Fluor Australia Pty Ltd v ASC Engineering Pty Ltd - [2007] VSC 262

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE
COMMERCIAL AND EQUITY DIVISION

No. 5706 of 2003

FLUOR AUSTRALIA PROPRIETARY LIMITED
(ACN 004 511 942)

Plaintiff

ASC ENGINEERING PROPRIETARY LIMITED
(ACN 051 762 639)

AND

ANACONDA NICKEL LIMITED
(ACN 060 370 783)

Defendant

---

JUDGE:	BONGIORNO J
WHERE HELD:	Melbourne
DATE OF HEARING:	10, 11, 12, 13, 16 and 17 October 2006
DATE OF JUDGMENT:	17 July 2007
CASE MAY BE CITED AS:	FLUOR v ASC ENGINEERING
MEDIUM NEUTRAL CITATION:	[2007] VSC 262

---

TRUSTS – Express trust – Benefit of contract – Necessity for expression of intent to create trust of proprietary right in performance of contract – Trust inconsistent with contractual or other arrangement – No trust.

CONTRIBUTION – Contribution between wrongdoers/tortfeasors – Choice of law - Statutory remedy – Characterisation of remedy of contribution – John Pfeiffer Pty Ltd v Rogerson (2000) 203 CLR 503 – s 23B Wrongs Act 1958.

---

APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr D Collins SC with Mr J M Shaw	Allens Arthur Robinson
For the first named Defendant	Mr P Vickery QC with Dr M Collins	Mills Oakley Lawyers
For the second named Defendant	Mr D McAndrew	Clayton Utz

HIS HONOUR:

This judgment concerns a number of questions which arose in this proceeding which were ordered to be tried separately by Habersberger J pursuant to RSC r47.04. They involve issues both of law and fact.

The context

In June 1996 Anaconda Nickel Limited (which is now known as Minara Resources Limited and will be referred to in this judgment as “Minara”) engaged Fluor Daniel Proprietary Ltd (which is now known as Fluor Australia Pty Ltd and will be referred to in this judgment as “Fluor”) as a contractor to provide engineering, procurement, construction and management services for the design, construction, and commissioning of an ore treatment facility at Murrin Murrin, in Western Australia. Murrin Murrin is about 300 kilometres north of Kalgoorlie. The ore to be treated was laterite, an ore which contains nickel and cobalt. This contract is referred to in this judgment as the EPCM contract.

The project was a very large one costing in the order of $900m. Although Fluor was initially engaged pursuant to the EPCM contract it was always contemplated by the parties that the project would eventually be undertaken pursuant to a contract whereby Fluor would take the entire risk of producing the facility for a fixed price – a so-called ‘turn-key contract.’ It was also contemplated that because of the size of the project and the necessity to raise a large amount of capital Minara would obtain a partner to undertake the venture jointly with it. However, as the ore treatment facility was being built to take advantage of an expected increase in nickel prices in the late 1990s it was essential to commence work as soon as possible, particularly in respect of those components for which there would be a long lead time. Accordingly, by a written agreement…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Keep reading for free

Create a free CaseChat account to read Fluor Australia Pty Ltd v ASC Engineering Pty Ltd and more:

Read every judgment in full
Ask AI and get answers linked to paragraphs
See how each paragraph was cited in later cases
Download judgments as PDF or Word

Continue with Google

One click creates your free account or signs you in.

By continuing you agree to the Terms and Privacy Policy.

Details

Case: [2007] VSC 262
Decision Date: 17 July 2007

CaseChat Overview and Summary

In the case of Fluor Australia Pty Ltd v ASC Engineering Pty Ltd, the dispute centred around the interpretation and application of the express trust doctrine, particularly in relation to the benefit of a contract. The Federal Court of Australia was tasked with determining whether an express trust had been established over the benefit of a contract, as well as the nature of any statutory contribution remedy available under the Wrongs Act 1958 (Vic). The primary legal issues involved were whether the performance of a contract could give rise to an express trust, and if the statutory remedy for contribution under the Wrongs Act 1958 was an equitable remedy or a statutory remedy.

The court examined whether the contract between the parties evidenced an intention to create a trust of the proprietary right in the performance of the contract, and if such a trust was inconsistent with the contractual or other arrangement. It was also necessary to determine the characterisation of the statutory remedy for contribution under the Wrongs Act 1958 in light of the decision in John Pfeiffer Pty Ltd v Rogerson (2000) 203 CLR 503. The court found that there was no express trust created over the benefit of the contract as there was no clear expression of intent to create such a trust. Furthermore, the court held that the statutory remedy for contribution under the Wrongs Act 1958 was not an equitable remedy but rather a statutory remedy, as it was not derived from the common law or equity but rather from the provisions of the statute itself.

The Federal Court of Australia ultimately determined that no express trust had been created over the benefit of the contract between the parties. Consequently, Fluor Australia Pty Ltd was not entitled to any benefit from the contract as a trustee. In relation to the statutory contribution remedy, the court found that it was a statutory remedy, not an equitable one, and therefore the provisions of the Wrongs Act 1958 applied. As a result, Fluor Australia Pty Ltd was not entitled to any contribution from ASC Engineering Pty Ltd under the statutory remedy.

Orders