Cromarty Resources Pty Ltd v Thalanga Copper Mines Pty Ltd

Cromarty Resources Pty Ltd (the appellant) and Thalanga Copper Mines Pty Ltd (the respondent) were parties to an agreement concerning the sale of mineral. The dispute centred on the interpretation of the agreement, specifically regarding the payment of royalties and the circumstances under which the agreement could be terminated. The matter was heard by Bell P, Meagher and Payne JJA in the Court of Appeal of Queensland.

The Court of Appeal was required to determine two primary legal issues. Firstly, it had to ascertain when an "actual sale" of the mineral occurred for the purpose of triggering royalty payments, and whether the royalty, calculated as a percentage of "net sales realisation," was to be determined after the deduction of sales realisation expenses. Secondly, the Court had to consider whether a breach of a time stipulation for payment, even after the provision of further time, constituted a breach of an essential term justifying termination, or if it amounted to repudiatory conduct evincing an unwillingness to render substantial performance of the contract.

The Court reasoned that an "actual sale" occurred when title to the mineral passed to the buyer, and that "net sales realisation" was to be calculated after the deduction of sales realisation expenses. Regarding termination, the Court held that a persistent failure to make payments by the stipulated time, even after an extension, demonstrated a repudiation of the contract, evincing an intention not to be bound by its essential terms. This conduct entitled the respondent to terminate the agreement.

The appeal was dismissed, and the appellants were ordered to pay the respondent's costs.