Sino Iron Pty Ltd v Mineralogy Pty Ltd - [2024] WASC 242

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CIVIL

CITATION:   SINO IRON PTY LTD -v- MINERALOGY PTY LTD [2024] WASC 242
CORAM:   COBBY J
HEARD:   21 & 22 MARCH 2024
DELIVERED          :   3 JULY 2024
FILE NO/S:   CIV 2336 of 2023
BETWEEN:   SINO IRON PTY LTD
First Plaintiff
KOREAN STEEL PTY LTD
Second Plaintiff
CITIC LIMITED
Third Plaintiff
AND
MINERALOGY PTY LTD
First Defendant
STATE OF WESTERN AUSTRALIA
Second Defendant

Catchwords:

Practice and procedure - Application for case management stay pending determination of appeal in other proceedings between the parties - Application for expedition - Application to strike out portions of amended defence raising issues pleaded in other proceedings between the parties

Legislation:

Rules of the Supreme Court 1971 (WA), O 20 r 19(1)

Result:

Application to stay proceedings dismissed
Application for expedition allowed in part
Application to strike out amended defence dismissed

Representation:

Counsel:

First Plaintiff	:	N C Hutley SC, J H Kirkwood SC, S Hartford-Davis & T B Maxwell
Second Plaintiff	:	N C Hutley SC, J H Kirkwood SC, S Hartford-Davis & T B Maxwell
Third Plaintiff	:	N C Hutley SC, J H Kirkwood SC, S Hartford-Davis & T B Maxwell
First Defendant	:	P Dunning KC, M Karam, H Cooper & D Fawcett
Second Defendant	:	No appearance

Solicitors:

First Plaintiff	:	Herbert Smith Freehills
Second Plaintiff	:	Herbert Smith Freehills
Third Plaintiff	:	Herbert Smith Freehills
First Defendant	:	Robinson Nielsen Legal
Second Defendant	:	State Solicitor's Office

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

Apotex Pty Ltd v Les Laboratoires Servier (No 6) [2012] FCA 745
EDWF Holdings 1 Pty Ltd v EDWF Holdings 2 Pty Ltd [2010] WASCA 78; (2010) 41 WAR 23
English v Vantage Holdings Group Pty Ltd [2021] WASCA 47
Henry v Henry [1996] HCA 51; (1996) 185 CLR 571
Langford v RCL Cruises Ltd t/as Royal Caribbean Cruises [2023] FCA 626
Michael Wilson & Partners Ltd v Emmott [2021] NSWCA 315; (2021) 396 ALR 497
Mineralogy Pty Ltd v Sino Iron Pty Ltd [2017] FCAFC 55
Mineralogy Pty Ltd v Sino Iron Pty Ltd [2022] WASCA 26
Palmer v CITIC Ltd [No 2] [2019] WASC 14
Palmer v CITIC Ltd [No 7] [2023] WASC 202
Sino Iron Pty ltd v Mineralogy Pty Ltd [2023] WASCA 96
Sino Iron Pty Ltd v Mineralogy Pty Ltd [No 15] [2023] WASC 56
Sino Iron Pty Ltd v Mineralogy Pty Ltd [No 2] [2021] WASC 170
Sino Iron Pty Ltd v Mineralogy Pty Ltd [No 3] [2021] WASC 384
Sterling Pharmaceuticals Pty Ltd v Boots Company (Australia) Pty Ltd [1992] FCA 71; (1992) 34 FCR 287
Williams and Humbert Ltd v W & H Trade Marks [1986] 1 AC 368

COBBY J:

These proceedings comprise another instalment in the long running series of disputes between the parties regarding the Sino Iron Project.

The applications for determination

There are three applications before the court, being (in chronological order):
(a)the first defendant's application for a stay of these proceedings pending the Court of Appeal's determination of an appeal and cross‑appeal from the decision of K Martin J in Sino Iron Pty Ltd v Mineralogy Pty Ltd [No 15];[1]
(b)the plaintiffs' application to strike out portions of Mineralogy's amended defence; and
(c)the plaintiffs' application for expedition of the proceedings.
[1] Sino Iron Pty Ltd v Mineralogy Pty Ltd [No 15] [2023] WASC 56.
As will be obvious, the plaintiffs (the CITIC parties) seek that the proceedings be expedited, while the first defendant (Mineralogy) seeks that they not progress at all until the Court of Appeal has determined the appeal and cross‑appeal from K Martin J's 2023 decision, in which his Honour considered a number of issues similar to those raised in these proceedings.
For the reasons which follow, I have determined to dismiss the plaintiff's strike out application and Mineralogy's application to stay the proceedings.
I have also determined that this action should be expedited, but the extent to which that can be achieved is limited by the fact that these proceedings will need to be tried with or after other long‑standing proceedings before the court.

Background

The first plaintiff (Sino) and the second plaintiff (Korean) are subsidiaries of the third plaintiff (CITIC) (together the CITIC parties).[2]
[2] I am indebted to Quinlan CJ for much of the following outline of the Project: see generally Sino Iron Pty Ltd v Mineralogy Pty Ltd [No 2] [2021] WASC 170.
Sino, Korean and the first defendant (Mineralogy) are parties to the Iron Ore Processing (Mineralogy Pty Ltd) Agreement (State Agreement), a State agreement ratified by the Iron Ore Processing (Mineralogy Pty Ltd) Agreement Act 2002 (WA).
Sino and Korean operate, through CITIC Pacific Mining Management Pty Ltd, the Project on three of the mining leases and certain other mining tenements held by Mineralogy which are the subject of the State Agreement.
The State Agreement provides for the development and exploitation of certain mining tenements held by Mineralogy, including those on which the Project is located.
That development and exploitation is required to be carried out in accordance with proposals approved by the relevant Minister in the Government of Western Australia. Importantly, proposals to the Minister must be submitted by Mineralogy, either alone or with co‑proponents.
The most recent proposals approved by the Minister in relation to the Project are the Second Sino Iron Concentrate Proposal and the Second Korean Steel Concentrate Proposal, each of which was submitted to the Minister with Mineralogy as co‑proponent, which were both approved on 6 January 2010.
The two proposals were designed to provide sufficient ore for approximately five years of operation of the Project.
Clause 7(6) of the State Agreement provides:
In respect of each proposal hereunder the Project Proponents in relation thereto shall subject to and in accordance with the EP Act and any approvals and licences required under that Act implement the approved proposals in respect of the Project in accordance with the terms thereof and subject to marketing arrangements and reasonable maintenance and operational shut down requirements the Project Proponents shall ensure continuous operation of the Project.
A Full Federal Court has held that the effect of cl 7.6 is that each of Sino, Korean and Mineralogy owes an express contractual obligation to 'ensure continuous operation of the Project' to each other, and to the State of Western Australia.[3]
[3] Mineralogy Pty Ltd v Sino Iron Pty Ltd [2017] FCAFC 55 [222].
Sino and Korean's rights in relation to the Project are conferred and regulated by a number of agreements, in addition to the State Agreement, between each of them and Mineralogy. Those agreements include:
(a)the Mining Right and Site Lease Agreements (MRSLAs);
(b)the Takeover Agreements;
(c)the Facilities Deeds (Facilities Deeds); and
(d)the Fortescue Coordination Deed.
The MRSLAs are two largely identical agreements entered into by Mineralogy with each of Sino and Korean respectively. The MRSLAs confer mining rights to the relevant tenements and grant a sublease over an area defined in the MRSLAs as the Site Lease Area.
The Facilities Deeds are, again, largely identical agreements made between Mineralogy and each of Sino and Korean respectively.
The Facilities Deeds relate to the construction and use of facilities on land defined in the Facilities Deeds as the Preston Area. Part of that area is the subject of general purpose leases held by Mineralogy under the Mining Act 1978 (WA). The CITIC parties have spent billions of dollars constructing various facilities in the Preston Area, including port facilities, for the purposes of the Project.
Relevantly for present purposes, pursuant to cl 11.5 of the Fortescue Coordination Deed, CITIC guaranteed Sino's and Korean's obligations under the various agreements between the parties, and indemnified Clive Frederick Palmer and Mineralogy against 'any loss suffered, paid or incurred' in respect in relation to the failure by Sino or Korean to perform their obligations under those agreements.
The key components of the Project comprise:
(a)an open cut mining pit, from which magnetite iron ore is extracted and then processed to enable the production of concentrated ore using magnetic separation;
(b)a tailings storage facility, in which the tailings produced by the concentration process are stored; and
(c)waste rock dumps, which are used to store the large quantities of waste rock produced by the open cut mining process.

The Project is fully integrated. The ore is removed from the ground, taken through primary crushers at the mine, and then conveyed, processed into concentrate, stockpiled, reclaimed, and ultimately exported on ocean going vessels.
The Project involves the movement and management of very high volumes of waste, comprising waste rock and tailings.
The integrated nature of the Project means that if any functional component (such as the tailings or waste rock storage) is unable to operate then the Project as a whole is unable to operate.
In 2017, the CITIC parties submitted mine continuation proposals (the 2017 MCPs) for approval by Mineralogy and submission to the Minister for approval. The CITIC parties sought, through the 2017 MCPs, to:
(a)extend the mine pit within the Sino Iron leases;
(b)increase the Project's tailings and waste capacity, partly upon additional tenements in respect of which Sino and Korean did not have access and use rights;
(c)increase the capacity of existing stockpiles and associated infrastructure at the port; and
(d)construct new infrastructure corridors.
Mineralogy did not submit the 2017 MCPs for approval by the Minister. The CITIC parties then instituted proceedings against Mineralogy (the 2017 MCP Proceedings), the claims advanced therein by the CITIC parties being summarised by the Court of Appeal as follows:[4]
1.The CITIC parties allege that Mineralogy was obliged contractually to submit the 2017 MCPs (and take the other steps identified in [12] above) by a series of express and implied terms in the MRSLAs and other agreements - and breached those terms by failing to do so (SOC pars 141 - 146, 151 - 158, 162 - 173).
2.The CITIC parties allege that Mineralogy's alleged failures and refusals amount to unconscionable conduct under the Australian Consumer Law (ACL) to which Mr Palmer has been an accessory. The CITIC parties rely on alleged conduct and behaviour going back to 2012. At the heart of the statutory unconscionability claim is an assertion that Mineralogy's alleged failures and refusals have been against commercial conscience (there being no reasonable basis for the failures and refusals) and have involved an unconscientious taking advantage by Mineralogy of its position as proponent under the State Agreement and holder of the relevant tenements (SOC pars 174 ‑ 181, 200, 201 ‑ 203).
3.The CITIC parties allege that Mineralogy is estopped from failing and refusing to take the steps requested of it. They rely on both estoppel by convention and estoppel by representation and conduct. It is said that Mineralogy made representations and engaged in conduct which led the CITIC parties to reasonably expect that Mineralogy would take such steps as were necessary to enable Sino Iron and Korean Steel to exercise their rights to mine and export - such steps including submitting proposals under the State Agreement, granting further tenure and taking steps to enable the use of the tenure, as was reasonably required for implementation of the Sino Iron Project (SOC pars 182 ‑ 199)
[4] Mineralogy Pty Ltd v Sino Iron Pty Ltd [2022] WASCA 26 [19].
The 2017 MCP Proceedings were heard by K Martin J over 33 hearing days between February and April 2022. On 7 March 2023, his Honour delivered reasons for his dismissal of all of the CITIC parties' claims, except in relation to a programme of drilling works (the PoW) referred to further below.[5]
[5] Sino Iron Pty Ltd v Mineralogy Pty Ltd [No 15] [2023] WASC 56.
The CITIC parties have appealed the dismissal of their claims (the Appeal). Mineralogy has cross‑appealed in relation to the PoW (the Cross‑Appeal).
The Appeal and Cross‑Appeal are listed for hearing before the Court of Appeal for seven days in August 2024.
It can reasonably be anticipated that the Court of Appeal will take some time to determine the Appeal and Cross‑Appeal, K Martin J's reasons for decision in the 2017 MCP Proceedings comprising 2,463 paragraphs over some 900 pages, with there being 18 grounds of appeal and three grounds of cross‑appeal.

The present proceedings

The present proceedings concern new mining continuation proposals which Sino and Korean sent to Mineralogy on 18 August 2023 under cover of a letter of that date (the 2023 MCPs), requesting Mineralogy join them in submitting the proposals to the Minister for approval under the State Agreement.
The CITIC parties allege that the 2023 MCPs do not require the grant of any additional access or use rights, and that the 2023 MCPs are a 'subset' of the 2017 MCPs, being in substance identical to those components of the 2017 MCPs which did not require the grant of additional tenure. They are said to be a solution to support the continued operation of the Project for an interim period.
Mineralogy has not agreed to submit the 2023 MCPs to the Minister, leading to the CITIC parties instituting these proceedings by a writ of summons filed 27 November 2023, endorsed with a statement of claim.
In these proceedings, the CITIC parties seek declarations that Mineralogy has breached its obligations under the agreements between the parties by (amongst other things) failing to consider or approve the 2023 MCPs or cooperate with the CITIC parties in formulating amendments to the 2023 MCPs which would enable Mineralogy to approve them.
They consequently seek orders in the nature of specific performance or injunctive relief requiring Mineralogy to submit the 2023 MCPs, either in the form provided to Mineralogy or as varied by the court, in conjunction with Sino and Korean to the Minister for approval under the State Agreement, and damages.
By its amended defence, Mineralogy denies the CITIC parties' claims.

The CITIC parties' application to strike out portions of the amended defence

In answer to the whole of the CITIC parties' claims, Mineralogy pleads in paragraph 1 of its amended defence filed 11 March 2024 as follows:
As to the whole of the proceeding, the first defendant says:
(a)at the time of commencement of the proceeding and at all material times thereafter:
(i)Sino Iron was in breach of the Sino MRSLA;
(ii)Korean Steel was in breach of the Korean MRSLA;
(iii)CITIC, Korean Steel and Sino Iron were in breach of the FCD,
in that:
(b)by reason of any, or any combination, of the allegations in paragraphs 37 to 99 inclusive of the substituted reply to the substituted defence filed 6 March 2024 (as amended from time to time) of the plaintiffs in Supreme Court of Western Australia Proceeding CIV2072/2017, Sino Iron, Korean Steel and CITIC breached (or one or some of them):
(i)clause 27(b) of the Sino MRSLA and Korean MRSLA as the allegations constituted acts or the contemplation of acts that adversely affected the interests of Mineralogy in the Project Area;
(ii)clause 37.4 of the Sino MRSLA and Korean MRSLA, as the conduct alleged therein was a failure to act in good faith towards Mineralogy in relation to the performance of the Sino MRSLA and the Korean MRSLA;
(iiA)clause 11.5(c) of the FCD, as CITIC has not indemnified Mineralogy against loss it has suffered or incurred in relation to:
(A)Sino Iron's and Korean Steel's failures to perform their obligations in clauses 27(b) and 37.4 of the Sino MRSLA and Korean MRSLA; or
(B)CITIC's failure to cause Sino Iron and Korean Steel to so perform,
includingbecause:
(iii)by operation of clause 25 of the FCD, the obligations of CITIC under the FCD are joint and several with Sino Iron and Korean Steel and are liable and responsible for the other's obligations under the FCD. A breach by CITIC of the FCD is a breach by Sino Iron and Korean Steel;
(iv)the conduct of the agents of Sino Iron, Korean Steel and CITIC as alleged therein were the conduct of Sino Iron, Korean Steel and CITIC pursuant to clause 1.6 of the MRSLAs;
(c)...;
(d)by reason of any, or any combination, of the allegations in Supreme Court of Western Australia Proceeding CIV2072/2017, Sino Iron, Korean Steel and CITIC were in breach of clause 11.5 of the FCD;
(e)by reason of any, or any combination, of the allegations in Supreme Court of Western Australia Proceeding CIV1267/2018, Sino Iron, Korean Steel and CITIC were in breach of clause 11.5 of the FCD;
(eA)...;
(f)the breaches were serious and of essential terms of the respective instruments;
(g)further or alternatively, the breaches were of interdependent obligations in the respective instruments, in that:
(i)the carrying out or participating in, Mining Operations for mining and extracting Magnetite Ore from the Mine Area (as defined in the MRSLAs) under clause 3.2(c) of the Sino MRSLA and the Korean MRSLA relied on by the plaintiff at paragraph 31 of the statement of claim, is dependent on, and interdependent with, clauses 27(b), 37.4 and the implied obligation of cooperation of the MRSLAs because it:
(A)constitutes relevant acts that would adversely affect the interest of Mineralogy in the Project Area or in any property, license or title, to which Mineralogy is the beneficial or legal owner under clause 27(b) of the MRSLAs;
(B)constitutes the performance of the MRSLAs in which Sino Iron, Korean Steel and CITIC must act in good faith towards Mineralogy under clause 37.4 of the MRSLAs;
(C)encompassed by the mutual obligations under the implied obligation of cooperation pleaded at paragraph 32 of the statement of claim;
(D)is expressly granted subject to the balance of the Sino MRSLA and the Korean MRSLA;
(ii)the obtaining of Government Approvals and the assistance of Mineralogy in obtaining Government Approvals under clause 15.1 of the of the Sino MRSLA and the Korean MRSLA relied on by the plaintiff at paragraph 31 of the statement of claim is are dependent on, and interdependent with, clauses 27(b), 37.4 and the implied obligation of cooperation of the MRSLAs because the Government Approvals:
(A)constitute relevant acts that would adversely affect the interest of Mineralogy in the Project Area or in any property, license or title, to which Mineralogy is the beneficial or legal owner under clause 27(b) of the MRSLAs;
(B)constitute the performance of the MRSLAs in which Sino Iron, Korean Steel and CITIC must act in good faith towards Mineralogy under clause 37.4 of the MRSLAs;
(C)are encompassed by the mutual obligations under the implied obligation of cooperation pleaded at paragraph 32 of the statement of claim;
(D)are Legal Requirements compliance with which, and subject to which, Mineralogy grants a Mining Right and Site Lease;
(iii)pursuant to clause 25 of the FCD, the obligations and liabilities of Sino Iron, Korean Steel and CITIC under the Sino MRSLA, Korean MRSLA and FCD are joint and several and each is liable and responsible for the others' obligations;
(iv)further or alternatively, clause 4.1(b) of the FCD is dependent on and interdependent with clause 11.5 of the FCD because:
(A)the indemnity and guarantee under clause 11.5 is expressly granted by CITIC in consideration for Mineralogy granting the right under clause 4.1(b);
(B)the indemnity and guarantee under clause 11.5 is an essential term of the FCD and specific performance of clause 4.1(b) would not be granted ~~which~~ while the plaintiffs are in breach of it;
(C)it is encompassed by the mutual obligations under the implied obligation of cooperation pleaded at paragraph 34 of the statement of claim.
(h)the breaches were matters to which Mineralogy was entitled to have regard in considering the 2023 MCPs;
(i)by reason of the said breaches, Sino Iron, Korean Steel and CITIC:
(i)are not able to establish an element of the causes of action pleaded in the statement of claim;
Particulars
(a)the plaintiffs are not able to establish that they were ready and willing to perform the MRSLAs and FCD at the commencement of the proceeding;
(b)the plaintiffs are not able to establish that they were not in breach of essential terms of the MRSLAs and FCD at the times of the alleged requests and conduct pleaded in the statement of claim;
(c)the plaintiffs are not able to establish an obligation on Mineralogy to perform at all times material to this proceeding the alleged terms of the MRSLAs, FCD, Direct Agreement, Takeover Agreements and State Agreement;
(ii)were and are precluded from instituting proceedings for specific performance of the Sino MRSLA, Korean Steel MRSLA, State Agreement and FCD;
(j)Sino Iron, Korean Steel and CITIC are disentitled from the relief sought in the claim.

Mineralogy pleads at paragraph 76(f) of its amended defence that it is entitled, in considering whether to agree to submit the 2023 MCPs to the Minister, to have regard to the matters identified in paragraph 1(h) and others, including an alleged failure on the part of the CITIC parties to 'demonstrate any willingness to negotiate in good faith for terms on which measures could be proposed to the State to enable the continued operation of the [Project] for the life of the mine',[6] and a failure to have 'provided sufficient commercial and technical information to enable Mineralogy to consider the 2023 MCPs'. [7]
[6] [64(c)], incorporated by [76(bA)], Amended Defence.
[7] [76(b)], Amended Defence.
By their amended chamber summons filed 18 March 2024, the CITIC parties seek to strike out:
(a)paragraphs 1(a)(iii), 1(b) to 1(e) and 1(g);
(b)the words 'and FCD' from particulars (a) and (b) to paragraph 1(i)(i);
(c)the words 'FCD, Direct Agreement, Takeover Agreements and State Agreement' from particular (c) to paragraph 1(i)(i),
of Mineralogy's amended defence, with no grant of leave to re‑plead. Although there is no application to strike out paragraph 76(f), that paragraph would fall away were the application to be granted.
As can be seen, paragraphs 1(b), (d) and (e) of Mineralogy's amended defence incorporate by reference part of Minerology's statement of claim and part of its reply in Action CIV 2072 of 2017, and its statement of claim in Action CIV 1267 of 2018. The CITIC parties are the defendants in each of those actions (together the FCD Proceedings).
The effect of paragraphs 1(b), (d) and (e) of Mineralogy's amended defence, if allowed to stand, is therefore to intertwine issues in these proceedings with those in the FCD Proceedings, which are presently case managed by Lundberg J. At the time these applications were heard, it was anticipated that the trial of the FCD Proceedings would take place in the second half of 2024, although they were yet to be entered for trial.
The claims made by Mineralogy and Mr Palmer in the FCD Proceedings were summarised by K Martin J in Palmer v CITIC Ltd [No 2].[8]
[8] Palmer v CITIC Ltd [No 2] [2019] WASC 14.
Clause 11.5(c) of the Fortescue Coordination Deed provides:
CITIC indemnifies Clive F Palmer and Mineralogy against any loss suffered, paid, or incurred by it in relation to the failure of Sino Iron and/or Korean to perform its obligations under this Deed or the Project Agreements or the failure of CITIC to cause Sino Iron and/or Korean to perform its obligations under this Deed or the Project Agreements.
In Action CIV 2072 of 2017 (the QNI Proceedings), Mr Palmer and Mineralogy claim against the CITIC parties loss said to have been suffered by Mr Palmer as a consequence of the failure by the CITIC parties to pay what is referred to as Royalty Component B. That loss is said to have been incurred because Mineralogy, not having received Royalty Component B when it should have done, did not provide funds to Queensland Nickel Pty Ltd (Queensland Nickel), as a result of which Queensland Nickel went into liquidation.
Mr Palmer is said to have been the ultimate beneficial owner of Queensland Nickel, and to have suffered loss as a consequence of its liquidation.
Mineralogy claims in the alternative, Mr Palmer not being a party to the Fortescue Coordination Deed, that Mineralogy holds CITIC's promise to indemnify Mr Palmer under cl 11.5(c) of the Fortescue Coordination Deed 'on trust for' him.
The QNI Proceedings were commenced in June 2017. As mentioned above, they are still to be entered for trial.
In Action CIV 1267 of 2018 (the Palmer Petroleum Proceedings), Mineralogy claims that the failure by the CITIC parties to pay Royalty Component B when due meant that Mineralogy did not provide funds to Palmer Petroleum Pty Ltd, as a result of which Palmer Petroleum did not pay a debt to a creditor and was consequently wound up in insolvency.
It is alleged that due to its liquidation Palmer Petroleum ceased conducting the business of owning, exploring, developing and exploiting petroleum in Papua New Guinea, such that the PNG Department of Petroleum and Energy cancelled its or its assignee's petroleum prospecting licences.
Mineralogy (being the shareholder in Palmer Petroleum) claims to have thereby suffered a loss in the region of $2.675 billion as a result of the diminution in value of Palmer Petroleum.
Although the Palmer Petroleum Proceedings were commenced in 2018, they too have not yet been entered for trial.
The CITIC parties plead by way of defence in each of the FCD Proceedings, amongst other things, that the proceedings are the subject of an Anshun estoppel, or constitute an abuse of process, or both.
In response, Mineralogy alleges by way of reply that the CITIC parties 'ought to be precluded from seeking such relief due to disentitling conduct by them'. Mineralogy pleads extensive conduct said to have been engaged in by the CITIC parties over the period December 2001 to November 2021, which it is said prevents the CITIC parties from maintaining their Anshun estoppel and the abuse of process pleas.
In Palmer v CITIC Ltd [No 7][9] Lundberg J summarised the conduct alleged (the Fulcrum Purposes pleas) as follows:
[9] Palmer v CITIC Ltd [No 7] [2023] WASC 202 [47] ‑ [48].
(a)the Sino Iron Project suffered various delays and losses;
(b)by no later than May 2010, the CITIC parties had determined that steps were required to be taken to alter the parameters in which the Sino Iron Project was operating, including the contractual regime and the area allocated to the Sino Iron Project under the CITIC Negotiated Agreements, to parameters more favourable to CITIC and any subsidiary company, and less favourable to Mineralogy and Mr Palmer, by reason of those delays and losses (described in the pleadings as the 'Contract Normalisation Objective');
(c)a group was formed within CITIC, known as the 'Fulcrum Group', made up of various executives and advisors;
(d)the Fulcrum Purposes are expressly pleaded to include the following matters:
[70]The purposes of the Fulcrum Group included:
(a)to achieve the Contract Normalisation Objective;
(b)to recoup the additional costs of developing the Sino Iron Project in paragraphs 65b and 65c above from Mineralogy; and
(c)to seek to sterilise Mineralogy's other valuable mining tenements; confound the evident commercial intent of the sophisticated contractual arrangements the parties agreed to; and render the Defendants the one and only miner that Mineralogy must sell its other rights to, the other tenements having been rendered unsaleable and unusable by Mineralogy as a miner (collectively, the Fulcrum Purposes).
(e)the Fulcrum Purposes are recorded in, or may be inferred from, seven matters, listed in the amended replies, and from the CITIC parties' conduct of the MCP Proceeding;
(f)since 2010, the CITIC parties have conducted the relationship with Mineralogy according to the Fulcrum Purposes, including to apply commercial pressure to Mineralogy and alter the terms of the CITIC Negotiated Agreements.
Next, the Mineralogy parties raise allegations concerning the MCP Proceeding, being CIV 1915 of 2019, which was commenced by the CITIC parties in October 2018. It is alleged in the replies that:
(a)the CITIC parties sought orders compelling Mineralogy to increase the Site Lease Area in the configuration depicted in Annexure 11 to the statement of claim in the MCP Proceeding;
(b)the proposed extension to the Site Lease Area would inhibit and impair the use of the Mineralogy Tenements for any other project or purposes under the State Agreement, would devalue the Mineralogy Tenements, and was not sought to accommodate a genuine requirement for areas to prosecute the Sino Iron Project and the true purpose was to prevent, impair or inhibit Mineralogy including from using its other tenements in the Mineralogy Tenements;
(c)the MCP Proceeding was commenced: (i) to further the Fulcrum Purposes; (ii) to permanently deprive Mineralogy of the ability to exploit and develop the balance of the Mineralogy Tenements, especially with any third party other than CITIC or any subsidiary company; and (iii) to vex Mineralogy with proceedings that are likely to, and did, lead to a trial that will, and did, run for months and consume a great amount of costs and management time of Mineralogy and prevent it from meaningfully pursuing the development or sale of the balance of the Mineralogy Tenements outside the Sino Iron Project in the meantime.
(d)the CITIC parties knew the extension to the Site Lease Area would have those consequences, which is to be inferred from a number of steps the CITIC parties took in the MCP Proceeding, all of which occurred on or after 29 March 2018; and
(e)the CITIC parties thus did not have any genuine belief in the alleged entitlement to relief in respect of the map in Annexure 11 to the statement of claim and at least to that extent instead maintained the MCP Proceeding in furtherance of and for the Fulcrum Purposes.
The CITIC parties unsuccessfully sought to have those allegations struck out in the FCD Proceedings in 2023.[10] As noted by Lundberg J, the pleas sought to be struck out in the FCD Proceedings by the CITIC parties are similar, but not identical, to allegations considered by six judges of this court on five different occasions prior to his doing so.[11]
[10] Palmer v CITIC Ltd [No 7].
[11] Palmer v CITIC Ltd [No 7] [2] and the cases cited in footnote 2.
Ultimately, Lundberg J was not being satisfied, in the context of the FCD Proceedings, that the Fulcrum Purposes pleas would prejudice, embarrass or delay the fair trial of the action, or otherwise constituted an abuse of process.[12]
[12] Palmer v CITIC Ltd [No 7] [88].
In coming to that view, his Honour had regard to the decision of the Court of Appeal in Mineralogy Pty Ltd v Sino Iron Pty Ltd,[13] in which the Court of Appeal substantially allowed Mineralogy's appeal from a decision by K Martin J in the 2017 MCP Proceedings to strike out similar allegations to the Fulcrum Purposes pleas on the ground that they failed to disclose a reasonable ground of defence.[14]
[13] Mineralogy Pty Ltd v Sino Iron Pty Ltd [2022] WASCA 26.
[14] Sino Iron Pty Ltd v Mineralogy Pty Ltd [No 3] [2021] WASC 384.
In that case, the Court of Appeal accepted that the obligation to not unreasonably refuse consent to mine continuation proposals owed by Mineralogy under the agreements between the parties was somewhat analogous to the situation where a tenant has an entitlement under a lease to ask for the landlord's consent to a course of action and that consent is not to be unreasonably withheld.
The Court of Appeal went on to say:[15]
The analogy sought to be drawn by senior counsel for the appellants is not perfect. However, the present context is one in which the question is whether there is a reasonable defence - a context in which great care must be exercised to ensure that a litigant is not improperly deprived of its opportunity to have a trial of its case. In that context there is a sufficiently arguable parallel between the landlord and tenant consent cases and the nature of the alleged contractual obligations contended for by the CITIC parties to make it reasonably arguable that the considerations which inform the landlord and tenant consent cases may also apply to the present case ...
So too, in our view, it is reasonably arguable that the Fulcrum Purposes pleaded in 3FAD pars 15R(a) and (b) - either individually or in combination - provide a defence on the basis that it was reasonable to refuse the CITIC parties' requests on that ground.
It is reasonably arguable that Mineralogy was entitled to take its own legitimate commercial interests into account when considering the CITIC parties' requests. Mineralogy's legitimate commercial interests are, in our view, arguably informed by or at the least affected by the actions of the CITIC parties so far as the CITIC parties are making requests of Mineralogy. In terms of the Fulcrum Purposes pleas at 3FAD pars 15R(a) and (b) it is reasonably arguable that a person in Mineralogy's position may entertain doubts, reasonably based, about consenting to submitting MCPs, granting further tenure, granting re‑purposing requests and submitting or authorising the submission of a programme of works where its counterparty has an object of altering the parameters of the contractual relationship between the parties as a means of recouping losses from Mineralogy. It is reasonably arguable that, in circumstances where the CITIC parties had and were furthering the Fulcrum Purposes pleaded at 3FAD pars 15R(a) and (b), a person in Mineralogy's position might reasonably refuse the CITIC parties' requests because it was not in Mineralogy's legitimate commercial interests to enlarge the commercial relationship with the CITIC parties.
[15] Mineralogy Pty Ltd v Sino Iron Pty Ltd [2022] WASCA 26 [128] ‑ [130].
In essence, the CITIC parties contend that the paragraphs sought to be struck out in these proceedings do not disclose a reasonable ground of defence, because:
(a)Mineralogy is not entitled to rely upon past breaches of the agreements between the parties as justifying refusal to consider or approve a proposal to ensure continuous operation of the Project, because cl 7(6) of the State Agreement constitutes a mutual covenant by Sino, Korean and Mineralogy to each other that they 'ensure continuous operation of the Project';
(b)the proposition that some or all of the obligations which the CITIC parties allege require Mineralogy to submit the 2023 MCPs to the Minister for approval are interdependent with cl 27(b) and cl 37.4 of the MRSLAs and cl 11.5 of the FCD is untenable; and
(c)the allegation that the CITIC parties are not ready willing and able to perform their obligations under the various agreements does not disclose a reasonable ground of defence, because 'there is no question that the [CITIC parties] will pay any sum ultimately awarded against them' in the FCD Proceedings, a plaintiff in a suit for specific performance is not required to show that it has strictly complied with all of its obligations under the contract in order to obtain that relief, and there is no allegation in the FCD Proceedings that the CITIC parties will not perform their obligations as found by the courts, there being a genuine disagreement between the CITIC parties and Mineralogy as to the interpretation of those obligations.
The CITIC parties' response to the Fulcrum Purposes pleas has evolved since the Court of Appeal considered Mineralogy's defence in 2022.
The CITIC Parties now contend that, while a party to a commercial agreement asked to grant consent to a request made under that agreement may have regard to its own interests, a party may not do so if that would cause disproportionate detriment to the other party, such conduct being unreasonable. They submit, citing the decision of the Court of Appeal in EDWF Holdings 1 v EDWF Holdings 2,[16] that a party will, in general, not be acting unreasonably if:
(a)the grounds for withholding consent are held honestly;
(b)the grounds relate to the objects of the agreement(s) or to rights, benefits or obligations of the affected party or the counterparty under the agreement(s);
(c)the grounds are permissible under those agreement(s) and are not materially inconsistent with their terms; and
(d)on the basis of the facts and circumstances, objectively ascertained, as at the date on which consent is refused, the grounds for withholding of consent are not unreasonable.
[16] EDWF Holdings 1 Pty Ltd v EDWF Holdings 2 Pty Ltd [2010] WASCA 78; (2010) 41 WAR 23 [115(c) and (d)].
Notably, the CITIC parties now emphasise that the Fulcrum Purposes pleas are inconsistent with cl 7.6 of the State Agreement, which contains a mutual covenant by Mineralogy, Sino and Korean to the State and each other that 'the Project Proponents shall ensure continuous operation of the Project'. The CITIC parties contend that it therefore cannot be open to Mineralogy, consistently with its obligation to ensure continuous operation of the Project, to rely on previous alleged breaches of the Project Agreements to refuse to consider otherwise reasonable proposals that are necessary to ensure the continuous operation of the Project.
Those arguments were not made to the Court of Appeal in 2022. It is open to me to distinguish the Court of Appeal's reasoning on that basis.
The CITIC Parties also place some reliance on the point that, unlike the 2017 MCPs, the 2023 MCPs do not require the grant of further access or use rights by Mineralogy to Sino and Korean, such that the 2023 MCPs do not 'enlarge' the relationship between the parties, a matter identified by the Court of Appeal as being relevant to the assessment of Mineralogy's legitimate commercial interests in determining whether to consent to a mine continuation proposal.[17]
[17] Mineralogy Pty Ltd v Sino Iron Pty Ltd [2022] WASCA 26 [130].
Mineralogy does not limit its case to reliance upon the matters pleaded in paragraph 1 of the defence in asserting that it 'is not obligated to submit the 2023 MCPs and entitled to refuse the purported request'[18] that it do so, but also says that those matters are one of several considerations to which it is entitled to have regard in determining whether to grant consent.
[18] [76(f)], Amended Defence.
The issue raised by paragraph 1(h) of the amended defence is whether it is reasonably arguable that a person in Mineralogy's position may have regard to the conduct the CITIC parties are alleged to have engaged in considering whether to agree to submit the 2023 MCPs to the Minister for approval.
I am not satisfied that the express obligation arising from cl 7.6 of the State Agreement or any term said to be implied from it necessitates a finding that Mineralogy may not have some regard to its own interests in considering whether to consent to the submission of a mine continuation proposal to the Minister.
I am not satisfied that proposition is unarguable, such that the references to the Fulcrum Purposes pleas are liable to be struck out. In coming to that view, I am conscious that care must be taken to ensure that Mineralogy is not deprived of a trial of its case, provided that the case is arguable.[19]
[19] Mineralogy Pty Ltd v Sino Iron Pty Ltd [2022] WASCA 26 [128].
The CITIC parties' application proceeds on the basis that the 2023 MCPs are both reasonable and otherwise unobjectionable, matters which are still to be established. In essence, the CITIC parties assert that the alleged overarching obligation to ensure continuous operations has the consequence that Mineralogy is not entitled to consider its own interests in granting or withholding consent to a mining proposal, where there may be alternative means of carrying out mining operations and it is yet to be established that the 2023 MCPs are both reasonable and otherwise unobjectionable.
In my opinion, it is reasonably arguable that Mineralogy may have regard to the matters pleaded in considering whether to agree to submit a mine continuation plan to the Minister. To say otherwise is to hold that a party is not entitled to have regard to its experience in dealing with another contracting party in considering whether to withhold its consent to a request made under their agreement.
I am therefore not prepared to strike out paragraph 1(b) of the amended defence.
In coming to that view, I have had regard to K Martin J's trenchant criticism of the Fulcrum Purposes pleas in his reasons for decision delivered following the trial of the 2017 MCP Proceedings,[20] although as his Honour acknowledged,[21] the court was ultimately not required to determine the question whether those allegations were made out, his Honour having found that there had been no reasonable request for the grant of additional tenure by the CITIC parties in that case.
[20] Sino Iron Pty Ltd v Mineralogy Pty Ltd [No 15] [2454] ‑ [2461].
[21] Sino Iron Pty Ltd v Mineralogy Pty Ltd [No 15] [2461].

That is not to say that I consider that the matters alleged are necessarily sufficient, in and of themselves, for it to be reasonable for Mineralogy to withhold consent to what may be an otherwise reasonable mine continuation plan. Although the matters identified in the Fulcrum Purposes pleas are arguably a consideration to which Mineralogy is entitled to have regard in determining whether to submit a mine continuation plan, Mineralogy's contractual obligation is not to unreasonably withhold consent to a mine continuation plan. A position that Mineralogy is entitled to refuse consent solely because of the alleged past breaches of the agreements on the part of the CITIC parties, serious or otherwise, is tantamount to asserting that Mineralogy's obligation to perform that promise is suspended or terminated by that conduct, when Minerology continues to require performance of the obligation to make royalty payments under the agreement.
I therefore do not consider Mineralogy's position to be a strong one. However, as Mineralogy points out, the fact that a case appears weak is not, in itself, a sufficient basis to strike it out.[22]
[22] English v Vantage Holdings Group Pty Ltd [2021] WASCA 47[55] ‑ [56].
As I have concluded that Mineralogy's reliance upon the Fulcrum Purposes pleas in the context of considering whether it is obliged to agree to submit the 2023 MCPs to the Minister is reasonably arguable, I do not accept that case management considerations justify striking out the impugned pleas.
In this regard, I agree with Lundberg J's observations in Palmer v CITIC Ltd [No 7][23] that the fact that the CITIC parties have previously had to consider substantially similar allegations to those now sought to be struck out will 'soften' the impact they might otherwise have had, the CITIC parties having known that they would face the Fulcrum Purposes allegations at the trial of the FCD Proceedings since June 2013, when Lundberg J declined their strike out application in those proceedings.
[23] Palmer v CITIC Ltd [No 7] [145] ‑ [146].
Having reached the position that I am not prepared to strike out paragraph 1(b) of the amended defence, I consider that there is little to be gained from proceeding to determine whether to strike out the allegations that the clauses of the various agreements relied upon by Mineralogy are interdependent with cl 3.2(c) and cl 15.1 of each MRSLA or cl 4.1 of the Fortescue Coordination Deed, and whether the CITIC parties are not ready, willing and able to perform their respective obligations to Mineralogy, or otherwise disentitled to the relief they seek.
The power to strike out a pleading is discretionary. The remaining issues raised by the CITIC parties' application raise, in my view, questions of law, which are unlikely to affect the extent of the evidence to be presented at the trial nor substantially shorten the length of the trial.
I am not satisfied, having found that the argument that Mineralogy is entitled to have regard to the matters identified in the Fulcrum Purposes pleas in considering whether to approve a particular mine continuation plan is reasonably open, that proceeding to determine the other issues raised by the strike out application will 'obviate the necessity for a trial, or will substantially reduce the burden of preparing for a trial, or the burden of the trial itself',[24] and, given their potential for fracturing the proceedings by giving rise to an interlocutory appeal, I decline to do so.
[24] See Williams and Humbert Ltd v W & H Trade Marks [1986] 1 AC 368, 435.
For those reasons, I will dismiss the CITIC parties' application to strike out portions of the amended defence.

Mr Goodman's evidence as to the Project's future operations

The CITIC parties relied upon an affidavit of Robert Bruce Goodwin sworn 15 February 2024 in support of their application for expedition.
Mr Goodwin is an engineer engaged by CITIC Pacific Mining Management Pty Ltd, with over 40 years' experience in the Australian resources sector. He gave evidence in support of the CITIC parties' claims in the 2017 MCP Proceedings.
His evidence is that the rate of production of concentrate at the Project will slow in the near future due, primarily, to physical constraints at the mine pit. The mine pit is an inverted pyramid or cone, narrowing as it descends. As the pit narrows, the area available for carrying out mining operations is reduced, leading to decreased production. A further consequence of the reduction of the area available for mining is that production will be further constrained by, amongst other things, the need to remove mining equipment from the pit to allow blasting due to, and restrictions on the ability to carry out certain other works simultaneously in, the smaller working area.
The CITIC parties' estimate is that 40.1 million tonnes (wet) of ore will be able to be mined in 2024, falling to 24.2 million tonnes (wet) in 2025 and 12 million tonnes (wet) in each year thereafter.
Mr Goodwin's evidence is that the open cut mine produces large quantities of waste rock. The waste rock is stored in waste rock dumps within the area in respect of which Sino and Korean have access and use rights. Although the waste rock can be used in the construction of the embankments of tailing storage facilities and other mine infrastructure, Mr Goodwin's evidence is to the effect that the waste rock that will be used to raise the embankments of the tailings storage facility has already been set aside and there are no other plans to use any significant volume of waste rock for infrastructure.
The CITIC parties estimate that there is approximately 26.8 Mm³ of waste rock storage remaining, which will be sufficient to store the waste rock likely to be produced from the existing mine pit if the mine produces iron ore concentrate at the decreasing rates arising from the reducing mining area, but insufficient to store the waste rock produced if the CITIC parties are to mine the 2 billion tonnes of magnetite ore permitted under the MRSLAs.
Mr Goodwin's evidence is that tailings are a waste product from the processing of magnetite ore to produce magnetite concentrate through magnetic separation. Approximately two thirds of the ore processed becomes tailings, in the form of a slurry that is pumped to the tailings storage facility.
His evidence is that there is a 'pinch point', created by the northern embankment of the tailings storage facility located on the boundary of mining lease M08/264 where it adjoins general purpose lease G08/53, such that it is impossible to raise the walls of the tailings storage facility above RL 66m[25] without encroaching upon an area in respect of which the CITIC parties do not have access or use rights. Due to that pinch point, once the embankments of the tailings storage facility have been raised to RL 66m and used for tailings storage, the existing facility will have reached its maximum capacity.
[25] The 'Reduced Level' height, which takes as the reference point the mean sea level as established by the Australian Height Datum.
Mr Goodwin's evidence is that raising the embankments to RL 66m should provide approximately two additional years of tailings storage, reaching capacity in the second half of 2025 at the previous rates of production, and in mid‑2028 at the decreasing rates which will be caused by the reduction in the available mining area.
According to Mr Goodwin, mining works are likely to be suspended in the second half of 2025 if the Project continues at the existing rate of production, although the reduced rate of production arising from the physical constraints referred to above means that the Project could continue to operate for a longer period of time prior to suspension, albeit at reduced profitability.
If the resolution of these proceedings is expedited, and if the CITIC parties are successful in obtaining orders requiring Mineralogy to join with Sino Iron and Korean Steel in submitting the 2023 MCPs to the Minister and those proposals are approved by the State, then the consequences for the Project are said to be that:
(a)the duration of the slowdown of production will be reduced; and/or
(b)potentially, suspension of the Project will be avoided; or
(c)if suspension occurs, the period of suspension will be reduced.
The evidence is that monthly royalties of approximately $15 million were paid to the State at the previous rates of production.
Mineralogy adopted the position that a comparison of Mr Goodwin's oral evidence before K Martin J in the 2017 MCP Proceedings and his affidavit evidence in these proceedings showed that the CITIC parties were overstating the need to have these proceedings determined urgently. Mineralogy contended, in essence, that the evidence showed that the CITIC parties were able to continue mining, albeit not profitably.
I do not consider that criticism is determinative of the competing applications for a stay or expedition of the proceedings. The approved mine continuation proposals that were in place at the time the 2017 MCP Proceedings were tried before K Martin J were never intended to operate for the whole of the life of the mine. I accept Mr Goodwin's evidence that both the tailings storage facility and the waste rock dump will reach capacity in the relatively near future, with the consequence that the CITIC parties will no longer have capacity to store either the waste removed from mining operations or the tailings resulting from the concentration process.
At that point, I accept that the mine would have to cease operation, regardless of the profitability of the mining operations.

Mineralogy's application for a stay of these proceedings

I turn to Mineralogy's application for the proceedings to be stayed pending the determination of the Appeal and Cross‑Appeal, which are to be heard in August 2024.
There is no longer any prospect that these proceedings will be heard before the Appeal, not least because I have declined to strike out those paragraphs of the amended defence which incorporate Fulcrum Purposes pleas by reference.
The writ in these proceedings was filed on 27 November 2023. By summons filed 23 January 2024, Mineralogy applied to stay the proceedings pending the determination of the Appeal.
It is common ground that the court has power to grant an interim order to stay proceedings pending the completion of related proceedings. Such an order has been described as a 'case management stay', because it involves 'no more than the postponement of pretrial preparation steps and any hearing, while the Court retains control over the proceedings'.[26]
[26] Langford v RCL Cruises Ltd t/as Royal Caribbean Cruises [2023] FCA 626 [24].
It is also common ground that the decision to grant such a stay is 'fundamentally a question of case management'. The exercise of the discretion is guided by practical considerations based on common sense and fairness.[27]
[27] Michael Wilson & Partners Ltd v Emmott [2021] NSWCA 315; (2021) 396 ALR 497 [105].
The considerations relevant to the grant of the discretion include:[28]
[28] Henry v Henry [1996] HCA 51; (1996) 185 CLR 571, 590 approving Lockhart J in Sterling Pharmaceuticals Pty Ltd v Boots Company (Australia) Pty Ltd [1992] FCA 71; (1992) 34 FCR 287, 291.
(a)which proceeding was commenced first;
(b)whether the termination of one proceeding is likely to have a material effect on the other;
(c)the public interest;
(d)the undesirability of two courts competing to see which of them determines common facts first;
(e)consideration of circumstances relating to witnesses;
(f)whether work done on pleadings, particulars, discovery, interrogatories and preparation might be wasted;
(g)the undesirability of a substantial waste of time and effort if it becomes a common practice to bring actions in two courts involving substantially the same issues;
(h)how far advanced the proceedings are in each court;
(i)the law should strive against permitting multiplicity of proceedings in relation to similar issues; and
(j)generally balancing the advantages and disadvantages to each party.
Mineralogy contends that the CITIC parties have 'set in motion a race between this Court and the Court of Appeal to decide common issues of fact and law at the expense of [Mineralogy], other litigants waiting their turn and the judicial system's public resources'.
It identifies three issues which it says are common to these proceedings and the Appeal, being:
(a)the proper construction of the various agreements between the parties;
(b)the location of the Fortescue River Road; and
(c)the divisibility of the 2017 and 2023 MCPs, and 'whether the court can "sever" defective or unmeritorious components of the 2023 MCPS when granting final relief'.
As to the first issue, there is no suggestion that the terms of the various agreements between the parties have been varied since K Martin J delivered judgment in the 2017 MCP Proceedings on 7 March 2023. To the extent that his Honour construed the terms of those agreements between the parties, that construction is binding upon them unless and until the Court of Appeal determines to the contrary.
There being no suggestion that there is any extrinsic evidence relevant to the construction of the various agreements relied upon in these proceedings, the proper construction of the various agreements is a question of law.
On the evidence as it stands, the 2023 MCPs are confined to areas over which Sino and Korean possess access and use rights, such that the issue whether the CITIC parties were entitled to the grant of access and use rights (referred to as 'additional tenure' in the 2017 MCP Proceedings), which was the principal issue in the 2017 MCP Proceedings, does not arise in these proceedings.
In the 2017 MCP Proceedings, K Martin J characterised 'the potential finding of a contractual obligation imposed upon Mineralogy to submit the MCPs (other things being equal), finding such an MCP assistance and cooperation obligation upon Mineralogy (ie, by a term requiring Mineralogy) under an express term of a Project Agreement, [to be] a relatively straightforward exercise',[29] referring to cl 4.1(b) of the Fortescue Coordination Deed and the implied obligation at law requiring parties to cooperate to give each other the benefit of a contract.
[29] Sino Iron Pty Ltd v Mineralogy Pty Ltd [No 15] [530].
In the Cross‑Appeal, Mineralogy contends that K Martin J should have found that the CITIC parties have 'to demonstrate a need to submit [a mine continuation proposal] for the purpose of performing the MRSLAs' before Mineralogy has any obligation to consider that proposal.[30]
[30] Ground 1 of the Cross‑Appeal.
By ground 3 of the Cross‑Appeal, Mineralogy contends that K Martin J erred in fact and law in finding that the PoW, which comprised a programme of works for investigative drilling submitted by the CITIC parties to Mineralogy, was 'reasonable assistance ... to progress development of the Project' within cl 7.1(e) and cl 7.1(i) of the Takeover Agreements and 'assistance' within cl 15(1)(e) of the MRSLAs - that is, assistance which Mineralogy was required to provide to Sino and Korean to allow them to obtain Government Approvals 'required to implement [Sino's/Korean's] Project and to carry out [Sino's/Korean's Activities]'.
In essence, Mineralogy contends that K Martin J should have found that Mineralogy was not obliged to submit the PoW for approval because Mineralogy did not owe any obligation to take the other steps requested by Sino and Korean.
Notwithstanding that the Court of Appeal considered that grounds 2 and 3 of the Cross‑Appeal had reasonable prospects of success in the relevant sense,[31] the Court of Appeal refused to stay the performance of the works the subject of the PoW on the grounds of balance of convenience.[32]
[31] Sino Iron Pty ltd v Mineralogy Pty Ltd [2023] WASCA 96 [51].
[32] Sino Iron Pty ltd v Mineralogy Pty Ltd [2023] WASCA 96 [30].
I consider that the issue raised by ground 1 of the Cross‑Appeal is of limited significance in determining the application for a stay. As the evidence presently stands, the CITIC parties gave an explanation to Mineralogy as to why they had submitted the 2023 MCPs to Mineralogy for consideration,[33] and Mineralogy, it would seem, did not request anything further by way of explanation.
[33] Letter from CITIC to Mineralogy dated 18 August 2023.
Accordingly, while there may well be disputes as to the adequacy of the explanation offered by the CITIC parties, it appears that the construction issue raised by ground 1 of the Cross‑Appeal is unlikely to arise in these proceedings, and if it does, the scope of the dispute will be limited to consideration of the communications between the parties regarding the 2023 MCPs prior to the issue of the writ and, assuming Minerology's construction of the agreement is correct, whether the explanation provided by the CITIC parties for requesting Mineralogy submit the 2023 MCPs to the Minister was adequate.
As to ground 3 of the Cross‑Appeal, the works the subject of the PoW are already being carried out. The 2023 MCPs comprise proposals by Sino and Korean for other works which it is said would enable mining operations to be continued if all necessary approvals were to be obtained in respect of them.
There therefore do not appear to be any common issues of fact so far as the PoW and the 2023 MCPs are concerned. Moreover, the 2023 MCPs appear to be of a different scope and character from the PoW, which was essentially limited to a drilling programme.
I note that both K Martin J[34] and Mineralogy[35] characterised the request for consent to the POW to be a minor issue in the range of disputes to be determined in relation to the 2017 MCPs.
[34] Sino Iron Pty Ltd v Mineralogy Pty Ltd [No 15] [2414], [2433].
[35] Mineralogy's submissions in the Cross-Appeal [1].
So far as any question of construction is concerned, Mineralogy's case appears to be that K Martin J mischaracterised the PoW as being necessary to progress the development of the Project, particularly because the PoW was for the purpose of implementing the Project in the manner proposed by the 2017 MCPs.
Ground 3 of the Cross‑Appeal is therefore relevant to ascertaining the extent of the obligations owed by Mineralogy under the various agreements. As mentioned above, K Martin J considered the determination of the extent of Mineralogy's obligations under the various agreements to be relatively straightforward.
I therefore consider that the construction issues identified by Mineralogy are of lesser significance in assessing the merits of the application for a stay.
As for the location of the Fortescue River Road, an aspect of the 2017 MCP Proceedings concerned the proposed relocation of the Fortescue River Road.
The CITIC parties contend that K Martin J did not make a clear finding about that proposal at trial. The evidence at the trial seems to have been to the effect that the CITIC parties had not finally determined where the Fortescue River Road should be relocated.[36]
[36] See, for example, Sino Iron Pty Ltd v Mineralogy Pty Ltd [No 15] [1443] ‑ [1444], [1778].
Ground 6 of the Appeal concerns K Martin J's finding that the additional areas sought by the CITIC parties were required to be 'essential', 'necessary' or 'critical', as opposed to 'reasonably required', for the purposes of the Project. By ground 7(f) of the Appeal, the CITIC parties contend that K Martin J erred in fact and law in failing to find that the moving of the Fortescue River Road was 'reasonably required' for the Project.
Mineralogy contends that the Court of Appeal will be required to determine whether the lack of detail regarding the proposed relocation of the road is fatal to the request that Mineralogy approve the 2017 MCPs. It says further that, as there is no detail in the 2023 MCPs as to where the CITIC parties propose the Fortescue River Road be relocated, there is 'significant overlap' between the two matters.

In answer, the CITIC parties state that the 2023 MCPs make clear that the road will be relocated within the areas in respect of which they have access and use rights, although they concede that the 2023 MCPs do not identify exactly that will be. That is because, they say, the location will have first to be agreed with the City of Karratha.
In my view, the issues regarding the relocation of the Fortescue River Road in the Appeal are not likely to lead to any substantial waste of time or costs in these proceedings. K Martin J does not appear to have made a finding of fact in the 2017 MCP Proceedings regarding the proposed location of the Fortescue River Road, and it would seem that little evidence was led regarding where the road should be relocated.
The adequacy of the information provided by the CITIC parties to Mineralogy regarding the location of the road, and the consequences (if any) of Mineralogy's failure to request any further information regarding the matter are likely to be issues at the trial of these proceedings. Expert evidence may also be required in order to assess any detriment said to be caused to Mineralogy by the proposed relocation of the road.
However, I assess those matters to be of relatively limited scope, such that the time and costs associated with them are unlikely to comprise a substantial portion of the trial.
In the event that the Court of Appeal holds that detail of the proposed relocation of the road is required to be provided to Mineralogy, as Minerology contends in the Cross‑Appeal, the parties will be bound by that determination in these proceedings.
The third issue raised by Mineralogy is the 'divisibility' of the CITIC parties' requests for approval of the 2023 MCPs - that is, whether the request that Mineralogy consent to the 2023 MCPs is a single request that it consent to the whole of the proposals, without modification.
Mineralogy submits that the 'orders sought by the CITIC parties defy the 2023 MCP Judgment insofar that K Martin J found that Sino's and Korean's request to submit the 2017 MCPS could only be understood as a singular request to submit the 2023 documents in their unaltered form', and that the 2023 MCPs are similarly expressed. It says that the Court of Appeal's findings about the 2017 MCPs will inform the court's findings about the 2023 MCPs.
I do not place significant weight on this factor.
It appears that K Martin J considered, as a matter of fact, that the 2017 MCPs had been submitted to Mineralogy for approval on a 'take it or leave it basis'. Although the CITIC parties challenge that finding by ground 8 in the Appeal, the position in the present case appears to be different.
Here, the CITIC parties' letter to Mineralogy dated 18 August 2023 expressly requested Mineralogy to 'consider and discuss any reasonable objections, amendments or alterations which Mineralogy might propose'. In my opinion, on a fair reading of that letter the CITIC parties requested that Mineralogy identify any difficulties it had with the 2023 MCPs, such that the issue before K Martin J identified by Mineralogy does not arise in the same form in these proceedings, if at all.
The second issue relating to divisibility is whether the court has power to order Mineralogy to propose to the Minister a different mine continuation plan, in essence formulated by the court by having regard to what is 'reasonably required' for the Project, which Mineralogy has not been asked to approve.
That issue involves the resolution of a question of law, and is accordingly unlikely to give rise to significant time and cost in the trial of the present action.
In assessing the application for a stay, it appears to me that the starting point is that K Martin J has construed the agreements between the parties. His construction of those agreements binds the parties in the present proceedings, and will continue to do so unless and until the Court of Appeal construes one or more of those agreements differently.
Ordinarily, a plaintiff is entitled to prosecute properly commenced proceedings to trial.[37]
[37] Sterling Pharmaceuticals Pty Ltd v Boots Company (Australia) Pty Ltd (294); Apotex Pty Ltd v Les Laboratoires Servier (No 6) [2012] FCA 745 [9].
Mineralogy's position is essentially that the CITIC parties are right to be concerned that their appeal will be unsuccessful.[38]
[38] Mineralogy's Outline of Submissions filed 28 February 2024 [1], [11].
Refusal of the stay advances the goal in O 1 r 4A of the Rules of the Supreme Court 1971 (WA) - the elimination of any lapse of time from initiation of proceedings to their final determination beyond that reasonably required for interlocutory activities essential to the fair and just determination of the issues between the parties and the preparation of the case for trial.
It is possible that these proceedings will be heard and determined prior to the Court of Appeal delivering judgment in the Appeal and Cross‑Appeal, but, as stated, that is now unlikely as a result of my decision to dismiss the strike out application. It is now likely that the trial of these proceedings will be heard no earlier than the trial of the FCD Proceedings, anticipated to occur later this year or in early 2025.
If these proceedings are heard and judgment delivered prior to the decision of the Court of Appeal, it is possible that the resources of the court and costs will be wasted should the Court of Appeal come to different conclusions than K Martin J, but the risk of that occurring is no longer as high as it might once have been.
So far as Mineralogy's concerns with the resources of the court being wasted, the court presently has the resources to hear these proceedings in the near term, a matter to which I return below. Accordingly, I consider that Mineralogy's concern with the public interest in these proceedings not delaying or disadvantaging other litigants' proceedings is not a determining factor in considering how this action ought to proceed.
As to the resources of the parties possibly being put to waste, having reviewed the history of the litigation between the parties, it appears to me that they have devoted extraordinary resources to their disputes.
I note that Mineralogy has claimed damages of several billion dollars in the FCD Proceedings, and that there was no suggestion before me that the CITIC parties would be unable to meet any award of damages, even of that scale, were Mineralogy to be successful in those proceedings.
Nor was there any real suggestion that any of the parties would be substantially prejudiced by their management being required to devote time and effort to the conduct of the present proceedings.
I bear in mind that it is the CITIC parties in these proceedings who are the appellants in the Appeal, and therefore that it is they who seek a different construction of the agreements from that reached by K Martin J.
In the circumstances, I consider that any prejudice arising from the prosecution of the present proceedings in the event that the Court of Appeal reached a different view from that of K Martin J can be adequately compensated by awards of costs.
Nor do I accept that Mineralogy is being twice vexed by the CITIC parties' pursuit of the Appeal and the present proceedings simultaneously. Mineralogy contends that the appeal is unlikely to be successful to any significant degree. If that is so, then the present proceedings, which assume that K Martin J's construction of the agreements is correct, will be unaffected by the determination of the appeal.
Further, although the CITIC parties contend before the Court of Appeal that K Martin J's construction of the agreements is incorrect, in the current proceedings they accept that they are bound by his Honour's construction of the agreements, so that there is no possibility of there being an inconsistent outcome between these proceedings and those determined by K Martin J.
I therefore do not accept that Mineralogy faces substantial detriment if required to defend the present proceedings while the Appeal is heard and determined.
In that regard, it was suggested that counsel for Mineralogy would be unable to give proper attention to the present proceedings and to the appeal which were both to be listed for determination in the present year. I do not accept that is a sufficient reason to stay the current proceedings for three reasons.
First, the trial of these proceedings will now take place after the Appeal and Cross‑Appeal are heard.
Secondly, almost the whole of the preparation work required for counsel to conduct the Appeal should have already been completed. Under the Supreme Court (Court of Appeal) Rules 2004 (WA), parties to appeals are required to prepare their case at the time of filing the appellant's case and the respondent's answer respectively.
Assuming that that has been done in the Appeal, and there is nothing to indicate that it has not, the only work required of the parties' legal advisors in relation to the Appeal is the preparation for and attendance at the hearing. It would be surprising if that work took as long as a month.
Finally, the parties are extraordinarily well resourced. At the hearing before me, Mineralogy was represented by senior counsel and three junior counsel. The CITIC parties were represented by two senior counsel and two junior counsel.
If there are parties who have the resources to comply with any timeframes necessary in order to ensure that their disputes are resolved expeditiously, it is the parties to these proceedings.
I therefore decline to grant Mineralogy's application for a stay of the 2023 proceedings pending the delivery of the Court of Appeal's judgment in the Appeal.

The CITIC parties' application for expedition of these proceedings

Following Mineralogy's filing its application for these proceedings to be stayed, the CITIC parties formally applied for their expedition by way of chamber summons.
In a sense, that application is unnecessary, because the matter has already been admitted to the court's Commercial and Managed Cases List. The pace at which the action proceeds is accordingly subject to control by the judge managing the proceedings.
Having said that, I accept that there is a need to ensure that these proceedings are determined with reasonable urgency, although the position is complicated by the dismissal of the CITIC parties' strike out application.
I accept Mr Goodwin's evidence to the effect that the present mining operations will be constrained within the next year or two by the inability to store the waste rock produced from mining operations and tailings produced by the concentration process. Given that the existing mine continuation proposals were approved in January 2010 and were intended to provide for five years of operation, with the first ore being shipped in 2013, it is not surprising that there is now a need to have the State approve new mine continuation plans.
On the evidence, essentially all steps to prolong the operation of the mine have either already been taken, or are in the process of being taken.
I also accept Mr Goodwin's evidence to the effect that it will take approximately two and a half years from the time that the 2023 MCPs are approved by the Minister, assuming that is what occurs, to obtain remaining government approvals and to construct the necessary additional mine infrastructure in order to continue mining operations.
In my view, that means that the mine, all other things being equal, is likely to cease operations within the next few years.
Mineralogy contends that the CITIC parties are principally concerned with their mining operations becoming unprofitable, as opposed to being unable to physically continue mining operations, such that the situation is not as urgent as claimed.
Assuming that is correct, I cannot see why it is in anyone's interest, including Mineralogy, to delay the resolution of these proceedings. The CITIC parties contend, and Mineralogy did not appear to seriously contest, that a reduction in mining operations or their cessation will have a substantial impact on the number of people employed at the mine, which presently comprises approximately 3,000 people, and in the royalties payable to the State.
In my view, those considerations favour the court taking steps to reduce the time the Project may operate at a reduced capacity. I consider that there is a real public interest in the ongoing disputes between these parties regarding the submission of new mine continuation plans to the Minister being resolved as soon as possible.
Further, the court presently has the resources to determine the FCD Proceedings and this action in the near term, without necessarily delaying the determination of other litigants' claims.
I therefore consider it is unnecessary to reach a final determination in relation to the CITIC parties' application for expedition, because I consider that the same outcome can be achieved through case management in the court's Commercial and Managed Cases List.

Summary

Accordingly, subject to hearing from counsel as to the precise form of the orders and as to costs, I propose to:
(a)dismiss Mineralogy's application for the stay of these proceedings pending the delivery of the Court of Appeal's reasons for decision in the Appeal;
(b)dismiss the CITIC parties' formal application for expedition of the proceedings, but on the basis that the proceedings will be advanced expeditiously in the court's Commercial and Managed Cases List; and
(c)dismiss the CITIC parties' application to strike out portions of Mineralogy's defence.

Future conduct of the proceedings

My assessment of the issues in these proceedings is that they involve similar, but not identical, issues of fact to those raised before K Martin J in the 2017 MCP Proceedings, with the exception that the present proceedings do not involve any question of the grant of further access and use rights to tenements by Mineralogy to the CITIC parties, which was a central issue in the 2017 MCP Proceedings.
As the FCD Proceedings have now been on foot for more than six years, I assume that they will be ready for trial this year or early in 2025, as had previously been indicated to Lundberg J.
Because of the dismissal of the strike out application, these proceedings will now have to await the determination of the FCD Proceedings.
However, as I have accepted that these proceedings are reasonably urgent, and should proceed to a hearing as soon as can be accommodated by the court, I presently consider that the trial of this action should be held either concurrently with, or immediately following upon, the trials in the FCD Proceedings.
As I have said, the resources available to the parties appear to be vast, such that they have the ability to prepare this action for trial within the time required for that to occur.
Further, the court presently has the resources available to hear all three matters in the near future. For that reason, it appears to me that the case management of the current proceedings should be undertaken by the same judge as the judge who has case management of the FCD Proceedings.
The parties will be advised which judge is to be the case manager once that has been determined by the court.
In the meantime, the parties should confer regarding the programming orders to be made to achieve that end.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
LT
Associate to the Hon Justice Cobby
3 JULY 2024