KBL Mining Limited v Kidman Resources Limited

Supreme Court

New South Wales

Medium Neutral Citation:

KBL Mining Limited v Kidman Resources Limited & Ors [2015] NSWSC 515

Hearing dates:

8 and 9 April 2015

Date of orders:

07 May 2015

Decision date:

07 May 2015

Jurisdiction:

Equity Division

Before:

White J

Decision:

Refer to para [215] of judgment.

Catchwords:

CONTRACT – interpretation – obligation to pay “interest “ on “Secured Money” - consideration of what constitutes interest – whether difference between subscription and redemption values of promissory notes issued by the plaintiff is “interest” under a related contract – “Secured Money” included money owing but not yet payable - held that, despite the strict literal meaning of the clause, the surrounding circumstances made it clear that the difference between subscription and redemption values of the notes was “interest” on “Secured Money” under the contract and no further interest was payable under the contract

CONTRACT – interpretation – contract provided that defendant company may appoint persons to investigate affairs of plaintiff if the defendant “considers that an Event of Default has occurred” – defendant served series of invalid notices alleging defaults – defendant seeking to trigger entitlement to enforce security before date for redemption of notes – defendant’s director not called - whether service of notice and email sent from defendant’s solicitors was sufficient evidence that the defendant considered that an Event of Default had occurred – held that the defendant had not established that it considered that an Event of Default had occurred

EQUITY – rectification – where plaintiff succeeded on its contractual interpretation argument as to interest – held that contract should also be rectified for abundant caution by inserting a new clause

MORTGAGES – contractual entitlement to costs in redemption suit – circumstances where an unsuccessful mortgagee will be deprived of its contractual entitlement to costs against the mortgagor – held that the mortgagee is not entitled to its costs because it acted improperly and in bad faith by issuing multiple contractual default notices as part of a campaign to enforce security interests over the mortgagor where there was no proper basis for the issue of most of the notices and where the mortgagee knew that its interpretation of the contract in issue was contrary to the true agreement made by the parties

Legislation Cited:

Civil Procedure Act 2005 (NSW)
Corporations Act 2001 (Cth)
Mining Act 1992 (NSW)
Personal Property Securities Act 2009 (Cth)

Cases Cited:

Amalgamated Investment & Property Co Limited (in liq) v Texas Commerce International Bank Limited [1982] QB 84
Aquaclear Technology Pty Ltd v Cameron & Brister & Co Pty Ltd [2001] SASC 186; (2001) 214 LSJS 289
Australian Gypsum Limited v Hume Steel Limited (1930) 45 CLR 54
Bond v Barrow Haematite Steel Co [1902] 1 Ch 353
Bush v National Australia Bank Ltd (1992) 35 NSWLR 390
Capital Networks Pty Ltd v .au Domain Administration Limited [2004] FCA 808; (2004) ATPR (Digest) 46-254
Codelfa Construction Pty Ltd v State Rail Authority of NSW [1982] HCA 24;