KGLNG E&P Pty Ltd v Santos Toga Pty Ltd - [2025] QCA 114

SUPREME COURT OF QUEENSLAND

CITATION:

KGLNG E&P Pty Ltd v Santos Toga Pty Ltd [2025] QCA 114

PARTIES:

KGLNG E&P PTY LTD
ACN 146 143 339
(first appellant)
TOTAL E&P AUSTRALIA
ARBN 112 603 880
(second appellant)
TOTAL E&P AUSTRALIA II
ARBN 149 617 167
(third appellant)
PAPL (UPSTREAM) PTY LTD
ACN 131 318 888
(fourth appellant)
v
SANTOS TOGA PTY LTD
ACN 077 536 871
(first respondent)
SANTOS TPY, LCC
ARBN 102 958 707
(second respondent)
SANTOS TPY CSG, LLC
ARBN 84 108 566 052
(third respondent)
SANTOS QUEENSLAND, LLC
ARBN 111 733 969
(fourth respondent)
SANTOS TOG, LLC
ARBN 102 958 734
(fifth respondent)
BRONCO ENERGY PTY LIMITED
ACN 121 979 664
(sixth respondent)
VAMGAS PTY LTD
ACN 006 245 110
(seventh respondent)
SANTOS QNT PTY LTD
ACN 083 077 196
(eighth respondent)

FILE NO/S:

Appeal No 11657 of 2024
SC No 15114 of 2021

DIVISION:

Court of Appeal

PROCEEDING:

General Civil Appeal

ORIGINATING COURT:

Supreme Court at Brisbane – [2024] QSC 169 (Bradley J)

DELIVERED ON:

24 June 2025

DELIVERED AT:

Brisbane

HEARING DATE:

14 April 2025

JUDGES:

Flanagan JA and Burns and Ryan JJ

ORDER:

The appeal be dismissed with costs.

CATCHWORDS:

CONTRACTS – GENERAL CONTRACTUAL PRINCIPLES – CONSTRUCTION AND INTERPRETATION OF CONTRACTS – where the parties are associated in an unincorporated joint venture concerning the upstream component of the GLNG Project – where the respondents agreed to pay the Tri-Star Royalty to Tri-Star on petroleum produced and sold by the upstream component from the Fairview and Arcadia Tenements – where such an obligation arose from the Settlement Agreement between the respondents and Tri-Star – where the appellants obtained interests in the upstream component by entry into three categories of deeds with the respondents, namely the Sale and Purchase Deeds, the Royalty Assumption Deeds and the Deeds of Assumption – where, by the Sale and Purchase Deeds, the appellants acquired 70 per cent of the undivided legal interest in and to the Fairview and Arcadia Tenements from the respondents – where the deeds did not alter the respondents’ obligations under the Settlement Agreement to pay to Tri-Star the Tri-Star Royalty – where, by the Royalty Assumption Deeds, the appellants agreed to pay a “Buyer’s Percentage” of the Tri-Star Royalty payable by the respondents to Tri-Star – where a dispute arose between the respondents and Tri-Star as to the calculation of the Tri-Star Royalty for the period September 2015 to September 2020 – where the Settlement Agreement provided for the resolution of disputes by way of arbitration in the State of Texas – where Tri-Star submitted the dispute to arbitration pursuant to that arbitration clause – where an arbitrator attempted to apply Exhibit C of the Settlement Agreement to calculate the Tri-Star Royalty – where the Award was confirmed in the District Court of Harris County, Texas – where the parties agree that the Award is erroneous – where the respondents have paid the additional payments for the Tri-Star Royalty as determined by the Award to Tri-Star…

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 KGLNG E&P Pty Ltd v Santos Toga 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: [2025] QCA 114
Decision Date: 24 June 2025

CaseChat Overview and Summary

The case of KGLNG E&P Pty Ltd v Santos Toga Pty Ltd involved a dispute between the appellants and the respondents regarding the interpretation and obligations under various deeds related to an unincorporated joint venture concerning the upstream component of the GLNG Project. The central issue was whether the appellants, having acquired interests in the upstream component from the respondents through different categories of deeds, were bound by the outcome of an arbitration concerning the calculation of a royalty owed to a third party, Tri-Star.

The legal issues before the court included whether the primary judge erred in construing the Royalty Assumption Deeds and the Deeds of Assumption, specifically whether the primary judge failed to give proper effect to certain terms and whether the primary judge correctly assessed the commercial risk and distinguished between different types of contractual provisions. The court also had to determine whether the primary judge erred in finding that the appellants' construction of the deeds required a theoretical determination of the Tri-Star Royalty, and whether the primary judge was correct in holding that the appellants were not bound by the arbitration award.

The court, in dismissing the appeal, found that the primary judge had properly interpreted the deeds in question. The construction of the Royalty Assumption Deeds was held to be correct, as the primary judge found that the Buyer’s Percentage necessarily included the additional amount determined by the arbitration award. Regarding the Deeds of Assumption, the court upheld the primary judge's finding that the appellants had promised to discharge in proportion to their joint venture interest the amount the respondents were legally obliged to pay to Tri-Star. Additionally, the court agreed with the primary judge's conclusion that the Tri-Star Royalty was not an Assumed Liability under the Sale and Purchase Deeds, and that the appellants were not bound by the arbitration award as privies of the respondents.

ORDERS:
The appeal be dismissed with costs.

Orders

Orders of the court

The appeal be dismissed with costs.

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

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.

CITATION:	KGLNG E&P Pty Ltd v Santos Toga Pty Ltd [2025] QCA 114
PARTIES:	KGLNG E&P PTY LTD ACN 146 143 339 (first appellant) TOTAL E&P AUSTRALIA ARBN 112 603 880 (second appellant) TOTAL E&P AUSTRALIA II ARBN 149 617 167 (third appellant) PAPL (UPSTREAM) PTY LTD ACN 131 318 888 (fourth appellant) v SANTOS TOGA PTY LTD ACN 077 536 871 (first respondent) SANTOS TPY, LCC ARBN 102 958 707 (second respondent) SANTOS TPY CSG, LLC ARBN 84 108 566 052 (third respondent) SANTOS QUEENSLAND, LLC ARBN 111 733 969 (fourth respondent) SANTOS TOG, LLC ARBN 102 958 734 (fifth respondent) BRONCO ENERGY PTY LIMITED ACN 121 979 664 (sixth respondent) VAMGAS PTY LTD ACN 006 245 110 (seventh respondent) SANTOS QNT PTY LTD ACN 083 077 196 (eighth respondent)
FILE NO/S:	Appeal No 11657 of 2024 SC No 15114 of 2021
DIVISION:	Court of Appeal
PROCEEDING:	General Civil Appeal
ORIGINATING COURT:	Supreme Court at Brisbane – [2024] QSC 169 (Bradley J)
DELIVERED ON:	24 June 2025
DELIVERED AT:	Brisbane
HEARING DATE:	14 April 2025
JUDGES:	Flanagan JA and Burns and Ryan JJ
ORDER:	The appeal be dismissed with costs.
CATCHWORDS:	CONTRACTS – GENERAL CONTRACTUAL PRINCIPLES – CONSTRUCTION AND INTERPRETATION OF CONTRACTS – where the parties are associated in an unincorporated joint venture concerning the upstream component of the GLNG Project – where the respondents agreed to pay the Tri-Star Royalty to Tri-Star on petroleum produced and sold by the upstream component from the Fairview and Arcadia Tenements – where such an obligation arose from the Settlement Agreement between the respondents and Tri-Star – where the appellants obtained interests in the upstream component by entry into three categories of deeds with the respondents, namely the Sale and Purchase Deeds, the Royalty Assumption Deeds and the Deeds of Assumption – where, by the Sale and Purchase Deeds, the appellants acquired 70 per cent of the undivided legal interest in and to the Fairview and Arcadia Tenements from the respondents – where the deeds did not alter the respondents’ obligations under the Settlement Agreement to pay to Tri-Star the Tri-Star Royalty – where, by the Royalty Assumption Deeds, the appellants agreed to pay a “Buyer’s Percentage” of the Tri-Star Royalty payable by the respondents to Tri-Star – where a dispute arose between the respondents and Tri-Star as to the calculation of the Tri-Star Royalty for the period September 2015 to September 2020 – where the Settlement Agreement provided for the resolution of disputes by way of arbitration in the State of Texas – where Tri-Star submitted the dispute to arbitration pursuant to that arbitration clause – where an arbitrator attempted to apply Exhibit C of the Settlement Agreement to calculate the Tri-Star Royalty – where the Award was confirmed in the District Court of Harris County, Texas – where the parties agree that the Award is erroneous – where the respondents have paid the additional payments for the Tri-Star Royalty as determined by the Award to Tri-Star…