Mineralogy Pty Ltd v BGP Geoexplorer Pte Ltd

Mineralogy Pty Ltd sued BGP Geoexplorer Pte Ltd in respect of a guarantee the plaintiff had provided to the defendant in relation to the defendant's contract with a third party. The third party had entered into a contract with the defendant for the provision of services in relation to a geological survey. The plaintiff had guaranteed the defendant's performance of the contract. The defendant made demand on the plaintiff under the guarantee for sums owing by the defendant to the third party. The plaintiff refused to pay, contending that the defendant had breached the contract with the third party and that any variations or waivers of the defendant's breaches by the third party discharged the plaintiff from the guarantee. The plaintiff also contended that the contract was void because the defendant had misrepresented to the third party and the plaintiff that the defendant had the skill and competence to provide a report as to the prospective existence and volume of resources of oil and condensate. The defendant counterclaimed for the amounts owing under the contract and interest on those amounts. The court had to determine whether the plaintiff was discharged from the guarantee, whether the plaintiff was entitled to relief under section 87 of the Trade Practices Act 1974 (Cth) and whether the defendant was entitled to interest on the amounts owing under the contract.

The court found that the plaintiff was not discharged from the guarantee because the contract between the defendant and the third party did not contain any terms that would operate to discharge the plaintiff from the guarantee. The court found that the plaintiff was not entitled to relief under section 87 of the Trade Practices Act 1974 (Cth) because the plaintiff had not proved that the defendant had made a misrepresentation to the third party and the plaintiff that was causally related to the plaintiff entering into the guarantee. The court found that the defendant was not entitled to interest on the amounts owing under the contract at the default judgment interest rate because the contract provided for specific interest rates during the first and second years after an invoice was issued.

The plaintiff's claim was dismissed. The plaintiff was ordered to pay the defendant the sum of US$17,629,673.68. The defendant's counterclaim for interest was dismissed.