Queensland Phosphate Pty Ltd v Korda - [2019] VSCA 119

SUPREME COURT OF VICTORIA

COURT OF APPEAL

S APCI 2018 0091

QUEENSLAND PHOSPHATE PTY LTD (ACN 609 384 894)	First applicant
PARADISE PHOSPHATE LIMITED (ACN 154 180 882)	Second applicant
v
MARK ANTHONY KORDA AND CRAIG PETER SHEPARD AS JOINT AND SEVERAL LIQUIDATORS OF LEGEND INTERNATIONAL HOLDINGS INC (IN LIQUIDATION) (ARBN 120 855 352)	First respondent
LEGEND INTERNATIONAL HOLDINGS INC (IN LIQUIDATION) (ARBN 120 855 352)	Second respondent

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JUDGES:	McLEISH and HARGRAVE JJA
WHERE HELD:	MELBOURNE
DATES OF HEARING:	10, 27 May 2019
DATE OF JUDGMENT:	30 May 2019
MEDIUM NEUTRAL CITATION:	[2019] VSCA 119
JUDGMENT APPEALED FROM:	[2018] VSC 789 (Randall AsJ)

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PRACTICE AND PROCEDURE – Stay – Winding-up order – Applicants granted stay pending appeal – Stay unopposed by respondents – Order for payment of arrears of rental and annual fees in respect of mining tenements – Undertaking to inform authorities of appeal – Breach by applicants of order and undertaking – Application by respondents to lift stay – Whether mining tenements at risk of cancellation for non-payment of rent and annual fees – Mineral Resources Act 1989 (Qld) ss 160, 308(2); Environmental Protection Act 1994 (Qld) ss 278(2)(f), 280, 316I – Whether onus on applicants to establish special or exceptional circumstances – Stay varied to require payment of arrears within 14 days.

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APPEARANCES:	Counsel	Solicitors
For the Applicants	Mr T Greenway (10 May 2019) Mr D Ratnam (27 May)	Coleman Greig Lawyers
For the Respondents	Dr C G Button QC with Ms R Zambelli	Arnold Bloch Leibler

McLEISH JA
HARGRAVE JA:

Paradise Phosphate Ltd is the holder of a number of mining tenements and associated exploration authorities in Queensland. By a series of transactions which it is unnecessary to explain in any detail, Queensland Phosphate Pty Ltd and Paradise (‘the applicants’) entered into an arrangement by which Queensland Phosphate purported to acquire from Legend International Holdings Inc all the shares in Paradise. Legend is the second respondent. The purchase price was stipulated as $1 or a valuation amount, if higher.

On 1 February 2019, Randall AsJ made orders, among other things, that the relevant agreements were void and unenforceable. He ordered that Paradise be wound up in insolvency under s 459A of the Corporations Act 2001 (Cth) and that Mark Anthony Korda and Craig Peter Shepard (who together are the first respondent) be appointed as its liquidators. Randall AsJ stayed those orders for 14 days to permit Queensland Phosphate and Paradise to seek leave to appeal, which they duly did. That stay was extended by Hargrave JA on 22 March 2019 until the determination of the present application for leave to appeal and any appeal.

The orders of Hargrave JA were made without full argument but on terms that were essentially unopposed. As part of the orders, Paradise was ordered to do all things necessary to maintain a valid and beneficial interest in each of its mining tenements, and not, by any act or omission to render any tenement liable to forfeiture, cancellation, suspension…

Grounds of appeal

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

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

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

Consideration

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

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

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Details

Case: [2019] VSCA 119
Decision Date: 30 May 2019

CaseChat Overview and Summary

The case of Queensland Phosphate Pty Ltd v Korda involved a dispute between the applicant and respondents regarding the status of mining tenements and the payment of associated fees. The applicants, Queensland Phosphate, sought a stay of a winding-up order pending their appeal, which was unopposed by the respondents. The applicants were required to pay arrears of rental and annual fees for the mining tenements under the Mineral Resources Act 1989 (Qld) and the Environmental Protection Act 1994 (Qld). They were also required to provide an undertaking to inform the authorities of the appeal and to pay the fees. However, the applicants breached the order and undertaking, prompting the respondents to apply for the stay to be lifted.

The primary legal issue before the court was whether the applicants had established special or exceptional circumstances that warranted the lifting of the stay. The court considered the legislative framework, including the Mineral Resources Act and the Environmental Protection Act, which stipulated the consequences of non-payment of rent and fees, including the potential cancellation of mining tenements. The onus was on the applicants to demonstrate that lifting the stay would result in substantial injustice or hardship. The court also assessed whether the applicants had breached the terms of the stay and the undertaking given.

In determining the matter, the court held that the applicants had failed to establish special or exceptional circumstances to justify the continuation of the stay. The court found that the applicants had breached the terms of the stay and the undertaking by not making the required payments. Consequently, the court varied the stay to require the applicants to pay the arrears within 14 days. The court emphasised the importance of compliance with court orders and undertakings, particularly in matters involving regulatory frameworks such as mining and environmental protection.

The final orders of the court included a variation of the stay to require the applicants to pay the arrears of rental and annual fees within 14 days. The court also required the applicants to inform the relevant authorities of the appeal and to provide an updated undertaking to comply with the terms of the stay. The court maintained the stay in place until the applicants fulfilled the specified conditions, ensuring that the mining tenements remained in compliance with the legislative requirements.

Orders