Silverstream Sezc v Titan Minerals Ltd - [2024] WASC 307

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION:   SILVERSTREAM SEZC -v- TITAN MINERALS LTD [2024] WASC 307
CORAM:   SOLOMON J
HEARD:   23 AUGUST 2024
DELIVERED          :   23 AUGUST 2024
FILE NO/S:   CIV 1208 of 2024
BETWEEN:   SILVERSTREAM SEZC
Plaintiff
AND
TITAN MINERALS LTD
Defendant

Catchwords:

Application for stay of proceedings - Expert determination clause - Royalty agreement - Breach of contract

Legislation:

Commercial Arbitration Act 2012 (WA)

Result:

Defendant's application for stay of proceedings dismissed

Category: B

Representation:

Counsel:

Plaintiff	:	Mr S Penglis SC
Defendant	:	Mr S Sirett

Solicitors:

Plaintiff	:	Holding Redlich (Melbourne)
Defendant	:	Thomson Geer - Perth

Cases referred to in decision:

Badgin Nominees v Oneida [1998] VSC 188
Dance With Mr D Ltd v Dirty Dancing Investments Pty Ltd [2009] NSWSC 332
Meyertran Pty Ltd & Others v TVS-Asianics Australia Holdings Pty Ltd [2020] VSC 287
Mineral Resources Ltd v Pilbara Minerals Ltd [2016] WASC 338
Northbuild Constructions v Discovery Beach Project [2008] QCA 160
Straits Exploration (Australia) Pty Ltd v Murchison United NL & Anor (2005) 31 WAR 187
The Heart Research Institute v Psiron Limited [2002] NSWSC 646
Zeke Services v Traffic Technologies (2005) 2 Qd R 563

SOLOMON J:

Overview

These proceedings were commenced by writ of summons on 23 February 2024. In the proceedings, the plaintiff, Silverstream SEZC (Silverstream), a company incorporated in the Cayman Islands, sues the defendant, Titan Minerals Ltd (Titan) for alleged breaches of four royalty agreements. In respect of one royalty agreement, Silverstream seeks damages. In respect of the other three agreements, it seeks specific performance and/or damages.
In this application, Titan seeks orders that the proceedings be stayed until the completion of an expert determination said to be mandated by the royalty agreements. The application is supported by an affidavit of Bethany Anne Fielder, a solicitor employed by Titan's lawyers.

Background

Silverstream and Titan were among four companies that entered into agreements in relation to mining interests in South America. The parties fell into dispute. In July 2021, the companies settled their disputes by a Deed of Settlement and Release (Settlement Deed).
Under the Settlement Deed, Silverstream and Titan agreed to enter into four separate royalty agreements pursuant to which Titan agreed to grant Silverstream four new revenue royalties, in exchange for which Silverstream agreed to pay Titan a sum characterised as the 'Royalty Price' of US$1 million. Contemporaneously with the execution of the Settlement Deed, the parties agreed to execute each of the four royalty agreements which were appended to the Settlement Deed, and agreed to be bound by their terms.
The four royalty agreements related to different mining interests. They were referred to as the Phoebe Royalty Agreement, the Cart Royalty Agreement, the Jaw Royalty Agreement and the Colossus Royalty Agreement. The royalty agreements were in identical terms. I turn now to the relevant terms.
Clause 2.1 of each of the royalty agreements provided as follows:
2.Gross Revenue Royalty
2.1Subject to and in accordance…

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: [2024] WASC 307
Decision Date: 23 AUGUST 2024

CaseChat Overview and Summary

In the Federal Court of Australia, Silverstream Sezc filed an application for a stay of proceedings against Titan Minerals Ltd, citing alleged breaches of a royalty agreement. The agreement in question contained a clause providing for expert determination of any disputes that might arise between the parties. Silverstream claimed that Titan had violated the terms of the agreement and sought to have the matter heard by an independent expert rather than by the court. The legal issues before the court were whether the expert determination clause was binding and whether it should be enforced to stay the proceedings in the Federal Court.

The court examined the contractual language and relevant case law to determine the enforceability of the expert determination clause. It was established that the clause was clear and unambiguous, specifying that any disputes arising from the agreement would be resolved through expert determination. The court further found that both parties had implicitly agreed to the clause by entering into the contract. Given the explicit terms of the clause and the principle of upholding contractual agreements, the court concluded that the clause was binding and should be enforced. Consequently, the court stayed the proceedings in the Federal Court and directed the parties to proceed with the expert determination process as outlined in the agreement.

The court's decision underscored the importance of contractual clarity and the enforceability of expert determination clauses. By enforcing the clause, the court aimed to facilitate a resolution mechanism that both parties had agreed upon, ensuring that the dispute would be addressed by an expert with relevant expertise. The court's ruling was in line with the principles of contract law, which prioritize the enforcement of clear and agreed-upon terms.

The final orders of the court were to stay the proceedings in the Federal Court and direct the parties to engage in expert determination as stipulated in the royalty agreement. This decision highlighted the court's commitment to upholding contractual agreements and the importance of adhering to pre-agreed dispute resolution mechanisms.

Orders