Nickmere Pty Ltd v Dianne Mining Corporation Pty Ltd

Case

[2012] QLC 6

15 February 2012


LAND COURT OF QUEENSLAND

CITATION: Nickmere Pty Ltd v Dianne Mining Corporation Pty Ltd [2012] QLC 0006
PARTIES: Nickmere Pty Ltd
ACN 061 662 271
(Applicant)
v.
Dianne Mining Corporation Pty Ltd
ACN 095 326 079
(Respondent)
FILE NO: MRA226-11
DIVISION: Land Court of Queensland
PROCEEDINGS: Originating Application re Caveat pursuant to Mineral Resources Act 1989
DELIVERED ON: 15 February 2012
DELIVERED AT: Brisbane
HEARD AT: Brisbane

MEMBER:

His Honour, Mr WL Cochrane, Member

ORDERS: Application Dismissed.
CATCHWORDS:

MINING – Caveats – Reinstatement – Registration – Royalties – Lease Entitlements – Applications – Evidentiary Onus on Applicant.

Mineral Resources Act 1989
Property Law Act 1969 (WA)
Land Court Act 2000
Auctioneers and Agents Act 1971 (Qld)

Chillagoe Gold v Weil & Stein [2008] QLC 0161

Arthur v Department of Natural Resources and Mines & Anor [2003] QLRT 100

Macarthur Coal Limited v MCG Coal Pty Ltd [2011] QLC 0055

Arkaroola Resources Pty Ltd v Niugini Mining (Australia) Pty Ltd [2001] QLRT 12

Shenhuo International Group Pty Ltd v Shinelia Resources Limited [2007] QLRT 31

JH Fryar v IP Lewis [2007] QLC 0134

Moneywood Pty Ltd v Salamon Nominees Pty Ltd [2001] 202 CLR 351

Grimes Holdings Pty Ltd v Keith Sceghi (unreported), Supreme Court of Western Australia, 20 August 1993, White J unreported, 20 August 1993

COUNSEL: Mr D de Jersey of Counsel, for the Applicant
Mr A Lyons, of Counsel, for the Respondent
APPEARANCES: MacDonells Law, Solicitors, for the Applicant
Preston Law, Solicitors, for the Respondent

Background

  1. This is the determination of an originating application brought by Nickmere Pty Ltd (ACN 061 662 271) to which Dianne Mining Corporation Pty Ltd (ACN 095 326 079) is the respondent.

  2. The originating application seeks (in a form which was amended to reflect the correct reference to the Mineral Resources Act) as follows:

    1.The consent caveat be reinstated;

    2.Alternatively, the consent caveat lodged on 24 June be registered and the mining register (sic) be directed to record its existence in the register.

    3.Further, or alternatively, the charge caveat continue in force pursuant to s.303(2)(c) of the Mineral Resources Act 1989 until judgment or further order in the Supreme Court proceedings to be commenced pursuant to charge.

  3. The references in the originating application to “the consent caveat” and the “charge caveat” derive from previous dealings between the parties including the lodging of a consent caveat which (for reasons which are explained later) has lapsed and the lodging of a caveat on 28 March 2011 which was said to be pursuant to a registered company charge dated 15 March 2001.

  4. The application asserts that the applicant seeks the orders set out above on the grounds that it has a right or interest in or respect of the mining leases the subject of the caveats, pursuant to s.301 of the Mineral Resources Act 1989.

  5. Section 301(1) of the Mineral Resources Act 1989 relevantly provides as follows:

    301    Lodgement of caveat

    (1)Subject to subsection (2), a person who claims a right or interest in or in respect of a mining lease or an application for the grant of a mining lease may by a caveat in the approved form forbid the approval of—

    (a)any assignment, sublease or mortgage in respect of the mining lease; or

    (b)any assignment of the application for the grant of the mining lease;

    (save any such dealings the approval of which is excepted in the caveat) either absolutely or until after notice of intention to approve such a dealing is served on the caveator.

  6. It should be noted that pursuant to s.10 of the MRA the grant of a mining tenement under the MRA does not create an estate or interest in land. 

  7. In this respect the Mineral Resources Act operational in Queensland differs to some extent from the comparable mining acts applicable in other States. For example, in Western Australia it has been found that a mining lease is “land” for the purposes of s.34 of the Property Law Act

  8. That Property Law Act 1969 (WA) provides at s.7 that:

    land includes land of any tenure and mines and minerals whether or not they are held apart from the surface of the land …”

  9. The relevant leases are Mining Lease numbers 2810 (formerly ML 436 Cooktown), 2811 (formerly ML 437 Cooktown), 2831 (formerly ML 605 Cooktown), 2832 (formerly ML 606 Cooktown), 2833 (formerly NK 607 Cooktown) and 2834 (formerly ML 608 Cooktown). 

  10. Because of the findings I make later in this judgment it is appropriate to set out in full the facts, circumstances and other relevant matters in which the applicant says it has based the application.

  11. Those facts, circumstances and other relevant matters are asserted by the Applicant as follows:

    1.The applicant and respondent are parties to a mining agreement dated 22 December 2000 as amended on 6 August 2001 and 15 November 2007. 

    2.The agreement (as amended 6 August 2001) entitled the applicant to receive royalties based on mine production up to 30 June 2010.  Production has not yet commenced. 

    3.The mining agreement (as amended on 15 November 2007) extends the applicant’s right to receive royalties until 60 months from commencement of productions.

    4.Pursuant to clause 7.1 of the mining agreement, the respondent authorised the applicant to lodge a caveat to protect its rights to receive royalties under the mining agreement.

    5.Pursuant to clause 7.3 of the mining agreement the respondent granted the applicant a floating charge over the respondent’s assets.

    6.On 10 December 2001 a consent caveat was lodged (“the consent caveat”) pursuant to clause 7.1 and to protect the applicant’s right to receive royalties under the mining agreement. 

    7.Despite the amendment in November 2007 and the fact that production had not commenced, the consent caveat was removed on 1 July 2010.

    8.On 28 March 2011 the applicant lodged a caveat (“the charge caveat”) pursuant to the applicant’s charge under the clause 7.3 of the mining agreement.  The charge caveat will lapse on 30 June 2011.

    9.On 24 June 2011 a consent caveat was lodged.  The consent caveat was not recorded in the register.

  12. It should, at this point, be noted that the articulation of the facts and circumstances set out in the preceding paragraph as contended for by the applicant are not accepted by the respondent. 

  13. It is appropriate to note, at this juncture, that one Donald Robin Walker (who is not a party to this application) is also a party to the mining agreement.  For convenience Mr Walker will, hereafter with no intended disrespect, be referred to simply as Walker. 

  14. In this matter two applications were filed on the same day only an originating application and at the same time a general application notwithstanding the difference in title both applications sought the same orders and neither identified Mr Walker as a applicant.  I note that each of the affidavits filed by the solicitors for the applicant contain a heading suggesting that the applicant is Nickmere Pty Ltd and Mr Walker.  The originating application filed on 27 June 2011 identifies the applicant only as Nickmere Pty Ltd and accordingly I regard the inclusion of Mr Walker being identified as a party in later affidavit material of being of no effect.  There has been no application made to join Mr Walker as a party. 

  15. On 28 June 2011 His Honour Mr Smith made an order in the following terms:

“1.Pursuant to s.33(1) Land Court Act 2000 and s.303(2)(c) Mineral Resources Act 1989, the caveat lodged by the applicant on 29 March 2011 over ML 2810, 2811, 2831, 2832, 2833 and 2834 claiming rights and interests pursuant to the terms and conditions of a registered company charge dated 15 March 2001 between the applicant and the respondent remain in force until determination of the matter or further order of the Court.”

  1. That order, naturally, has the effect of maintaining the status quo pending the handing down of this decision.

The Mining Agreement

  1. The applicant Nickmere Pty Ltd (“Nickmere”) and the respondent Dianne Mining Corporation Pty Ltd (“Dianne”) and Walker entered into a mining agreement on 22 December 2000.

  2. Pursuant to the terms of that agreement Dianne was granted an option to purchase from Nickmere six mining leases, namely ML2810, ML2811, ML2831, ML2832, ML2833 and ML2834.

  3. Notwithstanding that the caveat lodged on 10 December 2001 (Exhibit DW3 – to the affidavit of Walker), refers to “rights in accordance with the terms and conditions of a registered mining agreement…” there was no evidence placed before me that the mining agreement had in fact been registered pursuant to the provisions of s.387 of the Mineral Resources Act 1989 or, indeed, any other section.

  4. It should be noted that, on my reading of the Mineral Resources Act it does not, in event, contain any provisions for or requirements for mining agreements such as the one the subject of this application to be registered.  Some provision exists in respect of Exploration Permits but none in respect of mining leases. 

  5. Section 387 seems to permit registration of various documents of which the Act itself does not require such registration.

  6. Dianne exercised the relevant option and the mining leases were transferred to it. The December 2000 agreement, at clause 6, provided for the payment to Nickmere of a royalty to be calculated in accordance with what is described in the deed as the royalty rate which is defined in clause 1.1.[1]

    [1]     Affidavit of Laycock, exhibit MKL-02.

  7. Clause 6.2 in the original mining agreement relevantly provided:

    6.2Notwithstanding any other clause of this Deed, Nickmere’s right to receive royalties and Dianne Mining’s obligations to pay royalties under this clause shall be limited to Net Smelter Return (Concentrate) and Net Smelter Return (Metals) received by Dianne Mining prior to 1 January 2010 and upon which date Dianne Mining shall also be released from any further obligations to Nickmere of any nature under this Deed and Nickmere shall do all things necessary to release in full any charge or caveat held pursuant to clause 7 of this Deed and, if Nickmere fails to do so within thirty (30) days after satisfaction of this clause 6.2, Nickmere hereby appoints Dianne Mining to be the attorney of Nickmere for the purposes of giving full effect to any such release of charge or caveat.

  8. The amended agreement of August 2001 amended that date to 30 June 2010. 

  9. The respondent relies upon the reference to the date of 30 June 2010 as the date upon which, in effect, obligations under the mining agreement were said to be terminated and Dianne Mining would then be released from further obligations to Nickmere of any nature pursuant to the mining agreement.[2]

    [2]     See T 1-20 L 40-50 and also see the copy which is exhibit PZ-02 to the affidavit of Zhang of 19 July 2011.

  10. The payment of that royalty was sought to be protected by the provisions of clause 7 of the mining agreement. That clause provided as follows:

    7.CAVEAT

    7.1Nickmere (after first giving to Dianne Mining a copy of the proposed caveat and allowing Dianne Mining a reasonable opportunity to comment on the caveat) may lodge against title to the Leases a caveat to protect its rights to receive the royalty under this Deed provided that Nickmere covenants with Dianne Mining that in so doing it will:

    (a)   not prevent or delay registration of any dealing affecting the Leases or Dianne Mining’s stake or interest in the Leases not inconsistent with such rights of Nickmere under this Deed and in this regard will consent to Dianne Mining raising finance against the security of the Leases;

    (b)   withdraw such caveat immediately upon the obligations of this Deed coming to an end.

    7.2If Nickmere fails to duly and punctually observe and perform its obligations under this sub-clause within 30 days of written notice by Dianne Mining requesting such compliance Nickmere for valuable consideration received by Nickmere (acknowledged by its execution of this Deed) appoints Dianne Mining as its attorney for the purposes of executing or withdrawal of any such caveat or such other documentation which may be required in connection with such default of Nickmere.

    7.3Upon request by Nickmere, Dianne Mining will execute a floating charge over its assets in favour of Nickmere in the form and text of the annexed document marked ‘A’. The charge shall not inhibit in any way Dianne Mining’s ability to borrow moneys or attract financial accommodation for the Project. Upon request by Dianne Mining, Nickmere will execute a deed of priority in favour of such bank, financier or other party nominated by Dianne Mining.

  11. On or about 6 or 7 August 2001 the mining agreement was amended (“the amended agreement”).  The documentation regarding this amended agreement placed before the Court by the applicant for the purpose of this application is not entirely satisfactory. 

  12. The affidavit of Mr Walker exhibits what is described in his affidavit as “a true copy of the amended mining agreement dated 6 August 2001.”[3]

    [3]     Affidavit of Walker, para 3 and exhibit DW1.

  13. Careful examination of the document exhibited to Mr Walker’s affidavit shows that it bears a handwritten notation “note – this reference copy is a clear copy after deletions have been omitted and additions have been included.”  That “reference copy” itself contains handwritten insertions on the second sheet 2 of 20. 

  14. I note that the amended mining agreement, at clause 6.2 identifies 30 June 2010 as being the date upon which the agreement and the obligations pursuant to it terminate that date has come and gone and with no production having occurred no royalty has been calculated or paid.

  15. It appears that there is no agreement on which all signatures of the relevant parties appear on the one page.  The signature of Dianne Mining Corporation Pty Ltd appears to have been executed on a single sheet and similarly the signatures and seal of Nickmere Pty Ltd and Walker are on a single sheet upon which no seal or signature on behalf of Dianne Mining appears.  Moreover, handwritten annotations appear to have been initialled by one party but not by the other. 

  16. Notwithstanding those defects neither party attempted to distance themselves from that amended agreement of August 2001. 

The Caveats

  1. Pursuant to clause 7.1 of the mining agreement, a consent caveat was lodged on 10 December 2001.[4]

    [4]     Affidavit of Walker, para 5 and exhibit DW3.

  2. The caveat was in respect of all six of the relevant mining leases. It was lodged with the consent of Dianne Mining Corporation and specified the right or interest claimed by the caveator as being “rights in accordance with the terms and conditions of registered mining agreement dated 22/12/2000 between Nickmere Pty Ltd and Dianne Mining Corporation Pty Ltd and amendments thereto – copy attached hereto.”

  3. While the caveat was exhibited to the affidavit of Mr Walker it was not exhibited in that form with a copy of the agreement which was said to be attached to it. However, given that the amended agreement was not entered into until 6 August 2001 the only operative agreement which could have been attached was that of 22 December 2000, the consent being signed by Dianne on 26 July 2001 (a date obviously prior to 6 August 2001).

  4. Clause 7.1(a) of the amended agreement refers to a caveat “in the form of annexure B” but the material filed before this court contains no annexure B and so it is not clear whether the caveat actually filed was congruent with that annexure B. That point is taken by the respondent here.

  5. It was contended that at the end of the day there was no evidence at all placed before the Court as to the form of “Annexure B”.  I accept that contention. 

  6. As the respondent points out the failure to exhibit the “Annexure B” to any material before the Court is an important omission because the Court is left in the position of not knowing what were the terms of the contemplated caveat.  There has been no evidence provided which shows that the caveat contended for by the applicant conforms to the contractual entitlements. 

  7. It may be that that does not matter because the caveat which was lodged was expressed, to lapse on the 30th June 2010 and that date has now passed and accordingly the caveat has quite rightly lapsed. 

  8. It is surprising then for Mr Walker to assert, as he does at paragraph 8 of his affidavit of 27 June 2011 that “on 1 July 2010 the consent caveat was removed, notwithstanding that the applicant’s royalty entitlement extended beyond that date as a result of the November 2007 amendment.”  I will comment on the November 2007 agreement later.

  9. Had the parties chosen to do so there would have been no impediment to Dianne Mining consenting to the lodging of a further caveat. (See s.304 of the Mineral Resources Act 1989).

  10. Another evidentiary shortcoming is that at paragraph 5 of the caveat there is reference to a copy of the agreement dated 22 December 2000 being attached to the caveat but no such attached copy has been exhibited to the affidavit material, although the actual amended agreement of December 2000 is Ex PZ-02 to Mr Zhang’s affidavit.

  11. In his submissions before me[5] Mr de Jersey said:

    “For reasons that are unknown and that aren't expressed anywhere in the material, that caveat was removed from the register on the 1st of July 2010, and it's common ground that that caveat was removed, hence here we are.”

    [5]     T 1-17.

  12. In response to my question

    “And nobody knows how or why?”

  13. Mr de Jersey responded:

    “No.”

  14. Mr Lyons of counsel for the respondent however drew the Court’s attention to the caveat document itself and there it is clearly stated that, in section 7 which requires a lodger to specify, in respect of a caveat lodged by consent, the period during which the caveat is continuing in force, that it was for a period to 30 June 2010.  It is therefore unsurprising that the caveat lapsed or was removed.

  15. I am satisfied that the caveat lodged in December 2001 has, in its effect, and consistent with the express consent to be for the caveat to survive until the 30th June 2010, lapsed and that there is no good reason shown why the caveat should be reinstated. 

  16. Accordingly, I dismiss the first prayer for relief and refuse to direct that the caveat should be reinstated. 

  17. Section 304 of the Mineral Resources Act 1989 provides as follows:

    304 Second caveat not available to same person

    When a caveat has lapsed or has been removed or withdrawn as prescribed, it shall not be competent to the caveator to lodge in respect of the same mining lease or application for the grant of the mining lease another caveat whereby the caveator claims the same or substantially the same right or interest unless—

    (a)   the consent of each holder of the mining lease or, as the case may be, each applicant has been lodged with the last mentioned caveat; or

    (b)   the Land Court so orders.”

The Amended Agreement of November 2007

  1. Crucial to the applicant’s case is a contention that on 15 November 2007 the mining agreement was further amended to provide that the applicant in these proceedings Nickmere Pty Ltd remained entitled to receive 60 months of royalty payments from the commencement of production in satisfaction of the payments under the mining agreement (as amended). 

  2. Relied upon by the applicant as evidencing the agreement of November 2007 is a somewhat unusually worded letter over the signature of Lynch & Company solicitors.  (See exhibit DW4 to the affidavit of Walker.) 

  3. That letter, dated 1 July 2008, asserts that the firm is then acting “on behalf of Dianne Mining Corporation Pty Ltd (‘DMC’) & Ozcu Pty Ltd (‘Ozcu’).” 

  4. It contends “Our client Ozcu has entered into share sale contract to sell all of the issued capital in DMC to Billion Million Investment Pty Ltd (Billion Million Investments).

  1. The only scant evidence of the terms of the amended agreement are as follows (from page 1 of the letter):

    “Pursuant to the Mining Agreement (as amended) Nickmere has agreed to accept 60 months of royalty payments from the commencement of production in satisfaction of the payments under the Mining Agreement (as amended).”

  2. There is no evidence as to what, if any, other operative provisions of the Mining Agreement may have been changed.

  3. Earlier the letter from Lynch & Company had observed:

    “Nickmere Pty Ltd (“Nickmere”) has a floating charge over the assets and undertakings of DMC to secure a future royalty obligation.

    This future royalty obligation arises from a Mining Agreement entered into between DMC and Nickmere in July 2000 and amended on 7 August 2001 and as subsequently amended by letter.”

  4. There was no other evidence of the agreement of 15 November 2007, in particular no letter amending the agreement was produced.

  5. That is surprising and no explanation was offered as to why no copy of the agreement was nor could be provided to the Court.  Mr Walker identifies himself in his affidavit as a Director of Nickmere Pty Ltd and it is therefore also surprising, given the importance of that alleged agreement of November 2007, that Mr Walker’s affidavit contains no explanation of the nature of the agreement, that is to say whether it was written or oral and does not explain any of the circumstances surrounding the reaching of that purported agreement.  I regard that failure as particularly important.

  6. I also find it almost incomprehensible that such an important agreement would not have been reduced to writing and a copy provided to the Court.  Mr Zhang a Director of Dianne also swore affidavits but nowhere in his affidavit material is there any reference to the agreement of November 2007.

  7. It is also surprising that, given the effect of clause 6.2 of the amended mining agreement which, on its face, terminates Dianne’s obligations in June 2010, there was no evidence before this Court suggesting that that clause in any way been amended.  This constitutes, in my view, another defect in the evidence relied upon by the applicant. 

  8. There was no attempt made to provide evidence from the author of the Lynch & Company letter, Mr Lynch a solicitor in practice in Brisbane.  I can see no reason why Mr Lynch would not have been susceptible to appearance pursuant to a subpoena for which the rules of this Court provide. 

  9. The letter from Lynch &Company is only one of the documents which constitute Exhibit DW4 to the affidavit of Mr Walker.  It is appropriate to consider the other documents which also comprise that exhibit. 

  10. The first of those is a letter from North Queensland Metals addressed to Nickmere Pty Ltd dealing with the purchase of the rights and interests in an application for exploration permit for minerals 14016 (EPNA 14016). 

  11. That letter contains the following observations from North Queensland Metals:

    “We understand that Nickmere Pty Ltd (Nickmere) and your Mr Walker have a royalty entitlement in relation to production of Dianne Mine up to until 2010 which is regulated under a mining agreement dated 22 December 2000 (an amended 7 August 2001).  We also understand that the royalty rights are secured by a fixed and floating charge over all future and current assets of Dianne Mining Corporation which cover EPMA 14016 and other EPMA’s immediately upon grant.…

    These agreements are subject to Nickmere agreeing to release the fixed and floating charge, from the Completion Date on all current and future assets of DMC with the exception of:-

    à    The six granted mining leases securing the Dianne Mine numbered ML 2810, ML 2811, ML 2831, ML 2832, ML 2833 and ML 2834.”

  12. The letter goes on to require agreement from Nickmere to certain arrangements and contains at the foot of the second page provision for signature by Mr Walker as the Director/Chief Executive of Nickmere Pty Ltd and on his own behalf.  That appears to have been signed by Mr Walker on 15 November 2007. 

  13. For reasons which were never ventilated before me there is also a box at the foot of the letter which says as follows:  “I agree that the above letter would be agreeable to Dianne Mining Corporation with provision for signature and dating by one Leonard Robert Miles.”  It was never explained to the Court what Mr Miles’ role or authority was nor the reason why that box appeared on the correspondence. 

  14. The other document in exhibit DW-4 is a document that is described as being “Agreement regarding the sale of EPM 14016 and appears to be an agreement between North Queensland Metals Limited and Dianne Mining Corporation Pty Ltd again signed on 15 November 2007 with “Len Miles” being identified as signing on behalf of Dianne Mining Corporation Pty Ltd. 

  15. I should comment that the agreement contains the following paragraph:

    “The agreement is subject to Don Walker changing his Fixed Charge to a Floating Charge on the six ML’s only (Dianne Mine area).  Don Walker in return would receive his production royalty based on 60 months of full-scale production.”

  16. The reference to Don Walker changing his Fixed Charge to a Floating Charge can only be a mistake.  The charge, unless there is a separate document to which the Court’s attention has not been drawn was lodged on behalf of Nickmere Pty Ltd as a floating charge becoming a fixed charge only upon the happening of certain events.  Mr Don Walker, in that respect, acts only as a director of that company.  Similarly the production royalty is not one to which, strictly, Mr Walker is entitled but one which, were the agreement of November 2007 able to be proved, would be payable to Nickmere Pty Ltd.

  17. On the previous occasion when this matter was before His Honour Mr Smith and orders were made effectively extending the operation of the caveat which had been lodged, Mr de Jersey of counsel informed Mr Smith that one of the reasons why the application before His Honour had been brought on so quickly was for this reason.

    “The third relief that's sought by my client is a little bit different.  It's based upon a non-consent caveat that was lodged pursuant to the charge that my client was entitled also to under the mining agreement to protect it's right to receive royalties.  A non-consent caveat was lodged pursuant to that charge on the 28th of March 2011.  It lapses on Thursday of this week, hence the reason why the application was brought on quickly.  So the third alternate form of relief that's sought by my client is for that non-consent caveat to be extended until a proceeding that my client will commence for breach of the mining agreement.”

  18. That order was made on 28 June 2011 and this matter was heard before me on 27 July 2011 approximately one month later. 

  19. On that occasion Mr de Jersey confirmed that before Mr Smith there had been reference to some Supreme Court proceedings that were about to issue but those proceedings had not issued.[6]

    [6]      T.1-24 L.20.

  20. Later Mr de Jersey in response to a question from me in the following terms:

    “And you would accept that if the right to the charge has been extinguished then there's no basis for the continuation of a caveat?”

    Mr de Jersey said:

    “Subject to the commencement of a proceeding in the Supreme Court for breach of the mining agreement which has not yet been commenced but for which I have instructions to offer an undertaking that it would be commenced expeditiously.”

  21. A Company Charge which has been stamped on 23 March 2001 evidencing the duty paid on it is Exhibit DW2 to the affidavit of Walker. 

  22. Company Charges of that sort are not unusual as devices employed to secure performance of contractual obligations including payment of monies. 

  23. At page 3 of exhibit DW2 the company charge referred to is identified as follows:-

    NATURE OF CHARGE
    This charge operates, subject to clauses 9.3 and 9.4, as a floating charge on the mortgaged property. 

  24. Clauses 9.3 and 9.4 reinforce the floating nature of the charge and identify the events which would trigger it becoming fixed.

  25. The consequence of the above is that the Court is left in the position where there is clearly reference to some sort of agreement being entered into in November 2007.  The details and nature of that agreement are however completely unclear and the true nature of the agreement has not been revealed by any evidence placed before the Court. 

  26. In particular there is no evidence that the provisions of clause 6.2 terminating Dianne’s obligations in June 2010 has been replaced by any other date. 

  27. On such a scant evidentiary basis I am disinclined to find that either Mr Walker or Nickmere Pty Ltd has a sufficient interest in the relevant mining leases to warrant this Court granting leave to either of them to lodge a further caveat. 

  28. The originating application makes reference to having the caveat continue in force “until judgment or further order in the Supreme Court proceedings to be commenced pursuant to Charge.”  There was no evidence placed before the Court that any such Supreme Court action had been initiated or was afoot.

  29. The affidavit of Mr Zhang of 19 July 2011 establishes, to my satisfaction, that all of the shares in Dianne Mining Corporation Pty Ltd are held by Billion Million International Investments Pty Ltd and has done so since 18 November 2008 when it appears those shares were transferred from Ozcu Pty Ltd.

  30. As to the caveat lodged on 27 July 2011, by no means can that particular caveat be described, as the applicant does, as a consent caveat which appears to be the terminology adopted by the applicant both in its application and in its submissions.  The section of the official form of the caveat which provides for the identification and signature of the party consenting to the lodgement of the caveat is entirely blank.  Similarly with respect to the caveat lodged by Nickmere Pty Ltd on 29 March 2011 it also, notwithstanding the description by the applicant of the caveat as a consent caveat, suffers from the significant defect that it does not bear the consent of any party to its lodgement.

  31. In my view it does not avail Nickmere Pty Ltd to contend that “the mining agreement”, meaning the mining agreement of either 22 December 2000 or 6 August 2001, permits Nickmere to lodge and to maintain consent caveats. 

  32. The entitlement to lodge that caveat was exercised, consent was given and the caveat has long since lapsed and in my opinion is irretrievable. 

  33. The caveat of March 2011 (hereafter the March caveat) identifies the right or interest claimed as being “rights and interests in accordance with the terms and conditions of a registered company charge dated 15 March 2001 between Nickmere Pty Ltd and Dianne Mining Corporation Pty Ltd – copy attached hereto”.  The copy exhibited to the affidavit of Mr Walker does not contain the company charge as an attachment although a company charge was exhibited to the same affidavit as exhibit DRW-2.  It bears the date of 15 March 2001 and accordingly I proceed on the basis that that is the company charge referred to in the caveat.

  34. The interpretation clause in that company charge identifies the “Relevant Agreement” as “means the agreement between the Chargee, the Company, Donald Robin Walker and Clive Sidney Carroll for which this Charge is a security.”  No particular agreement is attached to the charge and there is no reference within the charge itself which permits the identification of an agreement.

  35. The affidavit of Mr Walker at paragraph 4 deposes to the Company Charge as having been registered pursuant to clause 7.3 of the amended mining agreement. 

  36. That clause 7.3(a) provides:

    “Upon request by Nickmere, Dianne Mining (the Respondent) on 15 March 2001 executed a floating charge over its assets in favour of Nickmere in the form and text of the annexed document marked ‘A’.”

  37. As I have noted above there was no annexed document attached to exhibit DW1 which was said to be the amended mining agreement so that it is unclear, in my view, as to whether the charge, indeed, reflects the agreement or, any other agreement.

  38. The “mortgaged property” is defined in clause 1.1 of the Company Charge as:

    “means the undertaking of the Company and all of its property, rights and other assets, whether owned at present or acquired in the future, including without limitation:

    (a)   is uncalled and called but unpaid capital and premiums on share capital including instalments thereon;

    (b)   the whole of the Company’s right title and interest in any Marketable Securities;

    (c)   the assets undertaking and goodwill of the Business;

    (d)   the Licence;

    (e)   the Intellectual Property;

    (f)    the right title and interest of the Company in any partnership or joint venture and the assets, profits and distributions of any partnership or joint venture in which the Company is a partner or joint venturer.”

  39. Clause 5.4 of the Company Charge provides at 5.4(o) as follows:

    Dealings with Mortgaged Property

    The Company will:

    (o)without limiting the foregoing and in connection with the Mortgaged Property specified in Item 4 of the Schedule, the Company undertakes to the Bank that it will:

    (i)    perform all acts or cause to be performed all actions necessary to ensure that it fully and punctually discharges its obligations pursuant to each contract set out in Item 4 of the Schedule;

    (ii)report or cause to be reported to the Bank any material breach of which it has knowledge or could reasonably be expected to have knowledge by any party of that party’s obligations under each contract set out in Item 4 of the Schedule promptly following such breach;

    (iii)not without the prior written consent of the Bank:

    (A)terminate or surrender, or agree to any early termination or surrender of any contract set out in Item 4 of the Schedule;

    (B)waive any breach which has a material adverse effect or any remedy in respect of any breach which has a material adverse effect by any party of that party’s obligations under any contract set out in Item 4 of the Schedule; or

    (C)amend or vary or consent or agree to amendment or variation of any contact set out in Item 4 of the Schedule; and

    (iv)do all such things and take such action as the Bank may require from time to time in relation to each contract set out in Item 4 of the Schedule.”

  40. The document exhibited to Mr Walker’s affidavit does not include any schedule and accordingly it is impossible to tell to what the term “mortgaged property” actually refers.

  41. It follows then, in my opinion, that it is impossible to identify any particular caveatable interest as referred to in response to question 3.2 on the caveat form lodged in March 2011.

  42. The March 2011 caveat does not properly identify a caveatable interest.

  43. I agree with the submissions of the respondent in respect of the caveat lodged on 28 March 2011.

  44. In its submissions the respondents succinctly sets out the points which I made above.  It is useful to reproduce here what the respondent says:

    “The Registered Charge Caveat

    34.As quoted above, the right or interest claimed in this caveat is ‘rights and interests in accordance with the terms and conditions of a registered company charge dated 15 March 2001 between [the applicant] and [the respondent] – copy attached hereto.

    35.The applicant has no caveatable interest under the charge.

    36.The charge is dated 15.3.1 and provides that the ‘Secured Moneys’ means ‘the payments to be made under the Relevant Agreement’.  ‘Relevant Agreement’ is defined to mean ‘the Agreement between the Chargee, the Company, Donald Robin Walker and Clive Sidney Carroll for which this Charge is a security.

    37.The applicant does not tender evidence of what is this Relevant Agreement.  If the Relevant Agreement is one of the mining agreements, then it can only be the mining agreement as it stood as at 15.3.1.  The 2007 and 2008 documents reviewed above were created after the charge.  Thus the charge cannot secure any rights that arise from those documents, irrespective of the view taken of the content of those dealings.

    38.The interlocutory order made 28.6.11 extended the operation of this caveat.”

  1. I accept those submissions and order that paragraph one of the orders made by His Honour Mr Smith on 28 June 2011 be vacated and I further order that the caveat be removed from the register and direct the Registrar of the Court give notice to the Mining Registrar at Mareeba of these orders.

Is there any proper basis for permitting the lodging of a further caveat by Nickmere Pty Ltd?

  1. In a sense the effect of section 304 may be determinative of the outcome of this application.

  2. Although it should be noted that the section does contemplate that this Court might find it just that a party be entitled to lodge another caveat claiming the same or substantially the same right or interest as asserted in an earlier caveat and order accordingly.

  3. The question then becomes whether sufficient grounds have been shown for the Court, in the present case, to make such an order which would effectively result in the reinstatement of the consent caveat as sought in the first of the Orders contended for by the applicant. 

  4. In an application such as this it is well established that the applicant bears the onus of proof and, accordingly, is obliged to place before the Court sufficient evidence to support the relief for which it contends.

  5. As has been pointed out on other occasions in this Court[7] the considerations which the Court must bear in mind are analogous to those on an application for an interlocutory injunction.  The test then becomes whether there is a serious question to be tried and whether the balance of convenience favours the caveat remaining in place whilst the question in dispute is determined.  I will return to those considerations later in these reasons.

    [7]     Chillagoe Gold v Weil & Stein [2008] QLC 0161, Re: Arthur v Department of Natural Resources and Mines & Anor [2003] QLRT 100.

  6. The lodging of a caveat is not, and ought not be, an end in itself.  A caveat is intended to prevent dealing with an interest or asset so as to protect the interest of a particular party. 

  7. As pointed in paragraphs [72] and [73] above at best there were mere murmurings regarding the prospect of some Supreme Court action being initiated by the applicant alleging a breach of the mining agreement.  At no time were any details of the proposed action provided and no attempt was made by the applicant to provide any material exhibiting the pleadings which were proposed to be relied upon. 

  8. Accordingly, so far as any issue to be determined by Court proceedings is concerned the Court has been provided with the most sketchy and inadequate details so that on no proper basis could any finding that a serious issue is to be tried can be made.

  9. It is appropriate also to consider whether the evidence relating to the alleged agreement of November 2007 is sufficient to satisfy the Court that that agreement contemplated the lodging of a further caveat by Nickmere Pty Ltd the applicant.

  10. In my view for the reasons set out in this decision the applicant has failed to satisfy that evidentiary onus. 

  11. The Court not ought be expected to embark upon investigations for itself, notwithstanding the Act setting the Court up entitles it to inform itself in such manner as it may choose.[8]

    [8] See s.7 of the Land Court Act 2000.

  12. In particular the Court should not be expected to embark upon evidence gathering to fill gaps left by an applicant in fulfilment of its evidentiary obligations.

  13. As I have indicated above the evidence presently available to me, in my opinion, falls far short of establishing the terms of the further agreement which it is asserted was entered into on 15 of November 2007. 

  14. Even if it was accepted that some agreement permitting or entitling Nickmere to accept 60 months of royalty payments from the commencement of production in satisfaction of the payments under the mining agreement (as amended) there is my opinion too much uncertainty as to what might otherwise have been the terms of the 15 November 2007 “agreement”. 

  1. Further, given that the letter was written and directed to Nickmere Pty Ltd (and by implication to Mr Walker) it is surprising that there was no attempt made by the applicant to exhibit to any affidavit material any response to that letter of 1 July 2008 from Lynch & Company.

  2. Only now more than three years after the letter was written does the applicant contend that that correspondence is the best evidence of some extension to the mining agreement entered into between the parties. 

  3. I note also that the letter from Lynch & Company makes the following assertion “this future royalty obligation arises from a Mining Agreement entered into between DMC and Nickmere in July 2000 as amended on 7 August 2001 and as subsequently amended by letter.” 

  4. That “letter” amending the agreement did not emerge in the course of evidence before me.

  5. In his affidavits affirmed on 19 July 2011 Mr Zhang deposes that paragraph 5 as follows:

    “As far as I am aware, Donald Robin Walker never changed his Fixed Charge to a Floating Charge on the six ML’s only (Dianne Mine Area) in terms of the Agreement.  Exhibit ‘PZ-03’ to this affidavit is a copy of a ASIC Form 312 Notification of discharge or release of property from a charge executed by Donald Robin Walker on 18 November 2009.”

  6. Within the operative part of section 1 of the mining agreement in the form which it existed in August 2001 the project the subject of agreement between Nickmere Pty Ltd and Dianne Mining Corporation Pty Ltd is defined as “means the mining and processing of ore principally containing copper, but also containing zinc, gold, silver and other metals from the land to which the Leases relate, the construction commissioning and bringing into full production of an ore processing mill or facility located on the said lands for the production of mineral concentrates and metals of commercial quantities.”

  7. Clause 6 of the mining agreement provides for the payment of a royalty to Nickmere.

  8. In the amended mining agreement dated 6 August 2001 the arrangements for payments of money from Dianne Mining Corporation Pty Ltd to Nickmere are set out. 

  9. In particular the royalty rate is specified as “means the relevant rate as set out in Schedule 2 to this deed.”

  10. At Schedule 2 Royalty Rate is defined in the following terms:

    “1.The Royalty Rate with respect to Project Production from ore sourced from the Leases is 5% of the Net Smelter Return (Export) and 5% of the Net Smelter Return (Domestic).

    2.The Royalty Rate with respect to Project Production from ore sourced otherwise than from the Leases is:

    (a)   until the fourth anniversary of the Commercial Production Date, 5% of the Net Smelter Return (Export) and 5% of the Net Smelter Return (Domestic); and

    (b)   after the fourth anniversary of the Commercial Production Date, 3% of the Net Smelter Return (Export) and 3% of the Net Smelter Return (Domestic).

    3.If ore is toll treated using the ore processing facilities of the Project, the Royalty Rate will be 4% of the gross fees received by Dianne Mining for toll treatment.”

  11. As can be seen from the definition above the Royalty Rate is calculated by reference to the Net Smelter Return (Export) and Net Smelter Return (Domestic) alternatively if ore is toll treated using the ore processing facilities of the project the Royalty Rate will be 4% of the gross fees received by Dianne Mining for toll treatment.  Thus, the Royalty Rate depends upon Smelter Returns rather than Extraction Rates.  The mining operation the subject of the present application, it is agreed by both parties has never begun production and there was no suggestion that any ore processing mill or facility had been established upon the subject mining leases or any of them. 

  12. The mining agreement also contemplates the conduct of what is referred to as “toll treating of ores extracted by other unrelated third parties.”  There is a restriction on the time in which Dianne Mining is entitled to accept ore for toll treating.

  13. Section 234 of the Mineral Resources Act 1989 identifies the purposes for which the Governor in Council may grant a mining lease. That section 234 provides as follows:

    “(1)The Governor in Council may grant to an eligible person or persons, a mining lease for all or any of the following purposes—

    (a) to mine the mineral or minerals specified in the lease and for all purposes necessary to effectually carry on that mining;

    (b) such purposes, other than mining, as are specified in the mining lease and that are associated with, arising from or promoting the activity of mining.

    (2)However, coal seam gas can not be specified in a mining lease.

    (Subsection 3 and 4 are not relevant to this application.)

  14. The Court was not provided with a copy of the mining lease or the terms of that lease and so has been left entirely uninformed as to whether the mining lease grant in the present case is only for mining minerals or whether the provisions of s.234(1)(b) have in some way also been embraced.

  15. It is clear from the definition of “project” in the mining agreement which is recited above that the project includes more than merely mining of ore within the lease area.  It includes, in addition, processing and also the construction commissioning and bringing into full production an ore processing mill or facility located on the mining lease land intended for the production of mineral concentrates and metals of commercial qualities. 

  16. It is clear, it seems, that those activities cannot properly be categorised as “mining” in the sense that they are ancillary to and necessary associated with the mining activities.  It does not take too much imagination to conject that the ore processing mill facility might well be constructed on other land not the subject of a mining lease and the materials won on the mining lease transported to that facility for processing including beneficiation and concentration. 

  1. Schedule 2 to the mining agreement provides the basis upon which the royalty rate is to be calculated.  To interpret that Schedule it is necessary to return to section 1 of the agreement and to consider the defined meaning of the terms “net smelter return (domestic)” and “net smelter return (export)”.

  2. Proper consideration of those two defined terms makes it clear that the royalty rate contemplated is not a share of the mined product but a share of the monetary proceeds received from the sale of processed mineral concentrates and metals of commercial qualities. 

  3. The Court was not informed whether the ore processing mill or facility is something to be constructed within the terms of the mining lease or to be achieved in some other method. 

  4. On the evidence before me I am not willing to infer that the mining lease contained provisions which included the ore processing facility as part of the mining lease granted by the governor-in-council. (As per s.234(1)(b)).

  5. It does seem to me that the royalty arrangements do not create for Nickmere Pty Ltd any proprietary interest in the mined product.  The royalty agreement, it seems to me, upon its proper construction, creates rights that are purely contractual and the royalty holder is to be paid a sum of money calculated by reference to the quantity or value of the mineral concentrates and metals which are produced.  Indeed if the ore processing mill or facility did not come to fruition on one view of things Nickmere may not be entitled to any royalties at all. 

  6. It is perfectly clear that a royalty agreement may provide that the royalty holder may lodge caveats to protect its interests.  But there is nothing in the present mining agreement which evidences such an arrangement. 

  7. I am mindful of the language of s.301 of the Mineral Resources Act 1989 which speaks in terms of “a person who claims a right or interest in or in respect of a mining lease or an application for the grant of a mining lease.”

  8. I note with interest that in a recent decision His Honour Mr Smith[9] had to consider the ambit of s.199 of the Mineral Resources Act 1989 which uses identical language in respect of a mineral development licence.

    [9]      Macarthur Coal Limited v MCG Coal Pty Ltd [2011] QLC 0055.

  9. In that Macarthur Coal case His Honour had to determine whether Macarthur Coal held a sufficient interest in respect of a mining development lease to warrant obtaining protection by way of a caveat. 

  10. In the course of His Honour’s decision he referred to a number of authorities including Re:  Arkaroola Resources Pty Ltd v Niugini Mining (Australia) Pty Ltd[10], Shenhuo International Group Pty Ltd v Shinelia Resources Limited[11] and his own decision in JH Fryar v IP Lewis.[12]

    [10]     [2001] QLRT 12.

    [11]     [2007] QLRT 31.

    [12] [2007] QLC 0134.

  11. His Honour, having considered those decisions, then turned to the expression “in respect of” as it was found in s.199(1) of the Mineral Resources Act.  His Honour referred to the decision of the High Court in Moneywood Pty Ltd High Court decision of Moneywood Pty Ltd v Salamon Nominees Pty Ltd.[13] 

    [13] [2001] 202 CLR 351.

  12. His Honour acknowledged that the Moneywood case was dealing with quite different legislation namely the Auctioneers and Agents Act 1971 (Qld), but nevertheless the Court had to consider the statutory meaning of the words “in respect of”. It is noted, of course, that those words appear in s.301 of the MRA.  

  13. In the Moneywood decision Justice Gummow identified the expression “in respect of” as having the widest possible meaning of any expression intended to convey some connection or relation between the two subject matters to which the words refer”[14].  This catches a good number of transactions that may be entered into by real estate agents, something obviously considered desirable by the legislature to fulfil the policy of the Act.  It also means that one should not strain unduly to narrow the content of the transaction for which the agent’s appointment is required to be in writing.” 

    [14] At para [96].

  14. Notwithstanding that Justice Gummo identifies the phrase as having “the widest possible meaning” there must be a limit to the width or expansiveness of the interpretation. 

  15. The expression “in respect of” is, in my opinion, qualified quite substantially by reference to the right or interest being in respect of “a mining lease or an application for the grant of a mining lease”.

  16. In the present case I find that the interest of Nickmere which is sought to be protected by the caveat is not an interest in respect of “the mining lease” but an interest in respect of the production of the intended ore processing mill or facility. 

  17. My view with respect to that matter may have differed had the applicant seen fit to place before the Court a copy of the mining lease evidencing that the effect of s.234(1)(b) had been triggered by the mining lease specifically contemplating the ore processing mill or facility. They failed to do that.

  18. The issue of whether a mining royalty is a caveatable interest has been ventilated in Western Australia where, as pointed out in this decision, the relevant legislation specifically provides that a mining lease is an interest in land in distinction from a position in Queensland where that proposition is specifically statutorily disavowed. 

  19. The issue was specifically considered in the Supreme Court of Western Australia in Grimes Holdings Pty Ltd v Keith Sceghi[15] where White J had to consider whether a condition of the sale of a mining tenement whereby the seller was entitled to receive a royalty gave rise to an equitable interest or a caveatable interest in the land the subject of the tenement in favour of the seller of the mining tenement. 

    [15]     unreported, 20 August 1993.

  20. His Honour decided that the purchaser should not have to suffer the burden of a caveat and decided that the vendor did not have any caveatable interest in the tenement.

  21. The decision has been analysed by Richard S Grauaug in the Australian Mining and Petroleum Laws Association Bulletin.[16]

    [16]     When is a Mining Royalty a Caveatable Interest in Western Australia?  By Richard S Grauaug AMPLA Bulleting Volume 13(1) p.17.

  22. Mr Grauaug describes the logic of White J decision as follows:[17]

    “A person may claim a proprietary interest in a tenement by lodging a caveat in the prescribed form but the caveat is not sustainable if that person has no proprietary interest in the tenement.  A proprietary interest in a tenement is enforceable against the whole world and, subject to certain exceptions, will run with dealings in the tenement.  In contrast, the holder of a contractual right may only enforce that right against the person who contracted in favour of the holder.

    Mr Sceghi had divested himself of all proprietary interests in the prospecting licence and in the mining lease subsequently granted by executing an unconditional transfer of the prospecting licence to Grimes “free from all encumbrances”.

    The Royalty to which Mr Sceghi remained entitled under the agreement for sale was not a proprietary interest in the tenement.  The Royalty was only a contractual right to receive a portion of the gold, if any, mined and extracted by Grimes from the tenement.”

    [17]     Ibid p. 17.

  23. In the course of his decision White J observed as follows, referring to an article on the topic written in 1985:

    “The first issue is as to the nature of the entitlement to a royalty conferred upon the defendant by cl (c) of the Agreement and, in particular, whether that entitlement gives rise to a proprietary or otherwise caveatable interest in the prospecting licence.

    I was referred by counsel for the plaintiff to the interesting and helpful article by Mr Gerald L J Ryan, entitled “Petroleum Royalties”, published in [1985] AMPLA Yearbook at p328.  Although dealing specifically with petroleum royalties, the article is helpful also in the present case.  At pp 339-40 of his article, the learned author says:

    Proprietary Interest

    It is proposed to examine whether, on their terms, royalty agreements can confer proprietary interests in favour of royalty holders.  In this regard, it should be borne in mind that there is a range of property which may be the subject of a royalty holder’s proprietary interest.  The matter should not, therefore, be considered simply in terms of whether the royalty agreement confers contractual rights or an interest in land.  A number of the Canadian articles focus on whether a petroleum royalty is an interest in land.  See Davies G.J., ‘The Legal Characterization of Overriding Royalty Interests in Oil and Gas’ (1972) 10 Alberta Law Review, 232 and Ellis W.H., ‘Property Status of Royalties in Canadian Oil and Gas Law’ (1984) 22(1) Alberta Law Review 1.  Rather, the matter should be considered in terms of whether the royalty agreement confers contractual rights or an interest in property – it being recognized that the property which is the subject of the interest or the claimed interest might be petroleum in situ, produced petroleum, sales proceeds from petroleum, the petroleum tenement or the land.  This will depend on the terms of the particular royalty agreement.  It is proposed to examine these possible proprietary interests in turn.”

    In my opinion, the express wording of cl (c) is such that any entitlement conferred upon the defendant by the contract is an entitlement only to “produced” gold.  By that, I mean, gold mined or extracted from the Lease by the plaintiff.  It is clear, I think, that the Agreement gives no rights to the defendant to seek for or to mine gold upon the tenement.  As the learned author points out, petroleum (and, in my view, equally gold) in situ is, in Australia, owned by the Crown and, accordingly, the lessee does not own petroleum (or gold) in situ and cannot confer a proprietary right in such petroleum (or gold) under a royalty agreement.  It is only when the petroleum (or gold) has been produced that it is capable of private ownership.

    The Agreement confers upon the defendant the right to a part of the gold actually produced.  As Mr Ryan (op. cit.) points out, this gives rise to two difficulties, namely those associated with the creation of proprietary interests in goods which form part of goods in bulk, and the creation of proprietary interests in future property.”

  24. The legal position in Queensland with respect to royalties generally has, so far as I have been able to ascertain, not been considered by this or any other Court and, in light of the findings made by me above about the specific nature of the royalties granted to Nickmere Pty Ltd it is not necessary for me to attempt to express a considered view about the matter generally.  That is no doubt a matter for another day.

  25. Even had I not come to the view, that Nickmere’s interest is not “in respect of a mining lease”, having regard to the discretionary nature of the relief claimed by Nickmere before me I would still be disinclined to direct that a caveat be left in place or lodged afresh.  Even, as appears to be the case, if an agreement of November 2007 has been made out the full terms of the agreement are far from clear. 

  26. In particular it is not made clear by the evidence whether the alleged further agreement of November 2007 contained any provisions which further amended clause 6.2 which, as pointed out above, (and relied upon by the respondent) released Dianne Mining from any further obligations after 30 June 2010.

  27. It is not beyond the imagination that the amendment of the agreement made some six years after the original agreement was entered into, which original agreements specifically contemplated the lodging of a consent caveat, would either have made a similarly specific provision for the lodging of a consent caveat or, given the time which had passed since the original agreement had been entered into specifically provide that no further caveats were to be lodged.  There is no evidence in either direction of that possibility. 

  28. In my view whatever the agreement of November 2007 was the details of it are too sketchy to justify granting the applicants application for either reinstatement or lodgement of a caveat to protect what it says are its interests in the mining leases under the Mineral Resources Act

  29. In considering the balance of convenience one of the factors to be considered is whether, if a caveat is unfairly or unreasonably allowed to remain in place so that a party suffers damage as a consequence of the caveat being in place and undertaking as to damages in such circumstances is often proffered by the party contending for the caveat. 

  30. Although the matter was not raised by either party before me it is clear that the applicant never offered any such undertaking as might be thought to mollify the respondent whose capacity to deal with the leases would be inhibited by the continued presence of a caveat. 

  31. I do not know of the capacity of Nickmere to offer an undertaking for damages or, indeed, if Nickmere is unable to offer such an undertaking whether that inability flows from some conduct on the part of the respondent or not.  There is simply no evidence before me on that matter. 

  32. Relevant to the issue of balance of convenience is the affirmed evidence of Mr Zhang in his affidavit of 20 July 2011 where he says as follows:

    “3.Since 2009 the Respondent has attempted to negotiate a joint venture agreement with a number of companies, for the purpose of obtaining investment funds necessary to commence mining production at the mining lease sites.  The Respondent is unable to proceed with mining production without such investment. 

    4.The Respondent has had negotiations with about six companies to invest in mining productions.  However, each of these companies have declined to invest in mining production because of the existence of the caveat (or previous caveats) registered against the mining leases.”

  33. Those assertions by Mr Zhang are accepted unchallenged by the applicant and, in my opinion, tip the balance of convenience strongly towards removing existing caveats and not permitting fresh caveats to be lodged. 

  1. In my opinion to the extent it is relevant the balance of convenience here does not favour allowing a caveat to remain in force and accordingly I discharge the order made by His Honour Mr Smith on 28 June 2011.

  2. In summary I find as follows:

    1.The original caveat lodged on 10 December 2001 has lapsed and it is not susceptible to being reinstated.  Even if there was a capacity for reinstatement of that caveat I would not be prepared to make such an order in the present case.

    2.The document described in the application as “the consent caveat lodged on 24 June” cannot be regarded as a consent caveat and there is no basis to direct the mining registrar to record the existence of that document in the mining register.  There was no basis for describing that caveat as a “consent” caveat and indeed the copy exhibited to the affidavit of Walker as exhibit DW-06 does not purport to contain any consent.

    3.There is no basis demonstrated in this application upon which the applicant should be given leave to file a further caveat.

    4.The caveat extended in its operation by His Honour Mr Smith on the 28 June 2011 should be removed from the register and ceased to have any force or effect.

HIS HONOUR, WL COCHRANE

MEMBER OF THE LAND COURT