Palmer v CITIC Ltd [No 8] - [2023] WASC 221

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION:   PALMER -v- CITIC LTD [No 8] [2023] WASC 221
CORAM:   LUNDBERG J
HEARD:   4 APRIL 2023
DELIVERED          :   22 JUNE 2023
FILE NO/S:   CIV 2072 of 2017
BETWEEN:   CLIVE FREDERICK PALMER
First Plaintiff
MINERALOGY PTY LTD
Second Plaintiff
AND
CITIC LTD
First Defendant
SINO IRON PTY LTD
Second Defendant
KOREAN STEEL PTY LTD
Third Defendant

FILE NO/S: CIV 1267 of 2018
BETWEEN: MINERALOGY PTY LTD
Plaintiff
AND
CITIC LTD
First Defendant
SINO IRON PTY LTD
Second Defendant
KOREAN STEEL PTY LTD
Third Defendant

Catchwords:

Practice and procedure - Applications brought by the Mineralogy Parties for leave to amend their statements of claim - Contractual indemnity claim under Fortescue Coordination Deed - Sixth proposed amended statement of claim in the QNI Proceeding - Third proposed amended statement of claim in the Palmer Petroleum Proceeding - Applications opposed by the CITIC Parties - Proposed amendments in QNI Proceeding criticised as being hopelessly general and failing to plead the necessary facts to establish the causal connection required for the contractual indemnity claim - CITIC Parties contend leave should be refused because pleading discloses no reasonable cause of action or is embarrassing - CITIC Parties also rely on case management considerations to oppose the pleading amendments - Objections to the third proposed amended statement of claim in Palmer Petroleum Proceeding derivative upon objections in QNI Proceeding - Consideration as to interaction between functions of pleadings and modern case management requirements

Legislation:

Rules of the Supreme Court 1971 (WA), O 1 r 4A and r 4B, O 20 r 19(1) and O 21 r 5(2)

Result:

Amendment application in CIV 2072 of 2017 dismissed (QNI Proceeding) and amendment application in CIV 1267 of 2018 allowed (Palmer Petroleum Proceeding)

Category: B

Representation:

CIV 2072 of 2017

Counsel:

First Plaintiff	:	Mr P J Dunning KC, Mr M Karam, Mr K S Byrne, Mr H Cooper and Mr D Fawcett
Second Plaintiff	:	Mr P J Dunning KC, Mr M Karam, Mr K S Byrne, Mr H Cooper and Mr D Fawcett
First Defendant	:	Mr S K Dharmananda SC, Ms S B Nadilo, Mr J R C Sippe
Second Defendant	:	Mr S K Dharmananda SC, Ms S B Nadilo, Mr J R C Sippe
Third Defendant	:	Mr S K Dharmananda SC, Ms S B Nadilo, Mr J R C Sippe

Solicitors:

First Plaintiff	:	Robinson Nielson Legal
Second Plaintiff	:	Robinson Nielson Legal
First Defendant	:	Allens
Second Defendant	:	Allens
Third Defendant	:	Allens

CIV 1267 of 2018

Counsel:

Plaintiff	:	Mr P J Dunning KC, Mr M Karam, Mr K S Byrne, Mr H Cooper and Mr D Fawcett
First Defendant	:	Mr S K Dharmananda SC, Ms S B Nadilo, Mr J R C Sippe
Second Defendant	:	Mr S K Dharmananda SC, Ms S B Nadilo, Mr J R C Sippe
Third Defendant	:	Mr S K Dharmananda SC, Ms S B Nadilo, Mr J R C Sippe

Solicitors:

Plaintiff	:	Robinson Nielson Legal
First Defendant	:	Allens
Second Defendant	:	Allens
Third Defendant	:	Allens

Case(s) referred to in decision(s):

Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27; (2009) 239 CLR 175
Avwest Aircraft Pty Ltd v Bombardier Inc [No 2] [2020] WASC 392
Barclay Mowlem Construction Ltd v Dampier Port Authority [2006] WASC 281; (2006) 33 WAR 82
Bond Corporation Pty Ltd v Thiess Contractors Pty Ltd [1987] FCA 84; (1987) 14 FCR 215
Bruce v Odhams Press Ltd [1936] 1 KB 697
Chan v Macarthur Minerals Ltd [2017] QSC 13
DFD Rhodes Pty Ltd v Hancock Prospecting Pty Ltd [2022] WASCA 97
English v Vantage Holdings Group Pty Ltd [2021] WASCA 47
Federal Steam Navigation Co Ltd v J Fenwick & Co Pty Ltd (1943) 68 CLR 55
Goldsmith v Sandilands [2002] HCA 31; (2002) 76 ALJR 1024
Hampton Transport Services Pty Ltd v Crushing Services International Pty Ltd [2018] WASC 54
Hightime Investments Pty Ltd v Lungan [No 2] [2010] WASC 296
Hooker Corporation Ltd v Commonwealth (1986) 65 ACTR 32
Lampson (Australia) Pty Ltd v Fortescue Metals Group [No 3] [2014] WASC 162
Lee v Abedian [2017] 1 Qd R 549
Mann v Bankwest - A Division of Commonwealth Bank of Australia [2020] WASCA 35
National Australia Bank Limited v Rowe [2018] WASC 330
Nyoni v Patterson [2012] WASCA 171
Palmer v CITIC Ltd [2017] WASC 253
Palmer v CITIC Ltd [No 2] [2019] WASC 14
Palmer v CITIC Ltd [No 3] [2019] WASC 424
Palmer v CITIC Ltd [No 4] [2022] WASC 292
Palmer v CITIC Ltd [No 5] [2023] WASC 44
Palmer v CITIC Ltd [No 6] [2023] WASC 188
Palmer v CITIC Ltd [No 7] [2023] WASC 202
Rowe v National Australia Bank [2019] WASCA 140
Sanrus Pty Ltd v Monto Coal 2 Pty Ltd (No 7) [2019] QSC 241
Sino Iron Pty Ltd v Mineralogy Pty Ltd [2022] WASC 151
Tetra Pak Manufacturing v Challenger Life Nominees [2013] NSWSC 349
Trackem Pty Ltd v Revenue Partners (A Partnership) [2021] WASC 345
Vantage Holdings Group Pty Ltd v Donnelly [No 4] [2019] WASC 398
Wheelahan v City of Casey (No 12) [2013] VSC 316

Table of Contents

A. Introduction and summary

B. Background

C. Relevant principles

Pleading principles

Case management principles

D. Mineralogy Parties' proposed amendments

Overview

QNI Proceeding

Palmer Petroleum Proceeding

E. CITIC Parties' submissions

QNI Proceeding

Palmer Petroleum Proceeding

F. Disposition - QNI Proceeding

Adequacy of the pleadings

Case management considerations

G. Disposition - Palmer Petroleum Proceeding

Adequacy of the pleadings

Case management considerations

H. Orders

ATTACHMENT A

ATTACHMENT B

LUNDBERG J:

A. Introduction and summary

The present reasons concern interlocutory applications brought by the plaintiffs in both actions (the Mineralogy Parties), seeking leave to amend their statements of claim. There are two chamber summonses before the court, both dated 23 January 2023 and which were heard on 4 April 2023 (Amendment Applications).[1]
[1] I refer to the plaintiffs' chamber summonses for leave to amend and other orders dated 23 January 2023 filed in CIV 2072 of 2017 and in CIV 1267 of 2018. Both applications were filed with the memoranda required by O 59 r 9 RSC, which demonstrated that extensive conferral had occurred between the parties. Not all of the matters the subject of these chamber summonses were brought on for hearing at the same time.
In large part, the proposed amendments are directed to matters of causation which are central to the plaintiffs' indemnity claims against the defendants (the CITIC Parties). The CITIC Parties oppose the grant of leave in respect of the amendments, other than in relation to mere typographical changes.
For the reasons which follow, I consider that:
(a)leave for the proposed amendments to the statement of claim in CIV 2072 of 2017 should be refused; and
(b)leave for the proposed amendments to the statement of claim in CIV 1267 of 2018 should be allowed.

B. Background

To state the background to the proceedings in simple terms, the QNI Proceeding and the Palmer Petroleum Proceeding (being CIV 2072 of 2017 and CIV 1267 of 2018 respectively) are together referred to as the FCD Proceedings. Both proceedings are connected with the instrument known as the Fortescue Coordination Deed or the FCD. In both actions in the FCD Proceedings, the Mineralogy Parties claim damages against the CITIC Parties pursuant to the indemnities given to the Mineralogy Parties under the FCD. The claims which are made by the Mineralogy Parties, as I have observed in earlier decisions on this matter, are for colossal sums of money, in excess of $4 billion.
The primary provision upon which the Mineralogy Parties rely is cl 11.5(c) of the FCD. The terms of this clause are set out in Attachment A to these reasons. Senior Counsel for the Mineralogy Parties describes this contractual indemnity as being of 'considerable breadth'.[2] In response to the apparent breadth of the clause, the CITIC Parties call attention to several issues of construction which they say naturally arise from the terms of the indemnity, including the operation of cl 9.1(e) of the FCD, which broadly speaking contains a contractual mitigation obligation. The relevant portions of that sub‑clause are also set out in Attachment A.
[2] ts 722.
There are thus several aspects of cl 11.5 and of the FCD generally which will require detailed examination at trial, once the necessary facts have been found. The claims advanced by the Mineralogy Parties, and the defences asserted by the CITIC Parties, necessarily demand that these phrases be closely considered.
At an earlier stage of these proceedings, the Mineralogy Parties proposed that various construction issues associated with cl 11.5 of the FCD (and other provisions of the FCD) be carved out for separate determination by the court. While sympathetic to the concept, Kenneth Martin J declined to grant leave for this course: Palmer v CITIC Ltd [No 2] [2019] WASC 14 [153] (Kenneth Martin J).[3]
[3] See Schedule A and Schedule B to the reasons of the court in Palmer v CITIC Ltd [No 2] [2019] WASC 14, which set out the various questions which were proposed for preliminary determination.
For present purposes, I observe in general terms that the clause is engaged when there are relevant failures by Sino Iron or Korean Steel to perform their obligations, and where there are relevant failures by CITIC to cause either of those aforementioned companies to perform their obligations. Upon these relevant failures being found, and leaving to one side for now issues concerning the identification of relevant parties and the ability of persons to claim for loss which may have been suffered by others, the indemnity extends to 'any loss suffered, paid, or incurred' by Mr Palmer or Mineralogy 'in relation to' the failures just mentioned.

There have been several interlocutory decisions published by this court in the FCD Proceedings since they were commenced in 2017 and 2018, which provide background and context to the Amendment Applications.[4]
[4] Palmer v CITIC Ltd [2017] WASC 253 (Le Miere J) (Stay application); Palmer v CITIC Ltd [No 2] [2019] WASC 14 (Kenneth Martin J) (Preliminary questions application); Palmer v CITIC Ltd [No 3] [2019] WASC 424 (Kenneth Martin J) (Discovery categories); Sino Iron Pty Ltd v Mineralogy Pty Ltd [2022] WASC 151 (Quinlan CJ) (Costs application); Palmer v CITIC Ltd [No 4] [2022] WASC 292 (Kenneth Martin J) (Strategic conference and timetabling); Palmer v CITIC Ltd [No 5] [2023] WASC 44 (Kenneth Martin J) (Directions and timetabling); Palmer v CITIC Ltd [No 6] [2023] WASC 188 (Lundberg J) (Application to set aside subpoenas); and Palmer v CITIC Ltd [No 7] [2023] WASC 202 (Lundberg J) (Strike‑out applications).
In particular, the present reasons should be read together with the court's earlier reasons in Palmer v CITIC Ltd [No 7] [2023] WASC 202, which concerned the strike‑out applications brought by the defendants in respect of the reply pleadings filed by the plaintiffs. Within those reasons, I set out background matters concerning these proceedings and the parties. I will not repeat all of those matters here, but will incorporate by reference the matters which I detailed at [4] ‑ [15] of those earlier reasons and note that I intend to deploy the same definitions and abbreviations employed in the earlier reasons.
As the pleadings presently stand, prior to the determination of the current applications, the latest statements of claim in the FCD Proceedings are:[5]
(a)the Fifth Amended Statement of Claim dated 2 September 2022 (filed in the QNI Proceeding), which I will refer to as the QNI 5ASOC; and
(b)the Second Amended Statement of Claim dated 2 September 2022 (filed in the Palmer Petroleum Proceeding), which I will refer to as the PP 2ASOC.
[5] The table in Attachment B to these reasons summarises the history of the statements of claim in both actions.
In addition, a set of further and better particulars have been served by the Mineralogy Parties in each proceeding, both dated 8 December 2022 (which I will refer to as QNI FABP and the PP FABP). The further and better particulars were, as a matter of timing, provided in relation to allegations which appear in the current statements of claim in the proceedings - not the proposed amended pleadings. However, a composite set of the proposed amended pleadings incorporating the QNI FABP was nonetheless provided to the court following the hearing (with the particulars sub-joined to the relevant paragraphs of the proposed amended pleading).[6]
[6] Index to Pleadings Bundle (TAB 4).
By the Amendment Applications, the Mineralogy Parties seek leave to amend the statement of claim in the QNI Proceeding in the form of the minute of the sixth amended statement of claim dated 23 January 2023 (QNI 6ASOC), and to amend the statement of claim in the Palmer Petroleum Proceeding in the form of the minute of the third amended statement of claim dated 23 January 2023 (PP 3ASOC). The amendments which are sought by the Mineralogy Parties in the QNI Proceeding are found at [28], [37A], [38], [39] and [44] of the QNI 6ASOC, and at [25] and [39AA(ba)] of the PP 3ASOC.
The Mineralogy Parties bring the Amendment Applications pursuant to O 21 r 5(2) of the Rules of the Supreme Court 1971 (WA) (RSC). Rule 5 provides as follows:
5.Amending writ or pleading with leave
(1) This rule is subject to -
(a) Order 18 rules 6, 7 and 8; and
(b)Order 20 rule 19(2) to (5).
(2)The Court may at any stage of the proceedings, without determining whether any relevant period of limitation has expired, allow the plaintiff to amend the plaintiff's writ, or any party to amend that party's pleading, on any terms as to costs or otherwise that may be just and in the manner (if any) that the Court may direct.
In support of the Amendment Applications, the plaintiffs relied upon the affidavit of Tracey Lyn Robinson sworn on 14 December 2022 (Robinson Affidavit), and two sets of written submissions dated 6 February 2023 and 27 February 2023 (Mineralogy Submissions and Mineralogy Reply Submissions). In opposition to the Amendment Applications, the defendants filed written submissions dated 20 February 2023 (CITIC Submissions).
The hearing of the Amendment Applications was conducted on 4 April 2023, with Mr P J Dunning KC leading the counsel team for the Mineralogy Parties and Mr S K Dharmananda SC leading the counsel team for the CITIC Parties.

C. Relevant principles

The principles concerning whether an amendment should be allowed are not prescribed by O 21 r 5(2) RSC. Rather, they involve the exercise of discretion in the interests of justice: Mann v Bankwest - A Division of Commonwealth Bank of Australia [2020] WASCA 35 [78] (Mitchell, Beech and Vaughan JJA).
Pleading principles
It is well‑accepted that leave to amend will not be given where the amended pleading is in a form which ought to be struck out.[7] Thus, the court should not give leave to amend a pleading where to do so would leave that pleading susceptible to being struck out pursuant to one of the grounds stated in O 20 r 19(1) RSC.
[7] Hooker Corporation Ltd v Commonwealth (1986) 65 ACTR 32, 38 (Kelly J); and Nyoni v Patterson [2012] WASCA 171 [38] (Pullin JA, with whom Buss JA (as his Honour then was) and Murphy JA agreed).
In Palmer v CITIC Ltd [No 7] [2023] WASC 202, I summarised the principles governing strike‑out applications brought pursuant to O 20 r 19(1) RSC and the inherent jurisdiction of the court. Those principles are well established and were summarised by Smith J in Vantage Holdings Group Pty Ltd v Donnelly [No 4] [2019] WASC 398 [60(d)] ‑ [60(j)] (Smith J).[8] The principles I set out in Palmer v CITIC Ltd [No 7] were largely adopted from the decision of her Honour. In summary:
(a)Strike‑out applications, in a modern context, must be assessed in the context of case management techniques. Case management considerations are not, however, necessarily antithetical to the observance of pleading rules. The objects of O 1 r 4A and r 4B RSC are often promoted by a clear and precise statement of the issues for decision.[9]
(b)Provided a pleading fulfils its basic functions of identifying the issues, disclosing an arguable cause of action (or defence), and apprising the parties of the case that has to be met, the court ought properly be reluctant to allow the time and resources of the parties and the limited resources of the court to be spent extensively debating the application of technical pleading rules that evolved in, and derive from, a very different case management environment.[10]
(c)Moreover, the mere fact that a case appears weak is not of itself sufficient to strike‑out the action.[11] As a general rule, a party is entitled as of right to have his or her case heard, to have the facts found and then to argue the question of law as it arises before the trial judge upon the facts as found.
(d)It is fundamental that, on a strike‑out application, not only must all the facts alleged in the pleading be accepted as true, but it must be taken for granted that on all other points the pleading is unassailable.[12]

(e)Pleadings may be struck out on the ground that they may prejudice, embarrass or delay the fair trial of the action because they are evasive, they conceal or obscure the real questions in controversy, they are ambiguous or not reasonably intelligible, they raise immaterial or irrelevant issues, they fail to confine the issues or state the case of the party in question with reasonable particularity, or they raise a case in terms which are simply too general.[13]
(f)Irrelevant or unnecessary pleas in a statement of claim will be struck out on the grounds that they will prejudice, embarrass or delay the fair trial of the action where the defendant must traverse the allegations and, thereby, raise false issues.[14]
[8] Approved by the Court of Appeal in English v Vantage Holdings Group Pty Ltd [2021] WASCA 47 [56] (Murphy, Mitchell and Vaughan JJA) and in DFD Rhodes Pty Ltd v Hancock Prospecting Pty Ltd [2022] WASCA 97 [226] (Quinlan CJ, Beech and Vaughan JJA).
[9] Vantage Holdings Group [60(g)] (Smith J).
[10] Vantage Holdings Group [60(h)] (Smith J).
[11] Vantage Holdings Group [60(f)] (Smith J).
[12] Lampson (Australia) Pty Ltd v Fortescue Metals Group [No 3] [2014] WASC 162 [44] (Edelman J).
[13] Vantage Holdings Group [60(i)] (Smith J).
[14] Vantage Holdings Group [60(j)] (Smith J).

There is a further point worth making at this point, of relevance to the current applications. Particulars to a pleading are not intended to fill gaps in a deficient pleading. The function of particulars is 'to fill in the picture of the [party's] cause of action with information sufficiently detailed to put the [other party] on his guard as to the case he has to meet and to enable him to prepare for trial': Bruce v Odhams Press Ltd [1936] 1 KB 697, 712 ‑ 713 (Scott LJ).[15]
[15] See also Goldsmith v Sandilands [2002] HCA 31; (2002) 76 ALJR 1024 [2] ‑ [3] (Gleeson CJ) and Wheelahan v City of Casey (No 12) [2013] VSC 316 [25] (Dixon J).
As noted, criticisms of the adequacy of a proposed pleading may properly be raised by the opposing party at the leave stage. That is clear. However, to the extent such criticism is directed to the generality of the pleading, the opposing party ought be mindful of the 'basic function of the pleading' proposition referred to above, and be mindful of the other interlocutory steps which are under way in the proceeding, or which may be deployed by the parties ahead of trial. These other steps assist to apprise a party of the case they need to meet at trial, and minimise the opportunity for surprise. It is appropriate at this stage that I mention the observations of Martin CJ in Barclay Mowlem Construction Ltd v Dampier Port Authority [2006] WASC 281; (2006) 33 WAR 82 [5] ‑ [8], an authority relied upon by the Mineralogy Parties:
[5]In my view, the contemporary role of pleadings has to be viewed in the context of contemporary case management techniques and pre‑trial directions. In this Court, those pre-trial directions will almost invariably include; firstly, a direction for the preparation of a trial bundle identifying the documents that are to be adduced in evidence in the course of the trial; secondly, the exchange well prior to trial of non-expert witness statements so that non-expert witnesses will customarily give their evidence-in-chief only by the adoption of that written statement; thirdly, the exchange of expert reports well in advance of trial and a direction that those experts confer prior to trial; fourthly, the exchange of chronologies; and fifthly the exchange of written submissions.
[6]Those processes leave very little opportunity for surprise or ambush at trial and, it is my view, that pleadings today can be approached in that context and therefore in a rather more robust manner, than was historically the case; confident in the knowledge that other systems of pre-trial case management will exist and be implemented to aid in defining the issues and apprising the parties to the proceedings of the case that has to be met.
[7]In my view, it follows that provided a pleading fulfils its basic functions of identifying the issues, disclosing an arguable cause of action or defence, as the case may be, and apprising the parties of the case that has to be met, the Court ought properly be reluctant to allow the time and resources of the parties and the limited resources of the Court to be spent extensively debating the application of technical pleadings rules that evolved in and derive from a very different case management environment.
[8]Most pleadings in complex cases, and this is a complex case, can be criticised from the perspective of technical pleading rules that evolved in a very different case management environment. In my view, the advent of contemporary case management techniques and the pre-trial directions, to which I have referred, should result in the Court adopting an approach to pleading disputes to the effect that only where the criticisms of a pleading significantly impact upon the proper preparation of the case and its presentation at trial should those criticisms be seriously entertained.

Since Barclay Mowlem was decided, there have been changes to this court's practice, with the evidence of witnesses now usually adduced orally, preceded by an outline of evidence‑in‑chief. As explained by Archer J in Trackem Pty Ltd v Revenue Partners (A Partnership) [2021] WASC 345, the requirement for a witness outline to be disclosed pre‑trial serves to reduce the risk of ambush and provides clarity to an opposing party. In the CMC List, the holding of strategic and other conferences also serve to identify the issues to be determined at trial.[16]
[16] Trackem Pty Ltd v Revenue Partners (A Partnership) [2021] WASC 345 [25] - [30] (Archer J).
Further, I refer to the more recent statements of Vaughan J (as his Honour then was) in National Australia Bank Limited v Rowe [2018] WASC 330 [4] ‑ [6], which were endorsed by the Court of Appeal in Rowe v National Australia Bank [2019] WASCA 140 [15] and [165]. In Rowe, Vaughan J drew particular attention to the terms of O 20 r 8(1) RSC, which relevantly provides:
... every pleading must contain, and contain only, a statement in a summary form of the material facts on which the party pleading relies for his claim or defence, as the case may be, but not the evidence by which those facts are to be proved, and the statement must be as brief as the nature of the case admits. (emphasis added)
None of the foregoing means that the need for a proper pleading can be ignored. The pleading must still fulfil its basic functions. It remains important for a pleading to inform the opposing party of the case it must meet at trial and it will not do so unless it includes every material fact which, if not pleaded, might take an opposing party by surprise.
Case management principles
As to the importance and relevance of case management considerations in determining a pleading amendment application, both parties accepted that the applicable principles were those set out in Beech J's decision in Hightime Investments Pty Ltd v Lungan [No 2] [2010] WASC 296. His Honour made reference in that decision to the principles expressed by the High Court in Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27; (2009) 239 CLR 175. I refer in particular to the statements made in the concluding paragraphs of the joint judgment of the plurality in Aon Risk at [111] ‑ [114] (Gummow, Hayne, Crennan, Kiefel and Bell JJ), including the following important statement of principle:
An application for leave to amend a pleading should not be approached on the basis that a party is entitled to raise an arguable claim, subject to payment of costs by way of compensation. There is no such entitlement. All matters relevant to the exercise of the power to permit amendment should be weighed. The fact of substantial delay and wasted costs, the concerns of case management, will assume importance on an application for leave to amend.[17]
[17] Aon Risk [111].
In Hightime, which dealt with pleading amendments, Beech J also made reference to the goals and objects respectively stated in O 1 r 4A and r 4B RSC. The goal in O 1 r 4A and the objects in O 1 r 4B(1) are to be borne in mind when exercising the power to permit amendment to pleadings, and to disallow such amendments.
The relevant passage from Beech J's decision is as follows:
[52]In Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27; (2009) 239 CLR 175 the High Court made observations about the considerations relevant to the exercise of a discretionary power to allow or refuse amendment to a pleading in the Australian Capital Territory. Notwithstanding some differences in the language of the relevant rules, their Honours' observations are of valuable assistance in Western Australia and have been applied by courts in Western Australia. Those observations include the following:
(a)the effect of an amendment on the court and on other litigants is relevant;
(b)there is no right to amend to introduce an arguable case and it is wrong to say that only in extreme circumstances would a party be shut out from litigating an arguable case;
(c)justice requires that parties have a proper opportunity to plead their case, but limits may be placed on repleading when delay and cost are taken into account;
(d)a just resolution does not mean that a party will always be permitted to raise any arguable case at any point in the proceedings, on payment of costs, even indemnity costs;
(e)the inevitable strains of litigation must be taken into account in weighing the adverse consequences of delay ‑ this applies to natural persons and other litigants;
(f)the nature and importance of the amendment to the party amending must be taken into account;
(g)attention must be given to the extent of the delay, and the costs associated with it, the prejudice which might reasonably be assumed to follow from it and any prejudice that is shown;
(h)the point in the litigation relative to the trial may be an important consideration;
(i)where a discretion is sought to be exercised in favour of a party, an explanation will be called for;
(j)the point can be reached where a party has had a sufficient opportunity to put its case.
[89] ‑ [103]; [111] ‑ [112].
With particular regard to the goal in O 1 r 4A and the objects in O 1 r 4B(1), the Court of Appeal in Mann v Bankwest further emphasised the following propositions from the High Court's decision in Aon Risk, namely:
(a)that the point may be reached where a party has had a sufficient opportunity to plead his or her case such that it is too late for further amendment so as to do justice to the other party and other litigants;
(b)much depends on the point the litigation has reached relative to the trial; and
(c)it has been recognised that when an application is made late in the day, and requires that dates set down for trial be vacated, the applicant bears a heavy burden to show why leave should be granted. In such a case the public interest in the timely and efficient resolution of legal proceedings and the effective use of court resources is a relevant consideration.
I propose to apply the foregoing principles to the resolution of the Amendment Applications.

D. Mineralogy Parties' proposed amendments

Overview

I will summarise in this section the amendments which have been proposed by the Mineralogy Parties in the QNI Proceeding and the Palmer Petroleum Proceeding, and the position advanced by the Mineralogy Parties in support of the grant of leave.
As an initial observation, I note the amendments to the statement of claim in the Palmer Petroleum Proceeding are less extensive in nature than the amendments in the QNI Proceeding and, as a result, the submissions and oral argument devoted less time to the proposed amendments in that action. Indeed, the challenge to the amendments embodied in the PP 3ASOC is muted at best, and merely derivative upon the challenge to the QNI 6ASOC.[18]
QNI Proceeding
[18] Mineralogy Reply Submissions, [5].
In general terms, the Mineralogy Parties have made claims against the CITIC Parties in the QNI Proceeding under the indemnity in the FCD. The Mineralogy Parties point to the failure of the CITIC Parties to pay Royalty Component B to them in accordance with their contractual obligations (known as RCB), and claim in respect of the diminution in the value of Mr Palmer's shareholding resulting from the closure of the Yabulu Refinery in Queensland (and the administration and then liquidation of QNI, which managed the joint venture in question).
The Mineralogy Parties allege a connection between the failure to pay the RCB amounts and the closure of the Yabulu Refinery in the sense that there were cash flow problems experienced by the joint venture which managed the refinery and payment of the RCB amounts would have enabled Mineralogy to provide funds to QNI to avoid the external administration which resulted.
As explained in the Mineralogy Submissions, the case advanced by the Mineralogy Parties is that, by making good the counterfactual, Mr Palmer's loss ought be found to be 'in relation to' the failure of the CITIC Parties to perform and is thus covered by the indemnity in cl 11.5(c) of the FCD.[19]
[19] Mineralogy Submissions, [12].
As it presently stands, [28] of the QNI 5ASOC (which is the present pleading on the record) provides as follows:[20]
[20] I will set out the form of the QNI 5ASOC to show the course of the developments in the pleading.
[28]In:
(a)the period to 30 September 2015, the total amount of Royalty Component B payable by Sino and Korean under the MRSLAs was US$49,342,647.
(b)the period to 31 December 2015, the total amount of Royalty Component B payable by Sino and Korean under the MRSLAs was $US56,395,838.
Particulars
Mineralogy and Palmer refer to paragraphs 434, 840, 841 and Table 7 at paragraph 775 of ~~the reason of the Honourable Justice Martin J delivered in the RCB proceeding on 24 November 2017~~ Mineralogy Pty Ltd v Sino Iron Pty Ltd [No 16] [2017] WASC 340.[21]
[21] In each extract of the pleadings in these reasons, the underlining and strike though notations reflect the pleading as filed or the proposed minute as filed.
Relevantly for present purposes, it is appropriate to set out the allegations in [37] to [44] of the QNI 5ASOC. These paragraphs are incorporated into the pleading under the following heading: 'The Royalty Component B payments due by Sino and Korean (and upon their default CITIC) to Mineralogy were not available to provide QNI with working capital'. The paragraphs state as follows:
[37]In 2015 there was a downturn in the price of nickel.
[37A] The decrease in the price of nickel adversely affected QNI's forecasted cashflow for the period to 30 June 2016.
Particulars
The Plaintiffs refers to paragraphs 66 and 72 to 79 inclusive of the affidavit of Darren Bruce Wolfe affirmed on 17 November 2015 (Wolfe affidavit).
[38]In or about November 2015, QNI required funding of $28 million as working capital to enable it to continue managing and operating the Joint Venture business during the period in which its forecasted cashflow was adversely impacted.
Particulars
Report by KPMG 'Cabinet in Confidence' Document dated 8 December 2015 page 7 under the heading 'KPMG Comments'. This document is in the possession of the Plaintiffs' solicitors and is confidential. A copy will be made available to the Defendants upon receipt of the usual undertaking to keep the document confidential.
The Plaintiffs also rely~~ies~~ upon the Wolfe affidavit
[39] In or about November 2015, if Sino, Korean and CITIC had paid Royalty Component B to Mineralogy in accordance with their obligations under the MRSLAs and the FCD, Mineralogy agreed and/or determined (subject to conditions which are not material), to provide $28 million to QNI for working capital funded from the payment of Royalty Component B and such further funds as it might require while Nickel prices remained low as working capital from the payment of Royalty Component B would have provided those funds to QNI to enable it to continue to manage and operate the Joint Venture business while nickel prices remained low.
~~Particulars~~
The Plaintiff refers to the affidavit of Clive Theodore Mensink affirmed on 17 November 2015 (the Mensink affidavit) filed in the interlocutory mandatory injunction proceeding referred to below and in particular paragraph 15.
[40] Not used.
[41]Not used.
[42] Not used.
[43]Not used.
[44] As ~~a result of~~ Sino, Korean and Citic's ~~failure to~~ did not pay Mineralogy Royalty Component B, including the amount of Royalty Component B due and owing to Mineralogy for the period ended 30 September 2015 and/or 31 December 2015, Mineralogy did not~~, and/or was unable to,~~ provide the funds to QNI, including the amount set out in paragraph 39 38 herein, to enable it to continue managing and operating the Joint Venture business.
The amendments which are presently in dispute are the amendments which are proposed to [28], [37A], [38], [39] and [44] of the QNI 6ASOC.
The amendment to [28] which is proposed by the Amendment Application is as follows:
[28]In the period to 31 March 2017, the amount of Royalty Component B payable by Sino and Korean under the MRSLAs was as follows:
(a) for the quarter ended 31 December 2013: US$559,770 (due by 14 January 2014);
(b) for the quarter ended 31 March 2014: US$4,164,000 (due by 14 April 2014);
(c) for the quarter ended 30 June 2014: US$5,670,996 (due by 14 July 2014);
(d) for the quarter ended 30 September 2014: US$8,823,397 (due by 14 October 2014);
(e) the quarter ended 31 December 2014: US$5,074,668 (due by 14 January 2015);
(f) for the quarter ended 31 March 2015: US$3,035,524 (due by 14 April 2015);
(g) for the quarter ended 30 June 2015: US$5,162,503 (due by 14 July 2015);
(h) for the quarter ended 30 September 2015: US$9,342,794 (due by 14 October 2015);
(i) for the quarter ending 31 December 2015: US$6,182,799 (due by 14 January 2016);
(j) for the quarter ending 31 March 2016: US$9,341,256 (due by 14 April 2016);
(k) for the quarter ending 30 June 2016: US$18,996,732 (due by 14 July 2016);
(l) for the quarter ending 30 September 2016: US$19,516,210 (due by 14 October 2016);
(m) for the quarter ending 31 December 2016: US$25,693,094 (due by 14 January 2017);
(n) for the quarter ending 31 March 2017: US$32,229,043 (due by 14 April 2017);
(o) by the end of the quarter ending 31 March 2017: a total of US$153,792,786.
~~(a) the period to 30 September 2015, the total amount of Royalty Component B payable by Sino and Korean under the MRSLAs was US$49,342,647.~~
~~(b) the period to 31 December 2015, the total amount of Royalty Component B payable by Sino and Korean under the MRSLAs was $US 56,395,838.~~
~~Particulars~~
~~Mineralogy and Palmer refer to paragraphs 434, 840, 841 and Table 7 at paragraph 775 of Mineralogy Pty Ltd v Sino Iron Pty Ltd [No 16] [2017] WASC 340.~~
At least in an optical sense, the amendment to [28] as seen above is quite extensive. Turning then to [37] to [44] of the Proposed 6ASOC, the foreshadowed amendments are set out below:
[37]In 2015 there was a downturn in the price of nickel.
[37A] The decrease in the price of nickel adversely affected QNI's forecast cashflow for the period to 30 June 2016.
(a) The Plaintiffs refer to paragraphs 66 and 72 to 79 inclusive of the affidavit of Darren Bruce Wolfe affirmed on 17 November 2015 (Wolfe affidavit).;
(b) Further particulars may be provided upon provided upon completion of interlocutory processes, including the exchange of expert reports.
[38]~~In or about November 2015~~ As a consequence of the matters alleged in paragraphs 37 and 37A herein, QNI required funding ~~of $28 million as~~ for working capital to enable it to continue managing and operating the Joint Venture business ~~during the period in which its forecast cashflow was adversely impacted~~.
~~Particulars~~
Report by KPMG 'Cabinet in Confidence' Document dated 8 December 2015 page 7 under the heading 'KPMG Comments'. This document is in the possession of the Plaintiffs' solicitors and is confidential. A copy will be made available to the Defendants upon receipt of the usual undertaking to keep the document confidential. The Plaintiffs also rely upon the Wolfe affidavit.
[39]~~In or about November 2015~~, iIf Sino, Korean and ~~CITIC~~ Citic had paid Royalty Component B to Mineralogy in accordance with their obligations under the MRSLAs and the FCD, Mineralogy would have provided those funds to QNI to enable it to continue to manage and operate the Joint Venture business while nickel prices remained low.
[40]Not used.
[41]Not used.
[42]Not used.
[43]Not used.
[44]As Sino, Korean and Citic's did not pay Mineralogy Royalty Component B, ~~including the amount of Royalty Component B due and owing to Mineralogy for the period ended 30 September 2015 and/or 31 December 2015~~, Mineralogy did not provide the funds to QNI, ~~including the amount set out in paragraph 38 herein,~~ to enable it to continue managing and operating the Joint Venture business.
The purpose of these amendments to the QNI 6ASOC is, according to the Mineralogy Parties, to remove the allegations concerning the cash flow and funding requirements as forecasts in the last quarter of 2015, and to substitute allegations as to QNI's cash flow and funding requirements, to be assessed retrospectively. The modification of the case concept, to adopt a retrospective analysis, requires some comment later in these reasons.
The Mineralogy Parties explain the amendments in the following manner:[22]
[18]This is because, for the purposes of demonstrating causation, the proper comparison is between the amount of outstanding Royalty Component B and the amount of funding that QNI actually required (or would have required were it not for its entry into external administration) to enable it to continue to manage and operate the Joint Venture business.
[19]Accordingly, [38] of the Proposed 6SOC excises the figure ($28 million) and time period (about November 2015) currently pleaded in that paragraph because they are based on a document prepared by KPMG in December 2015 (referred to in the to‑be‑excised particulars to [38]), which forecast QNI's funding requirements at that time.
[20]And further, given that the Proposed 6SOC no longer centres upon a one-off provision of funding to QNI in November 2015 (which was based on QNI's funding requirements as forecast in November 2015), paragraph [28] of the Proposed 6SOC pleads each outstanding Royalty Component B instalment that accrued prior to the commencement of the QNI Proceeding.
[22] Mineralogy Submissions, [18] - [20].
The foregoing matters are sought to be supplemented by the matters outlined in the QNI FABP, specifically at [2] of that document. The particulars supplied by the Mineralogy Parties in December 2022 include the following matters:
[2]As to paragraph 39:
(a)at all material times, Sino and Korean were required to pay Royalty Component B to Mineralogy under the MRSLAs as alleged herein:
(b)the amounts due and payable on account of Royalty Component B were:
(i)for the quarter ended 31 December 2013: US$559,770 (due by 14 January 2014);
(ii)for the quarter ended 31 March 2014: US$4,164,000 (due by 14 April 2014);
(iii)for the quarter ended 30 June 2014: US$5,670,996 (due by 14 July 2014);
(iv)for the quarter ended 30 September 2014: US$8,823,397 (due by 14 October 2014);
(v)the quarter ended 31 December 2014: US$5,074,668 (due by 14 January 2015);
(vi)for the quarter ended 31 March 2015: US$3,035,524 (due by 14 April 2015);
(vii)for the quarter ended 30 June 2015: US$5,162,503(due by 14 July 2015);
(viii)for the quarter ended 30 September 2015: US$9,342,794 (due by 14 October 2015);
(ix)for the quarter ending 31 December 2015: US$6,182,799 (due by 14 January 2016);
(x)for the quarter ending 31 March 2016: US$9,341,256 (due by 14 April 2016);
(xi)for the quarter ending 30 June 2016: US$18,996,732 (due by 14 July 2016);
(xii)for the quarter ending 30 September 2016: US$19,516,210 (due by 14 October 2016);
(xiii)for the quarter ending 31 December 2016: US$25,693,094 (due by 14 January 2017);
(xiv)for the quarter ending 31 March 2017: US$32,229,043 (due by 14 April 2017);
(c)over the period between about the first quarter of 2016 and the third quarter of 2017, QNI would have required funding of approximately AU$36,000,000 as working capital to enable it to continue to manage and operate the Joint Venture business;
(d)to enable QNI to continue managing and operating the Joint Venture business while nickel prices remained low, Mineralogy would have provided to QNI the funding referred to in subparagraph (c) out of payments made on account of Royalty Component B;
(e)further particulars may be provided upon completion of interlocutory processes, including the exchange of expert reports;
(f)the funds it is alleged that Mineralogy would have provided to QNI are that portion of Royalty Component B payable to Mineralogy that was necessary to enable QNI to continue to manage and operate the Joint Venture business while nickel prices remained low.
[3]As to paragraph 44:
(a)the funds it is alleged that Mineralogy did not provide to QNI are that portion of Royalty Component B payable to Mineralogy that was necessary to enable QNI to continue managing and operating the Joint Venture business.

As can be seen from the foregoing, the matters set out in [2(c)] of the QNI FABP attempt to clarify the pleading at [39] of the QNI 5ASOC, by asserting that between 'about the first quarter of 2016 and the third quarter of 2017', QNI would have required funding of a specific amount, being approximately A$36 million, for the purposes of working capital to enable it to continue to manage and operate the business.
I should also mention [2(d)] of the QNI FABP, which alleges that the Mineralogy Parties would have provided this funding to QNI from the payments made by the CITIC Parties on account of RCB.
Further, the Mineralogy Parties emphasise in their submissions that the RCB payments out of which Mineralogy would have provided the funding to QNI are those payments that had accrued when the funding was provided to QNI.[23]
[23] Mineralogy Submissions, [22].
The Mineralogy Parties submit that the QNI 6ASOC discloses a reasonable cause of action and is not otherwise embarrassing, and the determination of those matters is primarily to be undertaken by a careful review of the proposed pleading, rather than a review of the history of the FCD Proceedings or earlier iterations of the pleading.[24] The Mineralogy Parties maintain that the objections are technical, pedantic and inconsistent with the modern philosophy of civil litigation.[25] Additionally, and as mentioned above, the Mineralogy Parties submit that there is no real challenge to the amendments proposed in the Palmer Petroleum Proceeding - rather, the attention of the CITIC Parties is directed to the QNI Proceeding.[26] Further, the Mineralogy Parties criticise the CITIC Parties' use of the counterfactual concept.[27]
[24] Mineralogy Reply Submissions, [2], [3], and [7] - [27].
[25] Mineralogy Reply Submissions, [4].
[26] Mineralogy Reply Submissions, [5].
[27] Mineralogy Reply Submissions, [6].
During the course of argument on 4 April 2023, Senior Counsel for the Mineralogy Parties explained why, in his submission, the changes proposed by the QNI 6ASOC, albeit being more general in nature, nonetheless were adequate from a pleading point of view:[28]
And one can understand why, even though it's a human act later on, our learned friends don't really challenge that. You have got a group of companies ultimately controlled by one human actor. One should be getting in the tens of millions of dollars at least a quarter. Another is enterprises, because of a drop in commodities prices, needs some short‑term funding. He would have. It's not like, as you might have had in another case, where you said, look, this company here had facilities with its bank. And it would have used those facilities with the bank. In that case, you really would need a much more detailed account.
But here, what is the material fact? The material fact is, would Palmer - the actual person who controlled all of them - have chosen to use the money for this purpose or not? That's the material fact. So the real battleground ordinarily in a case such as this is, was there going to be $36 million? Because ordinarily, the argument is, look, sure we mightn't have paid you on time. But that wasn't the only reason the venture failed. Even if we had paid you on time, you would have failed. That's not really this case. But that's a case that is open to my learned friends to run.
So when one looks at that analysis in 32A and B and then 37, and we go back then to the statement of claim, the real battleground in truth is simply, as I said earlier, changing a forecast of $28 million to an ex-post facto known requirement of the 35. It doesn't cause our learned friends any embarrassment. It doesn't delay the trial. In fact, it should reduce the sorts of arguments you would expect in the interlocutory stages of the trial.
[28] ts 731.
As to the case management considerations, the Mineralogy Parties point to the explanation provided for the amendments, the importance of the amendments, the lack of any delay and the absence of prejudice to the CITIC parties.[29]
Palmer Petroleum Proceeding
[29] Mineralogy Submissions, [30] - [34]; Mineralogy Reply Submissions [28] - [31].
In the Palmer Petroleum Proceeding, Mineralogy claims that the failure by the CITIC Parties to make the RCB payments meant that Mineralogy did not provide funds to Palmer Petroleum Pty Ltd, in consequence of which the latter did not pay a debt to a service provider, BGP Geoexplorer Pte Ltd (BGP). By reason of the failure to pay the debt, Palmer Petroleum was wound up in insolvency.
In consequence, it is alleged that Palmer Petroleum ceased conducting the business of owning, exploring, developing and exploiting petroleum, and the Minister for Petroleum and Energy of Papua New Guinea cancelled its or its assignee's petroleum prospecting licences. As a consequence, Palmer Petroleum alleges it suffered a diminution in value of $2.675 billion, in consequence of which Mineralogy (its shareholder) suffered a loss in the same amount.
As the amendments are not extensive, I need not set out the form in which the PP 2ASOC pleading stood. The amendments in contest are found at [25] and [39AA(ba)] of the PP 3ASOC, in the following terms:
[25]In the period ~~from the fourth quarter of 2013~~ to ~~the second quarter of~~ 30 June 2016 (the latter quarter being the quarter immediately preceding the liquidation of Palmer Petroleum as referred to in paragraph 40 herein), the ~~total~~ amount of Royalty Component B payable by Sino and Korean under the MRSLAs was ~~US$73,349,207~~ as follows.:
(a) for the quarter ended 31 December 2013: US$559,770 (due by 14 January 2014);
(b) for the quarter ended 31 March 2014: US$4,164,000 (due by 14 April 2014);
(c) for the quarter ended 30 June 2014: US$5,670,996 (due by 14 July 2014);
(d) for the quarter ended 30 September 2014: US$8,823,397 (due by 14 October 2014);
(e) the quarter ended 31 December 2014: US$5,074,668 (due by 14 January 2015);
(f) for the quarter ended 31 March 2015: US$3,035,524 (due by 14 April 2015);
(g) for the quarter ended 30 June 2015: US$5,162,503 (due by 14 July 2015);
(h) for the quarter ended 30 September 2015: US$9,342,794 (due by 14 October 2015);
(i) for the quarter ending 31 December 2015: US$6,182,799 (due by 14 January 2016);
(j) for the quarter ending 31 March 2016: US$9,341,256 (due by 14 April 2016);
(k) for the quarter ending 30 June 2016: US$18,996,732 (due by 14 July 2016);
(l) by the quarter ending 30 June 2016: US$76,354,439.
~~Particulars~~
~~Mineralogy Pty Ltd v Sino Iron Pty Ltd [No 16] [2017] WASC 340, Table 7 at paragraph 775.~~
[39AA]If Sino, Korean and CITIC had paid Royalty Component B to Mineralogy in accordance with their obligations under the MRSLAs and the FCD, Mineralogy would have provided such of those funds to Palmer Petroleum and:
(a) Palmer Petroleum would have paid for the services rendered under the BGP Contract referred to in paragraphs 38A to 38C above and BGP would not have had a basis to issue the Statutory Demand (or any other demand);
(b) further or alternatively to subparagraph (a) above, Palmer Petroleum would have paid the amount in the Statutory Demand by the due date for compliance;
(ba) further or alternatively to subparagraphs (a) and (b) above, Palmer Petroleum would have paid the amount in the Statutory Demand and/or any further amount owing to BGP on or before 22 July 2016 (being the date when Palmer Petroleum was ordered to be wound up in insolvency as alleged herein at paragraph 40 below);
(c) further or alternatively to subparagraphs (a) ~~and~~ to (ba) above, Palmer Petroleum would have had sufficient funding to:
(i) meet its working capital requirements;
(ii) operate the Business;
(iii) pursue the Business Purpose.
The Mineralogy Parties explain the amendments sought to be introduced by the PP 3ASOC in the following manner.
First, it is submitted that [39AA] alleges what Mineralogy would have done if the CITIC Parties had paid RCB on time. The purpose of [39AA] as a whole is said to be to demonstrate that 'no matter how the counterfactual is articulated, Mineralogy would have provided sufficient funds to Palmer Petroleum out of receipts of Royalty Component B so that Palmer Petroleum would have avoided liquidation (and loss of the PPLs)'.[30]
[30] Mineralogy Submissions, [26].
The Mineralogy Parties explain that sub‑paragraphs (a) and (b) of [39AA] allege that Mineralogy would have provided funds to Palmer Petroleum out of receipts of RCB such that Palmer Petroleum would have paid either the amount owing under the BGP Contract (so that there was no basis for BGP to issue the Statutory Demand), or the amount in the Statutory Demand.
Next, it is explained that the new sub‑paragraph (ba) alleges that 'at any rate, Mineralogy would have provided funds to Palmer Petroleum out of receipts of Royalty Component B so that Palmer Petroleum could pay BGP the amount in the Statutory Demand, and any further amount (ie, default interest under the BGP Contract) on or before 22 July 2016, that is, when it was ordered to be wound up in insolvency.'[31]
[31] Mineralogy Submissions, [26].
Second, and consequently having regard to the foregoing matters, the Mineralogy Parties explain that [25] of the PP 3ASOC pleads out each outstanding RCB instalment that accrued prior to 22 July 2016.[32]

E. CITIC Parties' submissions

QNI Proceeding
[32] Mineralogy Submissions, [27].

The CITIC Parties object to the proposed amendments to [37A], [38], [39] and [44] of the QNI 6ASOC. It is contended that the amendments significantly change the plaintiffs' case for indemnity pursuant to cl 11.5(c) of the FCD.[33] The following submission is made in this regard:[34]
The plaintiffs' case is based on a 'counterfactual' purporting to link the CITIC parties' failure to pay Royalty Component B and the insolvency of Queensland Nickel Pty Ltd (QNI) and Palmer Petroleum Pty Ltd (Palmer Petroleum). In the Proposed 6ASOC, the new alleged sequence of events is devoid of the material facts necessary to formulate a complete cause of action for indemnity or, alternatively, to allow an impartial and uninformed reader to know what the case is about. The nature of the proposed amendments in Proposed 6ASOC are such that, if leave is granted, Mineralogy's case in the PP Proceeding will suffer from the same uncertainty.
[33] CITIC Submissions, [54] ‑ [59]
[34] CITIC Submissions, [5].
The CITIC Parties maintain the court should not grant leave to make these amendments because the proposed amended pleadings fail to disclose a reasonable cause of action[35] or are embarrassing[36] and, further, there are relevant case management considerations which tell against the grant of leave.[37]
[35] CITIC Submissions, [66] ‑ [92].
[36] CITIC Submissions, [93] ‑ [102].
[37] CITIC Submissions, [103] ‑ [112].
The written submissions filed by the CITIC Parties set out the long history of what are described as the 'novel and adventurous claims in the FCD Proceedings'.[38] The CITIC Parties point to the previous substantial repleading of the plaintiffs' claims, in September 2022, following a strategic conference before Kenneth Martin J. A number of criticisms are raised in this regard by the CITIC Parties, but ultimately it appears to have been accepted by the CITIC Parties that the case presented by the Mineralogy Parties was tolerably clear. The submission is in the following terms:
[37]Putting that issue to one side, following the amendments, the plaintiffs' case remained tolerably clear (subject to paragraph 38 below). They contended that Mineralogy 'would have' provided funding to QNI if Royalty Component B had been paid (and 'did not' because the CITIC parties did not pay Royalty Component B). What that meant in the circumstances of the case and how the allegation would be proved remained unclear - especially because of the deletion of the previous plea that Mineralogy had 'agreed and/or determined' to provide QNI funding from Royalty Component B. But it was still alleged that the consequences for QNI arose out of a $28 million funding gap in or around November 2015.
[38]The plaintiffs apparently contended that this assertion, that Mineralogy 'would have' provided $28 million of funding to QNI from Royalty Component B, was still sufficient to render CITIC liable for the $1.8 billion in alleged losses arising out of the circumstances described above. The then extant particulars remained in place to clarify the relevant pleas, and the CITIC parties requested further and better particulars of key aspects of the new pleadings (addressed below).
[38] CITIC Submissions, [8] ‑ [53] and especially [15]. The CITIC Parties also filed an aide-memoire summarising the relevant changes to the plaintiffs' pleadings over the past six or so years.
The CITIC Parties contend that the plaintiffs seek to change tack yet again in this case. They also submit that the further particulars provided in December 2022 are inconsistent with the allegations in the statements of claim as filed.[39]
[39] CITIC Submissions, [40] - [44].
Ultimately, the CITIC Parties contend that the proposed amended pleadings would contain entirely general allegations to the effect that:
(a)QNI required unspecified amounts of funding at unspecified times;
(b)the Mineralogy Parties would have provided that funding at unspecified times if RCB had been paid; and
(c)the Mineralogy Parties would have provided the funding out of unspecified payments of RCB.
As to the submission that the pleading amendments do not disclose a reasonable cause of action, the CITIC Parties correctly submit that it is for the plaintiffs to establish a case for the indemnity upon which it claims: Federal Steam Navigation Co Ltd v J Fenwick & Co Pty Ltd (1943) 68 CLR 55, 563 (Latham CJ). Building on this submission, the CITIC Parties say that the plaintiffs must plead and prove that the losses alleged to have been suffered by the indemnified party meet the condition of the indemnity, properly construed: Tetra Pak Manufacturing v Challenger Life Nominees [2013] NSWSC 349 [47] (McDougall J).
The written submissions filed by the CITIC Parties highlight the importance of the causal connection which is said to be integral to the indemnity in the FCD, and point to the significant questions of construction raised in the proceedings, including:
(a)the meaning of the phrase 'in relation to' within cl 11.5(c) of the FCD;
(b)the proper construction of cl 11.5(c) within the FCD as a whole; and
(c)the requisite causal factor that must be satisfied in this case.[40]
[40] CITIC Submissions, [68].
The CITIC Parties then say that the Mineralogy Parties' submissions (and, indeed, the QNI 6ASOC itself) overlooks the CITIC Parties' case as to the operation of cl 9.1(e) of the FCD.[41]
[41] CITIC Submissions, [70].

The CITIC Parties submit that the operation of cl 9.1(e) is a 'further significant question of construction which is live in these FCD proceedings'.[42] The contention advanced by the CITIC Parties is that this clause operates as a positive obligation on the party claiming the benefit of the indemnity, which is drawn upon to support the contention that the proposed amendments do not disclose a reasonable cause of action or are at least embarrassing.[43] For my part, I do not consider such a constructional question is appropriate for determination at this stage and therefore this contention does not present as a likely argument to withhold leave for the pleading.
[42] CITIC Submissions, [71].
[43] CITIC Submissions, [100] - [102].
Central to the opposition mounted by the CITIC Parties is the manner in which the proposed amendments remove previously pleaded material facts which arguably demonstrated the causal link between the receipt of RCB payments and the provision of funds to QNI. The CITIC Parties refer to the allegations in the QNI Proceeding which rested on 'the causal proposition that if Mineralogy had received the Royalty Component B payments on time, Mineralogy would have provided $28 million as working capital to QNI, as per its November 2015 agreement/determination, which would have enabled the business of the QN Joint Venture to continue'.[44]
[44] CITIC Submissions, [72].
The previous pleading (that is the pleading prior to the QNI 4ASOC) included the allegation of fact that Mineralogy had 'agreed and/or determined' in or around November 2015 to provide to QNI the specified amount of $28 million, which was the amount that the directors of QNI had identified as being necessary to enable QNI to continue to trade on a cash flow positive basis. In further support, the Mineralogy Parties had earlier pleaded as material facts the various steps taken by Mineralogy to seek interlocutory mandatory relief in the relevant proceedings.[45]
[45] CITIC Submissions, [73]. See [40] - [43] of the QNI 4ASOC.
It appears that both parties accept that the claims in the QNI 6ASOC are no longer premised on a one-off provision of funding to QNI in November 2015 to fill an identified gap in forecast cashflow. Rather, the CITIC Parties submit that the case now rests on a:
… hopelessly general causal proposition that if Mineralogy had received the Royalty Component B payments on time, Mineralogy 'would have' provided funds to QNI to enable it to continue to manage and operate the Joint Venture business.[46]
[46] CITIC Submissions, [76].
I say 'appears' in the preceding paragraph given the terms of the pleading and the written submissions as filed. I note however that, during the course of the hearing, Senior Counsel for the Mineralogy Parties, by reference to the affidavit which is incorporated into the pleadings, rejected the CITIC Parties' characterisation that the presently pleaded case (in the QNI 5ASOC) is confined to a one‑off provision of funding. There was never a case propounded, according to Senior Counsel, that there was one special day when funding of $28 million was needed: ts 765. Respectfully, a fair reading of [38] of the QNI 5ASOC and the Proposed QNI 6ASOC suggest to the contrary. The paragraph in the QNI 5ASOC begins with a reference to 'In or about November 2015, QNI required funding of $28 million as working capital'. This reading is also apparent from the Mineralogy Submissions themselves.[47]
[47] Mineralogy Submissions, [20].
The CITIC Parties emphasise that it is essential for the fair conduct of these proceedings that the statement of claim identifies to the CITIC Parties (and the court) the material facts that will be the subject of the plaintiffs' evidence. They complain that the plaintiffs now rely on a conclusion as a counterfactual, which is 'devoid of any coherent narrative of the material facts (i.e., who, what, where and when) and by which it is said simply that Mineralogy "would have" provided funds to QNI'.[48] The thematic submission made by the CITIC Parties is that the proposed amendments do not contain sufficient material facts which would enable the plaintiffs to affirmatively establish at trial the causal link required by cl 11.5(c) of the FCD. It is said that the allegations are stated at too high a level of generality and include conclusionary statements which obscure the underlying facts relied on.[49]
[48] CITIC Submissions, [84].
[49] CITIC Submissions, [77] - [88].
In addition to the foregoing pleading complaints, the CITIC Parties also raise a number of case management considerations which are said to point heavily against the grant of leave for these amendments.
Palmer Petroleum Proceeding
In opposing the amendments in the Palmer Petroleum Proceeding, the CITIC Parties concede that these amendments are not, standing alone, of the same significance as the proposed amendments in the QNI Proceeding.[50] The CITIC Parties refer to some remaining ambiguity but recognise that the pleading 'still identifies an amount of money and a time(s) at which it was required'.[51]
[50] CITIC Submissions, [51].
[51] CITIC Submissions, [51].

The extent of the CITIC Parties' opposition to these amendments may fairly be summarised as follows - the proposed amendments in the QNI Proceeding would render the Mineralogy Parties' case in the Palmer Petroleum Proceeding unclear. This proposition is supported by the contention that, in the Palmer Petroleum Proceeding, the Mineralogy Parties allege they would have used payments made on account of RCB to pay BGP. The Mineralogy Parties do not expressly say which particular payments would have been provided to Palmer Petroleum, nor when.
Importantly, the CITIC Parties say, the Mineralogy Parties now propose to remove details relating to the amount of funding required by QNI and when funds would have been provided (in the QNI Proceeding). The CITIC Parties thus contend that these details (in the QNI Proceeding) may affect which funds would have been available to Mineralogy to provide to Palmer Petroleum and when it could have provided funding.
The CITIC Parties submit that they are entitled to know these basal matters.

F. Disposition - QNI Proceeding

I turn now to exercise the discretion concerning the grant of leave for the amendments sought by the Mineralogy Parties in the QNI Proceeding. The first issue to address in this regard is whether the proposed pleading fails to disclose a reasonable cause of action or is embarrassing in any relevant sense, before then considering (to the extent necessary) whether the grant of leave for the amendments is consistent with case management principles.
Adequacy of the pleadings
In challenging the adequacy of the proposed amendments, the CITIC Parties have highlighted the history of the proceedings, and the manner in which the pleadings have developed. A detailed aide-memoire of the various iterations of the pleadings has been prepared to assist this analysis. An archaeological dig through the relics of past pleadings is typically of limited utility in an assessment of the adequacy of a freshly proposed pleading. In general terms, the history of the pleading and the various ebbs and flows over time are more likely to be germane to an assessment of applicable case management considerations than the harder‑edged analysis that is required by the lens of O 20 r 19(1) RSC.
There are some exceptions to this. For example, it may be necessary to consider whether a party is seeking to retreat from admissions previously made, or (in a broader sense) whether a party is now seeking to adopt a wholly inconsistent position on an allegation of fact. There will be other examples. The present case provides such an exception, in the sense that the historical review allows the reader of the proposed pleading to recognise the more precise manner in which the plaintiffs have previously been able to articulate their indemnity claim, from a causal perspective. The prior pleadings do not represent the only manner in which the claims can be articulated - but they demonstrate the factual scenarios available to be properly pleaded by the plaintiffs.
The CITIC Parties ultimately contend that the proposed amendments (both as to the allegations of fact and contentions which are being added, and as to the allegations and contentions which are being excised from the pleading) have the effect that the indemnity claim advanced by the Mineralogy Parties is not arguable, and so the pleading amendments should not be allowed. At its core, the CITIC Parties seek to persuade the court, on this interlocutory application, that the change of approach by the Mineralogy Parties to move away from a case based on a one-off provision of funding to QNI in November 2015, to a case based on Mineralogy's assertion that it 'would have' provided funds to QNI to enable it to continue to manage and operate the business, has left the court with a hopelessly general pleading which fails to properly plead the requisite causal connection.
The pleading amendments do not, as is evident from their terms, propose any alteration of the cause of action asserted by the Mineralogy Parties. The QNI 6ASOC fundamentally continues to embody a claim made under cl 11.5(c) of the FCD, being an indemnity claim grounded on alleged failures by the relevant counterparties to perform their contractual obligations. I accept that the change which is sought to be introduced through the amendments is nonetheless a significant one in the context of the QNI Proceeding. I simply observe that the amendments do not propose the introduction of new claims or the removal of any currently pleaded claims.
The analysis which is encouraged by the CITIC Parties' submissions is whether the amendments (by reason of their generality) would produce a pleading which does not fulfil its basic function of identifying the issues, disclosing an arguable cause of action, and apprising the CITIC Parties of the case that has to be met. In undertaking this analysis, it is necessary to bear in mind that not only must all the facts alleged in the pleading be accepted as true, but it must be taken for granted that on all other points the pleading is unassailable.
On my assessment, the QNI 6ASOC suffers from substantial difficulties in a pleading sense, through its overly generalised approach. The proposed pleading would leave the CITIC Parties facing a broad indemnity case, with few anchor points. The remaining anchor points are that:
(a)the CITIC Parties were obliged to make RCB payments to the Mineralogy Parties on certain dates between December 2013 and March 2017;[52]
(b)from around 2015,[53] QNI required funding for working capital to enable it to continue managing and operating the Joint Venture business;[54] and
(c)if the CITIC Parties had paid the RCB payments in accordance with their obligations, Mineralogy 'would have' provided those funds to QNI to enable it to continue to manage and operate the business.[55]
[52] QNI 6ASOC, [28].
[53] I refer to 2015 given the allegation in [37] of the QNI 6ASOC that the downturn in the nickel price occurred in 2015, and this downturn adversely affected QNI's cashflow (as alleged in [37A]), and both [37] and [37A] form the basis of the allegation in [38].
[54] QNI 6ASOC, [38].
[55] QNI 6ASOC, [39].
The adequacy of the pleading in its proposed form must naturally be assessed against the terms of cl 11.5(c) of the FCD. Now is not the time to fully explore the constructional issues which this provision (and the FCD more broadly) require, which have been highlighted in the submissions filed by the CITIC Parties. Such constructional issues will need to await trial, to be assessed by reference to the language used by the parties within the FCD when examined as a whole, the surrounding circumstances, and the purposes and objects to be secured by the FCD. It can at least be said at this stage that the indemnity claim requires that the Mineralogy Parties plead out the necessary facts to ensure the CITIC Parties are apprised of the case they need to meet, including those facts which are relied upon to demonstrate that the 'loss suffered, paid or incurred' was 'in relation to' the relevant failures to comply with the contractual obligations.
On my assessment of the proposed pleading, there is an absence of the necessary factual narrative to properly explain the causal connection between the pleaded non‑payment of the RCB amounts and the ultimate demise of QNI and the Joint Venture business. The proposed pleading attempts to bridge the gap in this regard by reliance on the generalised assertion that Mineralogy 'would have' provided the funds to QNI had they been received. This does not suffice, from a pleading perspective, in my view.
There are numerous statements in the authorities as to the importance of pleading the material facts necessary to establish a causal link between a breach or contravention, on the one hand, and the relevant loss, on the other. The relatively recent decision of the Court of Appeal in English v Vantage Holdings Group Pty Ltd is apposite in this respect. I refer to the observations of Murphy and Vaughan JJA in English v Vantage Holdings Group Pty Ltd, in assessing the adequacy of the pleading of a statutory accessorial liability claim under s 1317H of the Corporations Act 2001 (Cth) (the passages below include the footnote to [103]):[56]
[102]Sometimes a causal link between a breach or contravention and a particular head of damage may be obvious. In such a case an expressly pleaded causal link may be unnecessary. A general plea, such as that found at par 21AL, may suffice. If, however, the alleged causal link is not obvious, a claimant should plead the material facts relied on to establish the causal link between the breach (or contravention) and the claimed loss - and the alleged causal link must at least arguably establish the necessary causal connection between the breach (or contravention) and the alleged suffering of such a loss.
[103]In short, as French J (as his Honour then was) said in a misleading conduct case, 'the material facts establishing the necessary causal link should be pleaded'. Moreover, it is necessary to plead material facts which give rise to a 'reasonable inference' that the breach or contravention and the alleged loss stand to each other 'in the relation of cause and effect': Bond Corporation Pty Ltd v Thiess Contractors Pty Ltd & Ors [1987] FCA 84; (1987) 14 FCR 215, 221 - 222 (referring to Dow Hager Lawrance v Lord Norreys [1890] UKLawRpAC 14; (1890) 15 App Cas 210, 221). A number of similar authorities are collected by Bond J in Sanrus Pty Ltd v Monto Coal 2 Pty Ltd (No 7) [2019] QSC 241 [17] - [21].
[104]A cause of action should only be struck out as not being reasonable due to the absence of the requisite causal link where the allegation of causation is clearly untenable on the pleading. In this context the term 'reasonable' means reasonable according to law. The question of law stands independently of the facts giving rise to it. The court must proceed on the basis that the facts alleged in the pleading are established. The question is whether, on the facts as pleaded, there is a sufficient causative relationship alleged between the alleged breach (or contravention) and the alleged loss. Any question of causation is quintessentially a question of fact and degree. The question is fact sensitive and will be affected by the evidence. This accentuates the need to take a cautious approach in assessing whether a pleaded claim is untenable. Nevertheless, the basal requirement remains: the material facts as pleaded must be capable of being regarded as sufficient to establish that the required causal connection between a breach (or a contravention) and the loss exists.
[56] Such a claim necessitates consideration as to whether damage suffered for which the corporation seeks compensation is damage that resulted from the contravention. This requires a causal connection between the alleged damage and the contravening conduct, and only damage which is caused by the contravention can be the subject of an order for compensation (as explained at [99] in English v Vantage Holdings Group Pty Ltd).
On the facts before them, their Honours upheld the ground of appeal to which the foregoing discussion relates (Mitchell JA dissenting as to whether leave to appeal should be granted, but agreeing with their Honours as to the merits of the appeal, at [165]).
In the passages just quoted, Murphy and Vaughan JJA refer to the decision of French J (as his Honour then was) in Bond Corporation Pty Ltd v Thiess Contractors Pty Ltd [1987] FCA 84; (1987) 14 FCR 215. His Honour there stated that the material facts establishing the necessary causal link should be pleaded (in the context of a misleading or deceptive conduct case).[57]
[57] Bond Corporation Pty Ltd v Thiess Contractors Pty Ltd (1987) 14 FCR 215, 221 ‑ 222.
Their Honours in English v Vantage Holdings Group Pty Ltd also referred to the decision of Bond J in Sanrus Pty Ltd v Monto Coal 2 Pty Ltd (No 7) [2019] QSC 241 on this issue. Sanrus concerned contractual claims for damages for loss of opportunity, resting on breaches of detailed joint venture instruments. Bond J's decision principally concerned rulings on matters of expert evidence, but necessitated a review of the state of the pleadings and the allegations made as to the causal link between the conduct which the plaintiffs impugned and the loss they allegedly suffered.[58] By reference to the UCPR pleading provisions applicable in Queensland, which in this regard are not dissimilar to the provisions operative in this court, Bond J described it as a trite proposition of law that defendants are entitled to a 'direct and unambiguous identification of the material facts relied on to establish the causal link between the conduct which plaintiffs impugn and the loss they allegedly suffered, and which identification at least arguably establishes that link'.[59]
[58] Sanrus [15] (Bond J).
[59] Sanrus [17] (Bond J).
Bond J referred to prior statements to a similar effect in his earlier decisions in Lee v Abedian [2017] 1 Qd R 549 [81] and in Chan v Macarthur Minerals Ltd [2017] QSC 13 [39]. In Lee v Abedian, his Honour expressed the following view:
The defendants are entitled to have the plaintiff pinned down to a causation hypothesis which is not characterised by imprecision and ambiguity and which, at least arguably, establishes the requisite causal connection between the implementation of the conspiracy and the suffering of loss. If there is more than one causation hypothesis, then the statement just made must apply to each one. The pleading device of merely cross-referring back to events alleged to have happened is unlikely to be a satisfactory way of addressing a proper plea of causation. There must be a direct and unambiguous identification of the material facts relied on to establish the causal link which the law requires. And it must be something which makes narrative sense. The defendants should not be required to cherry pick through the pleading to work out what the case is that they have to meet in this regard.
Drawing together these various statements of principle, Bond J observed in Sanrus as follows:
[21]The result is that where a party's causation hypothesis depends on establishing a particular counterfactual scenario to establish the alleged causal link between breaches of contract and the loss which it is said would have eventuated if the conduct which the party impugns had not occurred, that counterfactual scenario must be pleaded and particularised in accordance with the rules of pleading. This should be done with the degree of clarity referred to in Oztech Pty Ltd v Public Trustee of Queensland. The pleading so framed must at least arguably establish a reasonable inference that the impugned conduct and the claimed loss stand to each other in the relation of cause and effect.
From a case management perspective, the importance of these propositions and the importance of a case being properly pleaded, becomes evident when the balance of Bond J's decision in Sanrus is reviewed. His Honour examined at great length the admissibility of certain expert evidence which was tendered in the proceedings, apparently in support of unpleaded matters, including an unpleaded counterfactual case.[60]
[60] Sanrus [23], [25] and [56] ‑ [82] (Bond J).
Returning then to the case at hand, can it fairly be said, in the context of this pleading and the contractual indemnity claim advanced by the Mineralogy Parties under cl 11.5(c) of the FCD, that the proposed pleading fails to meet the requirement in O 20 r 19(1)(a) RSC? In approaching this question, the caution emphasised by Murphy and Vaughan JJA must be borne in mind, as too must the fact sensitive nature of any such analysis. In my view, the absence of material facts to support and explain the causal ingredient of the plaintiffs' claim is sufficiently significant that it deprives the pleading of an essential integer to demonstrate a reasonable cause of action. The causal connection between the relevant failures on the part of the CITIC Parties and the ultimate loss must be supported by a sufficient array of material facts to enable the CITIC Parties to understand the case. The amendments do not achieve this. Indeed, this is one respect in which the historical review of the pleadings serves some utility, as it highlights the manner in which the plaintiffs' indemnity claim is shifting in character towards an overly generalised case.
It should be accepted that the plaintiffs are entitled to present their indemnity claim in the manner they see fit, subject only to the limitations inherent in the pleading rules of this court and the broader case management objectives. A broad indemnity claim may nonetheless amount to a viable indemnity claim, provided that it clearly identifies the material facts relied on to establish the causal link between the conduct which the plaintiffs impugn (being the CITIC failures) and the loss they allegedly suffered (being the diminution in the value of the Queensland refinery interests), such that the facts at least arguably establish this causal link.
The pleading which is proposed by the Mineralogy Parties would leave the proceedings in an unfortunate state, to the prejudice of the CITIC Parties and to the disadvantage of the efficient conduct of further interlocutory steps in the matter. These further interlocutory steps, such as the provision of discovery, lay and expert evidence, may be said to provide something of an antidote to the criticisms of the QNI 6ASOC, in the sense described in cases such as Barclay Mowlem. However, these further interlocutory steps are not best undertaken in a vacuum. The further steps leading to the trial of this action will achieve their intended benefits only against the backdrop of a clearly pleaded case. That is the starting point. In my view, that is missing at present, at least insofar as the causal connection is concerned.
I am therefore of the view that the proposed amendments should not be allowed. I have reached this view on the basis that they would result in the promulgation of a pleading which does not disclose a reasonable cause of action, in that it presents an unfairly general claim based on a core contention that, if the CITIC Parties had made the RCB payments between December 2013 and March 2017, Mineralogy would have provided the funding to QNI to enable it to continue to manage and operate the Joint Venture business, while nickel prices were low. This pleading fails to provide the required degree of clarity which is essential in any case of this nature, but more so in a case which seeks to impose enormous financial liability on the defendants.
The deficiencies to which I have referred are not such as to be capable of being remedied by mere particulars. That would invert the function of material facts and particulars. Thus, the reliance on the prospective provision of further particulars, which appears in [2(e)] of the QNI FABP, does not assist the plaintiffs' defence of the pleading itself.
The counterfactual scenario presented by the Mineralogy Parties is, in truth, no scenario at all. The pleading, in the form proposed to be amended, would alter the claim to be one based on a subjective decision of the relevant party (and its controller) to allocate the assumed funds to a particular end purpose (to QNI, as explained in the QNI Proceeding). The plaintiffs appear to rely (at least insofar as is evident from the pleading) on the existence of no prior course of conduct to support the causal link, nor on the existence of any legal or other obligation which supports the causal connection, nor on any other material facts in this regard (other than the connections in ownership or interest, in that Mr Palmer is pleaded to be the ultimate beneficial owner of the shares in the Queensland entities and has an economic interest in relation thereto).[61]
[61] QNI 6ASOC, [4], [4A] and [5].

Drawing these threads together, I consider the amendments introduced by the QNI 6ASOC would have the effect that the pleaded claim would transgress the proscription in O 20 r 19(1)(a) RSC and, a fortiori, would also prejudice, embarrass or delay the fair trial of the action in contravention of O 20 r 19(1)(c) RSC.[62] In summary, my reasons for these conclusions are:
[62] In the sense described at [19(e)] above in these reasons.
1.The court starts from the proposition that a pleading must fulfil its basic function, in the sense of identifying the issues, disclosing an arguable cause of action (or defence), and apprising the parties of the case that has to be met. A pleading will not inform the opposing party of the case it must meet at trial unless it includes every material fact which, if not pleaded, might take an opposing party by surprise. That does not require 'vast swathes of evidence or unnecessary particulars', as is clear from O 20 r 8(1) RSC.[63]
2.Whether the basic function of the pleading has been fulfilled will need to be assessed in the context of the particular causes of action alleged and the relief which is sought. When assessing a statement of claim, the plaintiff is required to plead the essential elements of the relevant claims by reference to the necessary material facts.
3.Relevantly for the purposes of the present applications and the objections raised by the CITIC Parties, the court must assess whether the proposed pleading advanced by the Mineralogy Parties includes the necessary material facts (and not mere particulars) required to demonstrate the causal connection between the relevant alleged failures and the alleged loss which has been suffered or incurred. This causal connection is an integer of the contractual indemnity claim in cl 11.5(c) of the FCD. The indemnity does not operate in a vacuum. There must be a causal connection between these matters in a relevant sense.
4.There are a number of ways in which material facts could be pleaded by the Mineralogy Parties in order to demonstrate the required causal connection, as is apparent from the earlier iterations of the statement of claim in the QNI Proceeding (for example, in QNI 4ASOC and in QNI 5ASOC). I understand from the interchange with Senior Counsel for the Mineralogy Parties during the hearing that it is not contended that the payments to QNI were required to be made by reason of any legal or other obligation on the part of Mineralogy. That is, of course, not the only basis on which the indemnity could be engaged and it is not suggested that the indemnity in cl 11.5(c) is so confined. The requirement is to plead, in a direct and unambiguous manner, those material facts which arguably establish the causal connection required by the phrase 'in relation to' which appears in cl 11.5(c) (or which provides the basis for a reasonable inference to be drawn in this regard).
5.In my view, a pleading which posits a wholly retrospective analysis of QNI's cash flow and funding requirements in order to demonstrate the required causal connection for the purposes of a claim made pursuant to the indemnity in cl 11.5(c) of the FCD Deed does not provide material facts necessary to demonstrate the connection. As a matter of logic, the material facts must be proximate in a chronological sense to the alleged failures upon which the indemnity is sought to be engaged, not an ex post facto assessment. This is not to decide a constructional question by stealth - it is to apply the text of the clause which is pleaded by the Mineralogy Parties, and upon which they rely for their claim, and assess whether a constituent element thereof has been appropriately pleaded.
6.The case for the Mineralogy Parties as presented in the QNI 6ASOC strays too deep into territory in which a causal connection is not apparent from any material facts (and the allegation that Mineralogy 'would have' done something is inadequate), leaving an indemnity claim based solely on a correlation between the alleged failures and the alleged loss. A correlation does not suffice, in my view, even a logical and commercial correlation such as the allegation that Mr Palmer would have directed funds to the ailing refinery business in Queensland of which he was the ultimate beneficial owner.
7.Further, without the necessary material facts, to allege that Mr Palmer 'would have' provided the funds to QNI does not sufficiently alert the CITIC Parties to the claim they will need to meet at trial. The case as pleaded in the QNI 6ASOC is impermissibly general.
8.A real risk which arises from the form of the proposed pleading, and the matters to which I have just alluded, is that the remaining interlocutory steps in the QNI Proceeding, and the trial of the matter, cannot be undertaken in an efficient and effective manner consistent with the goals in O 1 r 4A RSC and the objects in O 1 r 4B RSC, and may be productive of delays. The further interlocutory steps leading to a trial of this action will achieve their intended benefits (as explained in Barclay Mowlem) only against the backdrop of a clearly pleaded case which has appropriate anchor points to ground the claim.
Case management considerations
[63] See the observations of Archer J in this regard in Avwest Aircraft Pty Ltd v Bombardier Inc [No 2] [2020] WASC 392 [22] (Archer J).
Having regard to the principles to which I have referred earlier in these reasons, and but for my conclusion as to the inadequacy of the amendments, it would have been necessary in the disposition of the Amendment Applications pursued by the Mineralogy Parties that I take into account a number of case management factors including the goal of the practice, procedure and interlocutory processes of the court as stated in O 1 r 4A RSC.
Given the foregoing conclusion as to the adequacy of the QNI 6ASOC, it is unnecessary to turn to consider the broader discretionary and case management considerations applicable to the question whether leave should be granted for the amendments to the statement of claim in the QNI Proceeding. I will address these matters in the context of the Palmer Petroleum Proceeding.

G. Disposition - Palmer Petroleum Proceeding

Adequacy of the pleadings

The proposed pleading in the Palmer Petroleum Proceeding does not suffer from the same vices which infect the QNI 6ASOC. The anchor points in the prior pleading remain. The causal connection is pleaded in a sufficiently satisfactory manner that the defendants understand the case they need to meet. As earlier explained, the CITIC Parties' opposition to the PP 3ASOC was almost entirely derivatively based on the challenge to the QNI 6ASOC. Once the conclusion has been reached that the amendments in the QNI Proceeding should not be allowed, the pleading‑based objections to the PP 3ASOC rapidly recede.
Case management considerations
It remains to consider whether the case management considerations to which the CITIC Parties have called attention otherwise justify the refusal of leave for these amendments.
The factors to assess from a case management perspective include the effect and importance of the proposed amendments from the perspective of the Mineralogy Parties and the presentation of its case, the inevitable strains of litigation when weighing the adverse consequences of delay, the extent of the delay and the costs reasonably associated with that delay, the prejudice which might reasonably be assumed to follow from the delay and any prejudice specifically demonstrated by the CITIC Parties, the point in the litigation relative to the trial, and the explanation advanced by the Mineralogy Parties for the delay and the amendments.
I do not consider leave for the amendments to introduce the PP 3ASOC should be withheld on case management grounds. I say this for several reasons.
First, as an overarching point, I do not consider the amendments are likely to delay the progress of the FCD Proceedings to trial. As matters stand, no trial dates have been listed. The matters are approaching the stage where trial dates will be set, and for that purpose a strategic conference has been scheduled for 28 July 2023. It is clear from the various interlocutory applications which have been raised for the court's determination in recent months that these proceedings contain a few moving parts and although far from being in a state of flux, they may best be described as dynamic. In general terms, then, I do not assess the issue of delay as being significant to the determination of these applications.
Second, the amendments which are proposed to the Mineralogy Parties' statements of claim are directed to an issue which I assess as being central to the claims advanced by those parties. The central issue is the causal link between the non‑payment of RCB and the loss suffered by the Mineralogy Parties. I accept the submission made by the Mineralogy Parties that the amendments are required to allow them a proper opportunity to present their case at trial.
Third, the Mineralogy Parties have not, in truth, provided a detailed explanation for the provenance of these amendments, but rather have indicated that the necessity for the amendments emerged during the course of the preparation of the further and better particulars (which were prepared in and around December 2022). I accept the inherent logic of this explanation and in large part consider the nature of the amendments which are sought to these pleadings provides its own explanation.[64]
[64] ts 724.
The natural reality is that solicitors and counsel periodically re‑assess the sufficiency of their client's pleaded case and, in the course of addressing other interlocutory steps in the proceeding, refinements and modifications to the pleadings can and do emerge. Where those changes are identified, and are of importance to the case, it is crucial that they are raised with the opposing party promptly and, if leave is required, that the court is then moved for orders without delay.
In any event, I do not consider that every amendment to a complex pleading requires a specific explanation for the change, much less such an explanation to be provided by way of affidavit evidence.[65] The importance of a detailed explanation, supported by affidavit, will depend on the circumstances and, where the amendment is dilatory and close to trial, the necessity for such an explanation will be heightened, as will the level of detail required, and the party moving the amendment can expect close scrutiny thereof.
[65] See, for example, Hampton Transport Services Pty Ltd v Crushing Services International Pty Ltd [2018] WASC 54 [27] (Allanson J).
Fourth, the pleading amendments in the Palmer Petroleum Proceeding do not introduce a new claim or cause of action, and do not introduce new factual allegations. I can discern no material prejudice to the CITIC Parties arising from the amendments to [25] and [39AA].
So, while I consider the Mineralogy Parties should be refused leave to progress the QNI Proceeding under the auspices of the QNI 6ASOC, I consider leave should be granted for the amendments to the Palmer Petroleum Proceeding in the form of the PP 3ASOC. I have reached this view because I consider the amendments introduced by the PP 3ASOC are modest in nature and scope, because the proposed pleading is sufficiently arguable and appropriately detailed, and given the view I have taken in relation to the case management considerations as set out above.

H. Orders

For the foregoing reasons, I will refuse leave for the proposed amendments to the statement of claim in the QNI Proceeding (the QNI 6ASOC), and grant leave for the proposed amendments to the statement of claim in the Palmer Petroleum Proceeding (the PP 3ASOC).
I will hear from the parties as to the orders which should be made in this regard, including as to the timetabling of further pleadings and to costs.

ATTACHMENT A

FORTESCUE COORDINATION DEED

EXTRACTS OF RELEVANT PROVISIONS

BACKGROUND:
A.Sino Iron and Korean hold Mining Rights granted by Mineralogy.
B.Mineralogy and each of the Mining Right Holders is a party to the State Agreement and certain other Project Agreements described in this Deed.
C.CITIC has taken control over Sino Iron and Korean. CITIC has an option to acquire ownership and control over a Third Company which holds the right to mine one (1) billion tonnes of magnetite iron ore from Mineralogy ('CITIC Option').
D.Mineralogy, the Mining Right Holders and CITIC enter into this Deed in order to confirm the manner in which each of the Mining Right Holders will carry out and coordinate their respective Project activities, and to confirm the Project Area that will apply to such activities.

DEFINITIONS AND INTERPRETATION
1.1 Definitions
In this Deed, unless the context otherwise requires:
…
Project Agreements means the following agreements (each as amended from time to time) between the Company and the Seller and which have been disclosed to CITIC:
(a)the Korean Facilities Deed;
(b)the Korean Mining Right Agreement;
(c)the Korean Sublease;
(d)the Korean Steel Takeover Agreement;
(e)the Consolidation Agreement;
(f)the Sino Iron Facilities Deed;
(g)the Sino iron Mining Right Agreement;
(h)the Sino iron Sublease;
(i)this Co-Ordination Deed; and
(j)the Sino Iron Takeover Agreement.
…
PROVISIONS APPLICABLE TO INDEMNITIES
9.1The following provisions will apply to each indemnity provided for under this Deed:
…
(e)Each party claiming the benefit of an indemnity must take all reasonable steps to minimise and, where possible, avoid any loss or damage suffered by it.
…
MAINTENANCE OF THE MINING LEASES
…
Guarantee and Indemnity
11.5Guarantee by CITIC
(a)In consideration of Mineralogy granting the further rights to Sino Iron and Korean under this Deed and in further consideration of the sum of five thousand dollars ($5000.00) paid on the date hereof by CITIC to Mineralogy, CITIC unconditionally and irrevocably guarantees to Mineralogy the performance of Korean's or Sino Iron's obligations under this Deed and the Project Agreements.
(b)If Korean or Sino Iron fails to perform its obligations under this Deed or the Project Agreements when they are due, CITIC must immediately on demand from Mineralogy cause Sino Iron or Korean as the case may be to perform its obligations under this Deed or the Project Agreements as applicable. If Sino Iron or Korean fail to perform the obligation CITIC must itself perform the obligation within 7 days of a demand by Mineralogy to do so (which, for the avoidance of doubt, includes the payment of an amount which is due to be paid but which has not been paid by Sino Iron or Korean).
(c) CITIC indemnifies Clive F Palmer and Mineralogy against any loss suffered, paid, or incurred by it in relation to the failure of Sino Iron and/or Korean to perform its obligations under this Deed or the Project Agreements or the failure of CITIC to cause Sino Iron and/or Korean to perform its obligations under this Deed or the Project Agreements.

ATTACHMENT B

TABLE SHOWING HISTORY OF THE STATEMENTS OF CLAIM

IN THE FCD PROCEEDINGS

Year	QNI Proceeding CIV 2072 of 2017	Palmer Petroleum Proceeding CIV 1267 of 2018
2017	Statement of Claim dated 29 June 2017 (QNI SOC) Amended Statement of Claim dated 22 December 2017 (QNI ASOC)
2018	Second Amended Statement of Claim dated 16 January 2018 (QNI 2ASOC) Third Amended Statement of Claim dated 19 March 2018 (QNI 3ASOC) Fourth Amended Statement of Claim dated 17 July 2018 (QNI 4ASOC)	Statement of Claim dated 16 February 2018 (PP SOC) First Amended Statement of Claim dated 28 March 2018 (PP ASOC)
2019
2020
2021
2022	Fifth Amended Statement of Claim dated 2 September 2022 (QNI 5ASOC) Further and Better Particulars dated 8 December 2022 (QNI FABP)	Second Amended Statement of Claim dated 2 September 2022 (PP 2ASOC) Further and Better Particulars dated 8 December 2022 (PP FABP)
2023	Minute of the Sixth Amended Statement of Claim dated 23 January 2023 (QNI 6ASOC)	Minute of the Third Amended Statement of Claim dated 23 January 2023 (PP 3ASOC)

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
SAO
Associate to the Honourable Justice Lundberg
22 JUNE 2023