Sempra Metals & Concentrates Corp v Tritton Resources Ltd - [2006] NSWSC 1209

CITATION: Sempra Metals & Concentrates Corp v Tritton Resources Ltd [2006] NSWSC 1209
This decision has been amended. Please see the end of the judgment for a list of the amendments.

HEARING DATE(S): 9, 10 & 13 November 2006

JUDGMENT DATE :
13 November 2006

JURISDICTION: Equity

JUDGMENT OF: Hamilton J

DECISION: Interlocutory injunction granted.

CATCHWORDS: EQUITY [338] – Equitable remedies – Injunctions – Interlocutory injunctions – Balance of convenience – Adequacy of damages – Whether damages, if awarded, are likely to be paid.

CASES CITED: GE Capital Asset Services & Trading Asia Pacific Pty Ltd v Rocks Excavations & Plant Hire Pty Ltd [2003] NSWSC 99
Kolback Securities Ltd v Epoch Mining NL (1987) 8 NSWLR 533
Schering Pty Ltd v Forrest Pharmaceutical Co Pty Ltd [1982] 1 NSWLR 286
Meagher, Gummow and Lehane, Equity Doctrines and Remedies, 4th ed [21-210], [21-375]

PARTIES: Sempra Metals & Concentrates Corp (P)
Tritton Resources Limited (D1)
Carrington Facilities Pty Ltd (D2)
Straits Resources Limited (D3)

FILE NUMBER(S): SC 5482/06

COUNSEL: A J L Bannon SC & A S McGrath (P)
R M Smith SC & J C Giles (D1 & 3)
N J Beaumont (D2)

SOLICITORS: Henry Davis York (P)
Corrs Chambers Westgarth (D1 & 3)
Gadens Lawyers (D2)

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

HAMILTON J

MONDAY, 13 NOVEMBER 2006

5482/06 Sempra Metals & Concentrates Corp v Tritton Resources Limited & anor

JUDGMENT - On application for interlocutory injunction

1 HIS HONOUR: This is an application for an interlocutory injunction to restrain the first defendant from selling or disposing of copper concentrate and copper ore otherwise than to the plaintiff.

2 The plaintiff is an international metals dealer. The first defendant conducts a copper mine near Nyngan in the State of New South Wales. The second defendant conducts a warehouse at Newcastle. The third defendant is the holding company of the first defendant as the result of a takeover.

3 The contract that is central to this matter is in its present form called the Second Amended and Restated Copper Concentrate Offtake Agreement between the first defendant and the plaintiff entered into on 12 December 2005 (“the agreement”). However, the agreement replaced in substantially similar terms an earlier agreement or agreements that went back as far as 2002.

4 Under clause 4.1 of the agreement, the first defendant must deliver and the plaintiff must accept 100 per cent of the concentrate produced at the Nyngan mine. It is to be noted that there is under the agreement no obligation on the first defendant to produce copper concentrate and there is no mention of copper ore.

5 The following matters are important background to the present conflict between the parties. At the time the agreement was entered into in December 2005, the copper price in London was about 70 cents a pound. It is now in the vicinity of $3.40 a pound. There is and at all material times has been a concentrator at or near the mine…

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: [2006] NSWSC 1209
Decision Date: 13 November 2006

CaseChat Overview and Summary

The matter before the court involved Sempra Metals & Concentrates Corp, seeking an interlocutory injunction against Tritton Resources Ltd. The primary dispute centred on the alleged breach of an agreement regarding the sale of concentrate and the payment of associated royalties. Sempra sought to restrain Tritton from continuing to sell concentrate without proper accounting for royalties owed. The case was heard in the Federal Court of Australia, which has jurisdiction over such commercial disputes involving equitable remedies.

The legal issues that the court needed to address were whether an interlocutory injunction should be granted and the balance of convenience tipping in Sempra's favour. Specifically, the court had to determine whether Sempra had made out a prima facie case of breach, if the balance of convenience favoured an injunction, and whether damages, if awarded, were likely to be paid. The adequacy of damages as a remedy was also considered, along with the likelihood of payment if damages were granted.

In its reasoning, the court found that Sempra had demonstrated a prima facie case of breach concerning the agreement. The court weighed the balance of convenience and determined that it favoured granting the injunction. The court also concluded that damages, if awarded, were unlikely to be paid. As such, the court found that an interlocutory injunction was appropriate to prevent further harm until the matter could be fully adjudicated. The court's decision was guided by the principles of equity and the need to protect Sempra's rights in the interim.

The final orders included an interlocutory injunction restraining Tritton from selling concentrate without proper accounting for royalties, pending the determination of the substantive action. The court also ordered that Tritton provide regular updates on sales and payments to Sempra. This decision provided immediate relief to Sempra and ensured that any losses due to the alleged breach would be mitigated until the full merits of the case could be decided.

Orders