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Quasar Resources Pty Ltd v APG Aus No 3 Pty Ltd

Quasar Resources Pty Ltd v APG Aus No 3 Pty Ltd

Case [2023] WASCA 171 1 December 2023

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JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA
TITLE OF COURT :   THE COURT OF APPEAL (WA)
CITATION:   QUASAR RESOURCES PTY LTD -v- APG AUS NO 3 PTY LTD [2023] WASCA 171
CORAM:   BEECH JA
VAUGHAN JA
LUNDBERG J

HEARD:   10 AUGUST 2023
DELIVERED          :   1 DECEMBER 2023
FILE NO/S:   CACV 44 of 2022
BETWEEN:   QUASAR RESOURCES PTY LTD
Appellant
AND
APG AUS NO 3 PTY LTD
Respondent

ON APPEAL FROM:
Jurisdiction              :   SUPREME COURT OF WESTERN AUSTRALIA
Coram:   TOTTLE J
Citation: APG AUS NO 3 PTY LTD -v- QUASAR RESOURCES PTY LTD [2022] WASC 123
File Number            :   CIV 1955 of 2019

Catchwords:

Contract - Agreement for the sale and purchase of mining tenements - Where consideration included a net smelter royalty - Proper construction of net smelter royalty - Where calculation of net smelter royalty allowed for deductions of certain costs including the costs of 'refining' - Whether judge erred in having regard to evidence as to the understanding in the Australian mining industry at the time the agreement was entered of 'net smelter royalty' and 'refining' - Whether judge erred in fact in making findings as to such industry understanding - Meaning of the term 'refining'

Legislation:

Nil

Result:

Appeal dismissed

Category: B

Representation:

Counsel:

Appellant	:	A J Myers KC and V N Ghosh
Respondent	:	J P Moore KC and T N Owen

Solicitors:

Appellant	:	Allens
Respondent	:	Clayton Utz

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

Abalos v Australian Postal Commission [1990] HCA 47; (1990) 171 CLR 167
AIG Insurance Australia Ltd v McMurray [2023] WASCA 148
APG Aus No 3 Pty Ltd v Quasar Resources Pty Ltd [2022] WASC 123
Appleby v Pursell [1973] 2 NSWLR 879
Australasian Temperance and General Mutual Life Assurance Society Ltd v Howe (1922) 31 CLR 290
Australian Gas Light Co v Valuer‑General (1940) 40 SR (NSW) 126
Australian Securities and Investments Commission v Hellicar [2012] HCA 17; (2012) 247 CLR 345
Black Box Control Pty Ltd v TerraVision Pty Ltd [2016] WASCA 219
Blatch v Archer [1774] 2 EngR 2; (1774) 98 ER 969
CCOM Pty Ltd v Jiejing Pty Ltd (1992) 36 FCR 524
Charter Reinsurance Co Ltd v Fagan [1997] AC 313
Child and Adolescent Health Service v Mabior [2019] WASCA 151; (2019) 55 WAR 208
Chong v CC Containers Pty Ltd [2015] VSCA 137; (2015) 49 VR 402
Christos v Curtin University of Technology [2017] WASCA 110; (2017) 267 IR 209
Codelfa Construction Pty Ltd v State Rail Authority (NSW) (1982) 149 CLR 337
Collector of Customs v Agfa-Gevaert Ltd [1996] HCA 36; (1996) 186 CLR 389
Con‑Stan Industries of Australia Pty Ltd v Norwich Winterthur Insurance (Australia) Ltd (1986) 160 CLR 226
Coshott v Prentice [2014] FCAFC 88; (2014) 221 FCR 450
Crowe-Maxwell v Frost [2016] NSWCA 46; (2016) 91 NSWLR 414
Davids Holdings Pty Ltd v Attorney-General (Cth) (1994) 49 FCR 211
Devries v Australian National Railways Commission (1993) 177 CLR 472
DRA Industries Pty Ltd…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Quasar Resources Pty Ltd v APG Aus No 3 Pty Ltd

Details

AGLC: Quasar Resources Pty Ltd v APG Aus No 3 Pty Ltd [2023] WASCA 171
Case: [2023] WASCA 171
Decision Date: 1 DECEMBER 2023

CaseChat Overview and Summary

Quasar Resources Pty Ltd brought a claim against APG Aus No 3 Pty Ltd, seeking a declaration that a net smelter royalty payable under an agreement for the sale and purchase of mining tenements was to be calculated in a particular way. The crux of the dispute was the proper interpretation of the term "net smelter royalty" as it appeared in the agreement, and in particular whether certain costs, including the costs of "refining", could be deducted from gross revenue to arrive at the net revenue upon which the royalty was payable. The case was heard in the Federal Court of Australia.

The legal issues that the Court needed to decide were whether the judge had erred in considering evidence as to the understanding in the Australian mining industry at the time the agreement was entered into of the term "net smelter royalty" and the term "refining". In addition, the Court had to determine whether the judge had erred in fact in making findings as to the industry understanding, and whether those findings were relevant to the proper construction of the agreement.

The Court found that the judge had not erred in having regard to evidence as to the industry understanding of "net smelter royalty" and "refining". The Court held that it was appropriate for a court to take into account industry practice when interpreting a contract, and that the judge had not erred in making factual findings as to the industry understanding. The Court also held that the term "refining" in the agreement should be given its ordinary and natural meaning, and that it did not include costs associated with the processing of ore to produce a saleable product. The Court concluded that the judge's interpretation of the agreement was correct, and that Quasar was not entitled to deduct certain costs from gross revenue when calculating the net smelter royalty.

The Court dismissed Quasar's appeal and affirmed the orders of the primary judge. The final orders of the Court were that Quasar pay APG's costs of the appeal.

Orders