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Hancock Prospecting Pty Ltd v Wright Prospecting Pty Ltd

Hancock Prospecting Pty Ltd v Wright Prospecting Pty Ltd

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Case Copied 30 October 2012 77 min read

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JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

TITLE OF COURT : THE COURT OF APPEAL (WA)

CITATION: HANCOCK PROSPECTING PTY LTD -v- WRIGHT PROSPECTING PTY LTD [2012] WASCA 216

CORAM: McLURE P
NEWNES JA
LE MIERE J

HEARD: 12-15 JUNE 2012

DELIVERED : 30 OCTOBER 2012

FILE NO/S: CACV 43 of 2011

BETWEEN: HANCOCK PROSPECTING PTY LTD
Appellant
AND
WRIGHT PROSPECTING PTY LTD
Respondent

ON APPEAL FROM:
Jurisdiction              :  SUPREME COURT OF WESTERN AUSTRALIA
Coram  :MURRAY J
Citation  :WRIGHT PROSPECTING PTY LIMITED -v- HANCOCK PROSPECTING PTY LIMITED [No 9] [2010] WASC 44
File No  :CIV 1279 of 2001

Catchwords:

Contract law - Partnership agreement - Contractual right of partners to call for transfer of certain partnership property including temporary reserves granted under the Mining Act 1904 (WA) - Prohibition in temporary reserves on entry into 'any arrangement to transfer' the property without ministerial consent - Prohibition in State Agreement on assignment or 'other disposition' of the property without ministerial consent - Prohibition in Joint Venture Agreement on the assignment or transfer of, or the creation of any charge, lien, encumbrance or trust over, the property without the joint venturers' consent - Whether entry into partnership agreement, alternatively exercise of the right to call for transfer of the partnership property, breached prohibitions - Nature of partner's interest in partnership property and manner in which transfer effected - Proprietary effect of contract for transfer of property which is conditional on third party consent - Whether breach of statutory prohibition resulted in illegality of partnership agreement - Whether right to call for transfer superseded by subsequent partnership agreement

Contract law - Construction of partnership agreements - Codelfa and the 'true rule' of contractual interpretation - Meaning of ambiguity - Whether regard may be had to surrounding circumstances

Contract law - Abandonment - Scope of doctrine - Whether necessary to demonstrate an implied agreement to abandon the contract

Property law - Whether right to occupy a temporary reserve an interest in land under s 7 of the Property Law Act 1969 (WA) - Construction of 'easement, right, privilege or benefit in, over or derived from the land' - Assignment of chose in action at law and in equity

Equity - Equitable estoppel - Whether estoppel established on facts as pleaded - Role of equity in face of statutory illegality - Whether possible to fashion equitable relief protective of third party rights and interests

Legislation:

Iron Ore (Rhodes Ridge) Agreement Authorisation Act 1972 (WA)
Mining Act 1904 (WA), s 3, s 273, s 276, s 277
Mining Act 1978 (WA)
Partnership Act 1895 (WA), s 30(1), s 33
Property Law Act 1969 (WA), s 7, s 20, s 110
Supreme Court (Court of Appeal) Rules 2005 (WA)

Result:

Appeal dismissed
Notice of contention upheld in part
Crossappeal allowed in part

Category: A

Representation:

Counsel:

Appellant: Mr S Finch SC & Mr S Rushton SC & Mr C Bova
Respondent: Mr R Smith SC & Mr R Brender

Solicitors:

Appellant: Corrs Chambers Westgarth

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.

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Details

Case: [2012] WASCA 216
Decision Date: 30 OCTOBER 2012

CaseChat Overview and Summary

Hancock Prospecting Pty Ltd v Wright Prospecting Pty Ltd is a case involving a dispute over the interpretation of partnership agreements and the transfer of certain partnership property, including temporary reserves granted under the Mining Act 1904 (WA). The case was heard by the Supreme Court of Western Australia. The primary legal issues the court was required to decide were whether the entry into the partnership agreement or the exercise of the right to call for the transfer of the partnership property breached statutory prohibitions, the nature of the partners' interests in the partnership property, and the manner in which the transfer should be effected. Additionally, the court had to consider whether the breach of statutory prohibition resulted in the illegality of the partnership agreement, whether the right to call for transfer was superseded by a subsequent partnership agreement, and whether there was an equitable estoppel established on the facts as pleaded.

The court's reasoning involved a detailed analysis of the relevant statutes and partnership agreements, as well as the principles of contractual interpretation. The court found that the statutory prohibitions on the transfer of temporary reserves without ministerial consent did not render the partnership agreement illegal. It was also determined that the right to call for transfer of the partnership property was not superseded by a subsequent partnership agreement. The court emphasised the importance of the 'true rule' of contractual interpretation, as established in Codelfa, which involves considering the entire contract and the context in which it was made to resolve any ambiguities. The court held that there was no equitable estoppel established on the facts as pleaded, and thus equity could not be invoked in the face of statutory illegality. The court ultimately determined that the partner's interest in the partnership property was not an interest in land under the Property Law Act 1969 (WA) and that the right to occupy a temporary reserve was not an interest in land.

The final orders of the court were that the respondent's appeal be dismissed with costs. This meant that the respondent was not entitled to the relief it had sought in relation to the transfer of the partnership property, and the appellant was awarded costs for the proceedings.

Orders

Orders of the court

Full text does not contain this section.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

JUDGMENT OF THE COURT: The court published its reasons for judgment in this matter on 30 October 2012: Hancock Prospecting Pty Ltd v Wright Prospecting Pty Ltd [2012] WASCA 216. On the date of publication, the appellant sought further time to consider its position in relation to the orders sought by the respondent in a minute it provided to the court (the respondent's minute). On 30 October 2012 the President ordered that the appellant file and serve written submissions relating to the proposed orders by 13 November 2012 and that the respondent file and serve answering written submissions by 20 November 2012. The appellant's request that it be permitted to file written submissions in reply was refused. The written submissions filed by the parties (the first set of written submissions) disclosed that the only area of dispute related to the terms of the declaration the subject of ground 11 of the cross‑appeal: Hancock [316] ‑ [319]. After the filing of the first set of written submissions there was a flurry of correspondence to the court from the solicitors for the parties. The appellant's solicitors foreshadowed that it may seek leave to file a reply to the respondent's written submissions (letter dated 23 November 2012) and later, that it was having difficulty obtaining instructions on whether to seek leave to file submissions in reply (letter dated 27 November 2012). That triggered extensive written submissions from the respondent's solicitors opposing the grant of leave (letter dated 27 November 2012). By letter dated 28 November 2012 the appellant's solicitors requested leave to reply to the respondent's submissions in the course of which letter they provided in effect a summary of the submissions they would make in reply (the reply submissions). By letter dated 29 November 2012 the respondent's solicitors contend that the letter dated 28 November 2012 from the appellant's solicitors should be disregarded by the court and then go on to address the merits of the appellant's reply submissions. The written submissions and correspondence from the parties clearly identified and addressed the scope and merits of the issue in dispute. The respondent was seeking a declaration in terms which would, in effect, deliver to it an advantage which was neither apparent on the face of the declaration nor litigated by the respondent at trial or in the appeal. The issue in dispute emerged in this way. The declaration sought by the respondent in its prayer for relief in par 25A of its statement of claim (the claimed declaration) is set out in [316] of the judgment. The claimed declaration relevantly provided:… (c)HPPL is obliged to do all things necessary (including executing documentation and joining in the seeking of the consent of any Minister or joint venture party which may be necessary) to enable WPPL to have the benefit of the rights conferred on it by the 1984 Agreement.(d)(i) Subject to (ii), WPPL is entitled to the exclusion of HPPL to any proceeds of sale or other benefits derived on disposal by WPPL of the Rhodes Ridge Interest.(ii)WPPL's rights under (i) are subject to its obligation to ensure that any royalty obtained on such disposal shall be shared equally between HPPL and WPPL.

Ratio Decidendi

Legal Principle Established

Section 276 and s 277 of the 1904 Mining Act constitute a code for temporary reserves, with the consequence that the holder of a right of occupancy could occupy the reserve for prospecting without anyone being entitled to acquire claims over the reserve during the continuance of the right: Delhi International Oil Corporation v Olive [1973] WAR 52; Nicholas v The State of Western Australia [1972] WAR 168; Australian Anglo American Prospecting Ltd v CRA Exploration Pty Ltd [1981] WAR 97. It follows that the provisions of the 1904 Mining Act relating to miner's rights, and thus claims and mining tenements, have no application to temporary reserves. The holders of the Temporary Reserves do not have a right to work and get minerals or substances. Accordingly, the Temporary Reserves are not land under the 'mines and minerals' extension of the definition of land in the PLA. A further consequence is that there is no provision in the 1904 Mining Act, or the regulations made thereunder, regulating the transfer or creation of any interest in a temporary reserve. The regulations relating to transfers, registration and forfeiture (regs 162, 178 ‑ 189) are confined to 'mining tenements'. But for the definition of land in the PLA, a 'claim' under the 1904 Mining Act was, by virtue of s 273, a chattel personal: Adamson. Section 273 applies to '[e]very mining tenement, and every share and interest therein' and a 'claim' is a mining tenement. Section 273 does not apply to the Temporary Reserves because they are not 'mining tenements'. Not every statutory right is 'property': Cummings v Claremont Petroleum NL (1996) 185 CLR 124, 133. As to the categorisation of statutory property, see North Shore Gas (127); Wik Peoples v State of Queensland (1996) 187 CLR 1, 243 ‑ 244. However, the appeal was conducted on the assumption that a right of occupancy under s 276 of the 1904 Mining Act is 'property', the issue in contention being whether it was land or a chattel personal. Chattels personal are subdivided into choses in possession (tangible property other than land) and choses in action. The appellant asserts in the alternative that the Temporary Reserves are within the extended definition of land in the PLA as 'an easement, right, privilege or benefit in, over or derived from the land'. The appellant relies on the decision in Maddalozzo v Commonwealth (No 2) (1979) 39 FLR 254 for its claim that the Temporary Reserves are 'an easement, right, privilege or benefit in, over or derived from the land' within the extended definition in the PLA. The question in Maddalozzo was whether two statutory mining leases were an interest in land within the meaning of the Lands Acquisition Act 1955 (Cth). An 'interest' in relation to land was defined in s 5 of the Act to mean:(a)a legal or equitable estate or interest in the land; or(b)a right, power or privilege over, or in connexion with, the land. The majority (Forster & Brennan JJ) concluded that the rights which the mining leases conferred fell within one or other of the paragraphs of the statutory definition (255 ‑ 256). The case went on appeal to the High Court: Commonwealth v Maddalozzo (1980) 29 ALR 161. The reasons of the Federal Court and the High Court (see 163, 166, 168) do not assist in elucidating why the mining leases constituted an interest in land under the statutory definition.