RoyaltyOne Pty Ltd v Century Mine Rehabilitation Project Pty Ltd; Century Mine Rehabilitation Project Pty Ltd v RoyaltyOne Pty Ltd
[2025] VSC 152
•28 March 2025
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMERCIAL COURT
COMMERCIAL LIST
S ECI 2023 04674
| ROYALTYONE PTY LTD (ACN 611 602 530) & ORS (according to the schedule attached) | Plaintiff/Defendants by Counterclaim |
| v | |
| CENTURY MINE REHABILITATION PROJECT PTY LTD (ACN 614 818 683) & ANOR (according to the schedule attached) | Defendants/Plaintiffs by Counterclaim |
S ECI 2023 04759
| CENTURY MINE REHABILITATION PROJECT PTY LTD (ACN 614 818 683) & ORS (according to the schedule attached) | Plaintiffs/Defendant by Counterclaim |
| v | |
| ROYALTYONE PTY LTD (ACN 611 602 530) & ORS (according to the schedule attached) | Defendants/Plaintiff by Counterclaim |
---
JUDGE: | Waller J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 3 March 2025 |
DATE OF RULING: | 28 March 2025 |
CASE MAY BE CITED AS: | RoyaltyOne Pty Ltd v Century Mine Rehabilitation Project Pty Ltd; Century Mine Rehabilitation Project Pty Ltd v RoyaltyOne Pty Ltd |
MEDIUM NEUTRAL CITATION: | [2025] VSC 152 |
---
EVIDENCE — Client legal privilege — Waiver or loss — Legal due diligence report — Disclosure to third parties — Confidential communications — Effect of contractual provisions on privilege — Whether inconsistent with maintaining privilege — Underwriting agreement — Reliance letters — Witness outline suggesting absence of legal advice — Evidence Act 2008 (Vic) ss 117, 122(2), 122(3), 122(5)(a)(i), 133.
---
APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff/Defendants by Counterclaim in S ECI 2023 04674 and for the First to Third Defendants/Plaintiff by Counterclaim in S ECI 2023 04759 | M Borsky KC with A Willoughby | Arnold Bloch Leibler |
| For the Defendants/Plaintiffs by Counterclaim in S ECI 2023 04674 and for the Plaintiffs/Defendant by Counterclaim in S ECI 2023 04759 | A J Weinstock with S J Weinberg | Gilbert + Tobin |
| No appearance for the Fourth Defendant in S ECI 2023 04759 |
HIS HONOUR:
A. INTRODUCTION
This application concerns a claim of client legal privilege over a legal due diligence report prepared for the applicants. The report was subsequently disclosed to several third parties in connection with financing and capital raising transactions.
The respondents contend that these disclosures resulted in a waiver or loss of privilege because they were inconsistent with maintaining privilege despite being made under confidentiality arrangements. They also argue that the applicants waived privilege in the report by filing a witness outline suggesting the applicants had not received legal advice about royalty obligations, while simultaneously claiming privilege over the report which may contain such advice.
By summons filed 12 February 2025[1], Century Mine Rehabilitation Project Pty Ltd (‘CMRP’), Century Bull Pty Ltd (‘Century Bull’) and Sibanye Stillwater Australia Operations Pty Ltd (‘Sibanye Stillwater’) (previously named New Century Resources Ltd (‘New Century’)) (together, the ‘CMRP Parties’) apply for orders that:
[1]The summons was filed in proceeding number S ECI 2023 04759. A further summons seeking identical relief was filed 13 February 2025 by the CMRP Parties in proceeding number S ECI 2023 04674.
(a) RoyaltyOne Pty Ltd (‘RoyaltyOne’), Patrick Walta and John Carr (together, the ‘RoyaltyOne Parties’) and Evan Cranston, their instructing solicitors and counsel destroy or delete all copies of:
(i) the due diligence report (‘Report’) referred to at [122] of the witness outline of Mr Walta dated 13 September 2024 (‘Second Outline’); and
(ii) the Second Outline (including any drafts that contain the matters disclosed at [143] of the Second Outline); and
(b) the Second Outline be removed from the Court file.
The CMRP Parties make their application because they allege that the communications disclosed in the Report and at [143] of the Second Outline are subject to client legal privilege and that privilege has not been waived.
The RoyaltyOne Parties accept the CMRP Parties’ claim for privilege over the matters in [143] of the Second Outline and concede that the Second Outline should be amended to remove reference to the matters at [143].
The RoyaltyOne Parties also accept that the Report is prima facie subject to client legal privilege. However, they argue that the CMRP Parties have waived any such privilege.
The parties invited me to inspect the Report and I have done so in accordance with s 133 of the Evidence Act 2008 (Vic) (‘Act’).
For the reasons that follow, I consider that the CMRP Parties have acted in a way that is inconsistent with them maintaining client legal privilege in the Report.
B. BACKGROUND
B.1 The nature of the proceedings
Proceeding number S ECI 2023 04759, commenced by the CMRP Parties (‘CMRP Proceeding’), concerns various royalty deeds between CMRP and Century Bull pursuant to which CMRP purportedly agreed to pay a royalty to Century Bull in the form of a 2% net smelter return in connection with the Century Zinc Mine in north-west Queensland (‘Century Mine’) and the purported subsequent assignment of the royalties by Century Bull to RoyaltyOne.
In the CMRP Proceeding, the CMRP Parties make claims against RoyaltyOne and the beneficiaries to the royalties (who are also former directors of the CMRP Parties), being Mr Walta, Mr Carr and Mr Cranston. They seek to set aside the royalty deeds and other related deeds pursuant to which the royalties are said to be payable, on the basis of breaches of fiduciary duty by each of Mr Walta, Mr Carr and Mr Cranston.
In proceeding number S ECI 2023 04674, commenced by the RoyaltyOne Parties (‘RoyaltyOne Proceeding’), the RoyaltyOne Parties make claims against CMRP seeking payment of the royalties and interest said to be payable in accordance with the terms of the royalty deeds and other related deeds.
On 7 May 2024, Osborne J made orders that the two proceedings be tried together and that evidence in one proceeding be evidence in the other.
B.2 Officeholders at New Century
Mr Walta was Managing Director of New Century from about 13 July 2017 until 16 September 2022.
Mr Carr was Chief Business Development Officer of New Century from about July 2017 until December 2022.
Mark Chamberlain was Chief Financial Officer of New Century from 11 June 2019 until 30 May 2023.
Thomas Wilcox has held the role of Vice President Legal and Sustainability of Sibanye Stillwater since August 2023, was General Counsel of New Century between February 2021 and August 2023 and has held the role of Company Secretary of New Century/Sibanye Stillwater, CMRP and Century Bull since 22 February 2021.
In the course of their roles at New Century, Messrs Walta and Carr acquired copies of the Report.
B.3 New Century refinancing
In or around 2021, New Century took steps to refinance its existing debt (‘Proposed Refinancing’).
The CMRP Parties’ solicitors, Gilbert + Tobin, prepared the Report for New Century and its subsidiaries in connection with the Proposed Refinancing. The Report included a statement that it ‘is confidential and may not, without the prior written consent of [Gilbert + Tobin], be disclosed (whether in whole or in part) under any circumstances to any person’. The purpose of the Report was
to identify, on an exceptions basis, the key legal issues which may materially impact on the Lender’s assessment and structuring of the Proposed Refinancing or which G+T consider should be addressed to facilitate the Proposed Refinancing.[2]
[2]Affidavit of Crispian Paul Lynch filed 12 February 2025, Exhibit CPL-2, 191.
From July 2021, New Century and Macquarie Bank Limited (‘MBL’) entered into negotiations regarding the Proposed Refinancing. The proposed structure of the transaction also relevantly involved Argonaut Insurance Company (‘Argonaut’) as the surety provider and Global Loan Agency Services Australia Nominees Pty Ltd (‘GLASAN’) as the security trustee.
On 3 August 2021, MBL and New Century executed a One-Way Confidentiality Agreement in connection with the Proposed Refinancing (‘MBL Confidentiality Agreement’).
On 3 August 2021, Argonaut provided a confidentiality undertaking in favour of MBL and New Century in connection with the Proposed Refinancing.
On 11 October 2021, Mr Walta emailed a copy of the Report to Argonaut. Messrs Wilcox and Chamberlain were copied into that email.
On 18 October 2021, Mr Wilcox emailed a copy of the Report to MBL. Mr Chamberlain was copied into that email.
On 27 October 2021, New Century, MBL and Argonaut signed a commitment letter in respect of the provision of a facility, known as the Environmental Bond Facility (‘EBF’), in the amount of $180,000,000.
In connection with the EBF, MBL, Argonaut and GLASAN (together, the ‘EBF Parties’) signed reliance letters in favour of New Century. Those letters set out terms and conditions attaching to the provision of the Report. GLASAN and MBL’s reliance letters are dated 24 November 2021 and are signed by Gilbert + Tobin. Argonaut’s reliance letter is undated and was not signed by Gilbert + Tobin.
On 23 November 2021:
(a) MBL, Century Mining Ltd (‘Century Mining’) (as borrower), New Century (as an original obligor), Argonaut (as original surety) and GLASAN (as security trustee) and others entered into the EBF;
(b) GLASAN, Century Mining, New Century, Century Bull and CMRP and others entered into a general security deed;
(c) Century Mining, CMRP, RoyaltyOne and GLASAN executed a deed of covenant; and
(d) CMRP and RoyaltyOne executed an interest side deed.
B.4 New Century share offer
In late 2021, New Century took steps to raise equity capital through the issue of fully paid ordinary shares (‘Share Offer’). Jefferies (Australia) Pty Ltd (‘Jefferies’) and Canaccord Genuity (Australia) Limited (‘Canaccord’) were both considered by New Century to potentially become underwriters for the Share Offer.
Earlier, on 26 October 2020, New Century and Jefferies had executed a confidentiality deed with respect to New Century’s potential acquisition of the Mt Lyell mine (‘Jefferies Confidentiality Deed’).
On 22 October 2021, New Century signed a mandate appointing Canaccord Genuity (Australia) Limited (‘Canaccord’) and Jefferies to act as joint lead managers and underwriters in respect of the Share Offer.
On or about 13 October 2021, New Century provided the Report to Canaccord and Jefferies by providing access to New Century’s virtual data room.
On 27 October 2021, Canaccord and Jefferies executed an underwriting agreement whereby New Century appointed Canaccord and Jefferies as underwriters to manage the Share Offer (‘Underwriting Agreement’).
C. THE PRIVILEGE DISPUTE
C.1 How the dispute arose
On 7 August 2024, the CMRP Parties filed and served a witness outline of Mr Wilcox.
On 13 September 2024, the RoyaltyOne Parties filed and served four witness outlines, including the Second Outline and the documents it referred to.
On 5 November 2024, the CMRP Parties filed and served a witness outline of Mr Chamberlain (‘Chamberlain Outline’).
The Second Outline refers at [143] to a video-conference held between representatives of New Century’s ultimate holding company, Sibanye Stillwater Limited and solicitors from Ashurst.
The Second Outline refers to the Report at [122] as follows:
Gilbert + Tobin – the lawyers acting for New Century Resources and its subsidiaries – prepared a due diligence report on New Century Resources and its operations for the purposes of the EBF Refinancing. The report referred to the Royalty Deeds in its analysis of material contracts. [ROYO.003.001.0402]
On 17 September 2024, the CMRP Parties wrote to the RoyaltyOne Parties asserting a privilege claim on behalf of New Century over the Report.
On 1 October 2024, the CMRP Parties wrote to the RoyaltyOne Parties asserting a privilege claim on behalf of Sibanye Stillwater Limited, over the contents of the Second Outline [143]. As mentioned earlier, the RoyaltyOne Parties no longer contest this claim.
C.2 An overview of the parties’ submissions
The RoyaltyOne Parties submitted that the CMRP Parties have waived the privilege attaching to the Report in at least three ways:[3]
[3]In their written submissions, the RoyaltyOne Parties also argued that the CMRP Parties had waived privilege in the Report by filing pleadings which positively plead New Century’s lack of knowledge of matters referred to in the Report. This argument was abandoned in oral submissions: Transcript of Proceedings (3 March 2025) 57.2–57.7.
(a) by disclosing the Report to the EBF Parties;
(b) by disclosing the Report to Canaccord and Jefferies; and
(c) by filing the Chamberlain Outline containing a summary of evidence which conveys that New Century had not received legal advice in respect of the royalty deeds before October 2022.
The CMRP Parties’ overarching position in respect of the disclosures to the EBF Parties, Canaccord and Jefferies is that those disclosures were in each case subject to terms of confidentiality that made each disclosure a ‘confidential communication’ within the meaning of s 122(5)(a)(i) of the Act. For that reason, they submitted that privilege cannot have been waived by those disclosures.
The RoyaltyOne Parties contended that the various disclosures, taken as a whole, reveal considerably more than a disclosure of the substance of the evidence in the course of a ‘confidential communication’ within the meaning of s 122(5)(a)(i). They submitted that this was not a case of someone merely disclosing the substance of their legal advice to another person for a particular and confined purpose, under cover of a strict confidentiality agreement. Rather, this was a case of multiple disclosures to various contractual counterparties of New Century, each of whom had interests divergent from those of New Century, for the express purpose of the recipients relying on the contents of the Report disclosed, even being permitted to sue New Century or its lawyers on the contents of the Report and being at liberty to disclose the Report to others. They submitted that, while it is true that these were disclosures made pursuant to confidentiality agreements, that alone does not answer the question determinatively.[4]
[4]Transcript of Proceedings (3 March 2025) 56.6–56.25.
The Chamberlain Outline states that Mr Chamberlain told Robert Cooper —Mr Walta’s successor as New Century’s Managing Director — that ‘the obligation to pay the royalty had not, to Chamberlain’s knowledge, ever been the subject of verification by the company or independent legal advice’.[5]
[5]Witness Outline of Mark Norman Chamberlain, filed on behalf of the Plaintiffs in S ECI 2023 04759 on 5 November 2024, 4 [10].
The CMRP Parties contended that the Chamberlain Outline merely records a conversation without asserting its truth and that if it did, it would be inadmissible hearsay. They argued that even if taken as factual, it would not contradict the Report, which contains disclaimers assuming the validity of agreements rather than analysing their enforceability.
The RoyaltyOne Parties argued that the CMRP Parties waived privilege by filing the Chamberlain Outline because it directly contradicts the Report which contains legal advice about the royalty obligation, creating fundamental inconsistency and forensic unfairness if RoyaltyOne cannot cross-examine using the Report.
D. LEGAL PRINCIPLES
Division 1 of pt 3.10 of the Act relevantly provides as follows:
117Definitions
(1)In this Division—
client includes the following—
…
(b)an employee or agent of a client;
…
confidential communication means a communication made in such circumstances that, when it was made—
(a)the person who made it; or
(b)the person to whom it was made—
was under an express or implied obligation not to disclose its contents, whether or not the obligation arises under law;
confidential document means a document prepared in such circumstances that, when it was prepared—
(a)the person who prepared it; or
(b)the person for whom it was prepared—
was under an express or implied obligation not to disclose its contents, whether or not the obligation arises under law;
…
118 Legal advice
Evidence is not to be adduced if, on objection by a client, the court finds that adducing the evidence would result in disclosure of—
(a)a confidential communication made between the client and a lawyer; or
(b)a confidential communication made between 2 or more lawyers acting for the client; or
(c)the contents of a confidential document (whether delivered or not) prepared by the client, lawyer or another person—
for the dominant purpose of the lawyer, or one or more of the lawyers, providing legal advice to the client.
…
122 Loss of client legal privilege—consent and related matters
(1)This Division does not prevent the adducing of evidence given with the consent of the client or party concerned.
(2)Subject to subsection (5), this Division does not prevent the adducing of evidence if the client or party concerned has acted in a way that is inconsistent with the client or party objecting to the adducing of the evidence because it would result in a disclosure of a kind referred to in section 118, 119 or 120.
(3)Without limiting subsection (2), a client or party is taken to have so acted if—
(a)the client or party knowingly and voluntarily disclosed the substance of the evidence to another person; or
(b)the substance of the evidence has been disclosed with the express or implied consent of the client or party.
(4)The reference in subsection (3)(a) to a knowing and voluntary disclosure does not include a reference to a disclosure by a person who was, at the time of the disclosure, an employee or agent of the client or party or of a lawyer of the client or party unless the employee or agent was authorised by the client, party or lawyer to make the disclosure.
(5)A client or party is not taken to have acted in a manner inconsistent with the client or party objecting to the adducing of the evidence merely because—
(a)the substance of the evidence has been disclosed—
(i)in the course of making a confidential communication or preparing a confidential document; or
(ii)as a result of duress or deception; or
(iii)under compulsion of law; or
(iv)if the client or party is a body established by, or a person holding an office under, an Australian law—to the Minister, or the Minister of the Commonwealth, the State or Territory, administering the law, or part of the law, under which the body is established or the office is held; or
(b)of a disclosure by a client to another person if the disclosure concerns a matter in relation to which the same lawyer is providing, or is to provide, professional legal services to both the client and the other person; or
(c)of a disclosure to a person with whom the client or party had, at the time of the disclosure, a common interest relating to the proceeding or an anticipated or pending proceeding in an Australian court or a foreign court.
…
The principles governing the waiver of client legal privilege at common law were explained in Mann v Carnel (‘Mann’),[6] where the High Court stated:
It is inconsistency between the conduct of the client and maintenance of the confidentiality which effects a waiver of the privilege. …
Waiver may be express or implied. … What brings about the waiver is the inconsistency, which the courts, where necessary informed by considerations of fairness, perceive, between the conduct of the client and maintenance of the confidentiality; not some overriding principle of fairness operating at large.[7]
[6]Mann v Carnell (1999) 201 CLR 1 (‘Mann’).
[7]Ibid 13 [28]–[29] (Gleeson CJ, Gaudron, Gummow and Callinan JJ) (citations omitted).
Section 122 of the Act uses the term ‘loss’ of client legal privilege rather than ‘waiver,’ despite being based on the common law principles expressed in Mann. ‘Loss’ is a more appropriate term since ‘waiver’ suggests deliberate action by the privilege holder, even though concepts like implied or imputed waiver acknowledge that privilege can be surrendered unintentionally.
Although the common law and s 122 are closely related, the court must apply the text of the Act and direct itself to the statutory test, namely whether the party has ‘acted in a way that is inconsistent with … objecting’ to the adducing of the evidence.[8]
[8]Viterra Malt Pty Ltd v Cargill Australia Ltd (2018) 58 VR 333, 344 [43] (Whelan, Kyrou and McLeish JJA).
The burden of proof is on the party who asserts privilege has been lost. However, to the extent that a party claiming privilege relies on one of the qualifications to loss of privilege contained in s 122(5), the burden of proof shifts to that party to prove that one of those qualifications apply.[9]
[9]Hodgson v Amcor Ltd (2011) 32 VR 568, 574–6 [13]–[22] (Vickery J) (‘Hodgson’).
The parties disagreed concerning the proper interpretation of s 122(5) of the Act.
Counsel for the CMRP Parties, Mr Weinstock (appearing with Ms Weinberg), submitted that s 122(5) should be read as a deeming provision. He argued that while s 122(3) deems certain conduct to be inconsistent within the meaning of s 122(2), s 122(5) deems a disclosure of the substance of legal advice in the course of a confidential communication as not being inconsistent within the meaning of s 122(2).[10] He relied on the reasons of Daly AsJ in Fonterra Brands Australia Pty Ltd v Bega Cheese Ltd (No 4),[11] where her Honour stated:
The use of the word ‘merely’ indicates that, if a person discloses the substance of its legal advice in the course of a confidential communication, this is not a complete answer to the question of whether there has been a waiver of legal privilege.[12]
[10]Transcript of Proceedings (3 March 2025) 94.18–94.25.
[11]Fonterra Brands Australia Pty Ltd v Bega Cheese Ltd (No 4) [2020] VSC 16.
[12]Ibid [69].
Mr Weinstock submitted that, where legal advice has been disclosed in the course of making a confidential communication, privilege may still be waived, but only by some other act that is inconsistent with objecting to the adducing of the evidence.[13] Mr Weinstock submitted that if acting in the course of making a confidential communication could itself constitute an act of inconsistency within the meaning of s 122(2), then s 122(5)(a)(i) would have no work to do.
[13]Transcript of Proceedings (3 March 2025) 94.18–94.25.
Senior counsel for the RoyaltyOne Parties, Mr Borsky KC (appearing with Mr Willoughby), argued that s 122(5) merely prevents the automatic loss of privilege that would otherwise occur under s 122(3),[14] but does not prevent the court from finding privilege has been lost under the general inconsistency test in s 122(2). He characterised the CMRP Parties’ position as incorrectly suggesting that once a disclosure is found to be a ‘confidential communication’, the court cannot consider it at all when assessing inconsistency. Mr Borsky KC contended this interpretation contradicts the approach of the High Court’s decision in Mann,[15] which requires examining all circumstances of a disclosure to determine inconsistency with maintaining privilege, even when that disclosure occurs in a confidential context.
[14]Ibid 52.22–52.28.
[15]Ibid 54.25–55.4.
I do not accept that s 122(5) functions as a deeming provision like s 122(3). The critical difference lies in the statutory language. Section 122(3) states that a client ‘is taken to have’ acted inconsistently with maintaining privilege in certain circumstances, creating an automatic deemed loss of privilege. In contrast, s 122(5) states that a client ‘is not taken to have acted’ inconsistently merely because of certain conduct.
This distinction in wording is significant. If s 122(5) were intended as a counter-deeming provision (definitively establishing no loss of privilege), it would have been worded ‘is taken not to have acted inconsistently’. Instead, the placement of ’not’ before ‘taken to have acted’ indicates s 122(5) simply neutralises the automatic deeming effect of s 122(3) for certain confidential disclosures.
Therefore, s 122(5) merely prevents confidential communications from automatically triggering a loss of privilege under s 122(3), without preventing the court from finding inconsistency under the general test in s 122(2) based on all the relevant circumstances.
If a privilege holder establishes that their conduct falls within s 122(5), this only means the disclosure is not automatically deemed inconsistent under s 122(3). The court must still determine whether, considering all the relevant circumstances, they have acted inconsistently with maintaining privilege under the general test in s 122(2). This question must be resolved on the balance of probabilities with clear and unequivocal evidence.[16]
[16]Hodgson (2011) 32 VR 568, 576 [24] (Vickery J); Evidence Act 2008 (Vic) s 142.
The word ‘merely’ in s 122(5)(a)(i) is crucial to this interpretation. It signals that while a confidential disclosure alone doesn’t automatically constitute inconsistency, the nature and circumstances of that disclosure may still demonstrate inconsistency with maintaining privilege when analysed under s 122(2).
As Matthews AsJ (as her Honour then was) said in Andrianakis v Uber Technologies Inc ‘[t]he use of the word “merely” in that section indicates that privilege may be lost in appropriate circumstances, notwithstanding the confidential basis of the disclosure’.[17]
[17][2022] VSC 196, [170] (citations omitted).
E. HAS PRIVILEGE IN THE REPORT BEEN LOST?
E.1 Disclosure to the EBF Parties
The CMRP Parties’ position is that the disclosures of the Report to the EBF Parties were confidential communications within the meaning of s 122(5)(a)(i) of the Act because:
(a) in the case of GLASAN, the disclosure was subject to the terms of GLASAN’s reliance letter;
(b) in the case of MBL, the disclosure was subject to the terms of the MBL Confidentiality Agreement already in place or, alternatively, was made subject to the terms of MBL’s reliance letter; and
(c) in the case of Argonaut, the disclosure was subject to the terms of a confidentiality undertaking previously made by Argonaut or, alternatively, was made subject to the terms of Argonaut’s reliance letter.
Although the reliance letters are relevant to all three EBF Parties, I will primarily focus on that executed by GLASAN as MBL and Argonaut are subject to other alleged confidentiality obligations in addition to the reliance letters.
E.1.1 Disclosure to GLASAN
GLASAN had not executed a confidentiality agreement prior to receiving the Report. GLASAN executed a reliance letter on 22 November 2021.[18]
[18]Application Book, 614.
The introduction of the Report, under the sub-heading ‘Reliance on the Report’, relevantly reads:
This Report is confidential and may not, without the prior written consent of G+T, be disclosed (whether in whole or in part) under any circumstances to any Person. …
To the extent that any party other than NCZ wishes to rely on this Report, that third party will need to execute and return to G+T a Reliance Letter in the form set out in Schedule 5 (Form of Reliance Letter).[19]
[19]Ibid 1017–18.
The reliance letter relevantly stated:
2Basis for reliance
Your reliance on the Report (Reliance) is subject to the following:
…
(k)subject to paragraph 4.2 (Confidentiality of this letter), the Report is subject to legal professional privilege and you must maintain the Report in strictest confidence. Our Client does not waive any claim for legal professional privilege which it may have in respect of the Report;
…
3Limitation of liability
(a)Our liability to you in connection with the Report (in aggregate with all other claims (excluding claims by our Client) against us in connection with the Report that have been upheld, conceded or compromised (Other Claims)) shall be limited to a maximum liability equal to A$5,000,000 (not including GST) (Maximum Liability). …
(e)We shall have no liability in respect of any claim arising from or in connection with the Report unless we are given written notice of the claim (including full details of the claim and the amount claimed) within 24 months from the date of the Report. You agree to release us from all claims arising from or in connection with the Report not notified as required within that period.
…
4Confidentiality
4.1Confidentiality of the Report
(a)The contents of the Report are confidential and may not be duplicated or disclosed under any circumstances to any other person other than as set out in this letter or otherwise with our prior written consent.
(b)You may make copies of the Report available to each of your affiliates, related bodies corporate, directors, officers, employees and professional advisers (including financial, accounting, industry and legal advisers), provided that, in each case, you take reasonable steps to ensure that they understand and agree that:
(i)the Report is confidential and may not be disclosed to any other person without our prior written consent (which may be withheld in our absolute discretion);
(ii)the Report is provided to them under the terms of this letter; and
(iii)such persons may not rely on the Report; that is, reliance on the Report is limited to you in accordance with paragraph 5 (Reliance).
(c)In addition, you may disclose the Report, on a non-reliance basis only, if required to do so by law, regulation, a regulatory authority, rating agency, legal or judicial process or the rules of any stock exchange on which your shares are listed or to seek or establish any cause of action or defence in any legal proceeding or investigation. In those circumstances, so long as it is lawful and practical to do so, you must give us such prior notice as is reasonable of the intended disclosure and limit the disclosure of the contents of this letter and of the Report to the minimum required (in your reasonable assessment) to meet such requirements.
4.2Confidentiality of this letter
The terms of this letter are confidential and may not be shown, copied, quoted, duplicated, referred to in any public document or given to, or disclosed to, any person other than:
(a)your affiliates and related bodies corporate, and each of your and their directors, officers, employees, professional advisers (including financial, accounting, industry and legal advisers) and agents, provided that you ensure that such persons understand that this letter is confidential and may not be disclosed to any other person without our prior written consent;
(b)in the course of enforcing your rights under this letter; or
(c)as required by law, regulation, a regulatory authority, rating agency or legal or judicial process or the rules of any stock exchange or to seek or establish any cause of action or defence in any legal proceeding or investigation, or if requested by any prudential authority,
without our prior written consent. In the circumstances described in paragraph (c) above, so long as it is lawful and practical to do so, you must give us such prior notice as is reasonable of the intended disclosure and limit the disclosure of the contents of this letter to the minimum required (in your reasonable assessment) to meet such compliance.[20]
[20]Application Book, 609–12.
Mr Weinstock submitted that, while the reliance letter allows disclosure of the Report, it only does so in limited circumstances. The Report must be relevant to a fact in issue on the defence or the cause of action and, even then, disclosure must be limited, as stipulated from the second last line of cl 4.2, to the minimum required in GLASAN’s reasonable assessment to meet such requirements. Outside such requirements, there is no right to disclose the contents of the Report. In Mr Weinstock’s submission, disclosure of the Report to GLASAN under such terms is a confidential communication within the meaning of s 117 of the Act.
Mr Borsky KC accepted that the reliance letter imposed a confidentiality obligation, but argued that the nature of the obligation was still such as to make the Report’s disclosure to GLASAN (and, indeed, the other EBF Parties, to the extent the disclosure of the Report was subject to their respective reliance letters) inconsistent with New Century’s maintenance of privilege.[21] Mr Borsky KC submitted, first, that cl 3 of the reliance letter illustrates a divergence in interests between New Century and GLASAN — it was not the case of a confidential disclosure to someone within the privilege holder’s camp.[22] Secondly, Mr Borsky KC submitted that cl 4.1 of the reliance letter gave the recipient of the Report the right to transmit it further, to rely on it and to sue the privilege holder in respect to its contents.[23] He argued that these elements together diminished its confidentiality to the point that disclosure under the reliance letter was inconsistent with the maintenance of privilege over it.
[21]Transcript of Proceedings (3 March 2025) 68.1–68.10.
[22]Ibid 65.1–65.8.
[23]Ibid 68.13–68.15.
In reply, Mr Weinstock relied on Australian Securities and Investments Commission v Australian Lending Centre Pty Ltd (No 2) (‘ASIC v Australian Lending Centre’).[24] In that case, Perram J addressed s 127 of the Australian Securities and Investments Commission Act 2001 (Cth) (‘ASIC Act’). Mr Weinstock argued by analogy that the exceptions in the reliance letter emphasised by the RoyaltyOne Parties are far less numerous and far less discretionary than the totality of the exceptions in s 127 of the ASIC Act. Still, as Perram J found, there remained in s 127 an obligation of confidence on ASIC.[25]
[24][2011] FCA 1057 (‘ASIC v Australian Lending Centre’).
[25]Transcript of Proceedings (3 March 2025) 19.7–19.12.
Although the reliance letter purports to impose a confidentiality regime, I consider that its terms are inconsistent with the maintenance of client legal privilege over the Report. In disclosing the Report to GLASAN subject to the terms of the reliance letter, the CMRP Parties acted in a way that is inconsistent with it now objecting to the Report being adduced in evidence. I take this view for the following reasons.
First, client legal privilege exists primarily to protect confidential communications between lawyers and clients, allowing clients to obtain legal advice without fear that such advice might later be used against them. The reliance letter expressly allowed GLASAN to disclose the report ‘to seek or establish any cause of action or defence in any legal proceeding’. It explicitly contemplated GLASAN using the information in adversarial proceedings against the privilege holder or its lawyers, thereby creating a fundamental tension with maintaining privilege, which normally protects legal advice from potential adversaries. In disclosing the Report to GLASAN in these circumstances, the CMRP Parties undermined the essential purpose of the privilege by deliberately placing the privileged legal advice in the hands of a potential adversary with explicit permission to rely on that advice.
Secondly, the reliance letter permitted GLASAN to share the report with affiliates, directors, employees and advisors with minimal restrictions, significantly expanding the circle of confidentiality. GLASAN was only required to take ‘reasonable steps’ to ensure recipients understood their confidentiality obligations, but there was no requirement for written confidentiality agreements from secondary recipients and no limit on the number of people within these broad categories who could access the Report.
Thirdly, the CMRP Parties’ reliance on ASIC v Australian Lending Centre is strained, as the statutory confidentiality obligations in that case are materially different from the commercial arrangements here which expressly contemplated reliance on and potential litigation based on the Report. In ASIC v Australian Lending Centre, the exceptions primarily allowed ASIC to share information with other regulatory bodies and were not designed to enable recipients to rely on the information for their commercial decisions or to potentially bring litigation against ASIC or the original information provider.
E.1.2 Disclosure to MBL
The MBL Confidentiality Agreement, made between MBL and New Century (as ‘Counterparty’) on 3 August 2021 relevantly provided:
Background:
Macquarie (the “Recipient”) wishes to obtain, and the Counterparty (the “Discloser”) agrees that it may disclose, information that is confidential to the Discloser (and its Affiliates (as defined below)) for the sole purpose of Macquarie and its Affiliates considering whether to provide finance … to … the Counterparty or its Affiliates in relation to the Counterparty’s zinc mining operations at the Century Mine in Queensland …
The parties agree:
1.In this Agreement:
…
(b)“Confidential Information” means any information relating to the Approved Purpose, in any form whatsoever, made available to the Recipient by the Discloser (whether on or after execution of this Agreement) …
…
3.The Recipient agrees to, subject to the terms of this Agreement:
(a)keep the Confidential Information confidential and ensure that it does not disclose or permit the disclosure of the Confidential Information to any person (except as provided for in clause 4);
(b)take steps that are reasonably necessary, prudent or desirable in order to safeguard the confidentiality of the Confidential Information (including to establish and maintain effective security measures to safeguard all Confidential Information from unauthorised access, use, copying, disclosure, damage or destruction); and
(c)not use the Confidential Information for any purpose other than the Approved Purpose (without the prior written consent of the Discloser).
4.The Recipient may disclose the Confidential Information:
(a)to any of its Representatives to the extent they need to know the Confidential Information for the Approved Purpose, provided that the Recipient:
(i)makes such Representative aware of the terms of this Agreement; and
(ii)procures that such Representative complies with this Agreement;
(b)to any of its Professional Advisers or any Risk Participant, provided that such Professional Adviser or Risk Participant is subject to an obligation of confidentiality under terms no less onerous than those contained in this Agreement, whether contractual or otherwise, with respect to such Confidential Information;
(c)where the disclosure is requested by any legislative, judicial or administrative body of competent jurisdiction or required by any law, rule or regulation, provided that, to the extent practicable and if lawfully permitted to do so, the Recipient will give prompt written notice of such requirement to the Discloser to enable it to seek a protective order or other remedy; or
(d)with the prior written consent of the Discloser.[26]
[26]Application Book, 283–4.
Mr Weinstock submitted that the disclosure of the Report pursuant to the MBL Confidentiality Agreement, particularly cl 3 therein, is a confidential communication as defined in s 117 of the Act and therefore, by operation of s 122(5)(i)(a), cannot constitute an act of inconsistency pursuant to that section.[27]
[27]Transcript of Proceedings (3 March 2025) 11.2–11.6
The RoyaltyOne Parties did not directly address the MBL Confidentiality Agreement in either their written or oral submissions. They relied on the fact that New Century had disclosed the Report to the EBF Parties subject to the terms of the reliance letters issued to them.
If MBL had received the Report subject only to the terms of the MBL Confidentiality Agreement, I do not consider that would have resulted in a loss of the privilege attached to it. Such a disclosure would have been a ‘confidential communication’ within the meaning s 117 of the Act.
However, for the reasons I have set out above in respect of the disclosure to GLASAN, by making the disclosure to MBL subject to the terms of the reliance letter, the CMRP Parties acted in a way that is inconsistent with it now objecting to the Report being adduced in evidence.
E.1.3 Disclosure to Argonaut
A ‘mandate letter’ from MBL to New Century dated 29 July 2021 relevantly stated:
Introduction
Macquarie Bank Limited (Macquarie) is pleased to present New Century Resources Limited ABN 53 142 165 080 (New Century) with this engagement and mandate letter (the Letter) to act as sole arranger for a performance bond facility [which was to be the EBF] and corporate loan facility (the Facilities) to refinance and fund the Century zinc operations in Queensland…
This Letter sets out the terms of Macquarie’s appointment as sole arranger of the Facilities and the terms upon which Macquarie will carry out the Mandate …
7. Confidentiality
By Macquarie
The parties acknowledge that the Confidentiality Agreement between Macquarie and New Century dated on or around the date of this Letter applies to any confidential information provided by New Century pursuant to and in connection with the Mandate.
For the avoidance of doubt, the parties acknowledge and agree that Macquarie may disclose any confidential information obtained under the terms of this Letter to:
…
(b)to any risk participants or potential syndicate members which would be permitted under the “Assignment” clause of the Indicative Term Sheet (“Participants”), provided such parties have signed a confidentiality undertaking in the form of Schedule 1.[28]
[28]Application Book, 1148, 1151–2.
Argonaut executed the confidentiality undertaking as a deed poll in the form provided for in sch 1 to the mandate letter on 3 August 2021.[29] That confidentiality undertaking relevantly stated:
[29]Ibid 1158.
Confidentiality undertaking by
Argonaut Insurance Company of 225 W. Washington St, 24th Floor, Chicago, IL 60606 (Applicable Specified Person)
in favour of
Macquarie Bank Limited ABN 46 008 583 542 (Recipient) and New Century Resources Limited ABN 53 142 165 080 (Discloser)
Under a confidentiality agreement (Confidentiality Agreement) dated on or about 3 August 2021 made between the Discloser and the Recipient, the Recipient can only provide Confidential Information to officers or employees of the Applicable Specified Person after the Applicable Specified Person has entered into this undertaking.
The Applicable Specified Person agrees that it:
(a)has received and read a copy of the Confidentiality Agreement; and
(b)will comply with the obligations of the Recipient in the Confidentiality Agreement as if those obligations were also imposed personally,
The ‘Confidentiality Agreement’ referred to in Argonaut’s undertaking was the MBL Confidentiality Agreement.
Mr Weinstock submitted that because the report was disclosed to Argonaut on 11 October 2021, after Argonaut had given its confidentiality undertaking, the disclosure was made pursuant to that undertaking and Argonaut was therefore under an obligation not to disclose its contents in the form of MBL’s obligations not to disclose its contents.[30]
[30]Transcript of Proceedings (3 March 2025) 13.27–14.2.
As with the MBL Confidentiality Agreement, the RoyaltyOne Parties did not directly address Argonaut’s confidentiality undertaking. They again relied on the fact that New Century had disclosed the Report to the EBF Parties (including Argonaut) subject to the terms of the reliance letters issued to them.
If Argonaut had received the Report subject only to the terms of Argonaut’s confidentiality undertaking and the MBL Confidentiality Agreement, I do not consider that would have resulted in a loss of the privilege attached to it. Such a disclosure would have been a ‘confidential communication’ within the meaning of s 117 of the Act.
However, for the reasons I have set out above in respect of the disclosure to GLASAN, by making the disclosure to Argonaut subject to the terms of the reliance letter, the CMRP Parties acted in a way that is inconsistent with it now objecting to the Report being adduced in evidence.
E.2 Disclosure to Canaccord and Jefferies
The CMRP Parties’ position is that the disclosure of the Report to both Canaccord and Jefferies was a confidential communication within the meaning of s 122(5)(a)(i) of the Act because the disclosure was, in both cases, subject to respective Confidentiality Deeds, terms of access to the virtual data room and the Underwriting Agreement.
E.2.1 Jefferies Confidentiality Deed
Both Canaccord and Jefferies assented to the same terms of access to the virtual data room through which the Report was provided and both signed the joint Underwriting Agreement.
Jefferies had earlier entered into a confidentiality deed with New Century on 26 October 2020.[31]
[31]Application Book, 1160.
The Jefferies Confidentiality Deed relevantly provided:
1.1 Definitions
In this Deed the following terms shall bear the following meanings:
…
Authorised Purpose means purposes connected with the evaluation, consideration, investigation, assessment and implementation of a potential transaction between New Century and Vedanta regarding the Mt Lyell Mine.
Confidential Information means all information that is disclosed or made available, whether directly or indirectly and whether before or after the date of this Deed, by the Discloser to the Recipient or its Affiliates and their respective Representatives under or in connection with this Deed or in connection with the Authorised Purpose, including the Vedanta Confidential Information, the existence and content of this Deed and the fact that negotiations are occurring or may occur in relation to the Authorised Purpose, but does not include information:
(a)that is in the public domain at the time of entering into this Deed; or
(b)which at the time of signing this Deed, the Recipient can demonstrate is already known to the Recipient, its Affiliates or the Representatives (other than information contained on a confidential basis from the Discloser).
…
2.4 Recipient’s acknowledgements
The Recipient acknowledges that:
(a)the Confidential Information is secret and confidential to the Discloser and must be held in strict confidence;
(b)it must take all necessary and suitable measures and actions to effectively protect the Confidential Information at any time against loss as well as against unauthorised access;
(c)this Deed does not convey any interest of a proprietary or any other nature in the Confidential Information to the Recipient or to any person to whom the Recipient is entitled to disclose the Confidential Information under this Deed; and
(d)nothing in this Deed obliges the Discloser to disclose any particular information to the Recipient.
2.5 Authorised Purpose
(a)The Recipient may only access and use the Confidential Information solely for the Authorised Purpose and may only disclose the Confidential Information:
(i)to its Affiliates and the Representatives that have a specific need to have access to the Confidential Information for the Authorised Purpose and who:
(A)have been made aware of the terms upon which the Confidential Information has been disclosed to the Recipient; and
(B)are obliged and bound to treat the Confidential Information in substantially the same manner and to the same extent as is provided for on the part of the Recipient under this Deed;
(ii)in accordance with clause 3; or
(iii)with the prior written consent of the Discloser.
(b)The Recipient, its Affiliates and the Representatives must keep the Confidential Information secure and protect the Confidential Information from unauthorised use, disclosure, access and damage or destruction.
On 30 September 2021, Mr Walta wrote to Nick Chappel, Managing Director, Natural Resources, Australia of Jefferies, ‘I assume our existing CA would cover us for the purposes of this equity raise’, referring to the Share Offer.[32] Mr Chappel replied, the same day, ‘Yes our reading of the existing CA is that we are covered – attached for your reference’.[33] What was attached was the Jefferies Confidentiality Deed.
[32]Application Book, 1171–2.
[33]Ibid 1171.
Mr Weinstock submitted that, even if Mr Chappel’s reading of the Jefferies Confidentiality Deed was wrong, his agreement with Mr Walta that it ‘would cover us for the purpose of this equity raise’ entailed a variation to that effect. Alternatively, they proceeded on the common assumption that it would, estopping either party from denying that assumption.[34]
[34]Reply Submissions filed by CMRP on 27 February 2025, 14 [39] (‘CMRP Reply Submissions’).
The RoyaltyOne Parties did not directly address the Jefferies Confidentiality Deed in their written or oral submissions.
If Jeffries had received the Report subject only to the terms of the Jefferies Confidentiality Deed, I do not consider that would have resulted in a loss of the privilege attached to it. Such a disclosure would have been a ‘confidential communication’ within the meaning s 117 of the Act.
E.2.2 Canaccord confidentiality deed
No confidentiality deed between Canaccord and New Century was put before the Court. Mr Weinstock nonetheless submitted that Canaccord was subject to obligations materially the same as those undertaken by Jefferies in the Jefferies Confidentiality Deed. This is because, said Mr Weinstock, New Century’s ‘usual practice’ was that, before any third party got access to the virtual data room, New Century would obtain from the third party a confidentiality agreement in the form of New Century’s standard confidentiality deed (which is in the same terms as the Jefferies Confidentiality Deed). Mr Weinstock submitted that, because there is no evidence that this practice was not followed in this case, the Court should infer that it was, concluding that Canaccord entered into a confidentiality deed under New Century’s standard terms.[35]
[35]CMRP Reply Submissions, 17 [42].
The RoyaltyOne Parties did not directly address the absence of any evidence of a confidentiality deed between Canaccord and New Century. I am prepared to accept that it is more likely than not that New Century obtained a confidentiality agreement in the form of New Century’s standard confidentiality deed before granting Canaccord access to the virtual data room.
If Canaccord had received the Report subject only to the terms of New Century’s standard confidentiality deed, I do not consider that would have resulted in a loss of the privilege attached to it. Such a disclosure would have been a ‘confidential communication’ within the meaning s 117 of the Act.
E.2.3 Canaccord and Jefferies – virtual data room terms of access
Both Canaccord and Jefferies were given access to the Report through New Century’s virtual data room. On the evidence of Crispian Lynch of Gilbert + Tobin, solicitor for the CMRP Parties, when a representative of any third party accessed the virtual data room, the terms of access would pop up on a computer screen and the representative was required to agree to those terms by ticking a box before they could access the virtual data room.[36]
[36]Application Book, 1144 [17](c).
The terms of access relevantly stated:
TERMS OF ACCESS
…
I understand that the information contained in or accessible from the Online Data Room is subject to the terms and conditions of the confidentiality deed between the Recipient and the Company ("Confidentiality Deed") and the Data Room Rules set out below.
…
DATA ROOM RULES
…
Confidentiality & Privacy
All Information in the VDR, any additional data provided during the Q&A procedure and all notes or other records prepared therefrom in whatever form are confidential and subject to the terms and conditions of the respective Confidentiality Deed. Each User shall maintain the Information and any additional data provided in strict confidence and shall not disclose any of the Information or any additional data provided to others except as expressly permitted by the Confidentiality Deed.[37]
[37]Application Book, 710–13.
Access to the Report through New Century’s virtual data room was subject to the pre-existing confidentiality obligations contained in the confidentiality deeds obtained from Canaccord and Jefferies. As I have previously said, if Canaccord and Jefferies had received the Report subject only to the terms of New Century’s standard confidentiality deed, I do not consider that would have resulted in a loss of the privilege attached to it.
However, that is not the end of the matter as both Canaccord and Jefferies subsequently entered into an Underwriting Agreement with New Century which must also be taken into account.
E.2.4 Canaccord and Jefferies – Underwriting Agreement
Both Canaccord and Jefferies entered into the Underwriting Agreement two weeks after the Report had been disclosed to them.
The Underwriting Agreement relevantly provided:
4.3Support and access
(a)Until Completion, the Company must provide all reasonable support (including procuring all necessary assistance from any other Group Member):
(1)subject to clause 2.3(a), in the appointment of any co-lead managers, sub-underwriter or brokers to the Offer; and
(2)in the marketing of the Offer as reasonably required by the Underwriters and subject to compliance with its obligations under the Listing Rules, the Corporations Act and all applicable laws, including:
(A)(support and access) providing reasonable access to, and procuring reasonable assistance from, the Company’s senior executives for the promotion, advertising or marketing of the Offer, and briefings as reasonably requested by the Underwriters; and
(B)(copies of Investor Presentation Materials) providing electronic copies and the number of printed copies of the version of the Investor Presentation Materials as the Underwriters reasonably requires from time to time.
…
6.2Due Diligence Committee and Due Diligence Documents
The Company must:
(a)until Completion, maintain and continue the operations of the Due Diligence Committee to assist in complying with its obligations under clause 6.1; and
(b)at any time provide the Underwriters with full and free access to, and on request, copies of the Due Diligence Report and all materials and documents used or created in connection with the Due Diligence Process (including the Management Questionnaire), on receipt of reasonable notice from the Underwriters, and the Company must maintain those materials and documents until the later of 7 years from Completion for that purpose and completion of any relevant Enquiry.
…
6.4Confidentiality and legal professional privilege
(a)Except for copies of the Due Diligence Report and all materials and documents used or created in connection with the Due Diligence Process, to which the Underwriters have full and free access, if the provision of any access, information, materials, assistance and facilities contemplated by clauses 6.3 or 6.5 would in the reasonable opinion of the Company's external Australian legal advisers, lead to a loss of legal professional privilege:
(1)the Company must use all reasonable endeavours to identify and then employ a method for providing maximum access, information, assistance or facilities to the Underwriters without the loss of legal professional privilege;
(2)if the Company considers that any access, information, materials, assistance or facilities cannot be provided under clauses 6.3 and 6.5, it must obtain an opinion from senior counsel to confirm that the access, information, materials, assistance or facilities could not be provided without the risk of loss of legal professional privilege;
(3)the Company may withhold any access, information, materials, assistance or facilities in order to prevent the loss of any legal professional privilege only if it has first complied with paragraphs (1) and (2) above; and
(4)the Underwriters must comply with any reasonable steps identified by the Company under paragraph (1) to preserve any legal professional privilege.
…
6.7Information provided
(a)The Company agrees and acknowledges that the Underwriters will use and rely on information provided by or on behalf of the Company and its Representatives and advisers (including financial and accounting information) in performing its obligations under this agreement without having independently verified the information and that Underwriters do not assume responsibility for the accuracy or completeness of the information or any other information on which they may rely in connection with this agreement.[38]
[38]Application Book, 667–8.
Mr Borsky KC emphasised the expression ‘full and free access’ in cl 6.2(b), arguing that this granted Canaccord and Jefferies unrestricted access to the Report. He also highlighted cl 6.4(a), which expressly exempted the ‘Due Diligence Report’ from mechanisms designed to preserve ‘legal professional privilege’ for other documents, submitting that this carve-out demonstrated that the parties had ‘turned their mind to the question of whether they ought try to preserve privilege in the due diligence report and the answer is a clear and unmistakable no’.[39] He also pointed to cl 6.7(a), which explicitly authorised the underwriters to ‘use and rely on’ the information (including the Report) in performing their obligations. Finally, he noted that these obligations included marketing the offer (cl 4.3(a)(ii)) and potentially appointing sub-underwriters (cl 2.3(a)(2)) and argued that this showed the disclosures went beyond merely confidential sharing to authorizing reliance and potential further distribution.
[39]Transcript of Proceeding (3 March 2025) 78.7–78.31.
Mr Weinstock relied on the fact that the Underwriting Agreement was signed two weeks after the Report had already been disclosed and argued that it ‘did no more than to promise a disclosure that had already happened’ subject to confidentiality obligations. He characterised cls 6.2(b) and 6.4(a) as merely ‘promising access’ that had already been provided on a confidential basis. He submitted that the Underwriting Agreement could not retroactively remove confidentiality from disclosures that had already occurred.
As I have earlier stated, I do not consider that the initial disclosure of the Report to Canaccord and Jefferies resulted in a loss of the privilege attached to it. However, by later entering into the Underwriting Agreement, New Century significantly altered the basis on which Canaccord and Jefferies could access or use the Report and thereby acted in a way that was inconsistent with it maintaining privilege in the Report. This is so for the following reasons.
First, the Underwriting Agreement explicitly provided Canaccord and Jefferies with ‘full and free access’ to the Report,[40] which goes beyond mere confidential disclosure. The phrase ‘full and free access’ suggests complete access without reservation, constraints or conditions.
[40]Underwriting Agreement cl 6.2(b).
Secondly, while the Underwriting Agreement established a regime to preserve privilege in respect of ‘all materials and documents used or created in connection with the Due Diligence Process’,[41] the ‘Due Diligence Report’ (which included the Report) was specifically carved out from this privilege preservation regime.
[41]Ibid cl 6.4(a).
Thirdly, the Underwriting Agreement expressly authorised the underwriters to ‘use and rely on information provided’ (including the Report) in performing their obligations,[42] which included marketing the offer to third parties and potentially appointing sub-underwriters. This arrangement allowed the underwriters to make commercial decisions based on the legal advice contained in the Report and potentially share aspects of this information when marketing the offer or appointing sub-underwriters.
[42]Ibid cl 6.7(a).
E.3 Chamberlain Outline
The Chamberlain Outline filed by the CMRP Parties states that Mr Chamberlain will give the following evidence at trial in respect of a conversation between him and Mr Cooper:
[8]In or around October 2022, Chamberlain had discussion with Cooper about New Century’s cash position. Chamberlain and Cooper discussed concerns about New Century’s cash position due to the company’s operational performance, the pending amortisation of the Environmental Bond Facility (EBF) with Macquarie Bank, and the accumulating deferred royalty purportedly owed by CMRP to RoyaltyOne. Cooper asked Chamberlain to examine all of New Century’s current and proposed expenditure in working towards improving New Century’s cash position and maintaining solvency.
[9]Chamberlain understood that the royalty purportedly owed by CMRP to RoyaltyOne was calculated on a revenue basis, regardless of whether New Century was generating cash. Accordingly, while New Century had not paid a dividend to its shareholders in the period of its operation of the Century Mine, the royalty continued to accrue. Cooper expressed concerns to Chamberlain about the manner in which the royalties had continued to accrue, despite New Century’s financial position.
[10]Chamberlain told Cooper that the obligation to pay the royalty had not, to Chamberlain’s knowledge, ever been the subject of verification by the company or independent legal advice. Cooper said to Chamberlain that he wanted to ensure that CMRP was making payments only if it was legally obliged to do so.[43]
[43]Application Book, 973–4 [8]–[10].
Mr Borsky KC submitted that by filing and serving the Chamberlain Outline, which suggests that New Century had not received legal advice about the obligation to pay the royalty, the CMRP Parties have acted inconsistently with the maintenance of the privilege over that advice, being the Report. He submitted that to permit the CMRP Parties to lead that evidence while preventing the RoyaltyOne Parties from adducing or cross-examining by reference to contrary evidence (such as may be contained in the Report) would result in forensic unfairness.[44]
[44]Transcript of Proceedings (5 March 2025) 81.10–81.26.
Mr Weinstock submitted that the RoyaltyOne Parties mischaracterise the evidence proposed to be given by Mr Chamberlain. He argued that, on a plain reading of paragraph 10 of the Chamberlain Outline, the essential point is what Mr Chamberlain told Mr Cooper in October 2022. Evidence of that discussion is not led to prove its truth but to prove that the discussion occurred and when it occurred. If it were otherwise it would be hearsay and thus inadmissible, in which case the Report would not be needed to contradict it. Mr Weinstock submitted that the CMRP Parties have not put in issue the question of whether the obligation to pay the royalty had been verified by independent legal advice. Mr Weinstock further submitted that even if Mr Chamberlain were proposing to give evidence on whether the obligation to pay the royalty had been verified by independent legal advice, that evidence would not be contradicted by the Report which contains disclaimers that in preparing the Report, Gilbert + Tobin had ‘assumed except as otherwise specifically set out in this Report … the validity and enforceability of all agreements, contracts and other arrangements’.
A witness outline is intended to summarise the evidence on each topic or conversation on which the witness will give evidence (with sufficient detail of the substance of the evidence).[45] A witness outline does not constitute evidence but indicates in summary form what the witness will say.
[45]SC CC 1 Commercial Court (Second Revision) Practice Note [6.4].
Given this purpose, the argument that paragraph 10 of the Chamberlain Outline simply records a conversation rather than asserting a fact is technical and artificial. Because witness outlines must provide ‘sufficient detail of the substance of the evidence’, a reasonable interpretation of the Chamberlain Outline suggests the CMRP Parties are seeking to lead evidence that no legal advice existed on the royalty obligation. Whether New Century in fact received such advice is directly relevant to the issues in dispute having regard to the defences that have been pleaded to the claimed breaches of fiduciary and statutory duties against Mr Walta, Mr Carr and Mr Cranston.
The CMRP Parties’ reliance on the disclaimers and assumptions in the Report to argue that it contains no relevant legal advice appears strained. The particular disclaimer relied on is set out in sch 3 to the Report which contains several pages of standard form terms of that nature and is headed ‘Qualifications, disclaimer and assumptions’. Importantly, the particular disclaimer relied on contains the proviso ‘except as otherwise specifically set out in this Report’. As the Report specifically addresses the royalty deeds it is doubtful that the general disclaimer has any application to those deeds.
I consider that the CMRP Parties are acting inconsistently in seeking to lead evidence suggesting that no legal advice existed while simultaneously claiming privilege over the Report which appears to contradict this position. There is forensic unfairness in allowing the CMRP Parties to do this.
F. CONCLUSION
For these reasons, I have concluded that the Report may be adduced as evidence in the CMRP Proceeding and the RoyaltyOne Proceeding as the CMRP Parties have acted in a way that is inconsistent with them maintaining client legal privilege in the Report.
G. ORDERS
In view of their concession regarding the matters disclosed at [143] of the Second Outline, I will order in each proceeding that the RoyaltyOne Parties and Mr Cranston, their instructing solicitors and counsel destroy or delete all copies of the Second Outline (including any drafts that contain the matters disclosed at [143]) and that the Second Outline be removed from the Court file. Leave will be granted to the RoyaltyOne Parties to file and serve an amended version of the Second Outline removing any reference to the matters at [143].
The CMRP Parties’ summonses filed 12 and 13 February 2025 will otherwise be dismissed.
The parties are required to confer and, within seven days, either submit a consent minute in respect of the appropriate orders including as to costs or, failing agreement, file and serve submissions of no more than 3 pages addressing these matters.
---
SCHEDULE OF PARTIES
S ECI 2023 04674
BETWEEN:
| ROYALTYONE PTY LTD (ACN 611 602 530) | Plaintiff |
| v | |
| CENTURY MINE REHABILITATION PROJECT PTY LTD (ACN 614 818 683) | First Defendant |
| CENTURY MINING PTY LTD (ACN 006 670 300) | Second Defendant |
AND BETWEEN:
| CENTURY MINE REHABILITATION PROJECT PTY LTD (ACN 614 818 683) | First Plaintiff by Counterclaim |
| CENTURY MINING PTY LTD (ACN 006 670 300) | Second Plaintiff by Counterclaim |
| v | |
| ROYALTYONE PTY LTD (ACN 611 602 530) | First Defendant by Counterclaim |
| PATRICK WALTA | Second Defendant by Counterclaim |
| NEW CENTURY RESOURCES LTD (ACN 142 165 080) | Third Defendant by Counterclaim |
| GLOBAL LOAN AGENCY SERVICES AUSTRALIA NOMINEES PTY LTD (ACN 608 945 008) | Fourth Defendant by Counterclaim |
S ECI 2023 04759
BETWEEN:
| CENTURY MINE REHABILITATION PROJECT PTY LTD (ACN 614 818 683) | First Plaintiff |
| CENTURY BULL PTY LTD (ACN 614 817 686) | Second Plaintiff |
| SIBANYE STILLWATER AUSTRALIA OPERATIONS PTY LTD (formerly NEW CENTURY RESOURCES LTD (ACN 142 165 080)) | Third Plaintiff |
| v | |
| ROYALTYONE PTY LTD (ACN 611 602 530) | First Defendant |
| PATRICK WALTA | Second Defendant |
| JOHN CARR | Third Defendant |
| EVAN ALEXANDER GEORGE CRANSTON | Fourth Defendant |
AND BETWEEN:
| ROYALTYONE PTY LTD (ACN 611 602 530) | Plaintiff by Counterclaim |
| v | |
| CENTURY MINE REHABILITATION PROJECT PTY LTD (ACN 614 818 683) | Defendant by Counterclaim |
0
5
0