Prospect Resources Ltd v Molyneux

Case [2015] NSWCA 171


Court of Appeal
Supreme Court

New South Wales

Case Name: 

Prospect Resources Ltd v Molyneux

Medium Neutral Citation: 

[2015] NSWCA 171

Hearing Date(s): 

22 May 2015

Date of Orders:

25 June 2015

Decision Date: 

25 June 2015

Before: 

Beazley P at [1];
Ward JA at [2];
Leeming JA at [101]

Decision: 

1. The appeal is dismissed with costs.

Catchwords: 

CONTRACTS – interpretation – share subscription agreement – whether parties to a separate prospecting agreement “waived” conditions precedent to that agreement – whether issuer under subscription agreement “reasonably satisfied” the other parties thereto that conditions precedent to the prospecting agreement had been “waived”
 
WORDS AND PHRASES – “waived” – “waiver” – whether expression of understanding that conditions were satisfied constituted a waiver of those conditions
 
COSTS – appeal from order for indemnity costs – Calderbank letter – offer characterised by appellant as derisory and inviting capitulation – whether error in exercise of costs discretion

Legislation Cited: 

Uniform Civil Procedure Rules 2005 (NSW)

Cases Cited: 

Agricultural and Rural Finance Pty Ltd v Gardiner [2008] HCA 57; (2008) 238 CLR 570
Cat Media Pty Ltd v Allianz Australia Insurance Ltd [2006] NSWSC 790
Commonwealth v Verwayen [1990] HCA 39; (1990) 170 CLR 394
Craine v The Colonial Mutual Fire Insurance Company Limited [1920] HCA 64; (1920) 28 CLR 305
Doe d. Nash v Birch (1836) 1 M. & W. 402
Earl of Darnley v Proprietors & c. of London, Chatham and Dover Railway [1867] LR 2 HL 43
Gange v Sullivan [1966] HCA 55; (1966) 116 CLR 418
Hancock v Arnold; Dodd v Arnold (No 2) [2009] NSWCA 19
House v The King [1936] HCA 40; (1936) 55 CLR 499
Leach v The Nominal Defendant (QBE Insurance (Australia) Ltd) (No 2) [2014] NSWCA 391
Leichhardt Municipal Council v Green [2004] NSWCA 341
Mannai Investments v Eagle Star [1997] AC 749
Matthews v Smallwood [1910] 1 Ch 777
Pennant’s Case 2 Co. 171
Perri v Coolangatta Investment Pty Ltd [1982] HCA 29; (1982) 149 CLR 537
Perry v Davis [1858] 3 C.B. (N.S.) 769
Prospect Resources v Molyneux [2014] NSWSC 1096
Prospect Resources v Molyneux (No 2) [2014] NSWSC 1448
Regency Media Pty Ltd v AAV Australia Pty Ltd [2009] NSWCA 386
Robb Evans & Associates v European Bank Ltd (No 2) [2009] NSWCA 170

Category: 

Principal judgment

Parties: 

Prospect Resources Limited (Appellant)
Alexander Molyneux (First Respondent)
Blumont Group Limited (Second Respondent)
Pacific Advisers Pte Limited (Third Respondent)

Representation: 

Counsel:
JC Giles with Ms H Mann (Appellant)
AC Willinge (Respondents)
 
Solicitors:
Whittens & McKeough (Appellant)
Cardinal Litigation + Dispute Resolution (Respondents)

File Number(s): 

CA 2014/00256343

Publication Restriction: 

Nil

Decision under appeal: 

 Court or Tribunal: 

Supreme Court of New South Wales

  Jurisdiction: 

Equity Division

  Citation: 

[2014] NSWSC 1096; [2014] NSWSC 1448

  Date of Decision: 

15 August 2014

  Before: 

McDougall  J

  File Number(s): 

2013/360199

[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered…

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Prospect Resources Ltd v Molyneux [2015] NSWCA 171
Case
[2015] NSWCA 171
Decision Date

CaseChat Overview and Summary

Prospect Resources Ltd (Prospect) appealed to the Court of Appeal of New South Wales against orders made by the primary judge concerning a share subscription agreement and a separate prospecting agreement. The dispute centred on whether certain conditions precedent to the prospecting agreement had been satisfied or waived, and whether Prospect had reasonably satisfied the other parties to the subscription agreement of this fact.

The Court of Appeal was required to determine two primary legal issues. First, it had to consider the proper interpretation of the term "waived" in the context of the prospecting agreement and whether the conduct of the parties amounted to a waiver of the conditions precedent. Second, the Court had to assess whether Prospect had acted reasonably in satisfying the other parties that these conditions had been waived, as required by the share subscription agreement. The Court also considered an appeal against an order for indemnity costs, which had been awarded following a Calderbank offer made by the respondent.

On the issue of waiver, the Court of Appeal held that an expression of understanding that conditions were satisfied did not necessarily constitute a waiver of those conditions. The Court analysed the terms of the prospecting agreement and the conduct of the parties, concluding that the conditions precedent had not been waived. Consequently, Prospect had not satisfied the requirement under the share subscription agreement that it reasonably satisfy the other parties that the conditions precedent to the prospecting agreement had been waived. Regarding costs, the Court found no error in the primary judge's exercise of discretion in awarding indemnity costs, despite the appellant's characterisation of the Calderbank offer.

The appeal was dismissed with costs.

Orders

Orders of the court

1. The appeal is dismissed with costs.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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