held by the second respondent, IG Energy Holdings (Australia) Pty Ltd (IGEH). All of IGEH’s shares are currently owned by companies in the “Genuity Group”. It is common ground that the ultimate holding company of IGEH and the Genuity Group is OzGen (UK) Limited (OzGen UK). OzGen UK is owned by subsidiaries of the fourth respondent, Sev.en Global Investments a.s. (Sev.en), China Huaneng Group and Guangdong Yudean Group Co. Ltd.
On 24 March 2023, each of IGEH, IGPH, IGPC and IG Power Marketing Pty Ltd (collectively, the IG Power Group) were placed into voluntary administration by their respective directors. At or about that time, Messrs Grant Sparks and Richard Hughes of Deloitte Financial Advisory Pty Ltd were appointed as Joint and Several Administrators of the IG Power Group.
On 29 January 2024, on application of Sev.en Gamma a.s. (a wholly owned subsidiary of Sev.en), Messrs John Park and Ben Campbell of FTI Consulting were appointed as Special Purpose Administrators of the IG Power Group for the purpose of conducting an investigation into the cause of two catastrophic incidents: Sev.en Gamma a.s. v IG Power (Callide) Pty Ltd (Administrators Appointed) [2024] FCA 30 (Derrington J).
On 27 June 2024, orders were made by Derrington J removing Messrs Sparks and Hughes as the General Purpose Administrators of the IG Power Group and replacing them with the first respondents, Messrs Park and Campbell, as the General Purpose Administrators (Administrators).
On 12 October 2024, the Administrators caused IGEH to enter an agreement with Sev.en, which contemplates the sale of all of IGEH’s shares in IGPH to Sev.en (IGEH Share Sale Agreement).
It is the effect of the IGEH Share Sale Agreement that is the source of the dispute between the parties. It is common ground that if the IGEH Share Sale Agreement is completed, IGEH will cease to have a “controlling interest” in IGPC, and IGPC will cease to be a subsidiary of OzGen UK. Sev.en will come to own and control IGPC and its 50% interest in the CPP JV. CEPL contends that this state of affairs enlivens the obligations contained in cll 9A and 9B of the JVA. The Administrators and Sev.en dispute this to be the case.
The Administrators made an earlier application to this Court seeking directions under s 90-15 of the Insolvency Practice Schedule (Corporations) (IPS), being Sch 2 to the Corporations Act 2001 (Cth) (Corporations Act). They sought directions that, amongst other things, the obligations contained in cll 9A and 9B of the JVA were not engaged by the proposed transaction. CEPL was not joined to that application but appeared, with leave, under r 2.13 of the Federal Court (Corporations) Rules 2000 (Cth), and made detailed written and oral submissions.
On 15 November 2024, Derrington J made the directions sought by the Administrators: Park, in the matter of IG Power (Callide) Ltd (Administrators Appointed) (No 4) [2024] FCA 1316 (15 November Judgment). The result was a vindication of the position taken by the Administrators and Sev.en, and a reciprocal loss for CEPL. There was no appeal instituted from the orders made by Derrington J. Irrespective of whether it had any right to seek leave to appeal or appeal from those orders, CEPL took a different course in seeking its preferred outcome.
At the time at which Derrington J had listed the matter for pronouncement of the orders that his Honour ultimately made, representatives for CEPL informed his Honour that the present proceedings had been commenced and thereupon pressed an interlocutory injunction seeking to enjoin the IGEH Share Sale Agreement from proceeding pending the urgent determination of these proceedings. That interlocutory injunction was granted.
The matter was thereafter allocated for final hearing before me on 19 December 2024 as the Commercial and Corporations List Duty Judge. The parties read a number of affidavits in support of their respective cases. It is not necessary to specify these affidavits, which were contained in the Court Book that was economically and efficiently prepared by the parties’ representatives. The parties also tendered a Statement of Agreed Facts and the Court Book contained the relevant documents in chronological order. The parties filed written submissions and have since also filed supplementary submissions on matters arising from the oral hearing. With the assistance of the Court’s staff, I extended the sitting hours of the Court on 19 December 2024 to ensure that the hearing of the matter completed within the day given the urgency of the dispute and the availability of the parties’ representatives at that time of year.
At the oral hearing before me, the Administrators foreshadowed the filing of a cross-claim in the present proceedings (Cross-Claim). The purpose of that Cross-Claim was to ensure, if there was any doubt, that this Court was seized with jurisdiction of a federal matter. The Cross-Claim has since been filed. It seeks to invoke the Court’s jurisdiction under s 90-15(1) of the IPS to make orders in relation to the external administration of the companies that are presently under administration by way of declarations that are in substance the inverse of the relief sought by CEPL. As both CEPL’s claim and the Administrators’ Cross-Claim relate to companies under administration and matters that relate to their external administration, I am satisfied that this Court has jurisdiction to hear and determine the matters they raise, and the matters raised by the Cross-Claim put that beyond doubt.
The efficient conduct of the matter by the parties’ representatives has enabled me to focus on the real issues in dispute. The relief claimed by CEPL depends on whether cll 9A and 9B of the JVA are engaged by the proposed transaction between IGEH and Sev.en. This raises questions as to whether:
(a)IGEH is bound by cl 9A.2(b) to provide a “Sale Notice” to CEPL (First Question) which, in turn, raises the following issues:
(i)whether IGPC was acting as IGEH’s agent and with its actual authority to bind IGEH to the obligations contained in cl 9A.2(b) (Agency Issue);
(ii)alternatively, whether IGPC is obliged to use its reasonable endeavours to procure IGEH to give a Sale Notice to CEPL (Reasonable Endeavours Issue);
(b)IGPC is bound by cl 9B.2 to provide notice to CEPL that, as a result of the proposed transaction, it will cease to be a subsidiary of its ultimate holding company, OzGen UK (Second Question) which, in turn, raises the following issues:
(i)whether the words “Ultimate Holding Company” in cl 9B.2 are to be given the meaning that those words bear in the schedule of defined terms contained in the JVA or whether they are to be given their ordinary meaning (Constructional Issue);
(ii)alternatively, whether the Court should imply a term into the JVA to the effect that, if the nominated Ultimate Holding Company ceases to be IGPC’s ultimate holding company, then, for the purpose of cl 9B.2, the Ultimate Holding Company is the entity that is IGPC’s ultimate holding company (as defined in the Corporations Act) from time to time (Implied Term Issue).
For the reasons that follow, CEPL has not made out its case in relation to either the First Question or the Second Question. The result is that the Amended Originating Application should be dismissed with costs and orders should be made as sought in the Cross-Claim, but I will allow the parties a short time to confer to agree upon orders to dispose of the Cross-Claim in line with these reasons.
2. RELEVANT FACTS
2.1 The Original JVA
The JVA was executed in 1998 by CEPL, IGPC and CPM (Original JVA). At that time, IGPC was named “Shell Coal Power (Callide) Ltd” and was a member of the “Shell Group” of companies.
The Original JVA did not address the issues that might arise if there was to be a change in the ownership or controlling interest of IGPC. It did address the circumstance where one party could acquire the other’s “Interest” in the event that the other party became a “Defaulting Participant”: cl 7 of the Original JVA. That process is not presently relevant, but in substance it provided that in certain circumstances a “Non-Defaulting Participant” had a “right” to acquire the “Interest” of a Defaulting Participant: see cl 7.8 of the Original JVA. The Original JVA defined the word “Interest” as follows (which remained unchanged):
‘Interest’ means the undivided right, title and interest of a Participant, expressed as a percentage, in:
(a)the Joint Venture Property;
(b)rights arising under this Agreement and the Related Agreement; and
(c)any benefits arising from the foregoing (other than the proceeds of Electricity sales); and
(d)each Participant’s issued ordinary shares in the capital of the Manager,
The Original JVA also contained a clause dealing with “assignment” by either “Participant”, which relevantly provided as follows:
9. ASSIGNMENT
9.1 Assignment
A Participant (‘Assignor’) must not assign or otherwise deal with or alienate this Agreement or the Related Agreements or any right under this Agreement or any Related Agreement except:
(a)to any person (‘Assignee’) with the prior written consent of each other Participant which will not be unreasonably withheld or delayed if:
(i)the Assignee has agreed to be bound by the terms of this Agreement and the Related Agreements by a Deed of Assumption in accordance with Clause 9.2(a);
(ii)the Assignor has demonstrated that the Assignee is reputable and of good financial standing and has the capability to fulfil all the obligations of the Assignor under this Agreement and the Related Agreements, or
(b)to a Related Body Corporate (‘Related Body Corporate Assignee’) if the proposed Related Body Corporate Assignee has agreed to be bound by the terms of this Agreement and the Related Agreements by a Deed of Assumption in accordance with Clause 9.2(a).
Such an Assignment has no force or effect until the Assignor and Related Body Corporate Assignee have complied with Clause 9.2 and have entered into a deed of covenant with the other Participants, including a covenant by the Related Body Corporate Assignee to the effect that if, at any time, it ceases to be a Related Body Corporate of the Assignor for any reason, the Related Body Corporate Assignee will immediately reassign the Interest to the Assignor or, if the Assignor is then no longer a Related Body Corporate of the company which was, at the date of the original Assignment, its Ultimate Holding Company, then to a Related Body Corporate of that former Ultimate Holding Company.

This clause applied only to an assignment, dealing with, or alienation of the Agreement or any Related Agreement or any rights under them. By contradistinction to cl 7.8 and the later cll 8A and 9A, cl 9 did not address the acquisition or disposal of the controlling or other interest in either of the parties to the JVA.
Relevantly, to the extent that cl 9 referred to the “Ultimate Holding Company”, it did so as an anti-avoidance measure, designed to forestall any scheme which might otherwise be devised to assign the Agreement or any Related Agreements to a related corporation with a view to further transfer to a new owner. The effect of the clause was to make the effectiveness of such an assignment contingent on a deed of covenant which would operate so that, if the related company assignee ceased to be a related company, there would be an obligation to “reassign” the joint venture interest to the original assignor or, if that assignor had passed from the control of its former “Ultimate Holding Company”, to a related body corporate of that former Ultimate Holding Company.
The Original JVA contained the following definitions which were relevant to the operation of cl 9 and the other clauses of the JVA:
(a)the word “Participant” was defined in the introductory part of the JVA identifying the parties to the JVA and referred only to CEPL and IGPC;
(b)the term “Related Agreements” was defined to include a number of identified agreements, which specifically included any “Deed of Guarantee, Deed of Cross Charge, Permitted Charge’s Deed of Covenant (being a deed made and delivered in accordance with Clause 8.1) or Deed of Assumption entered into by the Participants for the purposes of this Agreement and any other agreement designated by the Participants as a Related Agreement”;
(c)the term “Related Body Corporate” was defined as follows:
‘Related Body Corporate’ means:
(a)in relation to any Participant other than CSE and Shell which acquires an Interest, a body corporate that is deemed to be related to it pursuant to Sections 9 and 50 of the Corporations Law,
(b) in relation to Shell:
(i)N.V. Koninklijke Nederlandsche Petroleum Maatschappij (‘Royal Dutch’);
(ii)The ‘Shell’ Transport and Trading Company plc (‘Shell Transport’); and
(iii)any other company (other than Shell) incorporated in any country which is for the time being directly or indirectly controlled by any one or more of Royal Dutch and Shell Transport. A particular company is deemed to be directly controlled by another company or companies if the latter company or companies own shares carrying not less than 50% of the votes exercisable at a general meeting (or its equivalent) of the first mentioned company, and a particular company is deemed to be indirectly controlled by a company or companies (the parent company or companies) if a series of companies can be identified beginning with the parent company or companies and ending with the particular company so related that each company of the series except the parent company or companies is directly controlled by one or more of the companies in the series,
(c)in relation to CSE either a body corporate that is deemed to be related to it pursuant to Sections 9 and 50 of the Corporations Law and a Minister of, or the Crown in the right of the State of Queensland,
(d)the term “Relevant Holding Company” was defined to have the meaning in cl 6.2(a) which provided, and continued to provide, that there was permission to disclose confidential information to a “Relevant Holding Company” which, for the purposes of “Shell” was defined to mean “Shell Coal Power Holdings Ltd”;
(e)the term “Ultimate Holding Company” was defined as follows:
‘Ultimate Holding Company’ means:
(a)in relation to any Participant other than CSE and Shell which acquires an Interest, a body corporate that is deemed to be related to it pursuant to Sections 9 and 50 of the Corporations Law,
(b)in relation to Shell:
(i)N.V. Koninklijke Nederlandsche Petroleum Maatschappij (‘Royal Dutch’);
(ii)The ‘Shell’ Transport and Trading Company plc (‘Shell Transport’); and;
(c)in relation to CSE either a body corporate that is deemed to be related to it pursuant to Sections 9 and 50 of the Corporations Law and a Minister of, or the Crown in the right of the State of Queensland,
As I will return to below, it is of relevance that the term Ultimate Holding Company was defined in relation to “Shell” to have a fixed rather than an ambulatory meaning. Thus, for IGPC, the “Ultimate Holding Company” was defined to mean two specific entities. As I will explain, the operation of the definition in a fixed way remained the case despite subsequent amendments to the JVA.
It is also necessary to observe that at the time that the Original JVA was entered into, it was the Corporations Law that applied (being s 82 of Part 13 of the Corporations Act 1989 (Cth)), which was later repealed and replaced with the Corporations Act.
2.2 The Original Deed of Guarantee
At or about the time that the JVA was made, a Deed of Guarantee and Indemnity was also executed (Original Deed of Guarantee). The parties to the Original Deed of Guarantee were each of CEPL (referred to as the CSE Participant), IGPC (referred to as the Shell Participant) and CPM (referred to as the Manager), CSE and another entity, Shell Coal Holdings (Australia) Ltd (referred to as Shell).
It is relevant that by this Original Deed of Guarantee, Shell agreed to “guarantee and indemnify the performance by” IGPC of its obligations under the JVA, and CSE did likewise in relation to CEPL.
2.3 The First Amending Deed
On 3 December 1999, the Original JVA (and certain related agreements including the Original Deed of Guarantee), was amended by way of a “Joint Venture Agreement and Related Agreements Amendments Deed” (First Amending Deed). It made a number of typographical corrections. None of these are presently relevant. However, it is relevant that the First Amending Deed was executed by entities other than CEPL and IGPC, including Shell Coal Holdings (Australia) Ltd.
2.4 The InterGen Transaction and the 2000 Deed of Assumption
In the second half of 2000, there was a reorganisation. It was common ground that by reason of this reorganisation which was referred to as the “InterGen Transaction”:
(a)Royal Dutch, Shell Transport and Bechtel Enterprises Holdings Inc (Bechtel) became owners of InterGen (an exempted company incorporated in the Cayman Islands with limited liability) (InterGen (Cayman Islands)); and
(b)Royal Dutch, Shell Transport and Bechtel incorporated new intermediate holding companies in Australia, including IG Investment (Callide) Pty Ltd (IGIC).
As a result of the InterGen Transaction, IGIC became the owner of all the shares in IGPH, such that IGPH and, therefore, IGPC became part of the InterGen Group.
In August 2000, a Deed of Assumption and Release was executed (2000 Deed of Assumption). The parties to the 2000 Deed of Assumption were each of the parties to the Original Deed of Guarantee, but with the addition of The Shell Petroleum Company Ltd (referred to as the Purchaser). The Recitals record that “Shell” had transferred its interest in the shares in Shell Coal Power Holdings Ltd, being the holding company of IGPC, to The Shell Petroleum Company Ltd, and that the latter had requested that the former be released from its obligations under the Original Deed of Guarantee on the basis that it would assume those obligations.
2.5 The 2000 Letter Agreement
On 9 October 2000, CSE and IGIC entered into an agreement in the form of a letter (2000 Letter Agreement). The 2000 Letter Agreement annexed a draft amending deed which would later become the Third Amending Deed: see [40] below.
The 2000 Letter Agreement provided that:
(a)IGIC would “cause [IGPC] to diligently pursue a private binding ruling from the Australian Taxation Office that no adverse tax consequences will arise for [IGPC], through the application of Division 16D of the Income Tax Assessment Act 1936, as a result of the grant or exercise of the rights of pre-emption or the purchase options provided for in the Joint Venture Agreement Amending Deed attached to this letter (the “Joint Venture Agreement Amending Deed”)”;
(b)IGIC would “consult with and involve [CSE] in all aspects of the relevant ruling request and in any subsequent dealings with the Australian Taxation Office in relation to that ruling request”;
(c)if “[IGPC] obtains a favourable ruling, [IGIC] and [CSE] will cause [IGPC], [CEPL] and [CPM] to enter into the Joint Venture Agreement Amending Deed”; and
(d)that “[o]n Completion, [IGIC] will cause [IGPC] to agree to do the things required of [IGPC]” under paragraph 5 of the 2000 Letter Agreement and to give certain representations recorded under the 2000 Letter Agreement.
At the time of the 2000 Letter Agreement, all the shares in IGPC were owned by IGPH, and all shares in IGPH were owned by IGIC. At that time, all shares in IGIC were ultimately owned by IGEH but there were two intermediate holding companies between IGIC and IGEH.
2.6 The Second Amending Deed
On 12 October 2000, the JVA was amended by way of an “Amending Deed” (Second Amending Deed). The Second Amending Deed was executed by CEPL, IGPC, CPM and CSE.
Relevantly, the Second Amending Deed changed the definition of “Ultimate Holding Company” to read as follows:
…
(a)in relation to IG Power, InterGen (an exempted company incorporated in the Cayman Islands with limited liability) or any Holding Company of InterGen nominated for this purpose by IG Power.
The term “Related Body Corporate” was also amended so as to include Royal Dutch, Shell Transport and Bechtel Enterprises (being Bechtel).
A new Deed of Guarantee and Indemnity was also executed (2000 Deed of Guarantee). The parties to the 2000 Deed of Guarantee were IG Holdings (Australia) Pty Ltd (IGAP), IGPC, CSE, CEPL and CPM. By this Deed, IGAP agreed to guarantee and indemnify the performance by IGPC of its obligations under the JV Agreement. A Deed of Release was also entered into by which “Shell Coal Holdings (Australia) Limited” was released from its earlier obligations of assumption.
2.7 Developments prior to the entry of the Third Amending Deed
On 1 March 2002, InterGen (Australia) Pty Ltd (IGA) sent a letter to CSE stating that IGPC nominated “InterGen (International) BV” (an entity incorporated in the Netherlands) as its Ultimate Holding Company for the purpose of the JVA. (IGA was an entity which functioned as a management or services entity for the InterGen Group).
On 15 November 2002, IGPC obtained a private binding tax ruling from the Australian Taxation Office (ATO) which was favourable to it in respect of the proposed rights of pre-emption contemplated by the 2000 Letter Agreement.
At the end of 2002, the holding structure of InterGen’s Australian entities (again) changed. After the restructure, IGEH directly owned all shares in IGPH, eliminating three intermediate companies, including IGIC.
2.8 The Third Amending Deed
In or about July 2003, the JVA was amended by way of a “Joint Venture Agreement Amending Deed” (Third Amending Deed). The Third Amending Deed inserted cll 9.1, 9A and 9B in their current form.
Clause 9.1 of the current JVA provides:
A Participant (‘Assignor’) must not assign or otherwise deal with or alienate this Agreement or the Related Agreements or any right under this Agreement or any Related Agreement except:
(a)to any person (‘Assignee’) with the prior written consent of each other Participant, which will not be unreasonably withheld or delayed if:
(i)the Assignee has agreed to be bound by the terms of this Agreement and the Related Agreements by a Deed of Assumption in accordance with Clause 9.2(a); and
(ii)the Assignor has demonstrated that the Assignee is reputable and of good financial standing and has the capability to fulfil all the obligations of the Assignor under this Agreement and the Related Agreements; or
(b)to the Ultimate Holding Company of the Assignor or a Subsidiary of that Ultimate Holding Company (in each case, a ‘Related Body Corporate Assignee’); or
(c)where required to do so under clause 7 or clause 9B.
If IG Power or a Related Body Corporate Assignee of IG Power (each an ‘InterGen Entity’) proposes to transfer all or part of its Interest, other than in the circumstances contemplated in paragraph (b) or (c) above, it must also comply with Clause 9A.
Clause 9A provides:
9AGrant of Pre-Emptive Rights to CSE
9A.1    When this Clause applies
This Clause 9A only applies for so long as CSE or a Related Body Corporate Assignee of CSE is wholly owned, directly or indirectly, by the State of Queensland and has an Interest of not less than 50%.
9A.2Giving of Sale Notice to CSE
If:
(a)an InterGen Entity wishes to transfer all or part of its Interest, other than under Clause 9.1(b) or where required under Clause 7 or Clause 9B; or
(b)an entity (‘Relevant Entity’) wishes to transfer a Controlling Interest in an InterGen Entity, or in a Holding Company of an InterGen Entity all or substantially all of the assets of which consist of a direct or indirect interest in that InterGen Entity, other than in the circumstances specified in Clause 9B.2(a)(i) or (ii),
that InterGen Entity or Relevant Entity (as applicable) (‘Seller’) must first give a notice in writing (‘Sale Notice’) to CSE stating:
(c)the Interest or Controlling Interest (as applicable) (‘Sale Interest’) to be transferred; and
(d)the price at which, and terms on which, the Seller is prepared to sell the Sale Interest.
9A.3    Sale Notice constitutes offer to sell
(a)The giving of a Sale Notice will constitute an offer (‘Offer’) by the Seller to sell the Sale Interest to CSE at the price and on the terms specified in the Sale Notice.
(b)The Offer:
(i)will be irrevocable for a period of 45 days (‘Offer Period’);
(ii)will expire if not accepted before the end of the Offer Period; and
(iii)cannot be accepted in respect of less than the whole of the Sale Interest.
9A.4    Acceptance of Offer
(a)If the Offer is accepted by CSE within the Offer Period, the Seller must sell the Sale Interest to CSE.
(b)Any contract arising from acceptance of the Offer will be conditional upon all necessary Governmental Approvals, and all necessary consents and approvals under the Related Agreements, being obtained.
9A.5Sale where Offer not accepted
If the Sale Interest is not sold under the preceding provisions of this Clause 9A, the Seller may sell the Sale Interest (but not part of it) to any person in a bona fide sale provided that:
(a)it does so at a price no less than, and on terms no more favourable than, those contained in the Sale Notice;
(b)the sale is effected within 12 calendar months of the date of the Sale Notice;
(c)it gives CSE evidence to its reasonable satisfaction that paragraph (a) has been complied with; and
(d)where applicable, Clauses 9.1(a) and 9.2 are complied with.
9A.6Rights Personal to CSE
The rights conferred on CSE under this Clause 9A are personal to it and cannot be assigned except to a Related Body Corporate Assignee of CSE.
9A.7References to CSE
References in this Clause 9A to CSE include a Related Body Corporate Assignee of CSE.
Clause 9B relevantly provides:
9BGrant of Purchase Options to CSE
9B.1 When this Clause applies
This Clause 9B only applies for so long as CSE or a Related Body Corporate Assignee of CSE is wholly owned, directly or indirectly, by the State of Queensland and has an Interest of not less than 50%.
9B.2 Notice of Proposed Change of Control
(a)If an InterGen Entity will cease to be a Subsidiary of its Ultimate Holding Company as a result of a proposed transaction, other than:
(i)a sale of all or substantially all of the assets of its Ultimate Holding Company;
(ii)a public offering of shares in that InterGen Entity, or a Holding Company of that InterGen Entity, which are to be listed for quotation on a recognised stock exchange; or
(iii)a transfer by a Relevant Entity of a Controlling Interest in that InterGen Entity, or in a Holding Company of that InterGen Entity, in accordance with Clause 9A,
it must give notice of the proposed transaction to CSE.
(b)If an InterGen Entity gives a notice under paragraph (a), CSE may, within 14 days after receipt of that notice, give notice to that InterGen Entity that it requires that the Fair Value of that InterGen Entity's Interest be determined.
9B.3Notice of Contravention
If an InterGen Entity:
(a)disposes of all or part of its Interest in contravention of this Agreement; or
(b)fails to give notice to CSE of a proposed transaction when required to do so under Clause 9B.2 and that transaction is subsequently effected,
CSE may, within 14 days after becoming aware of the relevant disposal or transaction, give notice to that InterGen Entity that it requires that the Fair Value of that InterGen Entity's Interest be determined.
…
At the time of the Third Amending Deed, all of the shares in IGPC were owned by IGPH, and all of the shares in IGPH were owned by IGEH.
2.9 Subsequent developments
On 2 December 2003, IGPC wrote to CEPL providing notice under cl 9B.2 of the JVA that it would cease to be a subsidiary of its Ultimate Holding Company, which at the time was InterGen (International) BV.
On 15 December 2003, CEPL acknowledged that IGPC’s letter constituted notice pursuant to cl 9B.2 of the JVA and stated that CEPL “hereby waive[d] its right to exercise its option to purchase, triggered by the notice above”.
On 13 December 2007, the JVA was amended by way of a “Callide C Power Project – Deed of Settlement, Release and Amendment” (Fourth Amending Deed). The Fourth Amending Deed was executed by CSE, CPM, CEPL and IGPC.
3. PRELIMINARY ISSUES
3.1 The 15 November Judgment and judicial comity
A preliminary issue that arises is whether the questions and issues raised before me have already been determined by Derrington J such that I am bound to follow the 15 November Judgment.
Although the respondents did not contend that there was an abuse of process (due to the urgency of the present proceedings), they submitted that I would not depart from Derrington J’s reasons unless satisfied that they were “plainly wrong”. It was submitted that the correct construction of cll 9A.2 and 9B.2 of the JVA were argued before and determined by Derrington J as a “necessary step in reaching his conclusion” to make the judicial directions sought by the Administrators and therefore constituted binding precedent: citing Bligh Consulting Pty Ltd v Ausgrid [2017] NSWCA 95 at [121] (Sackville AJA, McColl and Basten JJA agreeing). It was therefore submitted that the “plainly wrong” criterion applied: see Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs v FAK19 [2021] FCAFC 153; (2021) 287 FCR 181 at [13], [21] (Allsop CJ). It was submitted that these principles had been applied in the context of the construction of standard form contracts and therefore must apply equally, if not with greater force, in the context of the construction of the very same agreement by another single judge of this Court: Byland Holdings Pty Ltd v Pineland Property Holdings Pty Ltd [2009] NSWSC 1159 at [28]-[35] (Hammerschlag J); Bitannia Pty Ltd v Parkline Constructions Pty Ltd [2009] NSWSC 1302 at [77] (White J). It was said that if it were otherwise, this Court would substantively be placed in the position of hearing an appeal from Derrington J’s reasons.
Alternatively, the respondents submitted that even if I was not bound to follow the 15 November Judgment, I should follow Derrington J’s reasons because they were highly persuasive and plainly correct. It was submitted that his Honour had carefully analysed the issues over some 120 paragraphs and addressed in detail almost all of the arguments CEPL now puts, and in the context of a substantively identical factual landscape. As to the latter point, it was submitted that the position had not been changed by the fact that CEPL had adduced additional evidence or cast its arguments in a different way.

CEPL submitted that I was not bound by the 15 November Judgment and did not need to be satisfied that it was “plainly wrong”. CEPL contended that this flowed from the juristic nature of directions sought and made under s 90-15(1) of the IPS.
Gleeson JA has observed that the power under s 90-15 of the IPS is wider than its predecessor and accommodates the determination of substantive rights in a winding up so along as interested and affected parties have been given an opportunity to be heard: In the matter of Hawden Property Group Pty Ltd (in liq) (ACN 003 528 345) [2018] NSWSC 481; (2018) 125 ACSR 355 at [6]-[8], citing Meadow Springs Fairway Resort Ltd (in liq) v Balance Securities Ltd [2007] FCA 1443 at [49]-[51] (French J, referring to Australian Securities Commission v Melbourne Asset Management Nominees Pty Ltd [1994] FCA 1031; (1994) 49 FCR 334 at 352 (Northrop J)); Re Willmott Forests Ltd (No 2) [2012] VSC 125; (2012) 88 ACSR 18 at [45]-[46] (Davies J); and In the Matter of ICS Real Estate Pty Ltd (in liq) [2014] NSWSC 479 at [25] (Brereton J).
In One T Development Pty Ltd v Peter Krejci in his capacity as liquidator of ENA Development Pty Ltd [2023] NSWCA 120, the Court of Appeal of NSW (Ward P, Leeming and Mitchelmore JJA) considered that there was no reason to doubt the observation made by Gleeson JA in Hawden Property Group, stating at [35] that:
There is no reason to doubt that the current form of the power extends to the determination of substantive rights, although that could only occur, as Gleeson JA observed, with necessary and proper parties being given an opportunity to be heard, and (it might be added) joined.
CEPL contended that as it had not been joined to the proceedings before Derrington J, the observations made by Gleeson JA in Hawden Property Group and the Court of Appeal in One T Development did not apply. Derrington J had given consideration to these issues in the 15 November Judgment at [124]-[131]. In doing so, his Honour considered recent decisions of this Court as to the nature of the power(s) under s 90-15 of the IPS: see Re McCabe (in their capacity as joint and several deed administrators of the companies listed in Sch 1) [2023] FCA 1415; (2023) 169 ACSR 631 at [22]-[26] (Cheeseman J); Colbran, in the matter of Balsub Pty Ltd (in liquidation) [2023] FCA 1635 at [30] (McEvoy J); Park, in the matter of Queensland Nickel Pty Ltd (in liq) (No 3) [2022] FCA 1301 at [119] (Downes J). With one exception, CEPL did not take issue with the views expressed in these decisions as to the purpose, scope and extent of the power(s) conferred by s 90-15 of the IPS. It did take issue with Cheeseman J’s statement in Re McCabe at [26] that:
… the power extends to the determination of substantive rights, provided any necessary and proper parties have been given an opportunity to be heard and/or joined: see One T Development at [35]. See also Australian Securities and Investments Commission v Jones [2023] WASCA 130 at [306] to [307] (Buss P, Mitchell and Beech JJA).
Derrington J dealt with CEPL’s contentions as to this matter at [125]-[127] of the 15 November Judgment as follows:
CEPL submitted that the proposition referred to at [26] of her Honour’s reasons goes further than is legitimate, because substantive rights can only be determined where the parties affected are joined and given an adequate opportunity to be heard. Reliance was placed on the following passage in John Alexander’s Clubs Pty Ltd v White City Tennis Club Ltd (2010) 241 CLR 1, 46 [131]:
Walker Corporation submitted that where a court is invited to make, or proposes to make, orders directly affecting the rights or liabilities of a non-party, the non-party is a necessary party and ought to be joined. That submission is correct. The Court of Appeal’s orders directly affected Walker Corporation. The majority of the Court of Appeal (Macfarlan JA, Giles JA concurring) erred when it held to the contrary.
(Footnotes omitted).
So the submission went, it is not possible to bind a party merely because they are given notice of the proceeding and an ability to be heard (and are, in fact, heard at the hearing), if they are not formally joined as a party. Whether the passage quoted above was intended to go so far need not be determined in this matter, though it does raise an interesting question.
In any event, here, the advice sought concerns the administrators’ conduct of the administrations as to the manner in which they might act as regards to the rights under the JVA.
It was not suggested that any conclusion as to the operation of the JVA on which a direction might be based would bind CEPL. Its rights to specific performance of the JVA, if any, would remain unaffected by the direction.
CEPL relied upon these matters to contend that Derrington J had acknowledged that it would not be bound by the directions that the Administrators had sought and that its rights to specific performance would not be prejudiced.
In determining whether to make the directions sought, it is evident that Derrington J proceeded to exercise the power to give judicial directions on the basis that the determination of the substantive rights as between the parties to the JVA would not be determined on a final basis and would not bind CEPL. So much is apparent from the 15 November Judgment at [127]. His Honour also made a similar point at [161] in rejecting CEPL’s argument that it would be prejudiced by the making of directions, stating as follows:
That submission stood somewhat inconsistently with CEPL’s submission that it is not bound by any determination made in the course of giving the directions. Whilst it has been afforded an opportunity to be heard on this application, it has chosen not to become a party and it will not be bound by the conclusions reached, and no matter of construction will have been determined against it. Indeed, it was one of Mr Brereton SC’s submissions that the directions should not be given because they lack utility, given that they do not impact CEPL’s rights in any way.
Having regard to these matters, I am persuaded by CEPL’s contention that it follows from the basis upon which Derrington J heard and determined the matter before him that CEPL is not bound by the directions that his Honour made. It thereby follows that I am not strictly bound by his Honour’s decision or reasons. This means that it is not necessary for me to be persuaded that Derrington J’s reasons are “plainly wrong” in order to depart from them. As unsatisfactory as this position is to the administration of justice given that CEPL has been heard and the Court’s resources have now been called upon twice to urgently consider and determine in substance the same issues, the position is one in respect of which CEPL did make its position clear.
In addressing the questions before me, I have considered these questions and issues independently to Derrington J. As it happens, I have reached largely the same conclusions as his Honour, though for slightly different reasons.
3.2 Joint Venture Agreements and rights of pre-emption
In its submissions before me, CEPL advanced a number of propositions that it contended were relevant to the proper construction of joint venture agreements and rights of pre-emption. CEPL submitted as follows:
This application concerns clauses containing rights of pre-emption. The purpose of such clauses was described by Hargrave J in Beaconsfield Gold NL v Allstate Prospecting Pty Ltd [2006] VSC 320 at [33] as follows:
… Pre-emptive rights are usually included in resource joint venture agreements. Given the importance of the identity, financial capacity and reliability of the participants in a joint venture, pre-emptive rights operate to ensure that existing participants are empowered to exclude new participants by purchasing the outgoing participant’s interest if they so desire. They also permit a joint venturer who may take the view that it has expended a significant amount of money in a high risk area to have an opportunity to increase its interest if another joint venturer desires to withdraw from the joint venture. This allows an enhanced opportunity to reap the rewards from past risk-taking and expenditures.
The interpretation of such clauses, particularly in the context of a joint venture, have been considered in cases which:
(a) emphasise the need to avoid a narrow interpretation of pre-emptive rights clauses: Beaconsfield Gold at [33]-[34], Santos Offshore Pty Ltd v Apache Oil Australia Pty Ltd [2015] WASC 242 at [34]-[35]; THL Robina Pty Ltd v The Glades Golf Club Pty Ltd [2005] 2 Qd R 186 at [34]-[39]; Noranda Australia at 11 and 14;
(b) underscore the potential significance of surrounding circumstances in elucidating the purpose and therefore the proper construction of pre-emptive rights clauses: Beaconsfield Gold at [16]-[29]; THL Robina at [2], [17];
(c) illustrate the approach which the court takes to construing pre-emptive rights which, on a strict or literal construction would have limited operation, including:
i.giving words an extended meaning which differs from their “precise legal meaning”, even where the contract was prepared by experienced lawyers: THL Robina at [33], [35], [39];
ii. reading in additional words in a document which were necessary to avoid a construction which would “wholly defeat the intention of the parties that there be an enforceable pre-emptive regime”: APT SEA Gas Holdings Pty Ltd v ANP SEA Gas Holdings Pty Ltd [2010] NSWSC 1221 at [50]; Noranda Australia at 12;
iii. rejecting a construction of a clause which would result in a right to purchase a joint venturer’s interest operating only once, even though it was the “more obvious and natural” construction of the clause: Paul’s Trading Pty Ltd v Norco Co-operative Ltd [2006] QCA 128 at [12], [22], [30], [49];
iv. giving a pre-emptive rights clause with “oblique” drafting and “elliptical language” a construction which was not “meaningless or has a meaning of no practical use in conferring rights of significance on anybody”: Noranda Australia at 9, 12, 13.
As Pritchard J said in Santos Offshore (at [35]):
Having regard to the purpose of pre-emptive rights clauses, the courts have recognised that there is a need for caution in adopting a construction which would restrict their operation or which would permit their application to be avoided and thus which would erode the benefit conferred by the grant of a right of pre-emption. For the same reason, pre-emptive rights clauses have been construed so as not to render it impossible for a joint venturer to satisfy the requirements of the offer.
The same submissions were made before Derrington J. His Honour accepted at [48] of the 15 November Judgment the description of the general purpose of pre-emption clauses identified by Hargrave J in Beaconsfield Gold at [33]. Derrington J also accepted at [49] that “it is well accepted that pre-emption clauses should not be given any narrow interpretation” and embraced the contentions that had been advanced by CEPL as set out above. However, his Honour then stated at [49] that:
… so much can be accepted as general propositions. However, the approach to be taken in accordance with those propositions does not require the Court to rewrite a defective clause or to reconstruct one which has been effectively spent given the circumstances which have occurred. Less still does it require the Court to conjure up non-existent agency relationships so as to extend the operation of the clause and avoid the consequences of poor drafting or poor contract administration over time.
I agree with Derrington J. It should not be assumed that there is an archetype for pre-emption clauses, or a normative standard to which they aspire, and to which the process of construction must be directed. Whilst the general propositions advanced by CEPL may be accepted insofar as they go, the resolution of the questions and issues before me turn upon the specific purpose, text and context of the particular clauses in question here. The terms of the relevant contract are the surest and plainest guide to what has been agreed by way of a grant of pre-emption and attention must be focussed to the purpose, text and context of the relevant clauses.
These points are borne out by the case in hand. It will be recalled that the Original JVA did not contain any rights of pre-emption. It did make provision for assignment of the JVA and the Related Agreements, and separately dealt with the acquisition of interests from a Defaulting Party. However, it was not until the Third Amending Deed in July 2003 that rights of pre-emption were inserted into the JVA. It is those clauses, when read in context and having regard to the whole of the JVA, that govern the outcome of the questions and issues raised in the present case.
Further, to the extent that rights of pre-emption were agreed between the parties as recorded in the Third Amending Deed, they were in favour of CEPL. Whilst both cll 9A and 9B were expressed only to apply in circumstances where CEPL (or a related body corporate assignee of CEPL) remained wholly owned directly or indirectly by the State of Queensland and had an Interest of not less than 50% (cll 9A.1 and 9B.1), IGPC was not granted any right of pre-emption if that ceased to be the case. Whilst this fact is not determinative of any issue raised in the present case, it illustrates that the rights of pre-emption (such as they are) that were agreed to by the parties did not follow any pre-ordained norm as between the joint venture partners. They reflected the particular commercial bargain that was struck as recorded in the terms of the JVA.
4. THE FIRST QUESTION
In support of the First Question, CEPL initially advanced a number of arguments which it did not ultimately press. By closing submissions, CEPL had refined its case to two arguments in support of the relief it claimed relying upon cl 9A. This gave rise to the Agency Issue and the Best Endeavours Issue.
4.1 The Agency Issue
CEPL accepted that, as a matter of construction, cl 9A.2(b) imposed obligations on every one of IGPC’s “upstream” parent companies. It accepted that these entities were not parties to the JVA. However, it contended that IGPC acted as an agent of each of these Relevant Entities and, specifically, that IGPC had the actual authority of each of these Relevant Entities to bind them to the obligations contained in cl 9A.2(b). CEPL contended that it was unnecessary for it to establish on the evidence the relevant relationship of agency with each Relevant Entity, and that it was sufficient for it to establish that IGPC acted with the actual authority of IGEH such that, at the very least, IGEH had become bound by cl 9A.2(b).
As the party asserting the agency, CEPL had the burden of proving it: Quikfund (Aust) Pty Ltd v Prosperity Group International Pty Ltd (in liq) [2013] FCAFC 5; (2013) 209 FCR 368 at [67] (Foster, Barker and Griffiths JJ). For the reasons that follow, I am not satisfied that CEPL has established the agency that it asserted.
A relationship of agency is “almost invariably founded upon a contract between principal and agent”: Yasuda Fire & Marine Insurance Co of Europe Ltd v Orion Marin Insurance Underwriting Agency Ltd [1995] QB 174 at 185 (Coleman J); see also Clark v Johnson [1967] SASR 279 at 296 (Bray CJ). In the present case, CEPL could point to no express agreement by which the Relevant Entities, including IGEH, conferred actual authority upon IGPC to bind them to the obligations contained in cl 9A.2(b). Rather, CEPL sought to infer actual authority based on the objective surrounding circumstances.
It is well settled that an agent may have actual authority to bind a principal “which is distinct from, but may overlap [with], ostensible authority” and that actual authority may be express or implied: Equiticorp Finance Ltd (in liq) v Bank of New Zealand (1993) 32 NSWLR 50 at 132 (Clarke and Cripps JJA). As Diplock LJ explained in Freeman & Lockyer (a firm) v Buckhurst Park Properties (Mangal) Ltd [1964] 2 QB 480 at 502-503:
It is necessary at the outset to distinguish between an “actual” authority of an agent on the one hand, and an “apparent” or “ostensible” authority on the other. Actual authority and apparent authority are quite independent of one another. Generally they co-exist and coincide, but either may exist without the other and their respective scopes may be different. As I shall endeavour to show, it is upon the apparent authority of the agent that the contractor normally relies in the ordinary course of business when entering into contracts.
An “actual” authority is a legal relationship between principal and agent created by a consensual agreement to which they alone are parties. Its scope is to be ascertained by applying ordinary principles of construction of contracts, including any proper implications from the express words used, the usages of the trade, or the course of business between the parties. To this agreement the contractor is a stranger; he may be totally ignorant of the existence of any authority on the part of the agent. Nevertheless, if the agent does enter into a contract pursuant to the “actual” authority, it does create contractual rights and liabilities between the principal and the contractor. It may be that this rule relating to “undisclosed principals,” which is peculiar to English law, can be rationalised as avoiding circuity of action, for the principal could in equity compel the agent to lend his name in an action to enforce the contract against the contractor, and would at common law be liable to indemnify the agent in respect of the performance of the obligations assumed by the agent under the contract.
In the present case, CEPL had to prove that the Relevant Entities, including IGEH, had given their authority to IGPC to bind them to the obligations imposed by cl 9A.2(b).
CEPL’s first contention rested on the premise that the parties to the JVA did not intend cl 9A.2(b) to be illusory and intended it to “take bite”. This contention assumed the premise that, because the parties to the JVA intended cl 9A.2(b) to have actual and practical effect, it necessarily followed that IGPC was acting as an agent of the Relevant Entities including IGEH. CEPL contended that this was the only rational inference that was available as each other possible inference was unlikely. During the course of oral submissions, CEPL submitted that the facts before the Court only gave rise to three possible inferences: the first being the one urged by CEPL that IGPC was acting with the actual authority of the Relevant Entities including IGEH; the second being that the parties intended cl 9A.2(b) would have effect but made a mistake that resulted in the clause being inutile; the third being that there was never an intention on the part of the InterGen Group that cl 9A.2(b) have any binding effect. CEPL contended that the last contention was one that was tantamount to fraud and had not been suggested by any party to the dispute such that it could be disregarded. As between the first and second inferences, CEPL contended that first was more likely than the second. I do not agree.
CEPL’s contentions proceeded on the basis that the parties intended cl 9A.2(b) to have effect and “take bite”. CEPL contended that, as the parties must have intended the obligations to take effect, the only way this could have been achieved was because IGPC was acting as an agent of the Relevant Entities and, at least, as an agent of IGEH. In my view, this logic involved ex post facto reasoning. It may be accepted from the face of the Third Amending Deed that the parties to it intended cl 9A.2(b) to have effect. However, the fact that the parties to the JVA had intended cl 9A.2(b) to have effect did not establish, without more, that IGPC was acting as an agent of each of the Relevant Entities including IGEH.

CEPL’s reliance upon cl 9A.2(b) as being an evidential basis upon which to infer actual authority amounted to no more than the putative agent’s representation or conduct as the basis to establish the agency. As the Court of Appeal of NSW has stated, where there is no express agreement, it is “elementary” that actual authority “must be proved by means other than evidence about what the putative agent said or did”: Mitchell v Cullingral Pty Ltd [2012] NSWCA 389 at [127] (Campbell JA, Allsop P and McColl JA agreeing). To a similar effect, in Quikfund, after reviewing the authorities, the Full Court stated at [79] that:
It is clear from the above brief conspectus of some of the relevant authorities that assertions made by the alleged agent that he or she is acting for the alleged principal can never by themselves prove the existence of the alleged agency. More is required. There must be some conduct on the part of the alleged principal from which the relationship of agency can be inferred and which breathes life into the assertions of the alleged agent.
Here, the fact that IGPC had agreed to the Third Amending Deed and, in doing so, had apparently entered into an agreement that sought to bind its upstream parent companies did not establish that it had done so with their actual authority to bind them.
CEPL contended that, on the facts here, IGEH was aware of the terms of the Third Amending Deed and caused IGPC to enter into it with such knowledge including that it was in fulfilment of that which had been contemplated by the 2000 Letter of Agreement. CEPL relied upon the following evidence to support these contentions:
(a)the recitals to the Original JVA made clear that the relevant arrangement between the parties was not merely between the participants to the CPP JV, but rather involved those entities and their “Related Bodies Corporate”;
(b)these recitals were updated in a minor way by the First Amending Deed, when InterGen replaced Royal Dutch and Shell Transport as the relevant owner of the non-CEPL participant in the CPP JV, but the substance of the recitals was not altered;
(c)the recitals were not further amended in the Third Amending Deed which inserted cll 9A and 9B;
(d)IGPH had at all times remained the sole owner of IGPC and IGEH had, at all times since InterGen became involved in 2000, been a company higher up the corporate chain from IGPH;
(e)since December 2002 (prior to entering into the Third Amending Deed), IGEH had been the sole owner of IGPH;
(f)cl 16.1 of the JVA requires, as the final step in the dispute resolution process before arbitration or Court proceedings, “negotiation between the Chief Executive Officers of the Relevant Holding Company of each Participant” (being relevantly IGPH (then known as Shell Coal Power Holdings Ltd)), and this fact indicated that on serious matters arising under the JVA, it was IGPH (through its CEO), which was the party with power to resolve such a dispute, not IGPC;
(g)since the end of 2002, IGPH had been directly controlled by IGEH as its 100% owner;
(h)the 2000 Letter Agreement primarily imposed obligations on IGIC (as a holding company of IGPC) and CSE (as the holding company of CEPL). IGIC was relevantly bound to cause IGPC to seek a favourable tax ruling and then to enter into the Third Amending Deed;
(i)the insertion of the new pre-emptive rights in cll 9A and 9B were one part, albeit an important part, of a larger transaction, which involved the holding companies of IGPC and CEPL;
(j)on or about 31 December 2002, prior to execution of the Third Amending Deed, IGEH replaced IGIC as the sole owner of the shares in IGPH. After this change in ownership, IGPC still executed the Third Amending Deed.
CEPL contended that, having regard to these circumstances, it must be inferred that IGEH knew about the terms of the Third Amending Deed, assumed responsibility for causing IGPC (through IGPH) to enter into the Third Amending Deed, and in fact did cause IGPC to do so.
In further support of these contentions, CEPL submitted that the fact that IGPC was acting as an agent of IGEH was consistent with its role within the structure of the InterGen Group. CEPL relied upon the fact that IGPC employed no staff, and that the only apparent functions of IGIC, IGEH and IGPH was, and is, to hold the InterGen Group’s interest in IGPC (and through it, IGPC’s Interest in the CPP JV). In support of these contentions, CEPL relied upon the following:
(a)the financial statements of IGEH for 31 December 2001, 31 December 2002 and 31 December 2003 demonstrated that IGEH’s relevant functions and business and its revenue, costs, profits and losses were entirely the result of the operation and funding of IGPC’s business, being its interest in the CPP JV, and nothing else;
(b)the financial statements of IGPC for 31 December 2001, 31 December 2002 and 31 December 2003 confirmed that, during this time, it was the relevant trading entity which conducted the CPP JV business on behalf of IGEH, which entity recorded all profits (and losses);
(c)the financial statements of IGPH for 31 December 2001, 31 December 2002 and 31 December 2003 demonstrated that it simply held its interest in IGPC, with revenue, costs, profits and losses passing up the chain;
(d)in operating the business, IGPC did not itself have any employees, it derived its employees from elsewhere in the InterGen Group, namely IGA;
(e)correspondence was not typically issued by IGPC, but was issued under IGA’s name;
(f)each of IGEH, IGIC, IGPH and IGPC had a number of common directors during this period and operated from the same address, suggesting, again that one business was being conducted as concerned IGEH, IGIC, IGPH and IGPC;
The above facts were not put in issue. They may be accepted.
CEPL initially relied upon these facts to contend that IGPC was effectively a corporate agent of IGEH in circumstances where the latter was the “head and brain of IGPC (as the trading venture of the CPP JV)” and “IGEH was thus in effectual and constant control of the IGPC business”. It alternatively contended that IGPC was acting as a partner of IGEH. However, during the course of oral argument, CEPL indicated that it no longer pressed these arguments. Instead, CEPL refined its position to submit that these were facts from which the Court could infer that IGPC was (when it entered into the Third Amending Deed) acting as agent for, and therefore capable of binding, IGPH and IGEH.
I do not accept CEPL’s arguments.
It is to be recalled that cll 9A and 9B were documented in the proposed amending deed that was an annexure to the 2000 Letter Agreement. The 2000 Letter Agreement was one between IGIC (as an upstream holding company of IGPC) and CSE (as the holding company of CEPL). IGIC was required by that agreement to cause IGPC to seek a favourable tax ruling and then to enter into the form of the deed contained in the annexure which became the Third Amending Deed. It is relevant that the 2000 Letter Agreement imposed an obligation on IGIC to cause IGPC to do certain things. That fact demonstrates that IGIC was in a position to cause IGPC to do certain things, but stopped short of establishing that IGIC had thereby caused IGPC to act as its agent in binding it to those obligations. There was nothing in the terms of the 2000 Letter Agreement which suggested that IGIC expressly conferred authority upon IGPC to bind it to any obligations. Nor was there anything in the 2000 Letter Agreement that established IGIC had authority to bind IGEH to the terms of that Letter Agreement, let alone the draft amending deed annexed thereto.
By the time IGPC executed the Third Amending Deed, IGEH had come to replace IGIC as the owner of IGPH which in turn owned IGPC. It may be accepted that IGEH had knowledge of the fact that IGPC would be executing the Third Amending Deed. The evidence before me disclosed that at or about the time of entry into the Third Amending Deed, there were at least two common directors as between IGEH and IGPC, being Mr David Nelson and Mr John de Stefani. It may be accepted that their knowledge that IGPC was executing the Third Amending Deed on terms including cl 9A.2(b) was imputed to IGEH. However, the mere fact that IGEH and two of its directors were aware of the terms of the Third Amending Deed did not mean that IGEH had thereby authorised IGPC to act as its agent to bind IGEH to the contractual obligations contained in cl 9A.2(b). There are many factors that tell against this conclusion.
First, the objective and incontrovertible fact is that, on the one hand, the State of Queensland and, on the other, the Shell Group and later the InterGen Group made conscious decisions on each side that the CPP JV would be conducted by special purpose vehicles. The JVA was entered into in May 1998 between two entities selected to operate the power station: CEPL and IGPC (then named Shell Coal Power (Callide) Ltd). The State of Queensland selected CEPL as its special purpose operating entity, and the Shell Group selected IGPC. It was these entities that became the contracting parties who were bound by the JVA and identified as the Participants. This structure remained in place from the inception of the JVA, and remains in place today.
Second, to the extent that one or the other party to the JVA intended other entities to be bound by particular obligations, they attended to this by entering into related agreements to give effect to those obligations. This is clear from the fact that other entities became directly bound to perform, assure or guarantee certain obligations in connection with the joint venture, such as under the 2000 Deed of Guarantee. And, from time to time, these other entities were released from their earlier obligations when other entities came to assume them. The 2000 Letter Agreement is a different example where other entities (IGIC and CSE) who were not parties to the JVA bound themselves to a separate agreement by which they were required to cause the Participants in the joint venture to do certain things.
The fact that the parties carefully conducted their contractual affairs on the basis that other entities would be bound by separate deeds and agreements tells against the inference that CEPL advanced. Rather, these objective facts establish that the parties proceeded on the basis that particular entities would only be bound by obligations where they had expressly assumed or guaranteed them. These facts also reinforce that there was recognition on both sides that there were different companies in existence which had separate and distinct functions.
Third, the above two matters are consistent with the terms of the JVA itself by which the parties carefully and deliberately documented their agreement with recognition that there were related entities. The clauses of the JVA recognised the distinction between these entities. The definitions of Related Bodies Corporate, Relevant Holding Company and Ultimate Holding Company reflect that the parties were conscious that these were distinct entities. Neither CEPL nor IGPC conducted themselves on the basis that these careful definitions were unnecessary because each of them were effectively acting as agents for other entities.
Fourth, the objective evidence discloses that there was a specific commercial purpose at play which led to the 2000 Letter Agreement. One the one hand, CEPL was to acquire the pre-emption rights documented in the Third Amending Deed and, on the other, IGPC was concerned as to the tax consequences of granting such rights in its capacity as a taxpayer. It was on this basis that the parties had entered into an agreement that depended on whether a positive tax ruling could be obtained by IGPC, and the proposed amendments were contingent on that condition being satisfied.
The objective fact is that advice was sought, submissions were made, and an ATO ruling was obtained on the basis that it was IGPC that was the relevant taxpayer in relation to the grant of rights of pre-emption. It does not appear that any consideration was given to whether each of the upstream entities were the grantors of the pre-emption rights and, if so, how this would affect the tax position of IGPC or any other entity.
CEPL pointed to the fact that IGPC had retained PricewaterhouseCoopers (PwC) to advise it and make submissions to the ATO in support of obtaining a favourable tax ruling. CEPL further drew attention to the fact that the documents provided to PwC and prepared by PwC referred to cll 9A and 9B of the JVA, and indicated that the nature of the pre-emption rights would involve the Relevant Entities having to give notice. CEPL also pointed to email correspondence passing between the InterGen Group and CSE that indicated that officers of the former were aware of and had an intention to honour cll 9A and 9B. CEPL relied upon these facts to submit that the InterGen Group and its advisers all knew that the upstream parent companies would be bound by the obligations contained in cl 9A.2(b). However, as I have addressed above, the fact that there was knowledge of the obligations does not equate with the conferral of actual authority by the upstream companies to bind them to contractual obligations.
The matters that I have set out above militate against the drawing of the inference that CEPL urged. They point toward the fact that insufficient attention was given in 2003 to the contractual mechanism by which the Relevant Entities, including IGEH, would become bound by the obligations contained in cl 9A.2(b). This does not suggest that the promise was not intended to be honoured or to be illusory, but that despite the best intentions of each contracting party they did not take the steps necessary to secure performance of that which was intended. CEPL submitted that this inference, as to a mistake by one or more persons, was less likely than the inference that it urged. However, to describe what may have occurred as a mistake does not do justice to the myriad ways in which in the ordinary course of events mistakes may have been made. There may have been insufficient attention given to the contractual mechanism to bring about performance, or carelessness or inadvertence in the administration of those contractual mechanisms; there may have been assumptions made that one or the other party would do certain things, or assumptions made within each corporate group as to what needed to occur to secure performance, or any number of other things. It is not the task of the Court to determine these matters with precision. Rather, as Sev.en correctly submitted, the onus lay with CEPL to establish that the more probable inference was that IGPC was acting with the actual authority of each of the Relevant Entities, including IGEH, to bind each of them to cl 9A.2(b). As expressed by Dixon CJ in Jones v Dunkel [1959] HCA 8; (1959) 101 CLR 298 at 305:
But the law which this passage attempts to explain does not authorise a court to choose between guesses, where the possibilities are not unlimited, on the ground that one guess seems more likely than another or the others. The facts proved must form a reasonable basis for a definite conclusion affirmatively drawn of the truth of which the tribunal of fact may reasonably be satisfied.
In the present case, I am not satisfied that CEPL has established its case that IGPC was acting as agent of each Relevant Entity, including IGEH. CEPL’s contentions require acceptance that each Relevant Entity, including IGEH, not only adverted their mind to that fact that they would be bound by cl 9A.2(b) but also impliedly conferred actual authority upon IGPC to bind each of them to those obligations. CEPL maintained that it was not necessary to consider the position of each Relevant Entity, and it was sufficient if it could establish that IGPC acted with the actual authority of IGEH. However, irrespective of the precise entity involved, the logic of CEPL’s argument was that IGPC was binding each of those entities, including IGEH, with their actual authority. I am not satisfied that this was the case on the evidence before me.
For all of these reasons, I am not satisfied that CEPL has established that IGPC acted with the actual authority of each of the Relevant Entities, including IGEH, as their agent to bind each of them to the obligations contained in cl 9A.2(b).
4.2 The Reasonable Endeavours Issue
CEPL submits that cl 9A.2 should be construed as requiring IGPC to take all reasonable steps to require a Relevant Entity to comply with the obligations contained in the clause. This construction was said to be in line with authorities which highlight the importance of giving rights of pre-emption a practical field of operation, and avoiding a construction which would render them meaningless: cf Noranda Australia Ltd v Lachlan Resources NL (1988) 14 NSWLR 1 at 12. In support of its contentions, CEPL relied upon authorities which establish that a party is bound to do all that is reasonable to bring about compliance with terms of a contract, particularly in the context of rights of pre-emption: cf Esso Australia Ltd v Air Ride Transportation Pty Ltd (unreported, VSC, 28 September 1988, Marks J) at 20-23; THL Robina Pty Ltd v The Glades Golf Club Pty Ltd [2004] QSC 461; [2005] 2 Qd R 186 at [37]. CEPL further contended that the obligation to make such reasonable endeavours did not apply only to IGPC, but also to the Administrators given that Schedule 1 of the JVA provided that a reference to a “party” included a reference to its administrator(s).
During the course of oral submissions, CEPL acknowledged the force of the argument against it that IGPC as a subsidiary could not “force” its parent company or companies to do anything to procure a Sale Notice for the purpose of cl 9A, but CEPL sought to answer this argument by submitting that the Administrators (as administrators of IGPC) were in a different position. CEPL contended that, as the Administrators were also the administrators of IGEH, the Administrators were in a position to secure performance from both IGPC and IGEH.
However, in my view, even if the Administrators as administrators of IGPC sought to procure performance from IGEH and, in doing so, sought to secure performance from themselves as administrators of IGEH, the Administrators could not thereby force themselves to act other than in the best interests of each separate entity in administration. That may well present a conflict of interest, which only reinforces the point that, even if IGPC or its administrators sought to procure performance, they could not force IGEH to so perform.
For these reasons, I reject CEPL’s argument, and I am not satisfied that it provides a basis upon which to grant the relief that is sought.
For the above reasons, the First Question must be answered in the negative. IGEH is not bound by cl 9A.2(b) to provide a “Sale Notice” to CEPL in respect of the IGEH Share Sale Agreement.
5. THE SECOND QUESTION
As noted above, the Second Question raised two issues, being the Constructional Issue and, failing that, the Implied Term Issue. I address each in turn.
5.1 The Constructional Issue
Clause 9B.2 relevantly operates where IGPC ceases to be a “Subsidiary” of “its Ultimate Holding Company”. Although the term “Ultimate Holding Company” has a defined meaning in the JVA, CEPL contended that it was to be construed as referring to IGPC’s ultimate holding company from time to time and not by reference to that defined meaning.
CEPL acknowledged that, if (as described by it) a “woodenly literal” approach was applied, the definition of the term “Ultimate Holding Company” (as contained in the JVA) had a fixed meaning. It also acknowledged that, if this “woodenly literal” approach was applied to cl 9B.2, then, InterGen (International) BV had been nominated by IGPC as the “Ultimate Holding Company” for the purpose of the JVA in March 2002, and that IGPC ceased to be a “Subsidiary” of that entity in December 2003. It further acknowledged that, on this “woodenly literal” approach, as IGPC had not nominated any other entity as the Ultimate Holding Company for the purpose of the JVA, there was no entity that had been so nominated such that cl 9B had no remaining work to do. However, CEPL contended that acceptance of this “woodenly literal” approach would lead to absurd and unintended results. For these reasons, CEPL contended that the defined term should not be read into cl 9B.2(a). CEPL submitted that the Court was confronted with a “constructional choice” and that the Court should prefer its approach as it was consistent with and “more appropriately [did] justice to the purpose and intent of pre-emptive rights provisions and the long-term nature of the JVA as a whole”. In this regard, it made the following contentions.

It may be accepted, and I do accept, that by the Third Amending Deed, the parties intended to confer rights of pre-emption upon CEPL. However, in my view it was, and is, meaningless to engage with submissions about the conferral of such rights in an abstract or generalised way. The rights that the parties intended to confer are those that they agreed upon; no more and no less. By the Third Amending Deed, there were two types of pre-emptive rights that were conferred. The first was under cl 9A which operates in respect of a transfer of all or part of an InterGen Entity’s interest or (to the extent that it could be enforced) a Relevant Entity’s relevant transfer of a “Controlling Interest”. Unlike cl 9A, cl 9B does not operate in respect of a transfer of all or part of the interest or Controlling Interest in, relevantly, IGPC. Rather, cl 9B.2 applies only where, relevantly, IGPC ceases to be a Subsidiary of “its Ultimate Holding Company” as a result of a proposed transaction. If cl 9B is to be construed as only giving rise to a right of pre-emption on the first and only occasion or as having been spent after the first occasion on which IGPC ceases to be a Subsidiary of its Ultimate Holding Company, then: (a) it would not affect the rights in cl 9A; and (b) it would reflect no more than that that was the bargain struck between the parties as to the extent of the rights of pre-emption that were in fact agreed.
CEPL’s contentions rallied against these conclusions by, in substance, appealing to a normative commercial standard as to rights of pre-emption in joint venture agreements, and in relation to this specific one, as providing a touchstone for what was commercially sound. It in substance posed the question: why would CEPL, or the parties, have agreed to a clause whereby if CEPL did not exercise the option conferred upon it by cl 9B if, and when, relevantly, IGPC ceases to be a subsidiary of its nominated Ultimate Holding Company, it would thereafter not be able to have such an option? CEPL contended that this was not an intended result, especially when an alternative construction was “reasonably open” which gave “wider scope for pre-emptive rights”. The premise upon which these contentions proceeded was that there was no rational or commercially sound reason for cl 9B.2 (and cl 9.1(b)) to have a “short-lived and narrow field of operation” given that the JVA was one of long duration and it was in CEPL’s interest to have pre-emptive right in relevant circumstances of a change in control of its joint venture partner. However, the premise of these contentions is not borne out by the text or the context of the JVA itself. In this regard, it is notable that:
(a)first, cl 9B.2(a)(i) provided, as an exception to 9B.2(a), that an InterGen Entity (relevantly, IGPC) was not obliged to provide a notice to CEPL if there was a sale of all or substantially all of the assets of its “Ultimate Holding Company”;
(b)second, cl 9B.2(a)(ii) provided, as a further exception to 9B.2(a), that IGPC was not obliged to provide a notice to CEPL if there was a public offering of an InterGen Entity (relevantly, IGPC) or a Holding Company of that InterGen Entity (relevantly, IGPC), to be listed for quotation on a recognised stock exchange;
(c)third, as noted above, there were no rights of pre-emption granted in favour of IGPC or InterGen in the event of a change in control of CEPL.
The first two of the abovementioned scenarios would result in a change in control in the ultimate ownership of IGPC, but with no right of pre-emption other than that arising under cl 9A. The existence of these clauses run against the grain of CEPL’s contention as to the presumed commercial purpose of rights of pre-emption. When confronted by the existence of these clauses, CEPL submitted that these clauses made “commercial sense in the context of the protective function of a pre-emptive rights provision because [they] recognise[d] that the InterGen business [would be] remaining a coherent whole, rather than having CEPL’s joint venture partner being split out into a business about which CEPL has no knowledge or to which it has no exposure”. However, even if there was a “coherent whole” of a business, the fact is that CEPL would in the first scenario be dealing with a whole new ownership group and in the second scenario with multiple owners and potentially multiple retail and institutional investors. CEPL further contended that the “exceptions” in cl 9B.2(a)(i) and (ii) did not provide a “sound basis for reading down the scope of the rights beyond the express exceptions” and that their existence told against those exceptions ceasing to have effect upon the first and only occasion on which IGPC ceased to be a Subsidiary of its Ultimate Holding Company. I do not agree. In my view, the existence of these exceptions tells strongly against the fact that the parties here were adhering to any archetype as to rights of pre-emption. They point strongly in the direction that the parties here agreed to a particular bargain as recorded in their terms.
The fact that the parties had agreed to a particular form of pre-emption rights is reinforced by the fact that there were no rights of pre-emption in the Original JVA and, to the extent that they were agreed in the Third Amending Deed, they were rights granted only in favour of CEPL. The rhetoric of CEPL’s contentions equally applies to IGPC and its owners: why would a large multinational commercial party enter into the JVA with a State-owned enterprise without securing a right of pre-emption in the event that the State sought to dispose of its interest in the CPP JV to a third party? There may be several answers to this, but ultimately what matters is that which was agreed. These excursions into purpose, and rival purpose, only reinforce that caution must be exercised when Courts embark upon resolving questions of commercial purpose.
In any event, it is not the case that the result is that CEPL has no meaningful rights of pre-emption. This is to ignore the other right of pre-emption that CEPL secured by way of cl 9A, to the extent that it could be enforced. Either way, CEPL and IGPC had agreed to a specific bundle of pre-emption rights by way of the Third Amending Deed which had not previously existed. Those rights were not open-ended and at large. As Derrington J observed in the 15 November Judgment at [117]:
It should also be observed that pre-emption clauses can easily be drawn so that they operate in relation to any entity that becomes a joint venture participant. Necessarily, they can be drawn broadly and without specification of the entities involved or by reference to their specific corporate structure. In the present case, the parties adopted a different approach and agreed to a limited clause. It is not clear why that approach was taken, though it may well be that it had been assumed when the parties entered into the Second and Third Amending Deeds that if there was to be an alteration to the Ultimate Holding Company, CEPL would acquire IGPC’s interest in the JVA and it was not anticipated that any other interests would be included in the joint venture. Ultimately, it is not necessary to determine why the clause was drawn as narrowly as it was.
I do not accept that it is absurd or contrary to any apparent commercial purpose that CEPL’s right of pre-emption under cl 9B subsisted only for so long as IGPC in fact remained a subsidiary of the nominated entity, or that the JVA required there to be an Ultimate Holding Company nominated at all times. It may be accepted that the purpose of cl 9B was that the relevant right of pre-emption would exist so long as the State of Queensland retained a direct or indirect interest in CEPL of not less than 50%. However, that purpose only reveals part of the promise as recorded in cl 9B of the JVA. The right of pre-emption operated, and operates, where both that condition continues to prevail and, relevantly, IGPC ceases to be a Subsidiary of its Ultimate Holding Company. The operation of this clause in this way conveys that CEPL had by cl 9B negotiated and acquired a right of pre-emption that was available to be exercised at the point in time that, relevantly, IGPC will cease to be a Subsidiary of its Ultimate Holding Company. In that instance, cl 9B.2(a) contemplates that IGPC will give notice and cl 9B.2 contemplates the scenario where no notice is given or there has been a contravention of the JVA. In either case, CEPL obtained a right to give notice (within the relevant period of 14 days) that it required “Fair Value” of IGPC’s Interest to be determined and an option to purchase. CEPL could also waive its right to the “Fair Value” determination or waive its right to take up the “Purchase Option”. However, the JVA did not confer upon CEPL a right to insist in that circumstance that IGPC nominate a new Ultimate Holding Company. It may have been the case that the parties intended that CEPL could seek to do so at the point in time where it had 14 days within which to exercise its Purchase Option, or to leverage that position in some other way. It is unnecessary to decide whether this was the intended purpose. It is also unnecessary to decide whether cl 9B was capable of regeneration: cf 15 November Judgment at [118]. The fact is that that cl 9B conferred a right, which CEPL could exercise but chose not to.
I also do not consider it to be determinative that the use and meaning of the words “Fair Value” in cl 9B were inconsistent with the meaning of those words set out in the definition schedule of the JVA. CEPL relied upon this fact to contend that it followed that the defined term “Ultimate Holding Company” was equally inapplicable and that the defined terms were incongruent with the specifically and later negotiated rights of pre-emption. However, it does not follow from the fact that the defined term “Fair Value” does not apply to cl 9B that thereby the same result should apply in relation to the words “Ultimate Holding Company”.
Nor do I regard the decision of the Queensland Court of Appeal in PaulsTrading as being determinative here. There, the relevant joint venture agreement contained a clause (cl 9.1(a)(15)) which was expressed as follows:
“If, for any reason,:
…
(15) Effective control of a Participant … is altered without the prior written consent of the other Participants from that subsisting at the Commencement Date and in this paragraph effective control alters where any person or any person together with their Associates…
(Emphasis added).
The question that arose for determination was whether the words “Effective control of a Participant… is altered… from that subsisting at the Commencement Date” was a reference to there being: (a) only one change capable of occurring in respect of the effective control from that subsisting at the Commencement Date; or (b) any change in effective control from that subsisting at the Commencement Date. The Court of Appeal considered there was an ambiguity in the interpretation of the clause which presented a constructional choice. Williams JA (with whom McMurdo P and Jerrard JA agreed) concluded that the primary judge had correctly preferred the latter construction. In concurring reasons, Jerrard JA at [49]-[50] in persuasively practical terms got to the nub of the point as follows:
In this appeal I have read the reasons for judgment of Williams JA and respectfully agree with those and the orders proposed by his Honour. I add that the appellant’s construction of clause 9.1(a)(15) is the more obvious and natural one, but not the only construction. The respondent’s construction is open, and the phrase “[i]f .....[e]ffective control of a Participant....is altered.....from that subsisting at the Commencement Date....” is accordingly ambiguous. As explained by Williams JA and the learned trial judge, the respondent’s alternative construction accords considerably more with the commercial purpose of the Agreement and with the essential nature of a joint venture.
The respondent’s construction is open because it is common enough to use the phrase “altered from” in the sense in which the learned trial judge construed it and for which the respondents argue, namely to identify the state against which any subsequent alteration is to be compared. For example, one might write that the design and degree of mechanical sophistication of a standard Ford sedan has been altered many times from that subsisting as at the period of production of the Model T. The comparison made in the sentence is between each altered version of a standard Ford sedan and the Model T. I accordingly agree that the appeal should be dismissed.
The position in Pauls Trading is different than the present case. There, there was a literal ambiguity without the history and context that exists in the present case. Here, as I have detailed above, the use and re-use of the defined term “Ultimate Holding Company” tells against it being given no work to do.
CEPL contended that if the defined term was applied, then it would follow that the operation of cl 9.1 (as amended by the Third Amending Deed) would lead to absurd consequences. It was submitted that cl 9.1(b) would permit IGPC to assign its interest to an unrelated Mexican-owned company. However, this argument paid scant regard to the fact the defined term conferred upon IGPC a right to nominate any Holding Company of InterGen “for this purpose”. That purpose was for the identification of the entity for the purpose for which the defined term was used in the JVA. Upon IGPC ceasing to be a Subsidiary of the nominated entity, the purpose no longer existed. IGPC had notified CEPL of this fact in December 2003. Upon that event occurring, which was notified to CEPL, InterGen BV had ceased to be nominated for the purpose of the definition. The effect of that was that IGPC could not avail itself of the right to assign under cl 9.1(b) (without the consent of CEPL). This construction is harmonious with cl 9B in the sense that so long as IGPC was a subsidiary of its nominated Ultimate Holding Company, it could assign the JVA in the manner contemplated by cl 9.1 without the need for consent from CEPL. For the purpose of cl 9B, upon being notified that IGPC would cease to be a Subsidiary of its nominated Ultimate Holding Company, CEPL could at that point in time exercise the “Purchase Option” under cl 9B. However, upon IGPC ceasing to be a Subsidiary of that nominated Ultimate Holding Company, and unless some other entity was agreed to be so nominated, thereafter both parties lost their respective particular rights. In this sense, the clauses do operate harmoniously as a bundle of rights as between the parties. I do not regard this as being an unworkable or absurd outcome.
The above matters reinforce that the parties’ agreed defined term of “Ultimate Holding Company” should be applied, and that the context does not support the defined term not being applied. CEPL’s contention that the words “Ultimate Holding Company” should be given their “ordinary meaning” should also be rejected. As Leeming JA stated in Mainteck at [74]-[75], it is not helpful to speak of words having a “natural” meaning, and much the same may be said for words having an “ordinary” meaning. Here, the “ordinary meaning” that CEPL urged was that the words “its Ultimate Holding Company” as contained in cl 9B should be read as meaning the entity that was, as a matter of fact, IGPC’s “ultimate holding company” from time to time. However, to so read and construe the words, would be to attribute to the meaning of those words the content derived from, respectively, the Corporations Act, and thereafter to construe them so as to have that application from “time to time”. Curiously, CEPL contended that it was not seeking to read into cl 9B the definition from the Corporations Act, but that the definition of the term “ultimate holding company” in s 9 of the Corporations Act “merely reflects” the “conventional” application of those words. However, there was no elucidation as to the source from which the “conventional” application of those words was said to be derived. The contention involves at least two processes: (a) giving content to the meaning of the words as derived from some (undisclosed) “conventional” meaning or the Corporations Act; and (b) construing the clause as having application by reference to such an entity from time to time. In both respects, for the reasons I have already stated, this would involve not giving effect to the parties’ specific agreement to the contrary. The parties had consciously eschewed giving the words their meaning derived from the Corporations Act, or some other conventional meaning, and had given them a fixed operation by reference to specified or nominated entities, and not some ambulatory operation. In my view, neither the text nor context supports CEPL’s contention. If the parties intended the definition of “Ultimate Holding Company” to have the meaning contained in the Corporations Act, or some other conventional meaning, and to apply from time to time, then, given the long-term nature of the JVA, it was readily open to them to do so as they had done with the use of other defined terms. The parties made a deliberate choice not to take that course.
I also do not accept CEPL’s alternative construction. By this argument, CEPL contended that, if the defined words “Ultimate Holding Company” were read into cl 9B, then they are to be construed as referring to the company so nominated or identified by IGPC on the ASIC register as its ultimate holding company. This argument assumed the premise that it was necessary for there to be an “ultimate holding company” nominated at all times during the JVA in line with the commercial purpose of cl 9B. However, for the reasons stated above, I do not accept that premise. In any event, I do not accept that the CEPL’s construction is consistent with the text of the defined term. As noted above at [127], the defined term permits for a nomination of “any Holding Company” of InterGen, which is indicative of a choice being conferred upon IGPC to nominate one amongst other Holding Companies as the Ultimate Holding Company of IGPC for the relevant purpose of the clause, as reflected by the words “this purpose”. CEPL’s contentions do not accord with this text as they equate the general identification of an ultimate holding company on the ASIC register as being a nomination for the purpose of the clause. For these reasons, I reject the alternative construction.
For the above reasons, I reject CEPL’s case as to the Constructional Issue.
5.2 The Implied Term Issue
If it failed on the Constructional Issue, CEPL contended that the Court should imply a term to give business efficacy to the JVA in accordance with the principles enunciated in BP Refinery. It contended that a term should be implied into the definition of Ultimate Holding Company as a proviso such that, if the specified Ultimate Holding Company ceases to be IGPC’s ultimate holding company (as defined in the Corporations Act), then the definition applies to the entity which is in fact its ultimate holding company from time to time.
Although CEPL addressed the argument in its written submissions, it was not addressed in oral submissions at all. CEPL bears a heavy onus in seeking to imply a term into a detailed and complex commercial contract: see Codelfa Constructions Pty Ltd v State Rail Authority of New South Wales [1982] HCA 24; (1982) 149 CLR 337 at 346 (Mason J); New South Wales v Banabelle Electrical Pty Ltd [2002] NSWSC 178; (2002) 54 NSWLR 503 at [46] (Einstein J).
For the reasons I have reached in relation to the Constructional Issue, the implied term that CEPL advanced would be inconsistent with the parties’ agreement as recorded in the JVA. For those same reasons, I do not regard cl 9B as having a meaningless operation without the application of the implied proviso urged by CEPL, such that I do not consider it as satisfying the test of necessity.

Accordingly, CEPL has failed to establish its case on the Implied Term Issue.
6. DISPOSITION
For the foregoing reasons, the Amended Originating Application should be dismissed and I will so order. I will allow the parties a short time to confer as to the making of orders in relation to the Cross-Claim and provide to my chambers consent orders, failing which I will briefly hear the parties as to the appropriate orders to make.

I certify that the preceding one hundred and fifty-eight (158) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Shariff.
Associate:
Dated: 3 February 2025
SCHEDULE OF PARTIES

QUD 701 of 2024

Respondents

Fourth Respondent/Second Cross-Respondent:

SEV.EN GLOBAL INVESTMENTS A.S.

File number:	QUD 701 of 2024
Judgment of:	SHARIFF J
Date of judgment:	3 February 2025
Catchwords:	CONTRACTS – contractual construction and interpretation – joint venture agreement – pre-emptive rights clauses – where a pre-emptive right is exercisable upon a change in control – privity of contract – agency – where a clause purports to impose obligations on a non-party company in a corporate group – whether a subsidiary is obliged to use reasonable endeavours to procure its parent companies to perform contractual obligations – where a joint venture participant ceases to be a subsidiary of its ultimate holding company – whether a defined term must yield to the wider context of the agreement – whether a defined term results in absurdity or inconsistency – “woodenly literal” approach COURTS AND JUDGES – judicial comity – whether Court bound to follow earlier decision involving construction of same contractual provisions unless persuaded earlier decision “plainly wrong” – where earlier decision involved making of judicial directions under s 90-15 of the Insolvency Practice Schedule (Corporations)
Legislation:	Corporations Act 2001 (Cth) Sch 2 (Insolvency Practice Schedule (Corporations)), s 90-15 Corporations Act 1989 (Cth) Part 13 (Corporations Law), s 82 (repealed) Federal Court (Corporations) Rules 2000 (Cth) r 2.13
Cases cited:	Angas Securities Ltd v Small Business Consortium Lloyds Consortium No 9056 [2016] NSWCA 182 Australian Broadcasting Commission v Australasian Performing Right Association Ltd [1973] HCA 36; (1973) 129 CLR 99 Australian Securities Commission v Melbourne Asset Management Nominees Pty Ltd [1994] FCA 1031; (1994) 49 FCR 334 Beaufort Developments (NI) Ltd v Gilbert-Ash (NI) Ltd [1999] 1 AC 266 BHP Petroleum (Australia) Pty Ltd v Sagasco South East Inc [2001] WASCA 159 Bitannia Pty Ltd v Parkline Constructions Pty Ltd [2009] NSWSC 1302 Bligh Consulting Pty Ltd v Ausgrid [2017] NSWCA 95 BP Refinery (Westernport) Pty Ltd v Shire of Hastings [1977] UKPC 13; (1977) 180 CLR 266 Byland Holdings Pty Ltd v Pineland Property Holdings Pty Ltd [2009] NSWSC 1159 Chartbrook v Persimmon Homes Ltd [2009] 1 AC 1101 Cirrus Real Time Processing Systems Pty Ltd v Hawker Pacific Pty Ltd [2024] FCA 763 Cirrus Real Time Processing Systems Pty Ltd v Jet Aviation Australia Pty Ltd [2023] NSWCA 280; (2023) 113 NSWLR 80 Clark v Johnson [1967] SASR 279 Codelfa Constructions Pty Ltd v State Rail Authority of New South Wales [1982] HCA 24; (1982) 149 CLR 337 Colbran, in the matter of Balsub Pty Ltd (in liquidation) [2023] FCA 1635 Commissioner of Taxation v Sara Lee Household & Body Care (Australia) Pty Ltd [2000] HCA 35; (2000) 201 CLR 520 Current Images Pty Ltd v Dupack Pty Ltd [2012] NSWCA 99 Dockside Holdings Pty Ltd v Rakio Pty Ltd [2001] SASC 78; (2001) 79 SASR 374 Donau Pty Ltd v ASC AWD Shipbuilder Pty Ltd [2019] NSWCA 185; (2019) 101 NSWLR 679 Elisha v Vision Australia Limited [2024] HCA 50 Energy World Corporation Ltd v Maurice Hayes and Associates Pty Ltd [2007] FCAFC 34; (2007) 239 ALR 457 Equiticorp Finance Ltd (in liq) v Bank of New Zealand (1993) 32 NSWLR 50 Esso Australia Ltd v Air Ride Transportation Pty Ltd (unreported, VSC, 28 September 1988, Marks J) Freeman & Lockyer (a firm) v Buckhurst Park Properties (Mangal) Ltd [1964] 2 QB 480 Halford v Price [1960] HCA 38; (1960) 105 CLR 23 HDI Global Specialty SE v Wonkana No 3 Pty Ltd [2020] NSWCA 296; (2020) 104 NSWLR 634 In the matter of Hawden Property Group Pty Ltd (in liq) (ACN 003 528 345) [2018] NSWSC 481; (2018) 125 ACSR 355 In the Matter of ICS Real Estate Pty Ltd (in liq) [2014] NSWSC 479 James Adam Pty Ltd v Fobeza Pty Ltd (2020) 103 NSWLR 850 Jones v Dunkel [1959] HCA 8; (1959) 101 CLR 298 Maggbury Pty Ltd v Hafele Australia Pty Ltd [2001] HCA 70; (2001) 210 CLR 181 Mainteck Services Pty Ltd v Stein Heurtey SA [2014] NSWCA 184; (2014) 89 NSWLR 633 McCann v Switzerland Insurance Australia Ltd [2000] HCA 65; (2000) 203 CLR 579 McLellan v Australian Stock Exchange Ltd [2005] FCA 585; (2005) 144 FCR 327 Meadow Springs Fairway Resort Ltd (in liq) v Balance Securities Ltd [2007] FCA 1443 Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs v FAK19 [2021] FCAFC 153; (2021) 287 FCR 181 Mitchell v Cullingral Pty Ltd [2012] NSWCA 389 Miwa Pty Ltd v Siantan Properties Pte Ltd [2011] NSWCA 297; 15 BPR 29,545 Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd [2015] HCA 37; (2015) 256 CLR 104 MSW Property Pty Ltd v Law Mortgages Queensland Pty Ltd [2003] QCA 487 New South Wales v Banabelle Electrical Pty Ltd [2002] NSWSC 178; (2002) 54 NSWLR 503 Newey v Westpac Banking Corporation [2014] NSWCA 319 Noranda Australia Ltd v Lachlan Resources NL (1988) 14 NSWLR 1 One T Development Pty Ltd v Peter Krejci in his capacity as liquidator of ENA Development Pty Ltd [2023] NSWCA 120 Park, in the matter of IG Power (Callide) Ltd (Administrators Appointed) (No 4) [2024] FCA 1316 Park, in the matter of Queensland Nickel Pty Ltd (in liq) (No 3) [2022] FCA 1301 Pauls Trading Pty Ltd v Norco Co-operative Ltd [2006] QCA 128 Perpetual Custodians Ltd as Custodian for Tamoran Pty Ltd as trustee for Michael Crivelli v IOOF Investment Management Ltd [2013] NSWCA 231 Quikfund (Aust) Pty Ltd v Prosperity Group International Pty Ltd (in liq) [2013] FCAFC 5; (2013) 209 FCR 368 Re McCabe (in their capacity as joint and several deed administrators of the companies listed in Sch 1) [2023] FCA 1415; (2023) 169 ACSR 631 Re Willmott Forests Ltd (No 2) [2012] VSC 125; (2012) 88 ACSR 18 Reardon Smith Line Ltd v Hansen-Tangen [1976] 1 WLR 989 Rinehart v Hancock Prospecting Pty Ltd [2019] HCA 13; (2019) 267 CLR 514 Sev.en Gamma a.s. v IG Power (Callide) Pty Ltd (Administrators Appointed) [2024] FCA 30 Seymour Whyte Constructions Pty Ltd v Ostwald Bros Pty Ltd [2019] NSWCA 11; (2019) 99 NSWLR 317 Singh v Lynch [2020] NSWCA 152; (2020) 103 NSWLR 568 Sino Iron Pty Ltd v Mineralogy Pty Ltd [2019] WASCA 80; (2019) 55 WAR 89 THL Robina Pty Ltd v The Glades Golf Club Pty Ltd [2004] QSC 461; [2005] 2 Qd R 186 Watson v Scott [2016] 2 Qd R 484 Wilkie v Gordian Runoff Ltd [2005] HCA 17; (2005) 221 CLR 522 Wyllie v Tarrison Pty Ltd [2007] NSWCA 184 Yasuda Fire & Marine Insurance Co of Europe Ltd v Orion Marin Insurance Underwriting Agency Ltd [1995] QB 174 Herzfeld P and Prince T, Interpretation (2nd ed, Lawbook Co, 2020)
Division:	General Division
Registry:	Queensland
National Practice Area:	Commercial and Corporations
Sub-area:	Commercial Contracts, Banking, Finance and Insurance
Number of paragraphs:	158
Date of last submission:	28 January 2025
Date of hearing:	17 December 2024
Counsel for the Applicant/First Cross-Respondent:	Mr M Hodge KC, Mr S Webster KC and Mr A Psaltis
Solicitor for the Applicant/First Cross-Respondent:	Clayton Utz
Counsel for the First, Second and Third Respondents/First, Second and Third Cross-Claimants:	Mr D R Sulan SC and Mr R Jameson
Solicitor for the First, Second and Third Respondents/First, Second and Third Cross-Claimants:	White & Case
Counsel for the Fourth Respondent/Second Cross-Respondent:	Ms V Whittaker SC and Mr B W Smith
Solicitor for the Fourth Respondent/Second Cross-Respondent:	Quinn Emanuel Urquhart & Sullivan

ORDER MADE BY:	SHARIFF J
DATE OF ORDER:	3 FEBRUARY 2025

QUD 701 of 2024
Respondents
Fourth Respondent/Second Cross-Respondent:	SEV.EN GLOBAL INVESTMENTS A.S.