Morris v Hutchison

[2019] NSWLEC 164

Land and Environment Court

New South Wales

Medium Neutral Citation:	Morris v Hutchison [2019] NSWLEC 164
Hearing dates:	18, 19, 20, 22 March 2019
Date of orders:	31 October 2019
Decision date:	31 October 2019
Jurisdiction:	Class 8
Before:	Moore J
Decision:	See orders at [309]
Catchwords:	MINERAL CLAIMS - dispute concerning opal mining on three Mineral Claims in the Lightning Ridge region - arrangement between Applicant and First Respondent to undertake mining activities - arrangement based on profit share of opal won - Applicant to contribute mining equipment and labour whilst First Respondent contributed Mineral Claims - First Respondent unilaterally terminates arrangement - characterisation of the arrangement - arrangement was not a partnership - dispute as to terms under which the arrangement operated - First Respondent's version of terms for the arrangement not accepted - First Respondent's termination of the arrangement unlawful - not practical to reinstate arrangement - appropriate remedy to transfer one Mineral Claim to the Applicant - First Respondent ordered to transfer Mineral Claim to the Applicant MINERAL CLAIMS - First Respondent holder of two Mineral Claims - issue of whether arrangement between Applicant and First Respondent extended to mining both claims or merely the first claim upon which mining had commenced - purported sale of one Mineral Claim to Second Respondent - sale a sham - arrangement between Applicant and First Respondent encompassed mining of both Mineral Claims - appropriate to resolve the dispute between the Applicant and First Respondent on the basis that the First Respondent retained ownership of one Mineral Claim and beneficial ownership of the second Mineral Claim. MINERAL CLAIMS - First Respondent blockades Applicant’s mining equipment in underground workings - equipment detained for ~ 327 days - detention arose as part of dispute over unlawful termination of mining arrangement - claim for damages for detention of equipment - Applicant’s equipment detained unlawfully by actions of the First Respondent - opal mining inherently speculative and no proper basis available to calculate compensation for unlawful detention of mining equipment - compensation claim dismissed MINING EQUIPMENT - specialist equipment known as a Super Digger used for underground opal mining - Super Digger owned by the Applicant - desire of the First Respondent to have similar equipment constructed for his own purposes - necessity to have Applicant’s Super Digger measured for those purposes - dispute between the Applicant and First Respondent over costs of works undertaken to the Super Digger - Applicant's evidence preferred - First Respondent ordered to pay $10,000 to Applicant EVIDENCE - evidentiary conflict between Applicant and First Respondent - limited corroborative evidence - First Respondent's evidence untruthful or unreliable in a number of respects - evidence of Applicant to be preferred over that of the First Respondent unless First Respondent's evidence independently satisfactorily corroborated COSTS - although Applicant not entirely successful, no basis warranting apportionment of costs - Second Respondent (nominal owner of one transferred Mineral Claim) played no active part in proceedings - appropriate to order that First Respondent pay the Applicant’s costs as agreed or assessed unless some alternative costs order is sought within 14 days
Legislation Cited:	Partnership Act 1892, ss 1, 32
Cases Cited:	Briginshaw v Briginshaw (1938) 60 CLR 336; [1938] HCA 34 Browne v Dunn (1893) 6 R 67 Fox v Percy (2003) 214 CLR 118 Seven Network Limited v News Limited [2007] FCA 1062 State of NSW v Hunt (2014) 86 NSWLR 226
Category:	Principal judgment
Parties:	Shane Leslie Morris (Applicant) Owen Hutchison (First Respondent) Justin Hawkins (Second Respondent)
Representation:	Counsel: Ms F Ashworth, barrister (Applicant) Mr D Stretton, barrister (Respondents)   Solicitors: Arden Law (Applicant) Nelson Keane & Hemingway (Respondents)
File Number(s):	19911 of 2018
Publication restriction:	No

TABLE OF CONTENTS

Introduction

Summary of outcomes

Introduction

Acceptability of evidence

The Martin Hutchison conversation

The nature of the mining arrangement

General

The 2011 diary

Termination of the arrangement

Mining into Martin’s claim

Propping

Claim 2

The Super Digger claim

The cost of work by Parkes Hydraulics

Costs

Introduction to decision proper

The dispute between the Applicant and the Respondents

The Court's jurisdiction

The relief sought

The evidence

Introduction

The expert evidence

The Applicant’s lay witnesses

The First Respondent’s witnesses

Ms Messenger’s evidence

Introduction

Ms Messenger’s statement

Mr Hutchison’s cross-examination concerning Ms Messenger’s statement

Consideration

The issues

The primary evidentiary conflicts

The maps of the underground workings

The video evidence

The terms of the agreement between the Applicant and the First Respondent

Introduction

Mr Hutchison’s affidavit evidence

Characterisation of the mining arrangement

Introduction

The Applicant’s contribution

The First Respondent’s contribution

The profit-share arrangement

Ms Ashworth’s submissions on partnership

Mr Stretton’s submissions on partnership

Consideration of the nature of the arrangement

The transfer of Claim 2 to the Second Respondent

Introduction

The First Respondent’s evidence

The Second Respondent’s evidence concerning his acquisition of Claim 2

Consideration

Was Claim 2 part of the agreement?

Mining into Martin’s claim

Introduction

The evidence of the Applicant and the First Respondent

Mr Lohse’s evidence

Conclusion on mining into Martin’s claim

Propping and safety in the mine workings on Claim 1

Introduction

The Safety Guidelines

Chapter 7 Roof Failure

Chapter 8 Ground Support

Chapter 9 Room & Pillar Design

The expert evidence on propping

Mr Chapula’s written evidence

Mr Chapula’s reply report

The experts’ joint expert report

The experts’ concurrent oral evidence on propping

The future of mining in Claim 1

The Applicant’s propping evidence

Mr Lohse’s evidence on propping

Mr Carpenter's evidence

The prohibition notices

Consideration of propping matters

The Super Digger compensation claim

The First Respondent blocks underground access on Claim 1

The compensation claim

Available work for the Super Digger

Calculating compensation

Consideration

The Parkes Hydraulics’ claim

Introduction

The Applicant’s evidence on the Parkes Hydraulics’ account

The First Respondent's version

The Applicant’s response affidavit

Consideration

Renewal of Claims 1 and 2

Introduction

The appropriate remedies to be ordered

Costs

Orders

JUDGMENT

Summary of outcomes

Introduction

1. I have concluded that the appropriate way to structure this judgment is to set out, comparatively briefly, a summary of the conclusions which I have reached about the various contested issues and, as a consequence, what outcomes necessarily flow from all of them. I do so by grouping the various matters in a related fashion so that conclusions and outcomes in a particular area can be seen together.

Acceptability of evidence

2. Although there were some aspects of the evidence of Mr Shane Morris (the Applicant) that were not entirely satisfactory, I am satisfied that he did not, unlike Mr Owen Hutchison (the First Respondent), seek to lie to the Court in any material respect, nor to manipulate any of the physical features requiring consideration in these proceedings. As I have set out at relevant points in this judgment, I decline to accept the evidence of the First Respondent unless it is corroborated by reliable independent evidence (whether documentary or otherwise).

3. For the reasons I have later explained, I am satisfied that the First Respondent was not truthful in his evidence concerning the alcohol containers that he photographed in the underground workings on Mineral Claim 56861 (Claim 1). Indeed, I am satisfied that he physically manipulated two of the beer stubbies, shown in photographs forming part of his evidence, in order to have it appear that there were more such bottles in the underground workings than was actually the case. The two photographs evidencing this are annexed to this judgment.

4. It is unnecessary for me to make a positive finding that the First Respondent imported those alcohol containers shown on the surface and underground. It is sufficient for me to observe that the Applicant denied taking those containers onto Claim 1 or into the underground workings on Claim 1. Given that, for the reasons earlier explained, I consider it appropriate to prefer the Applicant's evidence over that of the First Respondent (when their evidence is in conflict), it is sufficient that I accept the Applicant's evidence that he did not take the alcohol containers onto Claim 1.

The Martin Hutchison conversation

5. Although I have not concluded that the conversation heard by Ms Messenger outside the courtroom in any way influenced the First Respondent's subsequent substantive evidence, I am unable to accept as truthful his evidence of a complete lack of recollection of anything said during that conversation, or of the tone used by the First Respondent’s son, Mr Martin Hutchison (Martin) to the First Respondent during the course of that conversation. The First Respondent’s unsatisfactory evidence, in this respect, provides a further reason to conclude that the Applicant's evidence is to be preferred when in conflict with the First Respondent's evidence, unless that evidence was to be independently satisfactorily corroborated.

The nature of the mining arrangement

General

6. The submission on behalf of the Applicant that the mining arrangement between him and the First Respondent was a partnership is rejected. The proposition advanced on behalf of the First Respondent that this arrangement was one based on a contract is the correct characterisation of the mining arrangement. This conclusion is consistent with the evidence given by the Applicant and by the First Respondent.

7. This relationship between the Applicant and the First Respondent was a contractual profit-share arrangement. I have concluded that it encompassed an arrangement whereby the Applicant would mine Claim 1 to the exhaustion of its potential before moving on to mine Mineral Claim No 56862 (Claim 2) on a similar basis.

The 2011 diary

8. I do not accept that the note made by the First Respondent in his 2011 diary book (depicted in Exhibit E) reflected conditions agreed to by the Applicant as forming the basis of the mining arrangement for the two Mineral Claims. I am satisfied that the arrangement was one simply confined to the share of the profits to be derived from opal won from the claims after reimbursement to the Applicant of his fuel costs.

9. Although it was not put to the First Respondent by Ms Ashworth, counsel for the Applicant, that this material was of recent invention, I am not satisfied, on the balance of probabilities, that what was there recorded resulted from any conversation between the parties (with this diary entry allegedly being a contemporaneous note of what it encompassed). This position arises as a consequence of my broad determination that, whenever there is a conflict of evidence between the Applicant and the First Respondent, the Applicant's evidence is to be preferred.

Termination of the arrangement

10. I have concluded that the arrangement between the Applicant and the First Respondent was unilaterally terminated by the First Respondent on or about 10 August 2017 without valid cause.

Mining into Martin’s claim

11. To the extent that the Applicant crossed the boundary line between Claim 1 and Mineral Claim 56735 held by Martin (Martin’s claim), I am satisfied that the First Respondent had actual or ostensible authority to authorise the Applicant to do so, and in fact did so.

Propping

12. Although the Applicant's underground operations can be regarded as not being carried out according with best practice, I am unable to conclude that they were actually, as opposed to potentially, unsafe. Indeed, the propping activities subsequently undertaken by the Applicant were a reasonable, if imperfect, response to the prohibition notices.

13. The evidence given by the Applicant as to the safety of his underground workings and the absence of propping necessity reflects a view honestly held by him, but a view not supported by the independent mining engineering evidence subsequently obtained by each party.

14. The fact that the Applicant had not undertaken propping did not provide a basis to justify the First Respondent's termination of his contractual arrangement with the Applicant, as the First Respondent had impliedly endorsed the mining process being undertaken.

15. The complaint by the First Respondent to the regulator leading to the issue of the prohibition notice/notices is to be seen as a tactical manoeuvre by the First Respondent to justify the termination of the arrangement with the Applicant. It did not reflect any genuine concern held by the First Respondent about safety of mining on Claim 1.

Claim 2

16. I am satisfied that the First Respondent remains the beneficial owner of Claim 2, despite his having transferred the nominal ownership of that claim to Mr Justin Hawkins (the Second Respondent).

17. The arrangement, whereby the First Respondent purportedly transferred ownership of Claim 2 to the Second Respondent, was a sham and that the First Respondent remained the beneficial owner of Claim 2, consistent with the assertion of this position by his legal representatives in March 2018.

18. I conclude that the reason for doing so was to avoid the potential for the Applicant to be able to enforce his right to mine Claim 2. This conclusion, and the fact that that First Respondent remains the beneficial owner of that Mineral Claim, was relevant when it came to consideration of what should be the compensation entitlement of the Applicant for the unlawful termination of the arrangement which he had with First Respondent.

The Super Digger claim

19. The First Respondent had no valid basis to block the entrance to the underground workings on Claim 1 in order to prevent the Applicant from removing his Super Digger and any other equipment from the underground workings.

20. However, although I am satisfied that the First Respondent’s blockade of the access shaft to the underground workings on Claim 1 had the effect of unlawfully depriving the Applicant of the ability for him to use his Super Digger for a period of about 327 days, for the reasons set out I am satisfied that there is no valid basis upon which I could calculate (and therefore order) compensation to the Applicant for this deprivation.

The cost of work by Parkes Hydraulics

21. I am satisfied that, of the work undertaken by Parkes Hydraulics on the Applicant’s Super Digger, a significant portion of that work was requested by the First Respondent. I am satisfied that that work was organised only for the benefit of the First Respondent and that he should bear the cost of this taking place.

22. As a consequence, it is appropriate to order the First Respondent to pay the Applicant $10,000, this (uncontested as to quantum) sum being the portion of the total costs of the work undertaken by Parkes Hydraulics on the Applicant’s Super Digger for the benefit of the First Respondent. It is appropriate to order that the First Respondent pay this sum to the Applicant within 28 days of the date of the orders finalising these proceedings.

Costs

23. Although the Applicant is not been entirely successful in his claims against the First Respondent, I do not consider that there is any basis upon which to apportion costs. As a consequence, the First Respondent is to pay the Applicant’s costs of the proceedings on the ordinary basis, unless my Associate is notified within 14 days that a party wishes to propose some alternative costs order. As the Second Respondent, although properly joined as a party to the proceedings, played no significant role in the proceedings, it is not appropriate to make any costs order against him.

Introduction to decision proper

24. Claim 1 has so far yielded ~$840,000 worth of opal. Claim 1 is located in the Olympic Dribble Opal Field, some 75 kilometres south-west of the town of Lightning Ridge in the north-west of New South Wales. Claim 1 has dimensions of approximately 50 metres by 50 metres and has been mined to approximately 20% of its area. The underground mining methods that have been deployed to extract the valuable opal already won from the mine on Claim 1 require later discussion in some detail. Claim 2 is of the same dimensions as Claim 1 and lies to its south, sharing a common 50-metre border with Claim 1. Claim 2 has not yet been mined.

25. As at about 25 May 2015, Claim 1 and Claim 2 were registered in the name of the First Respondent. The date of their original registration is not relevant. Claim 2 was subsequently transferred to the Second Respondent on 4 August 2017. The Second Respondent says that he paid the First Respondent $500 cash (this being the evidence of both respondents) to have the registered ownership of Claim 2 transferred. During the course of his oral evidence in these proceedings, the Second Respondent testified that he would not sell Claim 2 if he was offered $500,000 for it.

26. There is a third Mineral Claim involved in the factual matrix of these proceedings, Martin's claim.

27. The Applicant is an experienced opal miner who owns a collection of the substantive mining equipment necessary to carry out the surface and underground mining activities for the extraction of opal from mineral claims. The First Respondent owns a drilling rig used to sink holes of varying diameters. A number of holes on Claim 1, and along its boundary with Martin's claim (the claim immediately to the north of Claim 1), play a role in these proceedings.

The dispute between the Applicant and the Respondents

28. I have earlier noted the First Respondent’s ownership of Claim 1 and Claim 2 as at 25 May 2015. This date marks the commencement of the relationship between the Applicant and the First Respondent, when an agreement was struck between them that the Applicant would become the nominated mine operator of (at least) Claim 1.

29. The terms of that agreement are in dispute as to a number of significant elements.

30. It is, however, not in dispute that the arrangement (however to be described) was to be undertaken on the basis that the Applicant and the First Respondent would split the value of any opal won from Claim 1, on the basis of 70% to the Applicant and 30% to the First Respondent (after making an allowance in favour of the Applicant from the proceeds to reimburse him for the cost of the fuel utilised by him in undertaking the mining activities).

31. Such profit-sharing arrangements are not uncommon in the opal-mining industry because of its fickle nature - when some mineral claims may yield significant opal values, whilst others, even in the comparatively near vicinity, may turn out to be “complete duds”.

32. I set out below a table of relevant chronological events together with the source of the entry from which each item is derived:

The Court's jurisdiction

33. The Court's jurisdiction to deal with the dispute between the Applicant and the First Respondent arises from a number of the elements of s 293(1) of the Mining Act 1992 (the Mining Act). The relevant elements of s 293(1), potentially engaged in these proceedings, are set out below:

293   Jurisdiction of Land and Environment Court

(1)   The Land and Environment Court has jurisdiction to hear and determine proceedings relating to any of the following matters:

(a)   …,

(b)   …,

(c)   …,

(d)   …,

(e)   …,

(f)   any demand for debt or damages arising out of prospecting or mining,

(g)   any demand for specific performance of any contract relating to any authority or Mineral Claim,

(h)   the right to any mineral in, or to be recovered from, any land subject to an authority or Mineral Claim, and the rights under, or arising out of, any contract relating to any such mineral,

(i)   any transfer or disposition of, or charge on, land subject to an authority or Mineral Claim,

(j)   matters concerning:

(i)   any partnership relating to an authority or Mineral Claim, or to prospecting or mining, or

(ii)   the existence, formation and dissolution of any such partnership, or

(iii)   the taking of accounts in connection with any such partnership, or

(iv)   the contributions of the partners as between themselves, or

(v)   the determination of questions arising between the partners,

(k)   …,

(l)   …,

(m)   …,

(n)   …,

(o)   any question or dispute arising as to the working or management of land subject to an authority or Mineral Claim,

(p)   all rights claimed in, under or in relation to an authority or Mineral Claim or purported authority or Mineral Claim,

(q)   …,

(r)   …,

(s)   any question or dispute in connection with an interest (whether legal or equitable) in, or affecting, an authority or Mineral Claim,

(t)   …,

(t1)   …,

(u)   …,

(v)   …,

(w)   …,

(x)   any other matter in respect of which jurisdiction is conferred on the Court by this Act.

(2)   Nothing in this section limits or restricts the jurisdiction conferred on any other court by any other Act or law.

34. As can be seen, this list is expansive and provides sufficient basis to consider and determine all matters in dispute in these proceedings.

35. Ms Ashworth also submitted that the ancillary jurisdiction pursuant to s 16(1A) of the Land and Environment Court Act 1979 (the Court Act) was also potentially engaged. This provision is in the following terms:

16   Jurisdiction of the Court generally

(1)   The Court shall have the jurisdiction vested in it by or under this or any other Act.

(1A)   The Court also has jurisdiction to hear and dispose of any matter not falling within its jurisdiction under any other provision of this Act or under any other Act, being a matter that is ancillary to a matter that falls within its jurisdiction under any other provision of this Act or under any other Act.

(2)   For the purposes of this Act, the jurisdiction of the Court is divided into 8 classes, as provided in this Division.

36. However, s 22 of the Court Act set out below provides a better path for resolution of ancillary matters:

22   Determination of matter completely and finally

The Court shall, in every matter before the Court, grant either absolutely or on such terms and conditions as the Court thinks just, all remedies to which any of the parties appears to be entitled in respect of a legal or equitable claim properly brought forward by that party in the matter, so that, as far as possible, all matters in controversy between the parties may be completely and finally determined and all multiplicity of proceedings concerning any of those matters may be avoided.

The relief sought

37. In the Summons commencing these proceedings, the Applicant sought the following relief with respect to the arrangement between himself and the First Respondent concerning mining arrangements for Claim 1 and Claim 2. The final relief sought was in the following terms:

a.   A declaration of the complainant interest in the claims via taking accounts in relation to all transactions in relation to the claims.

b.   The defendant to do all such things and signs all such documents to give effect to the orders of the court in the event of any failure to act or sign any documents then the Registrar of the Land and Environment Court at Lightning Ridge be empowered to do such acts and sign such documents or any other orders this Honourable court deems fit.

c.   Any other order this Honourable court deems fit.

d.   Costs.

38. On 9 March 2018, a cross-claim was filed for the First Respondent. The cross-claim sought the following relief:

1   A declaration that the oral mining agreement entered on or about 26 May 2015 between the cross-claimant and the cross-defendant (mining agreement) was validly terminated by the cross-claimant on or about 10 August 2017 or alternatively 7 March 2018.

2   Damages for breach of the mining agreement.

3 Interest pursuant to ss 100 and 101 of the Civil Procedure Act.

4   Costs.

39. On 10 September 2018, a Notice of Motion was filed for the Applicant seeking leave to rely on an Amended Summons. The motion was heard and leave was granted on 24 September 2018. The relief now sought was:

1   A declaration that the partnership between the Applicant and the Respondent in respect of Mineral Claim Nos 56861 and 56862 (Mineral Claims) has not been terminated.

2   An order restraining the Respondent by himself and his servants and agents from taking any step calculated to prevent or hinder the Applicant from accessing the land to which Mineral Claim No. 56861 relates or from working such Mineral Claim.

3   An order requiring the Respondent to remove any and all obstructions to the access holes on the land to which Mineral Claim No. 56861 relates, installed by him or at his direction.

4   Equitable compensation and/or damages.

5   Damages for loss of use of the Applicant’s equipment that was detained in the area of Mineral Claim No. 56861 for the period 10 August 2017 to 3 July 2018.

6   Interest.

7   Costs.

The evidence

Introduction

40. Affidavit evidence was read in both the Applicant’s and First Respondent’s cases. Not all of the lay witnesses deposing affidavits were required for cross-examination. Of the non-party lay witnesses, only Mr Lohse, an opal miner giving evidence in the Applicant’s case, was required for cross‑examination.

The expert evidence

41. In addition, expert evidence was given by two mining engineers, Mr Panich, for the Applicant, and Mr Chapula, for the First Respondent. At this point, I provide only a summary of the expert evidence. It is discussed in more detail in my consideration of propping issues concerning Claim 1.

42. Each party provided a Geotechnical Assessment Expert Report for Claim 1 (the Applicant’s report, provided by Mr Panich, became Exhibit H and the Respondents’ report, provided by Mr Chapula, became Exhibit 3). Mr Chapula also provided a response to Mr Panich’s report (Exhibit 4). They provided a joint report which became Exhibit J. The geotechnical experts gave oral evidence concurrently on 20 March 2019. A number of issues arose out of their written and oral evidence which I will now detail.

43. In Mr Chapula’s initial report of 27 September 2019 (Exhibit 3), Mr Chapula provided a diagram of areas where he deemed secondary support was necessary before Claim 1 could have further mining undertaken on it (page 8, Figure 6). It should be noted that, to correctly read the diagram, it needs to be rotated slightly in a counter-clockwise direction. This diagram is reproduced as Annexure B.

44. The experts agreed in cross-examination that Annexure B accurately depicts that 28 timber poles have been installed (Transcript, 20 March 2019, page 258, line 46 and page 259, line 12). Mr Panich’s report of 30 October 2018 notes that the 28 timber poles were installed under the previous court orders to extract the Applicant’s equipment safely from the mine (Exhibit H, Court Book, folio 625, page 3).

45. Both experts also agreed that secondary support was needed for further work in the mine, this agreement being reflected in the Joint Expert Report (Exhibit J, Court Book, folio 647) and in cross-examination (Transcript, 20 March 2019, page 258, lines 46 to 49 and page 260, lines 32 to 34). However, there was contention between the experts regarding how many props were needed. Mr Panich stated 41 props in total were needed (Transcript, 20 March 2019, page 257, line 17), whereas Mr Chapula stated an additional 41 props, to the 28 props already in place, were needed (Transcript, 20 March 2019, page 257, line 14).

46. Through the cooperative process of the expert witness concurrent evidence, the experts agreed that if a party wanted total freedom to mine in any direction on Claim 1, 41 props would need to be installed. And if the miner took a particular direction in the mine, then that number could be less (Transcript, 20 March 2019, page 263, lines 5 to 17).

The Applicant’s lay witnesses

47. The lay witnesses who gave evidence on behalf of the Applicant were:

• The Applicant, himself. The Applicant deposed four affidavits. These were dated 8 December 2017, 9 June 2018, 28 August 2018 and 2 November 2018. Although a number of elements in these affidavits were not read, and some other elements were rejected (after objections pressed by Mr Stretton, counsel for the Respondents), these affidavits and their attached documents comprised the primary evidence in the Applicant’s case;

• Mr William O'Brien, a grazier who holds a number of mineral claims in the Lightning Ridge opal fields;

• Mr Charles Carpenter, an opal miner;

• Mr Todd Lohse, an opal miner who had done some work with the Applicant on Claim 1. As earlier noted, Mr Lohse was required for cross-examination. He gave his oral evidence by video-link from Walgett Court House, the courthouse closest to Lightning Ridge with such video-link facilities.

• Mr Tony Cummins, an opal miner who had done some tunnel drilling work with the Applicant in about 2009 or 2010 in Sydney and deposed to the charge rates of hydraulic digger contracts in the Sydney market for such services; and

• Ms Monique Messenger, a junior clerk in Ms Ashworth's chambers. Ms Messenger deposed an affidavit concerning a conversation she witnessed between he First Respondent and Martin outside the courtroom at the end of the second day of the hearing.

48. Mr O'Brien, Mr Carpenter, Mr Cummins and Ms Messenger were not required for cross-examination.

The First Respondent’s witnesses

49. The First Respondent deposed two affidavits dated 26 September 2018 and 6 December 2018. As with the Applicant, the First Respondent's affidavits were read after the exclusion of a number of elements which were not pressed and other elements that were rejected after objection by Ms Ashworth. A range of supporting documents and photographs were appended to the First Respondent's affidavits. The First Respondent was required for cross-examination. It is to be observed that, although the First Respondent has a camp in the vicinity of Lightning Ridge, his home is in the New South Wales Riverina township of Leeton.

50. The Second Respondent is the registered holder of Claim 2. The Second Respondent deposed an affidavit dated 20 December 2018. Although the Second Respondent’s usual occupation is as a labourer in Leeton, the town where he lives, he aspires to be an opal miner and has undertaken the mandatory pre-opal-mining course necessary before being permitted to be the operator of mining activities on a mineral claim. The Second Respondent was also required for cross-examination.

Ms Messenger’s evidence

Introduction

51. Ms Messenger is a law student employed as a junior clerk in Ms Ashworth’s chambers, Wardell Chambers. On the afternoon of 19 March 2019, she arrived outside my courtroom, shortly before the time scheduled for the afternoon adjournment, to collect Ms Ashworth’s trolley of folders and other papers.

52. Ms Messenger gave evidence by affidavit concerning an incident that she had witnessed outside my courtroom at about 3.50-3.55 pm on the afternoon of 19 March 2019. Her affidavit was dated 22 March 2019. The statement concerned what she had observed outside the courtroom. Her note of what she had observed was annexed to her affidavit and was admitted without objection. As earlier noted, Ms Messenger was not required for cross‑examination.

Ms Messenger’s statement

53. The relevant portion of her note was in the following terms:

… After some discussion that I did not hear, the Witness was asked to leave the Courtroom. Prior to the witness leaving the Courtroom 10A, I saw a man exit the room and turn right and wait around the corner opposite the lift. He was approximately 6ft tall, around 30-40 years of age, brown hair, of Anglo-Saxon decent (sic), wearing suit pants, black loafer shoes, and I believe a blue shirt. Then the witness leaved (sic) the Courtroom, this gentleman was older approximately 5 ft8 tall, grey hair, had a limp, wearing a green check shirt, belt and denim jeans, I heard his Honour refer to him as Mr Hutchison. As the doors of the Courtroom shut the younger of the two men started angrily addressing the witness with a low volume. I was not able to hear the full extent of the conversation, but I could tell the younger man was quite emotional and was using profanity. I heard him say multiple times of (sic) the witness ‘you need to stay on topic’ and ‘you’re going off fucking topic’. I did not hear the witness respond. Then the doors of Courtroom 10A were re‑opened, the witness was asked to enter, both men went back into the Courtroom. I heard his Honour decided to stand down for the day the Witness but not excuse him, the witness was then warned very clearly about not discussing his evidence with any of his legal counsel or his son. When Court was adjourned both men were the first to leave the Courtroom and waited for a lift together, however they were not talking.

Mr Hutchison’s cross-examination concerning Ms Messenger’s statement

54. On the morning of 20 March 2019, the hearing commenced with a number of preliminary matters, including preliminary matters concerning Ms Messenger’s note concerning what she had observed outside the courtroom the previous afternoon. As earlier noted, this was subsequently turned into an affidavit. The First Respondent was cross-examined by Ms Ashworth concerning the conversation about which Ms Messenger had recorded her note. This cross‑examination was in two tranches. The first of them was in the following terms (Transcript, 20 March 2019, page 199, line 37 to page 191, line 42):

Q. Do you recall yesterday afternoon, just before court finished for the day, the judge asked you to leave the courtroom?

A. Yes.

Q. And a short time later you were asked to come back inside?

A. Yes.

Q. Martin was outside the courtroom with you; correct?

A. Yesterday?

Q. Yesterday afternoon.

A. Yes.

Q. And Martin spoke to you when you were outside, didn't he?

A. I don't recall.

Q. You don't recall whether or not Martin said anything to you while you were outside the Court for a short time yesterday afternoon?

A. No.

Q. Do you know there's a camera outside the courtroom, Mr Hutchinson?

A. I presume there's a camera there.

Q. Do you recall Martin saying to you something to the effect of, "You're going off fucking topic."

A. I don't recall.

Q. Do you recall saying

A. He could have. I don't

HIS HONOUR: Hang on, the witness hadn't finished his answer.

ASHWORTH: I apologise.

WITNESS: I don't recall. I just don't remember what he was talking about. It might have been other things.

ASHWORTH

Q. So he was talking to you, though?

A. He could have been. I don't recall talking to him.

Q. Well, what was he saying?

A. I don't recall.

Q. He said to you, "You need to stay on topic," didn't he?

A. He could have. I can't remember.

Q. He was swearing?

A. I can't remember.

Q. You can't remember what happened yesterday afternoon?

A. I wasn't listening to him.

Q. He was angry with you, wasn't he?

A. I wasn't I just wasn't listening to what he was saying.

55. The second tranche was in the following terms (Transcript, 20 March 2019, page 193, line 28 to page 194, line 11):

Q. Someone saw Martin speaking to you outside the courtroom yesterday afternoon. So as a matter of fairness to you, I just want to give you an opportunity is it your evidence that you don't recall anything Martin said to you on that occasion?

A. Outside?

Q. Outside I'll just be very precise about the time. It was before court finished for the day, about five to ten minutes before court finished. Like I asked you earlier this morning, the judge

A. You meant just out here?

Q. Yes. The judge asked you to leave the courtroom

A. Yes.

Q. and Martin also

A. Yes.

Q. and then you were asked a short time later to come back inside

A. Yes.

Q. Your evidence earlier this morning was that you don't recall what Martin said to you?

A. I don't recall what he said.

Q. You don't recall him swearing at you?

A. No.

Q. You don't recall him saying, "You're going off fucking topic."

A. No.

Q. "You need to stay on topic."

A. No.

Q. You don't recall what his demeanour was?

A. No.

Consideration

56. As I was aware of the matters about which the First Respondent was to be cross-examined (as I had, without objection from Mr Stretton, already looked at the note prepared by Ms Messenger which subsequently became Annexure A to her affidavit), I paid close attention to the First Respondent’s demeanour in the witness box during his cross-examination on this topic.

57. There are several observations to be made concerning both what the First Respondent said and what I observed of him while he was saying it with respect to the conversation described by Ms Messenger.

58. As her recollection was unchallenged and was clearly recorded, I accept it as an accurate description of what occurred.

59. During his cross-examination by Ms Ashworth on this topic, the First Respondent did not expressly deny any of the matters about which Ms Messenger had made her note.

60. The First Respondent’s answers were, at best, dissembling and prevaricating. His repeated statements that he either “couldn't recall”; “couldn't remember” or “wasn't listening to what Martin was saying” are not credible under the circumstances of that which was described by Ms Messenger as to the nature of what was being said and the tone in which it was being delivered.

61. The First Respondent appeared to me to be quite uncomfortable at the nature of this questioning, as well as being surprised that he was being questioned on this topic. I noticed him shifting in his seat whilst he was responding to Ms Ashworth's questions.

62. I am unable to accept the First Respondent’s lack of recollection concerning what Martin had said to him and Martin's demeanour in its delivery.

63. I have set out the cross-examination, the context giving rise to it and my observations concerning the First Respondent’s demeanour during this cross‑examination, not for the purpose of suggesting that his further evidence concerning other topics was in any way influenced by the haranguing he received from Martin.

64. However, I do set it out for the purposes of explaining why it is one of the matters that causes me to conclude that I am unable to believe the First Respondent on matters where there is conflict with his evidence (particularly conflict with evidence given by the Applicant), unless the First Respondent’s evidence is otherwise credibly corroborated (and, as later discussed in more detail, I do not accept that the Second Respondent’s evidence is to be regarded as falling in such a category).

The issues

65. A series of separate but interrelated issues require to be determined to resolve the range of matters in dispute between the Applicant and the First Respondent. These matters are:

1. How the arrangement between the Applicant and the First Respondent for the mining of Claim 1 is to be characterised;

2. However the arrangement for mining of Claim 1 is to be characterised, what were the terms of that arrangement;

3. Did the Applicant breach the terms of the arrangement;

4. If so, what were the consequences (if any) of such breaches on the arrangement between the Applicant and the First Respondent to mine Claim 1, however characterised;

5. Did the arrangement between the Applicant and the First Respondent (however characterised) also encompass future mining of Claim 2;

6. How is the transfer of Claim 2 by the First Respondent to the Second Respondent to be viewed;

7. In light of the determinations with respect to all of the above issues, is it appropriate to contemplate making orders concerning the renewal of Claims 1 and 2, when their present terms expire in late 2019;

8. How is the dispute concerning the cost of works undertaken to the Applicant’s Super Digger by Parkes Hydraulic Services Pty Ltd (Parkes Hydraulics) to be resolved; and

9. Finally, what should be the appropriate form of such relief as might be appropriate to be granted to the Applicant (if any) in light of the conclusions reached with respect to each of the above issues.

The primary evidentiary conflicts

66. Although there was significant documentary and photographic evidence attached to the affidavits of the Applicant and the First Respondent (and additional documents were tendered during the course of the proceedings), the primary evidentiary conflict requiring my consideration and resolution arises with respect to the content of conversations held, or alleged to have been held, between the Applicant and the First Respondent. Resolution of which of these witnesses I should prefer on the basis of their written and oral evidence lies at the heart of my determination of the Applicant’s claim against the First Respondent.

67. It is appropriate to note that, in my conclusion that I should prefer the evidence of the Applicant over that of the First Respondent (for reasons explained in detail), it is to be observed that, given the known frailty of human memory when combined with the effluxion of time, conflicts of recollection will arise (even in stark terms, as is here the position).

68. As a general proposition, preferring one witness over another on relevant matters does not involve making a finding of deliberate untruthfulness concerning the evidence given by the witness who is not being preferred.

69. However, in this instance, for reasons set out in some detail at several points in this decision, I am satisfied that, concerning a matter of potential significance in the dispute between the Applicant and the First Respondent, the First Respondent’s evidence was both inaccurate and was deliberately fabricated. This is a significant factor weighing in my decision not to prefer his evidence over that of the Applicant.

The maps of the underground workings

70. Two maps of the underground workings on Claim 1 (and their incursions into Martin's claim) were in evidence. The first of them was produced by the Applicant (Court Book, Vol 1, folio 243), whilst the second was produced by Mr Chapula (Exhibit 4, page 6). These maps are, in all necessary fundamental respects, sufficiently similar that it is not necessary to draw any distinction between them. These maps are reproduced in Annexures A and B (with the map prepared by Mr Chapula rotated so as to be in the same orientation as the map prepared by the Applicant). These plans now both are oriented so that north is to the top.

71. It is to be observed that the map of the workings prepared by the Applicant does not include any details of propping, as what he has drawn is simply designed to reflect the state of the workings as he left them. It can also be seen that the map prepared by the Applicant is in multiple colours. The Applicant's evidence also included a key (Court Book, Vol 1, folio 242) to these colours. A copy of that key is to be found at Annexure C.

72. These maps of the underground workings are important to enable a proper understanding of:

1. the Applicant’s evidence concerning the safety of his working arrangements;

2. the relevant provisions of the NSW Opal Mining Safety Guidelines (the Safety Guidelines) later discussed;

3. Mr Lohse’s evidence concerning safe working practices; and

4. the prohibition notices issued by Mr Babic (also later discussed).

The video evidence

73. Appended to the Applicant’s affidavit dated 2 November 2018 was a USB stick containing two short videos taken by the Applicant on 20 February 2018 and 21 May 2018, being a date after he had been shut out from working Claim 1 and also being well after the date upon which the First Respondent asserts that he terminated the arrangement with the Applicant.

74. There being no objection to these videos by Mr Stretton, they were played in Court on the second morning of the hearing.

75. The first video was two minutes and 14 seconds in duration, whilst the second was two minutes and 53 seconds in duration. The USB stick storing these two videos became Exhibit D. The consequence of this is that all of the images in each of the videos became part of the evidence in the proceedings. It has not been necessary to extract any images from these videos for the purpose of annexing them to this judgment.

The terms of the agreement between the Applicant and the First Respondent

76. The First Respondent asserted, in his affidavit of 26 September 2018, that there were only a limited number of terms constituting the scope of the agreement he had with the Applicant as the basis of the Applicant working Claim 1. It was his evidence that his agreement with the Applicant was confined to Claim 1 and that, to the extent that the possibility of the Applicant mining Claim 2 at some time in the future arose, it only arose in a contingent sense. The contingency, it was the First Respondent’s position, was the satisfactory performance of the Applicant in mining out Claim 1 prior to there being any contemplation of mining on Claim 2.

77. It was the First Respondent's evidence that the terms of the limited agreement (however that agreement might be characterised, a matter needing to be discussed elsewhere in this decision) were:

1. The profit realised from mining Claim 1 (whether to be distributed as cash or opal being unspecified) was to be 70% to the Applicant and 30% to the First Respondent of the net value of the opals recovered. The net value was to be the gross value less the cost of reimbursing the Applicant for the fuel costs he incurred for running the equipment necessary to undertake the mining operation;

2. There was to be no mining across any of the boundaries of the claim by incursion into any adjacent claim; and

3. There was to be no consumption of alcohol on the claim by the Applicant.

78. This agreement was said to have been reached during the course of a conversation between the First Respondent and the Applicant held on 26 May 2015 at Lightning Ridge.

79. The Applicant does not dispute that an arrangement was agreed between himself and the First Respondent on the date nominated by the First Respondent. He does not dispute that the profit-splitting arrangement, and the ratio underpinning that arrangement, nominated by the First Respondent (post fuel cost reimbursement) had been agreed.

80. However, it was the Applicant’s evidence that this comprised the totality of the nature of the agreement between them. In effect, the position he advanced is that he would supply the necessary equipment underground and the surface equipment necessary to support the underground activities (such as a blower to ventilate the underground workings), whilst the First Respondent would, in effect, contribute his ownership of Claims 1 and 2 to the arrangement.

81. Ms Ashworth, on behalf of the Applicant, submitted that this arrangement should be characterised legally as a partnership, whilst Mr Stretton characterises it as a mere contract. Those differences will need to be explored later in my determination of the nature of the legal relationship established between the Applicant and the First Respondent for the purposes of exploiting the mineral potential of Claim 1 and whether Claim 2 was encompassed by the arrangement (however characterised).

82. I observe that, in his affidavit of 26 September 2018, the First Respondent said at paragraph 15:

I always viewed it as more like a share farming arrangement than a partnership.

83. However, the legal nature of the relationship between the Applicant and the First Respondent is a matter for my determination in light of all the facts and circumstances I find are appropriate to be considered in undertaking that determination.

84. The First Respondent’s belief, although expressed in imprecise and temporally undefined terms, and where there is no express evidence from either the Applicant or the First Respondent of any discussion of how their relationship concerning Claim 1 (and, potentially, Claim 2) was to be characterised, is, nonetheless, of some utility in my assessment (for reasons later explained.

85. There is no executed written agreement between the Applicant and the First Respondent. However, the First Respondent relies on what he asserts is a contemporaneous note which he made on 25 May 2015. It was the First Respondent's evidence that he had made this note in a 2011 calendar year diary that he habitually carried with him for the purposes of note-taking. A copy is reproduced at Annexure D.

86. The question of whether or not I should conclude that the relevant notations depicted on Annexure D were in fact a contemporaneous note of the fundamental terms of the agreement between the First Respondent and the Applicant is in dispute.

87. The First Respondent relies on Annexure D to justify his unilateral termination of the agreement because, amongst other things, of the Applicant’s breach of the “no alcohol” and “no boundary-crossing” conditions said to be evidenced by the notation in the diary. Other matters concerning the safety or otherwise of the underground activities undertaken by the Applicant on Claim 1 are also said by the First Respondent to give rise to significant safety issues, also contributing to the justification of his termination of the arrangement with the Applicant.

88. It is, therefore, in issue as to how I am to treat the entry on the right-hand page of the First Respondent’s 2011 diary, said by the First Respondent to contain his alleged contemporaneous note of the terms of his agreement with the Applicant.

89. Following its production, in response to a call made by Ms Ashworth, the whole of the First Respondent's 2011 diary book, together with the leather folder housing it and a number of pages which had been ripped from the diary but inserted in the sleeve in its leather holder, were tendered (Exhibit E). This material comprised the totality of what was depicted in the image at folio 419 of the Evidence Book.

90. Before turning to consider the relevant pages of the diary (the photocopy depicting more than merely the relevant page appearing at folio 419 of the Evidence Book and reproduced as Annexure D to this decision), I should note that there is no explanation as to why the right-hand page of the diary containing the notation upon which the First Respondent seeks to rely commences with the date 26 May 2011, whilst the left-hand page commences with a date more than three weeks’ earlier. There is no explanation for this curious occurrence or of the ripped-out pages as none was sought by Ms Ashworth in her cross-examination of the First Respondent. I therefore pay no heed to these missing pages.

91. The diary note also asserts that the Applicant was required to abide by all mining regulations.

92. In the context of the term in the agreement framework relied upon by the First Respondent concerning the necessity for the Applicant to obey mining regulations, there are three observations appropriate to be made.

93. First, to the extent that there might be regulations, in a subordinate legislation sense, applicable to opal-mining activities, the Applicant would be legally obliged to obey those that were relevant to his activities, whether or not any arrangement with the First Respondent encompassed them or not.

94. Second, matters relating to occupational health and safety regulations do play a role with respect to the Applicant’s mining activities, as later discussed in more detail.

95. Finally, the Safety Guidelines became Exhibit 1. The Applicant and Mr Lohse gave evidence from a miner’s perspective concerning matters contained in Exhibit 1, whilst Mr Chapula and Mr Panich gave short general evidence concerning the applicability of the guidelines contained in Exhibit 1. All of that evidence is considered elsewhere. It is, however, appropriate to note for the purposes of this discussion that the guidelines in Exhibit 1 do not constitute regulations as that term is properly to be understood.

96. On the Applicant’s case, the profit-share arrangement with the First Respondent effectively encompassed the totality of the contract between them concerning Claim 1. It is also his evidence that the scope of the contract also included the future mining of Claim 2 on the same profit-share basis.

97. On the other hand, the position concerning the arrangement pressed by the First Respondent is that, in addition to the profit-share arrangement for Claim 1, there were a number of further fundamental conditions recorded in Annexure D to govern the Applicant’s mining activities on Claim 1. The First Respondent denies that the agreement also encompassed Claim 2.

98. These further fundamental terms alleged by the First Respondent (as earlier noted) were that:

1. The Applicant would not consume alcohol (both above and below ground) on Claim 1; and

2. No mining would take place across the boundaries of Claim 1.

99. The First Respondent also presses that there was an implied term in the arrangement that the Applicant would diligently apply himself and his equipment to the mining operations on Claim 1.

100. With respect to the Applicant's assertion that the May 2015 agreement with the First Respondent also encompassed the future mining of Claim 2, the Applicant says that the 4 August 2017 transfer of the ownership of Claim 2 to the Second Respondent was a sham, one undertaken for the sole purpose of removing ownership of that claim from the First Respondent so that the Applicant could not assert what he says were his rights to mine that claim in the future.

101. It is also appropriate to make a further observation concerning the operation of the agreement between the Applicant and the First Respondent as it was undertaken (no matter what might be found by me to be its physical scope or operative terms). It is not disputed that the commercial elements of the arrangement were effected either in cash or by the division of the physical opal won from the Applicant's underground mining activities on Claim 1. No formal accounting records of transactions between the pair were kept.

102. However, the Applicant did keep some rudimentary records of fuel expenses and there was, in evidence as an attachment to his affidavit dated 9 June 2018, a record of the valuations given through the system operated by the Lightning Ridge Miners’ Association of the vast bulk of the opals taken by the Applicant from Claim 1. A copy of the first page of this document (Court Book, Vol 1, folios 82 to 84) is reproduced as Annexure E to this judgment.

Alcohol and bottle matters

Introduction

103. I have earlier noted, at [2] to [4] and at [64], that I prefer the Applicant’s evidence to that of the First Respondent’s when their accounts were in conflict. It is appropriate to explain, in some detail, a significant reason why I have reached this general conclusion. It arises from the First Respondent’s evidence concerning what he said was the “alcohol ban” condition of his version of the agreement with the Applicant and how the First Respondent said I should conclude that the Applicant had breached that condition. This is dealt with in this section of this judgment.

104. A second reason is later dealt with in my discussion of the “transfer” of Claim 2 to the Second Respondent.

105. Further reasons arise from the First Respondent’s oral evidence concerning Martin’s harangue of the First Respondent outside the courtroom on 19 March 2019 whilst the evidence (written and oral) concerning Parkes Hydraulics also provides reinforcement of my sense of unease concerning the First Respondent’s evidence overall.

Mr Hutchison’s affidavit evidence

106. As previously noted in this judgment, the First Respondent asserted in his affidavit of 26 September 2018 (Court Book, Tab 16, at [14] and [15]) that a term of his agreement for the Applicant to work Claim 1 was that no alcohol was to be on the site. His 2011 diary, recording reference to this allegedly agreed condition, was earlier noted.

107. The Applicant denied that this term formed any part of his agreement with the First Respondent (Transcript, 18 March 2019, page 47, line 22 to page 48, line 2). In cross-examination, the Applicant did not dispute that the First Respondent found bottles on Claim 1. However, he did deny that he had consumed alcohol on the site or let others drink on the site (Transcript, 18 March 2019, page 78, line 11 to page 79, line 1).

108. In his 26 September 2018 affidavit, the First Respondent stated that, in early 2017 he “started noticing beer cans and empty alcohol bottles on claim 56861 when [he] would visit” (at [37]). He then stated he attended Claim 1 and inspected it on around April 2017 (at [39(d)]):

There were alcohol cans and bottles inside the mine and around the hole. There was about 13 of them. I took photos later which I annex below.

109. The photos to which the First Respondent referred were annexed to his 26 September affidavit at Tab 16(F) and at appear at folios 429 to 432, 433, and 435 to 437 of Volume 2 of the Court Book. A short description of each bottle is necessary for the conclusion found in this section.

110. Folio 429 is a close-up photo of a Jim Beam bottle, positioned between a worn white hose and a rusted iron frame part. Folio 430 is a more distant photo of the Jim Beam bottle and includes an unidentifiable dark coloured beer bottle. These photos are taken above ground.

111. Folio 431 appears to be to be in the mine, with two James Squire One Fifty Lashes’ bottles, identifiable by the back of the label on each, wedged in a crack in the rock of the mine. Folio 432 is also two James Squire One Fifty Lashes’ bottles in the mine, positioned differently to the previous photo, with the front of their labels facing upwards.

112. Folio 430 is a photo of a XXXX Gold can. Folio 435 is a photo of two XXXX Gold bottles, with a third hidden under rubble in the mine.

113. Folio 436 is a photo of three XXXX Gold bottles with two of the labels facing up and, on the third of them, the label is turned to the side.

114. The final relevant photo is on Folio 437 and is a Bundaberg Rum can, identifiable also by the label.

115. The First Respondent was cross-examined extensively on his written and photographic evidence regarding bottles on the site. This included explicit questioning about the affidavit of 26 September 2018 and the photographs described above behind Tab 16. In cross-examination, when questioned, the First Respondent repeated his assertion that he found 13 bottles on the site (Transcript, 19 March 2019, page 179, lines 27 to 30).

116. Ms Ashworth continued to question the First Respondent about the alcohol bottles and whether the photos depicted the same alcohol bottles. The proposition was put to the First Respondent that he had moved them, which he denied (Transcript, 19 March page 181, lines 1 to 35), set out below:

Q. That photo shows a Jim Beam bottle; correct?

A. Yes.

Q. Can I take you to page 430?

A. Yes.

Q. The Jim Beam bottom in that photo is the same as the previous photo, isn't it?

A. Yes.

Q. Can I take you now to page 431, the next one over. It shows what look to be two beer bottles; correct?

A. Yes.

Q. Can I take you over the page to page 432, the next one over.

A. Yes.

Q. That's the same two bottles, isn't it?

A. No.

Q. They are the same‑‑

A. I never touched the bottles or the cans.

Q. You've moved the bottles and‑‑

A. No, I haven't.

Q. And taken the photo from a different angle, haven't you?

A. No.

Q. Just let me finish the question. You moved the bottles; correct?

A. I never touched them.

Q. And you took the photo from a different angle; correct?

A. No.

117. After this exchange, the transcript further records the First Respondent being taken again to photographs behind Tab 16 of the affidavit and it being again put to him that he had counted some of the bottles more than once to reach his asserted number of 13 bottles (Transcript, 19 March 2019, page 181, lines 44 to 49 and page 182, lines 1 to 25). At this point the First Respondent was asked if he had taken multiple photographs of the same bottles, to which he answered that, yes, he had (Transcript, 19 March 2019, page 182, lines 27 to 28) set out below:

Q. Did you take multiple photos of the same bottles?

A. I took some double photos on some, yes.

118. The First Respondent was then re-examined by his Counsel who requestioned him on the bottle matter (Transcript, 20 March 2019, page 214, lines 10 to 19) set out below:

Q. You were asked some questions yesterday about the alcohol bottles that you found on claim 56861. Do you remember that?

A. Yes.

Q. There were questions put to you as to the number of bottles, and you had said it was 13 bottles?

A. Yes.

Q. What was the basis for that figure of 13?

A. That was a count that I did above and below ground.

119. On 22 March 2019, during submissions for the First Respondent, I enquired from Mr Stretton what, if any, should be the consequences if I was to conclude with respect to the alcohol bottles that the First Respondent was not a witness of truth. Mr Stretton responded that if I was not satisfied that the First Respondent found them there, underground in the mine, then that part of the alleged breaches would fall away (Transcript, 22 March 2019, page 326, lines 27 to 34):

HIS HONOUR: What do you say should be the consequence, if any, for the remainder of matters, if I was to conclude with respect to the alcohol bottles that Mr Hutchinson was not a witness of truth?

STRETTON: If your Honour weren't persuaded that the alcohol bottles were there or if your Honour thought that if your Honour were not satisfied that Mr Hutchinson found them there, underground in the mine, then that part of the alleged breaches would fall away.

120. Further, I told Mr Stretton I was putting him on notice that it was open to me to conclude that the First Respondent deliberately moved the bottles between the two photographs (Owen Hutchison Affidavit of 26 September 2018, Annexure F, folios 435 and 436; also see Annexures F and G to this judgment). I said (Transcript, 22 March 2019, page 327, line 50 and page 328, lines 1 to 4):

HIS HONOUR: I'm not suggesting that they're duplicates. I'm suggesting that they're the same bottles at the same location, and that one of the bottles has been moved between photographs. I think that that is a conclusion open to me to draw and I'm simply putting you on notice of that, but it would be procedurally unfair if I did not do so.

121. Mr Stretton’s response appears below (Transcript, 22 March 2019, page 328, lines 5 to 10):

I understand your Honour. In the event that credibility is found to be lacking in relation to the bottles, in terms of the consequences of that, your Honour would then have to weigh Mr Hutchison’s evidence against the surrounding circumstances to see if there’s external corroboration, as it were, or if what he alleges is otherwise inherently plausible, which I will submit that it is.

122. It has been necessary to set out the above elements of the evidence because, in my view, the evidence of the First Respondent in this part of the proceedings was dishonest and untruthful. State of NSW v Hunt (2014) 86 NSWLR 226 emphasised the rule in Browne v Dunn (1893) 6 R 67, stating that two conditions needed to be satisfied before a finding of untruth could be made: first, reasons given for concluding that the truth had not been told; secondly, the witness must have been given the opportunity to answer the criticism (at [32]).

123. My reason for finding the First Respondent’s evidence untruthful on this topic is that his written and oral evidence goes against the evidence of the relevant photographs provided by the First Respondent that are described above and provided behind Tab 16 of his September 2018 affidavit.

124. This, coupled with the First Respondent’s demeanour during his cross‑examination during this topic, for example the First Respondent responding to a question about the bottles, “I never touched the bottles or cans”, before this was even put to him when taken to the photographs of the bottles satisfies me that his evidence was untruthful. I am mindful of the comments of the High Court in Fox v Percy (2003) 214 CLR 118, at [31], observing the following:

Further, in recent years, judges have become more aware of scientific research that has cast doubt on the ability of judges (or anyone else) to tell truth from falsehood accurately on the basis of such appearances. Considerations such as these have encouraged judges, both at trial and on appeal, to limit their reliance on the appearances of witnesses and to reason to their conclusions, as far as possible, on the basis of contemporary materials, objectively established facts and the apparent logic of events. This does not eliminate the established principles about witness credibility; but it tends to reduce the occasions where those principles are seen as critical (some citations omitted).

125. However, as said by Sackville J in Seven Network Limited v News Limited [2007] FCA 1062 at [373]:

The present judgment follows a trial at which a great deal of evidence was given by many witnesses. It is not an appellate judgment. Nonetheless, the observations in Fox v Percy are pertinent to the fact-finding process a trial judge is required to undertake. It is not inconsistent with those observations to observe that the importance of ‘demeanour’ as an indicator of the reliability of a witness may vary according to the circumstances. It may be quite inappropriate, to take an example not relevant to this case, to regard an indigenous person’s apparent unwillingness to make eye contact and hesitancy in answering questions as demonstrating untruthfulness. But if a confident and articulate witness becomes hesitant and defensive when confronted with documentary evidence apparently at odds with his or her own account of events, the witness’ hesitancy might well suggest a lack of candour: see McLellan, at 662.

126. Referring to the second condition in State of NSW v Hunt, for me to be satisfied to find evidence was untruthful, the proposition was put to the First Respondent that he had moved the bottles and he was given the opportunity to respond to this.

127. Therefore, I am satisfied that I should conclude from the evidence before me, that the First Respondent, at the very least, deliberately moved the XXXX Gold bottles when he took the pictures of them, so it appeared that more bottles were down the mine than there actually were. It is not necessary for me to conclude that the First Respondent had deliberately placed the bottles in/on Claim 1. This was not put to him and, for present purposes of addressing questions of the reliability of the First Respondent., I need not make such a finding

128. On the topic of alcohol bottles present on Claim 1 and whether he had consumed alcohol on Claim 1, the Applicant’s evidence should therefore be preferred.

129. The combination of the photographic evidence and the First Respondent’s oral evidence (and his demeanour while giving it) concerning the bottles in the mine cause me to conclude that this evidence was deliberately untruthful.

130. Indeed, the only valid broader conclusion concerning the First Respondent's evidence (to be drawn from his demeanour and the nature of his answers during his oral evidence, when coupled with the fact that I am satisfied he has been deliberately untruthful about alcohol bottles down the mine on Claim 1), is that I cannot confidently give any weight to his evidence, absent independent and verifiable supporting documentary or other independent oral evidence.

Characterisation of the mining arrangement

Introduction

131. The proposition advanced by Ms Ashworth on behalf of the Applicant was that the arrangement which he had entered into with the First Respondent was appropriate to be characterised as a partnership. If so characterised, Ms Ashworth submitted, various statutory provisions were therefore brought into play as governing the rights of each of the Applicant and the First Respondent as the two members of that partnership. On the other hand, as observed by the First Respondent in his evidence as earlier noted, the First Respondent regarded the arrangement between them as being akin to a share-farming arrangement.

132. Mr Stretton, whilst resisting the proposition that the arrangement between the Applicant and the First Respondent should be regarded as a partnership, adopted, by implication, the description given by the First Respondent of how I should regard the arrangement as being characterised.

133. In this context, it is appropriate to list, with a degree of precision, what each of the Applicant and the First Respondent contributed to the arrangement which existed between them, and what are the identified characteristics (both agreed and, where there is a conflict, as I have earlier determined) of the operation of the arrangement.

The Applicant’s contribution

134. The Applicant provided the following equipment to the endeavour:

• the underground working equipment known as a “Super Digger”;

• a blower, being the equipment necessary to circulate air through the underground workings to ensure adequate ventilation for those who were below the ground;

• a truck for the purposes of conveying material extracted from the underground workings to the location where puddling would take place to permit the separation of valuable opal material from the podge, earth and other valueless material.

135. In addition, the Applicant provided himself, or was responsible for the provision by others, of the necessary operating labour for the mining and associated activities.

The First Respondent’s contribution

136. Primarily, the First Respondent provided the two Mineral Claims. However, he also provided the drilling equipment. This drilling equipment was used to sink the various wider shafts that were depicted on the sketches of the underground workings’ layout prepared by the Applicant and that prepared by Mr Panich. In addition, the First Respondent’s drilling equipment was also used, subsequently, for the purpose of sinking a number of narrower shafts along the boundary between Claim 1 and Martin's claim.

137. There is no suggestion that the First Respondent, either personally or through the agency of others, provided any of the physical labour for the mining activities which had been undertaken on Claim 1.

138. Finally, it is also to be inferred that, to the extent that ancillary mining equipment may have been required (for example, to hoist extracted material from the underground workings), such equipment was provided by the Applicant.

The profit-share arrangement

139. I have also set out, earlier, the 70:30 post fuel cost arrangement that it is agreed by the Applicant and the First Respondent governed the distribution of such valuable material as was able to be extracted from the mining activities undertaken on Claim 1.

140. I have, elsewhere, dealt with what I have concluded with respect to the other matters asserted by the First Respondent as having been incorporated in the arrangement with the Applicant. However, it is also to be observed that those arrangements, and the conclusions I have reached with respect to them, do not provide any assistance of significance to resolving the conundrum as to how the arrangement between the Applicant and the First Respondent is to be characterised. Indeed, even assuming that the version advanced by the First Respondent was to be accepted, those conditions are not inconsistent with a characterisation finding that the arrangement between the First Respondent and the Applicant was that of a partnership.

141. It is also to be observed that the First Respondent, effectively, left the Applicant to his own devices in undertaking the mining activities underground on Claim 1. The evidence discloses that, between the commencement of the arrangement in May 2015, and its interruption by events in August 2017, the First Respondent only went underground into the workings on Claim 1 on two occasions.

142. The first was in September 2015 (Transcript, 19 March 2019, page 172, lines 41 to 45 and Court Book, Vol 1, Affidavit af Owen Hutchison, 9 June 2018, Tab 8, folio 51[26]).

143. The second was in July 2016 (Transcript, 19 March 2019, page 173, lines 15 to 19 and Court Book, Vol 1, Affidavit of Owen Hutchison, 9 June 2018, Tab 8, folio 51[26]).

144. Finally, the arrangement between the Applicant and the First Respondent had the Applicant undertaking the primary responsibility for commercial disposition of gemstones mined from Claim 1 or from the division of those gemstones, if not sold to a dealer, for distribution between them according to the agreed formula.

145. I now turn to the parties’ submissions on partnership.

Ms Ashworth’s submissions on partnership

146. In her written submissions, Ms Ashworth stated that there was no factual contest as to whether there was a partnership, only a question of legal conclusion. She relied on the fact that the mining agreement between the Applicant and the First Respondent was for the carrying on of a business in common with a view to profit: at [4} of outline of closing submissions.

147. Ms Ashworth also submitted that the partnership was for a fixed venture and was a fixed-term partnership. She stated that such a partnership could not be terminated by notice unless agreed between the parties as required by s 32 of the Partnership Act 1892 (the Partnership Act) (outline of closing submissions at [7]).

148. In her oral submissions, Ms Ashworth noted that s 1(1) of the Partnership Act defines a partnership as the carrying on of a business in common, with a view to profit, and submits that these elements are met in the current circumstances (Transcript, 22 March 2019, page 278, lines 25 to 46).

149. She emphasised that, on the Applicant’s case, the characterisation of the agreement between the Applicant and the First Respondent is critical to the level of the validity of termination and also relevant to the entitlement and form of relief that would flow from any breach of that arrangement (Transcript, 22 March 2019, page 288, lines 1 to 6).

150. Ms Ashworth noted s 20(1) of the Partnership Act states, in determining whether a particular asset was a partnership property, that one looks to whether or not that property was originally brought into the partnership stock and submits that in the current circumstances there is no partnership without the mining claim or claims (Transcript, 22 March 2019, page 289, lines 1 to 9).

151. She further submitted that the intention of the parties, given the nature of their agreement, the subject matter of the agreement, the admitted terms of the agreement, their arrangement, that it should be inferred that the intention of the parties objectively ascertained was the claim to form part of the partnership property (Transcript, 22 March 2019, page 289, lines 38 to 45).

Mr Stretton’s submissions on partnership

152. Mr Stretton submitted that it was incorrect that the First Respondent owed fiduciary duties to the Applicant as his partner. At [105] of Respondent’s Written Submissions, he set out the following reasons as demonstrating that the agreement between the parties did not create a partnership:

•   No evidence of any separate entity or ABN for the alleged partnership.

•   An absence of an agreement to share losses.

•   Mr Hutchison did not have a day to day managerial or administrative role in the agreement between the parties.

•   The business was not operated either by or on behalf of all the persons who are alleged to be partners (Mr Morris and Mr Hutchison).

•   The example of Mr Morris bearing all mining expenses but receiving re-imbursement for fuel only was given.

153. Mr Stretton was succinct in his oral submissions, repeating that he relied on his written submissions (Transcript, 22 March 2019, page 325, lines 34 to 39). He then disagreed with a proposition put by Ms Ashworth that s 32 of the Partnership Act meant that if I found that a partnership existed in these circumstances, it could not be terminated until the expiry of the venture for which it was created (Transcript, 22 March 2019, page 325, lines 39 to 42). Mr Stretton submitted the following (Transcript, 22 March 2019, page 325, lines 42 to 50):

With respect, that is not what s 32 of the Partnership Act says; s 32 relates to the, as it were, period of natural expiry of a partnership. Nothing in that section suggests that you lost your common law or equitable rights to terminate a partnership agreement. To the contrary, s 46 of the Partnership Act, and I don't think that is in the authorities, but I refer your Honour to it, preserves common law and equitable rules in relation to partnerships, and therefore would preserve one's common law right to terminate a partnership agreement in the event of fundamental breach or serious breach of non-essential terms.

154. Regarding the property of the partnership (if there was one), in his oral submissions Mr Stretton put that (Transcript, 22 March 2019, page 326, lines 3 to 16):

But if there was a partnership, then the property of the partnership was simple the opals extracted from the ground at an operational level, and certainly not the claim itself. Owen owned 56861 before this alleged partnership began, and merely by getting Shane in to dig for opals does not mean that he is transferring beneficial interest in the claim to Shane. Similarly, if a farmer were to get somebody to plant some crops and harvest them on their land, that doesn't mean that that person is coming into share farm, thereby gains an interest in the property and could ask for it to be transferred to both of them. The Canny Gabriel case that my learned friend refers to involved the contractual term where there was an attempt to give both partners in the partnership an interest in the relevant contracts, so there was an express attempt to bring certain property, being the contractual rights, into the partnership. And that, in my submission, did not occur here.

Consideration of the nature of the arrangement

155. Resolution of these competing positions, in the final analysis, is comparatively uncomplicated.

156. Despite Ms Ashworth’s valiant attempts to endeavour to characterise the nature of the arrangement between the Applicant and the First Respondent as a partnership, I am unable to accept that I should conclude that this was a correct characterisation of their relationship. In addition to my accepting the technical submissions made by Mr Stretton on this point, of fundamental importance is the fact that neither of the parties considered that they had or had intended to enter into a partnership.

157. Although the Applicant said, in his affidavit of 9 June 2018 at [3], that he regarded the arrangement with the First Respondent as a joint venture partnership, these words, as used by the Applicant, are not evidence of the legal nature of the relationship and the other factual evidence is, in fact, to the contrary.

158. I have earlier set out the First Respondent’s evidence on this point. He clearly did not regard the arrangement as a partnership and never intended it to be characterised as one.

159. The Applicant was cross-examined at length by Mr Stretton across a range of topics. One of his answers, obviously honestly and conscientiously given, revealed how the Applicant considered the arrangement that he had had with the First Respondent (Transcript, 18 March 2019, page 92, lines 34 to 36):

Q. And as things currently stand, you don't want to work with him anymore, do you?

A. I didn't work with him; I worked for him.

160. The Applicant also clearly did not regard the arrangement as a partnership and never intended it to be characterised as one.

161. In circumstances where both the First Respondent and the Applicant have a broadly similar, common understanding of the nature of their relationship and where it would require making significant semantic and legal assumptions, contrary to the evidence of both of them, in order to force a conclusion that there was a partnership in a legal sense, it is not appropriate to do so.

The transfer of Claim 2 to the Second Respondent

Introduction

162. I have, elsewhere, dealt in more general terms with the First Respondent's evidence. It is, however, necessary to consider the written and oral evidence of the First Respondent and Second Respondent concerning the transfer of Claim 2 from the First Respondent to the Second Respondent.

163. First, the official departmental records (Exhibit G) disclose that the transfer of ownership of Claim 2 was effected on 4 August 2017, with this date being the date recorded for its occurrence at [8] to [11] of the Second Respondent’s affidavit.

A. Yes.

Q. He never offered to pay you $10,000 cash, did he?

A. Yes.

Q. You didn't say anything about that in your affidavit, did you?

A. I mightn't have used the word "cash," but I did mention the $10,000 that he owes.

Q. Were you telling the whole truth in your affidavit?

A. Yes.

Q. You don't say anything other than $10,000 deducted from opal proceeds, do you?

A. I'm not sure where you're at with that.

Q. In your affidavit, you don't say anything in terms of an offer by Owen to pay $10,000, other than by deduction from opal sale proceeds. Correct?

A. I'm missing the question, sorry.

Q. In your affidavit, you mention that Owen offered to pay $10,000 by way of deduction from opal sale proceeds?

A. That's what Owen said, not I.

Q. That's the offer he made, isn't it?

A. Yes.

The First Respondent's version

277. First Respondent's evidence concerning the work done by Parkes Hydraulics was set out in his affidavit of 26 September 2018 in the following terms:

108   In relation to paragraph 18 (in which Shane says I took his Super Digger with his consent to have it copied), and paragraph 19 (in which Shane says I took Shane’s Super Digger to Parkes Hydraulic Services and had them carry out work it required without his consent or without obtaining an estimate or quote), Shane said that I could have it for a week. My son Martin wanted it copied so he could have one. I took it to Leeton to have it measured. When I was bringing it back, Shane said “Take it to my cousin in Gilgandra to have the ram pin holes repaired” I tried to reach Shane, but I couldn’t reach him and didn’t know where this relation lived. So I took the digger back to Glengarry. When I got there, I spoke to Shane and we had a conversation to the following effect:

I said:   I’ve brought the digger back because I didn’t know where your relation was and I couldn’t reach you to find out the address.

He said:   You should have waited.

I said:   What do you mean waited? For how long?

He said:   Until I rang you

I said:   Well who pays for the motel bill?

109   We later had a conversation to the following effect:

I said:   They’ll be able to fix at Parkes.

He said:   Well take it back there and get them to fix the ram.

110   NOT READ

111   NOT READ

112   Ultimately nothing from Parkes Hydraulic Services was used in Martin’s digger.

113   In relation to paragraph 20 (in which Shane says I agreed to pay $10,000 towards the Parkes Hydraulic Services invoice), after Shane had received the invoice from PHS, he was complaining about the invoice. I said to him words to the effect of “I’ll give you $10,000 towards the bill, you fix him up and then go back to work”. Shane said “No I’m not paying him. He can wait. I’ll pay him out of my Centrelink payments”, declining my offer. Since Shane didn’t appear interested in me helping him to get him back to work, I didn’t make the offer again and he never tried to accept it. Our agreement did not change. Shane was to pay for all of the expenses in the mining of the claim, including equipment repairs and maintenance. That is part of why his share of proceeds was much more than mine (70 vs 30), to account for that. I don’t owe him anything in relation to the repairs of the digger. Shane also provided me a bundle of correspondence between himself and Parkes Hydraulics Service …

114   I assisted Mr Morris by writing to Parkes Hydraulics Services on his behalf …

278. His oral evidence on this point was in the following terms (Transcript, 20 March 2019, page 203, line 3 to page 206, line 4):

Q. Now, in or around September 2015 you asked Mr Morris if you could borrow his Super Digger for the purposes of having it copied; correct?

A. Yes.

Q. And he agreed; correct?

A. Yes.

Q. And you removed it from the mine from around mid to late September 2015?

A. I can't recall the exact date.

Q. You didn't go underground on that occasion, though?

A. No.

Q. And you were assisted in removing it by Mr Morris' brother, Chris?

A. Yes.

Q. And Mr Barker?

A. Yes.

Q. And you then took it to Parkes Hydraulic Services for the first time, didn't you?

A. Yes.

Q. And on that occasion you intended for the hydraulic cylinders, or rams, to be measured in situ do you understand what I mean by "in situ"?

A. (No verbal reply)

Q. I'll withdraw the question. On that occasion you intended for the hydraulic cylinders, or ram said, to be measured without the need for dismantling the machine; correct?

A. Yes.

Q. And they told you they couldn't measure them without taking the machine apart; correct?

A. No.

Q. Well, it turned out that they didn't measure the hydraulic components you wanted them to on that occasion, did they?

A. No.

Q. And you were having a person in Leeton drawing the body work, or the machine frame; correct?

A. Yes.

Q. So you took the Super Digger back home without having the measurements taken?

A. For the rams.

Q. For the rams?

A. Yes.

Q. So at that point you still needed the hydraulics measured; correct?

A. Yes.

Q. And you knew at that time that would involve dismantling the digger; correct?

A. No.

Q. Well, that's what Parkes told you, didn't they?

A. No.

Q. Now, you then took the digger back to Parkes Hydraulic Services for a second time; correct?

A. Yes.

Q. And on that occasion, they did do the measurements you wanted?

A. No.

Q. You wanted the hydraulics to be measured so you could copy the machine; correct?

A. Yes.

Q. And they did that for you; correct?

A. No.

Q. They certainly say they did that, Mr Hutchinson?

A. Well, they never took the number off the rams when he disassembled it to do Shane's job.

Q. In order for the hydraulics to be measured, the digger needs to be dismantled, doesn't it?

A. No.

Q. Well, why couldn't they do it for you on the first occasion then?

A. Time. They said I got there too late.

Q. Well, it was because they couldn't measure them without dismantling the machine, wasn't it?

A. He told me he needed more time.

Q. The dismantling of the machine takes time, doesn't it?

A. No. Ian Allen said he needed more time to measure the rams.

Q. Because he needed to dismantle the machine.

A. He never mentioned dismantling.

Q. But you know now that is what's required, don't you?

A. No.

Q. Well, that is, in fact, how Parkes measured the rams for you, isn't it?

A. No.

Q. Well, when you took it back a second time, you took it back to get the measurements, didn't you?

A. Yes.

Q. And the work involved in getting the measurements was to dismantle the digger; correct?

A. The digger was three quarters dismantled when it went to Parkes Hydraulic.

Q. It was. You're right.

A. Yes.

Q. But they had to further dismantle the digger, didn't they?

A. Yes.

Q. And they were then able to measure the rams; correct?

A. No. They were, but they didn't.

Q. They did do that work?

A. Well, not according to what Ian told me.

Q. That's why they dismantled the machine, wasn't it?

A. No. Mainly to fix Shane's digger. They had his digger.

Q. And after they measured the hydraulics, they put it back together; correct?

A. Yes.

Q. The digger back together?

A. With Shane and myself were there when it got reassembled.

Q. Because it took many days, didn't it, for the digger to be put back together?

A. Two days it was reassembled.

Q. Well, how long was it at Parkes the second time?

A. I don't know. Shane could tell you that.

Q. Well, you dropped it off, didn't you?

A. Yes.

Q. And you were there, you said, when you picked it up?

A. I was in Leeton, and I came back. Shane came down from Lightning Ridge

Q. So what's your I apologise.

A. And just we got the man to assemble the digger.

Q. How long do you recall that period of time being?

A. It was two days.

Q. I'm going to suggest to you that's not correct.

A. Well, I only stayed in a motel one night, as far as I can recall.

The Applicant’s response affidavit

279. In his affidavit of 2 November 2018, Mr Morris made specific response to the written element of Mr Hutchison's affidavit evidence on this issue set out earlier. This response was in the following terms:

56)   Paragraph 108: I deny I told Mr Hutchison to take my digger to my cousin in Gilgandra. I do not have any cousins or other relations anywhere with engineering skills or hydraulic knowledge.

57)   Paragraphs 108 to 14:

(a)   There was more work done to the digger by Parkes Hydraulic Services (PHS) than I authorised;

(b)   Some of the work was done solely for Mr Hutchison’s benefit to enable PHS to obtain information on the hydraulic system so they could copy it and use it in a new digger for Mr Hutchison’s son, Martin. Of the total amount, $10,000 related to such work;

(c)   At this stage I did not know Martin Hutchison or that the digger was for him;

(d)   I did not reject Mr Hutchison’s offer to pay $10,000 towards the PHS invoice;

(e)   Mr Hutchison later gave me $12,000 cash to purchase hydraulic rams from Rex Boyes (at cost), which as a favour on his behalf;

(f)   I continued to assist Mr Hutchison with the building his/Martin’s new digger;

(g)   I ordered a DCV80 hydraulic control bank from Jason Flint in Sydney on 15 January 2016 for $1995 + GST which was paid by Martin Hutchison;

(h)   I did not want to confuse one agreement with another and so I preferred Mr Hutchison to pay me the $10,000 direct rather than deducting it from his share of the sale of opal;

(i)   I refer to paragraph 20 of my affidavit of 28 August 2018.

280. Finally, in re-examination, the First Respondent was taken to the issue of the repairs/measurement dispute concerning the Applicant's Super Digger. His evidence was (Transcript, 20 March 2019, page 214, lines 21 to 38):

Q. You were asked some questions today in relation to the digger and Parkes Hydraulic Services. Do you recall some questions bet that?

A. Yes.

Q. I think you were asked a question that may have had two parts about whether the digger got reassembled after the hydraulics got measured. Could you just clarify whether the hydraulics got measured?

A. I don't think the hydraulics got measured, and the reason being he give he when he pulled the digger apart to do the repairs for Shane, he found a number on the rams and then there was no need to measure them, and the price he gave him was too dear and I rejected it because he originally told me he was going to make them himself, not get someone else to make it.

Q. Just coming back to my question.

A. Sorry.

Q. Did the hydraulics to your knowledge get measured?

A. No.

Consideration

281. First, although this claim by the Applicant to have the First Respondent pay $10,000 towards the cost of the Parkes Hydraulics’ invoice was not the subject of a specific claim as set out in the elements of relief sought in the Amended Summons, it is clear that I do have jurisdiction to hear and determine this aspect of the dispute between the Applicant and the First Respondent. This arises as a consequence of s 22 of the Court Act, a provision in the following terms:

22   Determination of matter completely and finally

The Court shall, in every matter before the Court, grant either absolutely or on such terms and conditions as the Court thinks just, all remedies to which any of the parties appears to be entitled in respect of a legal or equitable claim properly brought forward by that party in the matter, so that, as far as possible, all matters in controversy between the parties may be completely and finally determined and all multiplicity of proceedings concerning any of those matters may be avoided.

282. It is in the context of this power that I turn to consider this dispute concerning whether or not the First Respondent owes the Applicant a $10,000 contribution toward the cost of the works undertaken by Parkes Hydraulics.

283. The first matter to be observed arises from the correspondence referred to by the First Respondent at the end of [113], and at the end of [114], set out in the earlier extract from his affidavit of 26 September 2018. I have carefully read this correspondence. The first extract referred to was reproduced in the Court Book at folios 462 to 475. It primarily relates to an exchange of e-mails and other correspondence between the Applicant and Mr Ian Allen of Parkes Hydraulics with a number of handwritten invoice or works’ records documents interspersed. Although I have carefully read this material, it provides little assistance beyond the fact that it is clear that elements of the work undertaken by Parkes Hydraulics were understood by that firm to be being undertaken on behalf of the First Respondent.

284. The second tranche of material comprises two letters written by the First Respondent. The first of them, at folios 476 and 477, is headed “Arbitration between Mr Shane Morris and Mr Ian Allen of Parkes Hydraulics Services”. It is introduced with the opening comments:

As requested, I am providing the following information to assist with understanding the work commissioned by Mr Morris at Parkes Hydraulics Services.

285. It is unnecessary to set out, in any detail, what is contained in this document by which the First Respondent addresses his understanding of a range of matters concerning what was done, or to be done, by Parkes Hydraulics with the Applicant's Super Digger.

286. It is, however, clear that, at the very least, the First Respondent acknowledges that there was an intention that Parkes Hydraulics would undertake some activities concerning the Applicant's Super Digger for the purposes of the building of a Super Digger for Martin. This letter also acknowledges that the First Respondent was aware that Parkes Hydraulics was also to undertake some repair works on the Applicant's Super Digger.

287. It is to be observed that this letter is undated.

288. The next document is a letter from the First Respondent to Mr Allen of Parkes Hydraulics. It is dated 14 March 2016 and is reproduced at folios 478 to 481 of the Court Book. The letter is in somewhat combative terms (commencing, before dealing with matters of detail, by stating that he is writing “concerning your unprofessional conduct”). The first approximately two-and-a-half pages disputes the extent (if any) to which the First Respondent might owe money to Parkes Hydraulics for services provided by that enterprise. The final portion of the letter (from the middle of folio 480 to the end of the document) disputes why the First Respondent should be being invoiced for works carried out on or in connection with the Applicant's Super Digger. It is appropriate, for present purposes, to quote the final dot point on folio 480 and the second dot point on folio 481. These are in the following terms:

•   Why my son Mr Martin Hutchison (a third party completely unrelated to Mr Morris) has received details of Mr Morris’s invoice for repairs to Mr Morris’s digger makes no sense to me. I would assume invoices and business correspondence should be intended only for the customer paying. This is how most professionals conduct business in my experience. Further, I do not understand why I have been listed on service reports as it was repeatedly advised by myself and Mr Morris that this was not my job as it is not my digger.

…

•   Finally, what concerns me most are the unsubstantiated claims that Mr Morris and I are in somewhat acting in tandem to use the services of Parkes Hydraulics Services without payment for our own benefit. I quote:

“At the end of the day I feel both you and Owen have set Parkes Hydraulics Service up, Owen has used your machine to gain all the information required to build his own, you have received a full rebuild and basically have a new machine and we, Parkes Hydraulic Services have allowed you to take the machine prior to payment as we felt you were both honourable characters.

For all the work Owen wanted done, he then cancelled any future work as the cylinders in your machine are different to those quoted by the original Manufacturer and after I had drawn all the cylinders for my alternate supplier, received a quotation of $5,000 less which I passed onto Owen who advised he had gone a different way.”

289. It is also to be observed that the bundle of e-mails and workshop notes/costing sheets referred to above and carried into evidence by virtue of [113] of the First Respondent's affidavit of 28 September 2018 were not objected to by Ms Ashworth. The same position applied with respect to the two documents brought into evidence by virtue of their being referenced in [114] of the same affidavit.

290. That which is to be drawn from the documents referenced at [113] of the affidavit is confined, relevantly, to the limited extent I have already set out.

291. With respect to the two documents in evidence via [114] of the affidavit, it is clear that the first of them (although undated and only first in sequence in the Court Book, it is inferred to be first in time as its tone is entirely supportive of the Applicant in his dispute with Parkes Hydraulics) does not, in its terms, evidence any dispute between the First Respondent and the Applicant over matters concerning whatever work was proposed to be undertaken or had been undertaken by Parkes Hydraulics on the Applicant’s Super Digger.

292. However, the second of the documents (the letter of 14 March 2016 addressed to Mr Allen of Parkes Hydraulics) clearly discloses that, by that date, there was a three-sided dispute involving the First Respondent, the Applicant and Parkes Hydraulics. It is from this letter that I have, earlier, extracted what I consider to be two relevant elements.

293. I now turn to what conclusion I consider it appropriate to reach concerning the confined element of whether or not, utilising the power given to me by s 22 of the Court Act, it is appropriate to make some order to resolve what the Applicant says is his claim to be indemnified to the extent of $10,000 by the First Respondent of the amount invoiced to the Applicant by Parkes Hydraulics.

294. Resolving this limited aspect of the conflict concerning works undertaken by Parkes Hydraulics to the Applicant's Super Digger follows from two elements to be derived from the evidence in these proceedings. The first of those elements comes from the material imported via [113] and [114] of the First Respondent's affidavit as earlier discussed. This material makes it clear to me that, despite the position advanced on behalf of the First Respondent that no works were contemplated to be, or actually were, undertaken on the Applicant's Super Digger on behalf of the First Respondent (whether for his own purposes or for Martin’s purposes being irrelevant), that proposition is demonstrated to be false by this material.

295. The second, broader reason why I am unable to accept the position advanced by the First Respondent that I should not accept that he bore any financial responsibility for any element of the cost of works undertaken on the Applicant’s Super Digger is by general conclusion earlier explained that, whenever there is an evidentiary conflict between the Applicant and the First Respondent, the Applicant's evidence is to be preferred. That is here the position. This position is reinforced, specifically, by the first of the evidentiary elements discussed immediately above.

296. I am therefore satisfied, to the degree of comfortable satisfaction appropriate in the circumstances (Briginshaw v Briginshaw (1938) 60 CLR 336; [1938] HCA 34), that work was undertaken on the Applicant's Super Digger for the benefit of the First Respondent and/or Martin and, therefore, that the First Respondent should make a payment to the Applicant to enable the Applicant to discharge the relevant portion of the Parkes Hydraulics’ invoices (if the Applicant has not already paid them in full) or to reimburse the Applicant for the appropriate portion of those invoices (if the Applicant has already discharged the indebtedness to Parkes Hydraulics).

297. As there was nothing advanced by the First Respondent disputing detail of the quantum (merely a denial that there was any liability at all), it is appropriate that the amount to be provided for in the order resolving this element of the dispute between the Applicant and the First Respondent be for the sum of $10,000.

Renewal of Claims 1 and 2

Introduction

298. The rights conferred by the granting of a Mineral Claim run for a period of five years from the date of the registration of the claim. However, Mineral Claims are able to be renewed for further five-year periods. If a renewal application is made by the holder of a claim, the renewal is, effectively, automatic. If not renewed, the claim and its attendant rights lapse. Upon such lapsing, an application may be made by a new person to be granted the right to work that claim for a fresh period of five years. The present right of the First Respondent to Claim 1 (and Claim 2 on the basis of my earlier finding concerning the true ownership of that claim) expires in late December 2019.

298. I gave Ms Ashworth and Mr Stretton the opportunity to provide me with short supplementary written submissions on what might be the available powers with respect to renewal of these claims should the necessity arise in the overall structure of the outcomes of these proceedings to consider addressing those points.

299. However, given the conclusions I have reached and the remedies I have ordered, it is unnecessary to make any determination on this point.

The appropriate remedies to be ordered

301. The Applicant gave evidence (Transcript, 18 March 2019, page 92, line 24 to page 93, line 1) concerning the present state of his relationship with the First Respondent. The evidence was in the following terms:

Q. Anyway, you say you can't trust Owen and he's caused you a fair bit of trouble. You agree with that?

A. Yes.

Q. You dislike him now?

A. I wouldn't say dislike, no.

Q. Not particularly fond of him though?

A. Not fond of him, no.

Q. And as things currently stand, you don't want to work with him anymore, do you?

A. I didn't work with him; I worked for him.

Q. You don't want to work for him anymore, do you?

A. No.

Q. In fact, one of the things you were asking for in your affidavit of 28 August 2018 was that you would get 56861 and he would get 56862. Correct? That's one of the things you were asking for?

A. One of the things, yes.

Q. Or alternatively, you were suggesting that the claims be split between you?

A. Yes.

Q. And the point of any split, of course, was that you wouldn't have to work together or for each other, wasn't it?

A. Yes.

302. It is also clear from the First Respondent's actions in blockading the Applicant from access to Claim 1 and the First Respondent's general position in response to these proceedings that the First Respondent also accepts that the mining relationship between him and the Applicant is, effectively, at an end.

303. As it is clear that the working relationship between the Applicant and the First Respondent has irretrievably broken down, I am satisfied that the appropriate way to compensate the Applicant for the unlawful termination of the arrangement is to order the First Respondent to transfer Claim 1 to the Applicant within 14 days of the date of the orders I make in these proceedings.

304. The consequence of requiring the transfer of that Mineral Claim to the Applicant within that time period means that there is no necessity to address the question of whether or not I would have the power to order the First Respondent to renew Claim 1 prior to the date when it will otherwise expire due to the effluxion of time. The transfer of the Mineral Claim to the Applicant will leave it in the Applicant's hands to effect that renewal in his name should he wish to do so.

305. Although Mr Hawkins has been joined as the Second Respondent to the proceedings, in his capacity as the nominal owner of Claim 2, as the Applicant sought no specific order against the Second Respondent and as there is no cross-claim made by the First Respondent against the Second Respondent, there is no basis to make any orders against him. It was, however, appropriate that the Second Respondent be joined as a respondent, given that the arrangement between the Applicant and First Respondent encompassed both Claim 1 and Claim 2 and, for the reasons earlier set out, the First Respondent’s continuing beneficial ownership of Claim 2 means that the Second Respondent holds that claim as trustee for the First Respondent.

Costs

306. Although the Applicant has not been successful on all of the elements founding his claims against the First Respondent, I am not satisfied that there is any appropriate basis to apportion costs, as the time spent on addressing the First Respondent’s unlawful detention of the Applicant's Super Digger did not form a significant element of the contest at trial.

307. As a consequence, I am satisfied that the First Respondent should be required to pay the Applicant’s costs on the ordinary basis, with this order being contingent on there being no notification, within 14 days of the date of the making of the orders, that a party wishes to be heard to propose some alternative costs order.

308. It is not appropriate to make any costs order against the Second Respondent.

Orders

309. The orders of the Court are:

1. Within fourteen (14) days of the date of these orders, the First Respondent is to cause title to Mineral Claim 56861 to be registered in the name of the Applicant;

2. The First Respondent is to pay any costs associated with the implementation of (1);

3. The Applicant's claim for compensation for the detention of the Applicant's mining equipment underground on Mineral Claim 56861 dismissed;

4. Pursuant to s 22 of the Land and Environment Court Act 1979, the First Respondent is to pay the Applicant, within 28 days of the date of these orders, the sum of $10,000 for works on the Applicant's Super Digger undertaken for the benefit of the First Respondent;

5. The First Respondent’s cross-claim is dismissed;

6. The First Respondent is to pay the Applicant's costs of these proceedings as agreed or assessed unless a party notifies my Associate within 14 days of the date of these orders that that party wishes to be heard to propose some alternative costs order; and

7. The exhibits are returned.

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Annexure A

Appendix A - emergency grid map - holes A, B, C E, digger (86.0 KB, pdf)

Annexure B

Appendix B - geotech report - folio 582 (28.1 KB, pdf)

Annexure C

Appendix C - Morris explanation of mine plan - folio 480 (234 KB, pdf)

Annexure D

Appendix D - folio 419 - diary pages (151 KB, pdf)

Annexure E

Appendix E - folio 82 - note of expenses (75.5 KB, pdf)

Annexure F

Appendix F - bottle photo - folio 435 (1.55 MB, pdf)

Annexure G

Appendix G - bottle photo - folio 436 (1.41 MB, pdf)

Annexure H

Appendix H - E2 - pole in boundary hole tape is in 56735 (493 KB, pdf)

Annexure I

Appendix I - Map - Claim 56735 (174 KB, pdf)

Decision last updated: 15 November 2019