FRENCH CJ, KIEFEL, BELL, GAGELER, KEANE, NETTLE AND GORDON JJ
Matter No S99/2015
MOUNT BRUCE MINING PTY LIMITED APPELLANT
AND
WRIGHT PROSPECTING PTY LIMITED & ANOR RESPONDENTS
Matter No S102/2015
WRIGHT PROSPECTING PTY LIMITED APPELLANT
AND
MOUNT BRUCE MINING PTY LIMITED & ANOR RESPONDENTS
Mount Bruce Mining Pty Limited v Wright Prospecting Pty Limited Wright Prospecting Pty Limited v Mount Bruce Mining Pty Limited
[2015] HCA 37
14 October 2015
S99/2015 & S102/2015
ORDER
Matter No S99/2015
Appeal dismissed with costs.
Matter No S102/2015
1.Appeal and cross-appeal allowed.
2.Set aside paragraphs 1–6 of the order of the Court of Appeal of the Supreme Court of New South Wales made on 9 December 2014 and, in their place, order that the appeal to that Court be dismissed with costs.
3.The first respondent pay the appellant's and the second respondent's costs in this Court.
On appeal from the Supreme Court of New South Wales
Representation
A J Myers QC with K A Stern SC and R J Hardcastle for the appellant in S102/2015 and the first respondent in S99/2015 (instructed by Clayton Utz Lawyers)
N J Young QC with M J Darke SC and M A Izzo for the appellant in S99/2015 and the first respondent in S102/2015 (instructed by Allens)
N C Hutley SC with J C Giles for the second respondent in both matters (instructed by Horton Rhodes)
Intervener
A C Archibald QC with M P Costello for Perron Iron Ore Pty Ltd, intervening (instructed by King & Wood Mallesons)
Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports.
CATCHWORDS
Mount Bruce Mining Pty Limited v Wright Prospecting Pty Limited Wright Prospecting Pty Limited v Mount Bruce Mining Pty Limited
Contract – Construction of terms – Where contract concerned acquisition of rights in relation to temporary reserves and payment of royalties in respect of iron ore mined – Where royalty payable in respect of iron ore mined from "MBM area" – Whether "MBM area" refers to physical area of land or rights in relation to that land – Meaning of phrase "deriving title through or under".
Contract – Construction of terms – Recourse to background or surrounding circumstances.
High Court – Appellate jurisdiction of High Court – Precedential value of special leave reasons.
Words and phrases – "commercial purpose", "deriving title through or under", "MBM area", "surrounding circumstances", "temporary reserves".
Wright Prospecting Pty Limited ("WPPL"), Hancock Prospecting Pty Limited ("HPPL") (together "Hanwright"), Hamersley Iron Pty Limited ("Hamersley Iron") and Mount Bruce Mining Pty Limited ("MBM") entered into an agreement dated 5 May 1970 ("the 1970 Agreement"). These appeals arise out of a dispute about the construction of a provision of the 1970 Agreement concerning the payment of royalties by MBM in relation to ore mined from areas of land the subject of the…
Grounds of appeal
[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.
[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.
[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.
Consideration
[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.
[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.
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Details
AGLC
Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd [2015] HCA 37
Case
[2015] HCA 37
Decision Date
CaseChat Overview and Summary
The dispute in this matter concerned the construction of a contract relating to the acquisition of rights in temporary reserves and the payment of royalties for iron ore mined. The parties involved were Mount Bruce Mining Pty Ltd and Wright Prospecting Pty Ltd. The case was heard in the High Court of Australia.
The High Court was required to determine the meaning of the phrase "MBM area" within the contract, specifically whether it referred to a physical area of land or rights in relation to that land. Additionally, the Court had to interpret the phrase "deriving title through or under" and consider the extent to which background or surrounding circumstances could be used in the construction of the contract.
The Court reasoned that the parties agreed the terms "MBM area" and "through or under" were ambiguous. Consequently, the interpretation of these terms was to be determined by reference to what reasonable businesspersons, with the background knowledge available at the time, would have understood them to mean. The Court noted that the label chosen for a defined term is generally not arbitrary and should reflect the concept intended to be precisely stated in the definition. The primary judge's conclusion that the joint venturers' title to exploit the area was derived "through or under" MBM was upheld.
In Matter No S99/2015, the appeal was dismissed with costs. In Matter No S102/2015, the appeal and cross-appeal were allowed, the orders of the Court of Appeal were set aside, and the appeal to that Court was dismissed with costs. The first respondent was ordered to pay the appellant's and the second respondent's costs in the High Court.
Orders
Orders of the court
Matter No S99/2015
Appeal dismissed with costs.
Matter No S102/2015
1. Appeal and cross-appeal allowed.
2. Set aside paragraphs 1–6 of the order of the Court of Appeal of the Supreme Court of New South Wales made on 9 December 2014 and, in their place, order that the appeal to that Court be dismissed with costs.
3. The first respondent pay the appellant's and the second respondent's costs in this Court.
Background
Background to the litigation
Full text does not contain this section.
Evidence
Evidence Before The Court
Full text does not contain this section.
Decision
Reasons for decision
FRENCH CJ, NETTLE AND GORDON JJ
KIEFEL AND KEANE JJ
BELL AND GAGELER JJ
Accordingly, the primary judge was right to conclude that the joint venturers' title to exploit the area affected by ML 265SA was title derived "through or under" MBM.Conclusion We agree with the orders proposed by French CJ, Nettle and Gordon JJ. These appeals do not raise an important question on which intermediate courts of appeal are currently divided. That question is whether ambiguity must be shown before a court interpreting a written contract can have regard to background circumstances. Until that question is squarely raised in and determined by this Court, the question remains for other Australian courts to determine on the basis that Codelfa Construction Pty Ltd v State Rail Authority of New South Wales[80] remains binding authority. That point, which of itself says nothing about the scope of the holding in Codelfa, was made in the joint reasons for judgment in Royal Botanic Gardens and Domain Trust v South Sydney City Council[81]. The point was reiterated, but taken no further, in the joint reasons for refusing special leave to appeal in Western Export Services Inc v Jireh International Pty Ltd[82]. It should go without saying that reasons for refusing special leave to appeal in a civil proceeding are not themselves binding authority. [80](1982) 149 CLR 337; [1982] HCA 24.[81](2002) 240 CLR 45 at 63 [39]; [2002] HCA 5.[82](2011) 86 ALJR 1 at 2-3 [3]-[4]; 282 ALR 604 at 605; [2011] HCA 45. The question whether ambiguity must be shown before a court interpreting a written contract may have regard to background circumstances does not arise for determination in these appeals because the parties agree that the terms "MBM area" in cl 2.2 and "through or under" in cl 3.1 of the 1970 Agreement are ambiguous. The parties also agree, consistently with numerous recent statements of principle in this Court[83], that the proper interpretation of each of those terms is to be determined by reference to what reasonable businesspersons having all the background knowledge then reasonably available to the parties would have understood those terms to have meant as at 5 May 1970. [83]See Electricity Generation Corporation v Woodside Energy Ltd (2014) 251 CLR 640 at 656-657 [35] (and the cases there cited), 662 [53]; [2014] HCA 7. See also Maggbury Pty Ltd v Hafele Australia Pty Ltd (2001) 210 CLR 181 at 188 [11]; [2001] HCA 70. To the extent that there is any issue of interpretative principle which divides the parties, that issue is limited to whether the meaning of the defined term "MBM area" can be informed by the defined term itself. The issue is not to be resolved by invocation of the strictures of logic presumptively applicable to the interpretation of a defined expression within a complex statutory scheme[84]. It is to be resolved instead by reference to the overriding criterion of how reasonable businesspersons can be taken to have understood the term. In the absence of the background circumstances indicating some reason to think otherwise, it is therefore appropriate to proceed on the assumption that the words chosen as the label for the defined term were not chosen arbitrarily but as "a distillation of ... a concept intended to be more precisely stated in the definition"[85]. [84]Cf Wacal Developments Pty Ltd v Realty Developments Pty Ltd (1978) 140 CLR 503 at 507; [1978] HCA 30. See also Commissioner for Railways (NSW) v Agalianos (1955) 92 CLR 390 at 397; [1955] HCA 27.[85]Chartbrook Ltd v Persimmon Homes Ltd [2009] AC 1101 at 1112-1113 [17].
Ratio Decidendi
Legal Principle Established
Established by:
FRENCH CJ, NETTLE AND GORDON JJ,
KIEFEL AND KEANE JJ,
BELL AND GAGELER JJ