Glencore Coal Queensland Pty Limited v Aurizon Network Pty Ltd; Yarrabee Coal Company Pty Ltd v Aurizon Network Pty Ltd

The appeal involved two coal mining companies, Glencore Coal Queensland Pty Limited and Yarrabee Coal Company Pty Ltd (the appellants), who challenged the decisions of the Queensland Court of Appeal in relation to their contracts with Aurizon Network Pty Ltd (the respondent), a company operating a rail network for shipping coal from mines to port facilities in Queensland. The appellants had contracted with the respondent for an upgrade to the rail network to facilitate the transport of coal to the Wiggins Island Coal Export Terminal (WICET). They issued notices under clause 6.1(c) of the deeds, which would have reduced their liability to pay certain fees to nil and required the other parties to pay for their share, and in turn, served notices which would have put all the liability for the fees, estimated to total $480 million, onto one company.

The legal issues that the Court of Appeal was required to decide included whether the notices given by the appellants were valid and whether there was an implied term of good faith. The respondent argued that the notices were invalid because they were not given for the correct reason, and because the appellants were not acting in good faith. The respondent also argued that the capacity of WICET had not reached the milestone before the notices were given, and therefore the notices were invalid. The appellants argued that the notices were valid because they were given in accordance with the terms of the deeds, and that there was no implied term of good faith.

The Court of Appeal found that the notices given by the appellants were ineffective. The Court held that the notices could not be given unless it was because the Customer would not be using that part of the rail network in order to transport its coal to WICET. The Court found that the capacity of WICET had not reached the milestone before the notices were given, and therefore the notices were invalid. The Court also found that there was no implied term of good faith, and therefore the appellants were not required to act in good faith when giving the notices. The Court dismissed the appeals and set aside the costs orders made on 11 October 2019. The appellants were ordered to pay the costs of the respondent of the proceeding in the Trial Division and of the appeal.