Citic Ltd v Mineralogy Pty Ltd [No 6] - [2021] WASC 144

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION:   CITIC LTD -v- MINERALOGY PTY LTD [No 6] [2021] WASC 144
CORAM:   KENNETH MARTIN J
HEARD:   5 MAY 2021
DELIVERED          :   6 MAY 2021
FILE NO/S:   CIV 1514 of 2016
BETWEEN:   CITIC LTD
First Plaintiff
SINO IRON PTY LTD
Second Plaintiff
KOREAN STEEL PTY LTD
Third Plaintiff
CAPE PRESTON RESOURCE HOLDINGS PTY LTD
Fourth Plaintiff
AND
MINERALOGY PTY LTD
First Defendant
CLIVE FREDERICK PALMER
Second Defendant

Catchwords:

Judgment and orders - Specific performance of exercised option under agreement - Consideration of final orders following publication of reasons for decision following trial - Issues as to aspects of proposed orders for judgment

Legislation:

Nil

Result:

Orders for judgment settled and issued

Category: B

Representation:

Counsel:

First Plaintiff	:	Mr J H Karkar QC, Mr S H Parmenter QC & Mr A D Barraclough
Second Plaintiff	:	Mr J H Karkar QC, Mr S H Parmenter QC & Mr A D Barraclough
Third Plaintiff	:	Mr J H Karkar QC, Mr S H Parmenter QC & Mr A D Barraclough
Fourth Plaintiff	:	Mr J H Karkar QC, Mr S H Parmenter SC & Mr A D Barraclough
First Defendant	:	Mr P Dunning QC & Mr K S Byrne
Second Defendant	:	Mr P Dunning QC & Mr K S Byrne

Solicitors:

First Plaintiff	:	Allens
Second Plaintiff	:	Allens
Third Plaintiff	:	Allens
Fourth Plaintiff	:	Allens
First Defendant	:	Kane Jones
Second Defendant	:	Jonathan Shaw

Cases referred to in decision:

CITIC Ltd v Mineralogy Pty Ltd [No 5] [2021] WASC 89

KENNETH MARTIN J:

After a trial conducted during December 2020, my reserved reasons for decision post trial were delivered on 30 March 2021 - see CITIC Ltd v Mineralogy Pty Ltd [No 5] [2021] WASC 89 (reasons). As canvassed in those reasons, the parties had ultimately reached agreement by the commencement of the trial that orders for specific performance should issue in relation to the exercise of a First Option during April 2012 for CITIC Ltd to acquire control over all shares in a Further Company in accordance with provisions of the parties' China Project Option Agreement (CPOA) of 22 October 2008 (as later varied on 30 March 2012).
Notwithstanding the parties' trial concurrence to the effect that specific performance orders should issue, I needed to be, and ultimately was, independently satisfied that it was appropriate in all the circumstances for the discretionary equitable remedy of specific performance to issue (for instance, see [49] of the reasons).
Due to the complexity of what were essentially drafting disputes unresolved as between the parties, it was necessary for my reasons for decision to grapple with and resolve a host of subsidiary drafting issues, mainly concerning the terms of necessary 'Project Agreements'. The nominated Further Company (Balmoral Iron) would be, or become, a party to those Project Agreements with Mineralogy. Further drafting dispute issues surrounded additional terms in the envisaged Balmoral Iron Takeover Agreement. Those disputes as they presented at trial were also all resolved in the reasons (see [255] - [259], [262] and following).
Having resolved in the reasons all of the many contentious subsidiary drafting issues then raised as between the parties, I proceeded, commencing at [464], to evaluate the rival trial minutes of proposed final orders as submitted by each of the parties at the trial. As canvassed between [464] and [479], I rejected aspects of both protagonists' proposed minutes of final relief as regards a seeking of general declaratory relief and more general orders for specific performance (see [464]). In the course of that evaluation, I observed at [470]:
A second reason for not issuing a general declaration is that the form of the order to issue for specific performance, seen assessed by reference to the forms and precedents as I earlier identified in Seton at chapter L, looks to proceed on the basis that the court will 'declare' a party is entitled to specific performance of a particular agreement. Ultimately, I would propose here to eventually, as I foreshadow, issue a specific performance order concerning the First Option in such terms. Anything beyond that is unnecessary.
At [479] of the reasons (prior to my own formulation of draft terms of a prima facie order for judgment at [480]) I said:
Having regard to the now settled final terms for CPOA Project Agreements that were required to be resolved by this trial, and also to issues over the disputed terms of the Balmoral Iron Takeover Agreement, the as now resolved by me resulting clean consolidated versions of those instruments should be appended to the court's final specific performance orders to be issued. There should be no room left for even a whiff of future disagreement over matters of detail as I have needed to resolve by these reasons.
As mentioned, my reasons for decision post the December 2020 trial were delivered and published to the parties on 30 March 2021. At [482] - [484] I said:
The parties will then have 21 days after the publication of the reasons to then consider their respective positions and to confer over the form of final orders.
The CITIC plaintiffs, as the moving party for relief, ought within that time frame submit to my Associate and to the defendants, draft orders in alignment with these reasons and which will attach to them the resolved final iterations of the various instruments the subject of these reasons and draft order under [480] above.
Any residual issues following that conferral period, if they still remain unresolved, may be dealt with by agreement, or otherwise, the parties should contact my Associate to arrange for a special appointment for the purposes of resolving any residual arguments, including over costs issues, if they present.
In the wake of a circulation of those reasons there has obviously and properly ensued an extensive conferral process between the parties. The parties, in fact, then needed and sought further time to complete that conferral process with a view to settling the envisaged final orders, including the necessary documents be annexed to the orders. Much has obviously been accomplished.
However, the parties remained in disagreement essentially in seven areas concerning aspects of the proposed orders and also extending to aspects of the terms in an envisaged amended Balmoral Iron MRSLA as a Project Agreement and an aspect of the Balmoral Iron Takeover Agreement.
Resolution of then outstanding difficulties as between the parties required a further hearing that was conducted remotely by video linkage to respective senior counsel and their instructors on 5 May 2020.
For the purposes of the further hearing the parties exchanged rival minutes of proposed final orders and which evolved somewhat over time.
Ultimately, the contest as between the parties was between two rival minutes. I turn first to address the CITIC plaintiffs' minute of proposed orders of 28 April 2021 (folio document 196).

The CITIC plaintiffs' minute of 28 April 2021

The CITIC plaintiffs' minute reads in the following terms:
This action having been tried between 7 December and 15 December 2020 and upon hearing Mr J H Karkar QC, Mr S H Parmenter QC and Mr A D Barraclough for the plaintiffs and Mr P J Dunning QC and Mr K S Byrne for the defendants and the defendants having undertaken to the Court on 15 December 2020 that on the making of an order for specific performance they will, and will ensure that Balmoral Iron and any other party to the three instruments signed on 19 October 2020 (referred to in Mineralogy's letter of 9 November 2020 being exhibit 2.5.231.2279) also will, treat the instruments as being of no force or effect and pass all necessary resolutions confirming that the instruments have not been approved and are rescinded, IT IS ORDERED THAT:
Specific Performance Orders
1.Declare that the plaintiffs are entitled to specific performance of the CPOA of 22 October 2008 (as varied subsequently on 30 March 2012) so far as it remains to be performed in respect of the first plaintiff's (CITIC's) exercise of the First Option (as defined by the CPOA) on 13 April 2012 and to that end that within seven days of the date of these orders that the first defendant, Mineralogy Pty Ltd (Mineralogy), shall:
(a)execute the amendment deed in relation to the Balmoral Iron Mining Right and Site Lease Agreement in the form of annexure 1 to this order;
(b)execute the deed of amendment and accession to the Fortescue Co-ordination Deed in the form of annexure 2 to this order;
(c)cause Balmoral Iron Pty Ltd (Balmoral Iron) to execute the amendment deed in relation to the Balmoral Iron Mining Right and Site Lease Agreement in the form of annexure 1 to this order; and
(d)cause Balmoral Iron to execute a counterpart of the deed of amendment and accession to the Fortescue Co‑ordination [D]eed in the form of annexure 2 to this order.
2.Within seven (7) days of the date of these orders, CITIC, the second plaintiff, Sino Iron Pty Ltd (Sino Iron) and the third plaintiff, Korean Steel Pty Ltd (Korean Steel), are to execute a counterpart to the deed of amendment and accession to the Fortescue Co-ordination Deed in the form of annexure 2 to this order.
3.Within seven (7) days of completion of the steps in the preceding two orders, Mineralogy shall give CITIC written notice that it has satisfied its obligations for the purposes of clauses 3.6(c)(i) and 3.6(c)(ii) of the CPOA.
4.Within fourteen (14) days of the notice in the preceding order being given by Mineralogy to CITIC:
(a)Mineralogy shall execute a counterpart of the Takeover Agreement in the form of annexure 3 to this order and provide the signed counterpart to CITIC, Sino Iron, Korean Steel and the fourth plaintiff, Cape Preston Resource Holdings Pty Ltd (CPRH);
(b)Mineralogy shall cause Balmoral Iron to execute a counterpart of the Takeover Agreement in the form of annexure 3 tot his order and provide the signed counterpart to CITIC, Sino Iron, Korean Steel and CPRH;
(c)CITIC, Sino Iron, Korean Steel and CPRH shall execute a counterpart of the Takeover Agreement in the form of annexure 3 to this order and provide the executed counterpart to Mineralogy.
5.No later than the date of Completion (as defined in the Takeover Agreement):
(a)the second defendant, Mr Clive Palmer, shall execute a Deed of Guarantee in the form of annexure 4 to this order;
(b)Mineralogy shall cause Balmoral Iron to execute a Deed of Guarantee in the form of annexure 4 to this order; and
(c)CITIC and CPRH shall execute a Deed of Guarantee in the form of annexure 4 to this order.
6.No later than the date of Completion (as defined in the Takeover Agreement):
(a)Mineralogy shall execute a Deed of Indemnity in the form of annexure 5 to this order;
(b)Mineralogy shall cause Balmoral Iron to execute a Deed of Indemnity in the form of annexure 5 to this order; and
(c)CITIC and CPRH shall execute a Deed of Indemnity in the form of annexure 5 to this order.
7.The parties shall duly perform the Takeover Agreement so as to effect Completion (as defined in the Takeover Agreement).
8.Until the date of Completion (as defined in the Takeover Agreement), Mineralogy and Mr Palmer shall use their reasonable endeavours to obtain the fulfilment of the conditions in clause 8.2 of the CPOA.
Costs
9.Within two (2) months of the date of these orders, the plaintiffs file their proposed costs orders, and any affidavits and submissions regarding their proposed costs orders.
10.Within one (1) month of receiving the material referred to in order 9, the defendants file their proposed costs orders, and any affidavits and submissions regarding their proposed costs orders.
11.Within three (3) weeks of receiving the material referred to in order 10, the plaintiffs file any affidavits and submissions in reply to the material filed pursuant to order 10.
12.The matters be listed for a special appointment to determine the appropriate costs orders at the earliest convenient date to the Court and the parties four (4) months after the date of these orders.
Other Matters
13.There is liberty to apply.
Accompanying the CITIC plaintiffs' minute of proposed orders, and in alignment with a requirement under [479] of the reasons for clean consolidated versions of the instruments to be appended to the court's final specific performance orders, there are some eight (8) annexure documents submitted with folio document 196 - see submitted annexure documents 196a - 196h.
The proposed annexures in some respects evolved and were modified over time, no doubt under the ongoing conferral process as conducted between the parties post the publication of the reasons.

The defendants' rival minute of proposed orders

On the part of the defendants a rival minute of proposed orders was submitted, also on 28 April 2021. I refer to folio document 197.
For convenience purposes, I will set out verbatim below the content of the defendants' rival minute of proposed orders. The document highlights in red deletions or suggested augmentations against the CITIC plaintiffs' minute:
~~Specific Performance Orders~~
1.Declare that the plaintiffs are entitled to specific performance of the CPOA of 22 October 2008 (as varied subsequently on 30 March 2012) so far as it remains to be performed in respect of the first plaintiff's (CITIC's) exercise of the First Option (as defined by the CPOA) on 13 April 2012 and to that end that within two (2) days of the date of these orders that the first defendant, Mineralogy Pty Ltd (Mineralogy), shall:
(a)execute the amendment deed in relation to the Balmoral Iron Mining Right and Site Lease Agreement in the form of annexure 1 to this order.
(b)execute the deed of amendment and accession to the Fortescue Co-ordination Deed in the form of annexure 2 to this order.
(c)cause Balmoral Iron Pty Ltd (Balmoral Iron) to execute the amendment deed in relation to the Balmoral Iron Mining Right and Site Lease Agreement in the form of annexure 1 to this order; and
(d)cause Balmoral Iron to execute a counterpart of the deed of amendment and accession to the Fortescue Co‑ordination [D]eed in the form of annexure 2 to this order.
2.Within two (2) days of the date of these orders, CITIC, the second plaintiff, Sino Iron Pty Ltd (Sino Iron) and the third plaintiff, Korean Steel Pty Ltd (Korean Steel), are to execute a counterpart to the deed of amendment and accession to the Fortescue Co-ordination Deed in the form of annexure 2 to this order.
3.Within two (2) days of completion of the steps in the preceding two orders, Mineralogy shall give CITIC written notice that it has satisfied its obligations for the purposes of clauses 3.6(c)(i) and 3.6(c)(ii) of the CPOA.
4.Within two (2) days or sooner of the notice in the preceding order being given by Mineralogy to CITIC:
(a)Mineralogy shall execute a counterpart of the Takeover Agreement in the form of annexure 3 to this order and provide the signed counterpart to CITIC, Sino Iron, Korean Steel and the fourth plaintiff, Cape Preston Resource Holdings Pty Ltd (CPRH);
(b)Mineralogy shall cause Balmoral Iron to execute a counterpart of the Takeover Agreement in the form of annexure 3 to this order and provide the signed counterpart to CITIC, Sino Iron, Korean Steel and CPRH;
(c)CITIC, Sino Iron, Korean Steel and CPRH shall execute a counterpart of the Takeover Agreement in the form of annexure 3 to this order and provide the executed counterpart to Mineralogy.
(d)CITIC cause Cape Preston Resource Holdings Pty Ltd within 5 business days of receiving the executed Takeover Agreement from Mineralogy pay the Deposit of US $20,000,000 pursuant to Clauses 1.3(a)(i) and 3.1(a) thereof.
(e)CITIC cause Cape Preston Resource Holdings Pty Ltd within 45 business days of receiving the executed Takeover Agreement from Mineralogy pay the balance Deposit of A$69,000,000 pursuant to Clauses 1.3(a)(ii) and 3.1(b) thereof.
5.No later than the date of Completion (as defined in the Takeover Agreement):
(a)the second defendant, Mr Clive Palmer, shall execute a Deed of Guarantee in the form of annexure 4 to this order;
(b)Mineralogy shall cause Balmoral Iron to execute a Deed of Guarantee in the form of annexure 4 to this order; and
(c)CITIC and CPRH shall execute a Deed of Guarantee in the form of annexure 4 to this order.
6.No later than the date of Completion (as defined in the Takeover Agreement):
(a)Mineralogy shall execute a Deed of Indemnity in the form of annexure 5 to this order;
(b)Mineralogy shall cause Balmoral Iron to execute a Deed of Indemnity in the form of annexure 5 to this order; and
(c)CITIC and CPRH shall execute a Deed of Indemnity in the form of annexure 5 to this order.
7.The parties shall duly perform the Takeover Agreement so as to effect Completion (as defined in the Takeover Agreement).
8.Until the date of Completion (as defined in the Takeover Agreement), Mineralogy and Mr Palmer shall use their reasonable endeavours to obtain the fulfilment of the conditions in clause 8.2 of the CPOA.
Costs
9.All questions of costs as between the parties are to be dealt with at a short appointment before K Martin J at a date to be fixed.
Other Matters
10.There is liberty to apply.
As may be seen from the defendants' proposed minute of 28 April 2021, there present four areas of conceptual disagreement manifested under that exchange of rival minutes. It is convenient to resolve the four presenting areas of dispute in reverse order.

Costs

In relation to the parties' observed counter positions as regards questions of costs orders, the stance of the defendants has altered. As was communicated by Mr Dunning QC, senior counsel for the defendants at the commencement of the hearing on 5 May 2021, the defendants say they are now content to accept a programming proposal concerning the determination of residual costs issues in the litigation under the CITIC plaintiffs' proposed orders 9 through 12 concerning costs. Consequently, that will be the position.

The defendants' proposed orders 4(d) and (e) concerning the payment of the two tranches of deposit in respect of the acquisition of the shares in the Further Company

Whilst the parties remained in disagreement about this issue at the hearing, the essential position is that under proposed order 7 of the CITIC plaintiffs' submitted minute the court would order (mirroring the terms of the prima facie order I postulated at par 7 of the orders under [480] of my draft proposed specific performance order) that:
The parties shall duly perform the Takeover Agreement so as to effect Completion (as defined in the Takeover Agreement).
Proposed order 7 envisages under its terms a completion by the parties of all required aspects of the Balmoral Iron Takeover Agreement. That must include deposit payment terms for the two tranches of deposit payable within respectively five (5) business days and then 45 business days, as is provided for under cl 3.1(a) and (b) of the Balmoral Iron Takeover Agreement.
At root, therefore, there is no substantive disagreement between the parties about meeting the dual deposit payment obligations as specified by cl 3.1(a) and (b). I accept the submission of the CITIC plaintiffs to the effect that there is no basis in principle to specifically extract and highlight the two particular deposit payment obligations as done by the defendants under proposed orders 4(d) and (e) of that minute. The ordered performance of that aspect of the Balmoral Iron Takeover Agreement is catered for under the more generally framed proposed order 7. That is sufficient.

Proposed truncation of the time for performance to two (2) days under proposed orders 1 through 4 of the defendants' minute

The CITIC plaintiffs essentially for logistical reasons of expressed pragmatism oppose any deviation away from the seven (7) day timeline as is proposed by the defendants (under proposed orders 1, 2, 3 and 4) and 14 day timeline (under proposed order 4).
Had the parties been in agreement concerning a truncated timeline to address these identified aspects of performance, then I would have been minded to accede to a joint request. However, the CITIC plaintiffs, in effect, say that given the international locale of CITIC Ltd, the current constraints of the COVID-19 pandemic and a need for, in effect, calm, meticulous and careful checking of considerable underlying materials (including all the proposed annexed documents to the orders) that matters cannot be rushed and that they should be afforded the original time lines prima facie contemplated by the draft orders seen at [480] of the reasons.
That stance, in my view, is not unreasonable. In a context of the amount of time which has elapsed since the First Option was exercised during April 2012, I consider it reasonable that matters not be rushed at this end stage and that the original timelines as proposed should be afforded.

Proposed excision of the preface to the specific performance orders under proposed order 1

This aspect of this agreement between the parties over their rival minutes presented perhaps as the most significant area of disagreement manifesting over the terms of the orders. Senior counsel for the defendants, Mr Dunning QC, essentially submitted that the declaratory component or, indeed, as I understood the submission, any reference to specific performance of the First Option aspect of the CPOA, would be out of alignment with the determinations of the post trial reasons for decision. This was on a basis that, essentially, all the court needed to resolve in the end were disputed issues of the CPOA's construction as between the parties - there being no disagreement over the making of specific performance orders at the trial.
However, as I indicated during the course of my dialogue with senior counsel on 5 May 2021, although the parties fell into alignment at trial as to the making of specific performance orders, it was still necessary for the court to be independently satisfied that an issuance of specific performance relief as a discretionary equitable remedy was otherwise appropriate, in all the presenting circumstances. In the end, I was so satisfied. See again [49] of the reasons. Moreover, as I indicated commencing at [464] and following, particularly at [470], my assessment was that an appropriate order for specific performance, having regard to the forms and precedents I had identified from Seton (see [5] of the reasons) would commence with the court declaring a party was entitled to specific performance and then proceed to address the performance aspects of the required conduct more precisely. See also then my rejection of the CITIC plaintiffs' original proposal for a more generalised declaration at [464] and my eventual decision at [476] to confine:
... the relief to be granted simply to specific performance orders which will be directed at the rights and obligations arising out of the undoubted 13 April 2012 exercise by CITIC of its First Option under the CPOA and to the ensuing takeover completion events under the CPOA which are to follow concerning the accepted Further Company (Balmoral Iron).
The draft proposed specific performance order, seen at order 1 under [480], reflect my considered decision that a declaration as to an entitlement to specific performance of the CPOA in respect of the First Option exercise, was appropriate. Notwithstanding the submissions of senior counsel, I remain of the view that the order for specific performance so phrased is appropriate and, indeed, is necessary. To that extent, I also accept the submissions of senior counsel for the CITIC plaintiffs, Mr Karkar QC, to the extent that what is now seen as the agreed preamble to the proposed orders, by reference to a recording of the defendants' undertaking to the court of 15 December 2020, is contingent upon the making of an order for specific performance - so that the aspects of proposed order 1 which have been challenged by the defendants are nevertheless all required to be retained.

Three (3) issues concerning two annexed agreements to the final orders

Three (3) remaining issues of controversy were as communicated under Mineralogy's legal counsel, Mr Smith's, communication to my Associate of 27 April 2021 (folio document 198).
They are, essentially, issues of controversy as communicated by Mr Smith on behalf of the defendants.
Two of the three controversial issues relate to more amendments as proposed to terms of the Balmoral Iron MRSLA. This proposed document may be found as folio document 196b. Mr Smith's points concern suggested further amendments to cl 4.1 and cl 5.2 within that instrument.
The CITIC plaintiffs object to the approach of the defendants in seeking to raise these further suggested augmentations at this very late point rather than at the trial itself. They say, correctly, that no reason has been properly articulated by the defendants for the suggested further changes when there has been every opportunity, in effect, for them to have been raised earlier. Whilst the objection is correct, where the point is reasonably raised, I prefer to resolve each of the suggested augmentations by the defendants on their merits or demerits rather than by way of a plenary rejection.

Balmoral Iron MRSLA cl 4.1

In relation to the augmentation now suggested to cl 4.1 in the Balmoral Iron MRSLA, the question ultimately at issue is over a use of the word 'outlined' in the first line of cl 4.1, there referring to the Site Lease Area in a plan which is agreed as between the parties to be attached to the MRSLA as Annexure 1.
There is no disagreement as between the parties about the correct plan. It is, indeed, the very same plan as is referred to as an annexure in the Sino Iron MRSLA and the Korean Steel MRSLA. Each of those MRSLA agreements uses the terminology of 'outlined', rather than Mineralogy's late suggestion that the word 'coloured' be used instead. The words following in cl 4.1 after the word 'outlined' read:
... in red in the plan ... attached to this Agreement as Annexure 1 ...
The actual plan itself is before me as electronic document 196c. Viewing that document alone it may be observed that the mining lease areas of Mineralogy are identified in bright red by reference to the legend. They look, indeed, to be coloured completely in red rather than only outlined. Accordingly, were the matter now being approached with a blank canvas, as a better drafting suggestion, there may be much to be said for a grammatical selection of the word 'coloured', rather than the word 'outlined' as used in cl 4.1. However, there is no blank canvas. Instead there is a bloodied post‑trial battlefield of Gettysburg dimensions.
My reasons for decision concerning the terms of the CPOA canvas at some length a requirement for Project Agreements to be drawn substantially by reference to the Sino Iron MRSLA, as the CPOA's chosen underlying template. I refer particularly to my observations about that in the reasons at [68] and [69].
By contrast, the CPOA's chosen template for a Further Company Takeover Agreement under the CPOA was the Korean Steel Takeover Agreement. See the reasons at [92]. These template agreement choices were obviously careful and deliberate, objectively assessed. See also my following observations at [150], [151], [152] and [155].
By my assessment, bearing in mind the very same plan in question is referred to by the Sino Iron MRSLA and the Korean Steel MRSLA, it would be curiously grating and inconsistent were differing terminology to be deployed by using the different word 'coloured' in an amendment to cl 4.1 of the Balmoral Iron MRSLA. A need for consistency as between the three MRSLA agreements viewed in overall context is a greater policy concern, which must, in the end, override any rival consideration of using grammatical deviation to use a different word that might, on reflection, have presented as more the appropriate had the position been otherwise unconstrained.
Consequently, Mineralogy's suggested augmentation, as regards substituting the word 'coloured' for the word 'outlined' in cl 4.1 of the Balmoral Iron MRSLA, is rejected.

Balmoral Iron MRSLA cl 5.2

Under Mr Smith's communication of 27 April 2021 it is further proposed that existing cl 5.2 in the Balmoral Iron MRSLA be amended to read:
(a)The parties acknowledge that no project proposals have been approved in accordance with Clause 7 of the State Agreement.
It was said by Mr Smith that such wording is more appropriate because cl 5.2 in the Sino Iron MRSLA related to matters that were true in respect of Sino Iron in 2006. Nevertheless, Mr Smith says that in 2008 for the Korean Steel MRSLA:
... such wording was changed to reflect the then circumstances as they related specifically to Korean.
Mr Smith continued:
Likewise Balmoral should have the same change as provided in the Korean MRSLA cl 5.2 ...
Nevertheless, I must reject the submission, essentially for two main reasons. First, I have specifically addressed cl 5.2 of the proposed Balmoral Iron amended MRSLA under [413] of the reasons, where I said:
Likewise, for item 35, which references cl 5.2 and item 36 regarding a disputed proposed new cl 5.2(d) ... The CITIC plaintiffs' as proposed drafting augmentations to the MRSLA under exhibit 9.3 in these respects, however, are not essential.
Essentially, I had accepted Mineralogy's contended position under what had been submitted as its exhibit 8.1 at trial, concerning then the contended making of very limited amendments to the Balmoral Iron MRSLA as it had been perfected on 21 March 2006, then amended under a Deed of Variation of 30 March 2006. The submission of Mineralogy concerning cl 5.2 under that document had then effectively rejected amendments as suggested by the CITIC plaintiffs. Mineralogy proposed instead incorporating terms rendering cl 5.2 into a direct alignment with the terms of cl 5.2 of the Sino Iron MRSLA, as it had been amended, on 8 January 2008. In short, therefore, Mineralogy won the item 36 contest at the time. For Mineralogy at this point to be permitted to deviate in the wake of the publication of the reserved reasons post trial would, on this issue, effectively be to allow it to reopen its trial case completely. That course, as a matter of policy, would be directly against a necessary need for finality and for the permanent quelling of considered disputes by the trial process.
My second reason for disallowing what is proposed by the defendants by the newly proposed cl 5.2 better reflecting, as Mr Smith says, the content of the Korean Steel MRSLA, is that the explicitly chosen CPOA template for Project Agreements, as the post‑trial reasons discuss at some length, was not the Korean Steel MRSLA. See the definition of 'Project Agreements' in the CPOA, subcl (a), explicitly selecting the template agreements as those between Sino Iron and Mineralogy, not those between Korean Steel and Mineralogy. That, by way of contrast under the CPOA, can be compared with the position concerning the template Takeover Agreement where Korean Steel was selected. See CPOA cl 3.6(f) and Schedule 3 to the CPOA in its preface.
In any event, the settled upon content of cl 5.2 in referring to Sino Iron's project proposals (not to Balmoral Iron's proposals), albeit historic and making no reference to project proposals concerning Balmoral Iron, ultimately, on my assessment, does no violence at all to the content of the proposed Balmoral Iron MRSLA, as a workable future instrument emerging via the CPOA's requirements. To the extent that there are historic redundancies carried over within the content of that agreement, then they will no doubt be viewed and isolated to that extent.

Warranties

The last of Mr Smith's 27 April 2021 areas of disagreement with the CITIC plaintiffs concerns the content of the envisaged Balmoral Iron Takeover Agreement, in particular at Schedule 1 thereof and by reference there to some warranties therein under the heading 'Licences and Approvals'. As expressed by Mr Smith, the objection is:
... the Defendants' position is that warranties 1 to 4 should be deleted as they are untruthful and false and say as follows in respect of each warranty the numbering coinciding with the numbering of the warranty.
1.Balmoral has no project approvals under the State agreement and holds no [e]nvironmental approval. Balmoral therefore has no existing authorisations.
2.There are no environmental approvals issued to Balmoral in its name[,] accordingly, this is a false warranty and must be deleted.
3.There is no correspondence in respect of Balmoral. The letters referred to relate to Sino Iron. The warranty should therefore be deleted.
4.As the warranty 4 relates to warranties 1 to 3 it also is not true and must be deleted.
Mr Smith continued:
Each of the directors of Mineralogy cannot sign an agreement that contains warranties that are false because of their duties under section 180 to 184 of the Corporations Act.
For their part, the CITIC plaintiffs oppose any excision of this aspect of 'Schedule 1 - Sellers' Warranties and Representations' within the terms of the proposed Balmoral Iron Takeover Agreement.
Of course, it is necessary to see the precise terms of the warranties and representations. They can be found in the written submissions of the CITIC plaintiffs upon this issue (folio document 199) - to which I refer below.
Before looking at the four warranties however, it is necessary to recall that the CPOA itself, under cl 3.6(f) made a reference to an envisaged Takeover Agreement in respect of the 'Further Company' as being:
... in substantially the same form as the Korean Steel Takeover Agreement but modified in the manner described in Schedule 3 ...
Then, Schedule 3 of the CPOA had relevantly provided:
The form of the Takeover Agreements to be entered by Mineralogy or Palmer and CITIC or its nominee on exercise of an option involving the acquisition of a Further Company from the Seller will be substantially the same as the form of the Korean Steel Takeover Agreement with the following exceptions:
...
(c)Warranties contained in the Takeover Agreement will be amended to take account of any matter disclosed by Mineralogy or Palmer which would make any such warranty untrue. (my emphasis in bold)
Accordingly, it may be seen that, objectively assessed, the drafters of the CPOA at October 2008 had addressed the at then hypothetical issue of the appropriateness of the Sellers' warranties that would otherwise apply in the same form as those found within the Korean Steel Takeover Agreement. Critically, any amendments away from the template are seen to be driven by taking account of 'any matter disclosed by Mineralogy or Palmer' (my emphasis in bold). However, there have been no such matters disclosed as a matter of fact by Mineralogy or Mr Palmer.
The present issue concerning the appropriateness of the four warranties seen under the heading 'Licences and Approvals' within Schedule 1 of the proposed Balmoral Iron Takeover Agreement, was not raised at all at the trial. Consequently, it is not the subject of any observations found in the post trial reasons rendered towards the Balmoral Iron Takeover Agreement. See the observations commencing generally at [262].
Nevertheless, were it seriously to be the case that the position at this time was shown to be that Mineralogy was being asked to provide a warranty in respect upon a matter that was demonstrably false, then in the overall interests of justice, notwithstanding the powerful policy considerations of quelling disputes and finality in dispute resolution, I would be inclined to allow at least an opportunity for any unsatisfactory position to be remedied, albeit overlooked till now.
However, the position as was clarified under the opposing written submissions against the defendants filed by the CITIC plaintiffs is otherwise and the submissions persuade me ultimately that that is not the position.
Below I will set out what the CITIC plaintiffs have said about this issue under pars 40 - 54 of their written submissions filed 4 May 2021. In order to better comprehend those submissions, however, it is necessary to appreciate that the proposed Balmoral Iron Takeover Agreement expressly defines the term 'Authorisation' under its definitions found in cl 19.1 as follows (unless the contrary intention appears):
Authorisation includes any consent, registration, filing, agreement, licence, approval, permit, authority or exemption from, by or with a government agency.
The definition is extensive. It would, as the written submissions of the CITIC plaintiffs contend, seemingly extend to catch the State Agreement to which, as I observed within the reasons, Balmoral is already a party. Set out below I now incorporate pars 46 - 54 of the CITIC plaintiffs' written submissions (folio document 199):
46.The term 'Authorisation' is defined in clause 19.1 of the Balmoral Takeover Agreement as including any consent, registration, filing, agreement, licence, approval, permit, authority or exemption from, by or with a government agency'. This definition is the same in the Korean Steel Takeover Agreement. The State Agreement to which Balmoral is a party, would, for example, be an Authorisation within this broad definition. Based on the information provided by Mineralogy in the due diligence process, Warranty 1 is not untrue and can be given by Mineralogy as required.
47.In any event, his Honour did not accept that other provisions should be excised on the basis of redundancy. See, for example, paragraph [421] of the Reasons, where his Honour referred to clause 13 of the MRSLA and stated:
If it is redundant as a matter of history, then its redundant retention will do no harm and will simply be inconsequential.
48.Warranty 2 states:
The Minister for Environment has given the approval required to permit the construction of facilities for the production of at least 7 million tonnes per annum of Products.
49.The warranty does not state that environmental approvals have been issued to Balmoral in its name. Mineralogy has not provided any information which makes the warranty (as drafted and included in the Korean Steel Takeover Agreement) untrue.
50.Warranty 3 under the heading 'Licences and Approvals' in Schedule 1 of the Takeover Agreement states:
The Seller has provided copies of correspondence from the former Western Australian Minister for Resource Development, the Honourable Clive Brown M.L.A., and the Minister for the Environment, the Honourable Dr Judy Edwards MLA, in respect of the production of concentrate and a letter from the Premier of Western Australia to the Seller dated 9 March 2006. The Seller confirms that such letters are true copies of the originals and to the best of the Seller's knowledge reflect Western Australian Government policy.
51.The defendants object to this warranty on the basis that the correspondence referred to does not relate to Balmoral Iron, but rather relates to Sino Iron. However, that does not render the warranty untrue or false as claimed by the defendants. The warranty does not state that the correspondence relates to Balmoral Iron. The same warranty was given by the defendants under the Korean Steel Takeover Agreement notwithstanding the defendants' claim that the correspondence relates to Sino Iron. As such, there is no reason why the warranty cannot also be given under the Balmoral Iron Takeover Agreement.
52.While the correspondence referred to in warranty 3 under the heading 'Licences and Approvals' is historical, his Honour did not accept that other provisions should be excised on that basis. See, for example, paragraph [386] of the Reasons, where his Honour acknowledged that Recital D under the defendants exhibit 8.1 has been historically overtaken, but held that the Recital must nevertheless remain.
53.Warranty 4 states:
The Seller is not aware of anything which might adversely affect the continuation of the Authorisations.
54.The defendants allege that the above warranty is untrue on the basis that it relates to warranties (1) to (3). As set out in the preceding paragraphs, warranties (1) to (3) are not untrue.

These submissions of the CITIC plaintiffs generally must be accepted. In particular, I cannot accept that as currently framed warranties 1, 2 and 3 are false, as Mr Smith suggests. Whilst there may be elements of historic redundancy, particularly concerning warranty 2 in relation to the earlier construction of facilities, that is, as I observed again in the post trial reasons at [421], an insufficient basis to correct or excise input from the chosen template. That historic input may simply provide context.
As the CITIC plaintiffs correctly point out, warranty 2 does not state that environmental approvals have been issued to Balmoral Iron. Likewise is the case in relation to the historic matters dealt with under warranty 3.
Again, the point made by the CITIC plaintiffs at par 51 of their written submissions to the extent that the same warranties have been given by the defendants under the Korean Steel Takeover Agreement, notwithstanding the referred correspondence relates to Sino Iron. None of that demonstrates obvious falsity in these four warranties. In short, redundancy does not equate to falsity.
I am not persuaded then to accept the objection to these four warranties raised under Mr Smith's correspondence of 27 April 2021.

Conclusion as to orders

That concludes my resolution of the issues as raised concerning the terms of final orders for judgment on 5 May 2021.
During the course of verbal submissions, however, one further point was sought to be raised by Mr Dunning QC for the defendants. The submission concerned effectively a minor drafting clarification proposed concerning the former name of CITIC Ltd as 'CITIC Pacific Ltd', with there being a suggestion that two of the document proposed to be annexed to the specific performance orders proposed be adjusted to render that evolution in naming nomenclature explicit. The submission was put in respect of the execution version of the Fortescue Co-ordination Deed (folio document 196e) and in the Deed of Amendment and Accession to the Fortescue Coordination Deed (folio document 196d) at item 4 in reference to the parties.
In the end, however, I must accept Mr Karkar QC's submission for the CITIC plaintiffs to the effect that the nomenclature change is obvious and well-known to all parties concerned. At this late stage tinkering again with the annexure documents in that minor aspect is an unnecessary inconvenience bearing in mind the extent of the toil committed to generate them into their present state.
Consequently, upon the publication of these supplementary reasons, orders in terms of the minute of proposed orders as was submitted by the CITIC plaintiffs on 28 April 2021 will issue, thereby implementing, in effect, my reasons for decision of 30 March 2021 as a judgment and orders of the court upon publication.
I also record for posterity a prima facie view that the CITIC plaintiffs should have their costs of and associated with the 5 May 2021 hearing that was required in relation to finalisation of orders. That issue, however, will be encompassed with orders 9 through 12 that will otherwise now issue.

I certify that the preceding paragraphs comprise the reasons for decision of the Supreme Court of Western Australia.
DW
Associate to the Honourable Justice Martin
6 MAY 2021