Sino Iron Pty Ltd v Mineralogy Pty Ltd [No 16] - [2023] WASC 192

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION:   SINO IRON PTY LTD -v- MINERALOGY PTY LTD [No 16] [2023] WASC 192
CORAM:   KENNETH MARTIN J
HEARD:   20 APRIL 2023
DELIVERED          :   2 JUNE 2023
FILE NO/S:   CIV 1915 of 2019
BETWEEN:   SINO IRON PTY LTD
First Plaintiff
KOREAN STEEL PTY LTD
Second Plaintiff
CITIC LIMITED
Third Plaintiff
AND
MINERALOGY PTY LTD
First Defendant
CLIVE FREDERICK PALMER
Second Defendant
STATE OF WESTERN AUSTRALIA
Third Defendant

FILE NO/S: CIV 2326 of 2021
BETWEEN: SINO IRON PTY LTD
First Plaintiff
KOREAN STEEL PTY LTD
Second Plaintiff
CITIC LIMITED
Third Plaintiff
AND
MINERALOGY PTY LTD
First Defendant
CLIVE FREDERICK PALMER
Second Defendant
THE STATE OF WESTERN AUSTRALIA
Third Defendant

Catchwords:

Judgment and orders - first defendant (appellant) mostly successful at trial save for Programme of Works (PoW) issue - Mandatory orders requiring submission of PoW proposal by first defendant to State government department for necessary approval considerations - Post-trial reasons found breach of contract by first defendant by not assisting in submission of the PoW proposal - Long term stalemate on any PoW advancement - Appeals by all plaintiffs and first defendant following trial decision - Appeal by first defendant against mandatory PoW submission orders - Application for stay by first defendant pending resolution of its appeal - Further PoW delays if stay granted - Delays exceeded five years - No prejudice suffered by first defendant if stay refused - Subject matter of the appeal on PoW issue not rendered nugatory - Breach damages issue as to PoW requiring damages assessment at a further trial hearing - Ongoing relevance of PoW breach subject matter for appeal - Status of PoW as submitted or as approved before appeal determined not material - No real prejudice to appellant even if appeal ultimately allowed - PoW breach damages assessment redundant if appeal allowed

Legislation:

Iron Ore Processing (Mineralogy Pty Ltd) Agreement Act 2002 (WA)

Result:

Stay refused on Programme of Works mandatory orders

Category: B

Representation:

CIV 1915 of 2019

Counsel:

First Plaintiff	:	J Karkar KC & J Kirkwood SC
Second Plaintiff	:	J Karkar KC & J Kirkwood SC
Third Plaintiff	:	J Karkar KC & J Kirkwood SC
First Defendant	:	P Dunning KC, M Karam, K Byrne, H Cooper & D Fawcett
Second Defendant	:	No appearance
Third 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	:	In person
Third Defendant	:	State Solicitor's Office

CIV 2326 of 2021

Counsel:

First Plaintiff	:	J Karkar KC & J Kirkwood SC
Second Plaintiff	:	J Karkar KC & J Kirkwood SC
Third Plaintiff	:	J Karkar KC & J Kirkwood SC
First Defendant	:	P Dunning KC, M Karam, K Byrne, H Cooper & D Fawcett
Second Defendant	:	No appearance
Third 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	:	In person
Third Defendant	:	State Solicitor's Office

Cases referred to in decision:

Billabong Gold Pty Ltd v Vango Mining Ltd [2022] WASCA 35
Sino Iron Pty Ltd v Mineralogy Pty Ltd [No 15] [2023] WASC 56
Sino Iron Pty Ltd v Mineralogy Pty Ltd [No 15] [2023] WASC 56 (S)

KENNETH MARTIN J:

Introduction

In the wake of the reserved trial decision reasons in Sino Iron Pty Ltd v Mineralogy Pty Ltd [No 15] [2023] WASC 56 delivered 7 March 2023 ('post-trial reasons'), a series of orders for judgment followed on 10 March 2023 (folio 495) ('judgment orders').
A stay application is now formally moved against an aspect of those judgment orders, by the first defendant ('Mineralogy') under its subsequent chamber summons filed 6 April 2023 (folio 509). It seeks orders staying the operative effect of the mandatory injunction order - issued under order 1 of the judgment orders. For present purposes, it is convenient to set out orders 1, 2, 3, 5, 6, 7 and 8 of those judgment orders. They concern the required submission by Mineralogy of the as-referenced Programme of Works ('PoW') to a State of Western Australia ('State') government department - in the form of annexure 1 to the judgment orders.
Programme of Works
1.The first defendant shall, within 7 days of the hearing referred to in paragraph 8 of this Order or any further order of the Court, submit the Programme of Works in the form of annexure 1 to these orders to the Department of Mines, Industry Regulation and Safety (DMIRS) for assessment, by email to Mr Richard Sellers, Director General of DMIRS, copied to the first and second plaintiffs care of their solicitor Mr Gerard Woods, Partner of Allens.
Other claims for injunctive relief
2.The plaintiffs’ claims for relief in paragraphs A, B, BA and C of the Consolidated Further ReAmended Statement of Claim dated 30 December 2021 (CONSOC) be dismissed.
Claims for monetary relief
3.Except in so far as they relate to the plaintiffs’ claims for breach of contract in relation to the Programme of Works, namely the claims made in CONSOC paragraph 172 together with paragraph 204(a), as they relate to the breach of the obligations pleaded at CONSOC paragraphs 162(a)(ii) and (b), the plaintiffs’ claims for relief in paragraphs E, H and I of the CONSOC be dismissed.
4.…
Other claims for monetary relief, and costs
5.The issue of the further conduct or disposition of the plaintiffs’ claims for relief in paragraphs E, H and I of the CONSOC in so far as they relate to the plaintiffs' claims for breach of contract in relation to the Programme of Works, namely the claims made in CONSOC paragraph 172 together with paragraph 204(a), and the issue of the reserved costs of the proceeding, be adjourned to a special appointment on Friday, 21 April 2023 at 10.30am WST (Reserved Issues).
Application for stay of Order 1
6.By 4.00pm WST on Thursday, 6 April 2023, the first defendant shall file and serve any application to stay paragraph 1 of this Order (Stay Application), any affidavit material and an outline of submissions.
7.By 4:00pm WST on Monday, 17 April 2023, the plaintiffs shall file and serve any outline of submissions and affidavit material in opposition to the Stay Application.
8.The Stay Application be listed for hearing on Thursday, 20 April 2023 at 2.15pm WST.
The effect of orders 1, 6, 7 and 8 of the judgment orders was, in effect, to grant an interim stay of the PoW mandatory orders until the parties had filed more materials for the purpose of a disputed hearing upon a then as-foreshadowed formal stay application to be made by Mineralogy against order 1 of the judgment orders - at a special appointment hearing which was fixed for 20 April 2023 at 2.15 pm.
The purpose of that special appointment hearing was to determine whether or not the interim stay, that I had granted concerning the PoW issue on 10 March 2023, should be extended - under circumstances where Mineralogy had foreshadowed then, but in the interim had since commenced, an appeal to the Court of Appeal of Western Australia (CACV 37 of 2023). The appeal by Mineralogy seeks to set aside and to reverse order 1 of the judgment orders granting that mandatory PoW relief against Mineralogy - which, in effect, obliges Mineralogy to assist the plaintiffs (Sino Iron Pty Ltd ('Sino Iron'), Korean Steel Pty Ltd ('Korean Steel') and CITIC Ltd ('CITIC'), collectively the 'CITIC plaintiffs') by it submitting the PoW to the relevant State department for its assessment and approval. That relevantly is, the Department of Mines, Industry Regulation and Safety ('DMIRS').
For the purposes of determining Mineralogy's current application seeking a longer duration stay of those PoW orders until its pending appeal is determined, I received its outline of written submissions of 6 April 2023 (folio 511). Opposing any further extension of the interim stay of those PoW mandatory orders (which was extended further, awaiting these reasons and decision), the CITIC plaintiffs rely upon their outline of written submissions of 17 April 2023 (folio 510).

Principles underlying an application for a stay of judgment orders in the wake of a pending appeal to the Court of Appeal

There was no dispute between the parties concerning the applicable principles governing the granting of a post-trial stay, pending determination of an appeal made against a primary decision. Conveniently, the law is found expressed in the recent joint reasons of Quinlan CJ and Mitchell JA in Billabong Gold Pty Ltd v Vango Mining Ltd [2022] WASCA 35 at [33], in the following terms:
An application for interim relief such as a stay or suspension order generally needs to demonstrate that there are special circumstances justifying departure from the ordinary rule that a successful litigant at first instance is entitled to enforce the judgment pending the determination of any appeal. There are three essential considerations that arise in the context of the general principles relevant to the grant of a stay of a primary court's orders: (1) whether the refusal of a stay could render the appeal nugatory; (2) whether the appeal has reasonable prospects of succeeding; and (3) whether the balance of convenience favours the grant or refusal of a stay.
In broad terms, the written submissions exchanged as between Mineralogy (as stay applicant against order 1 of the judgment orders) and the CITIC plaintiffs (as the successful parties upon this PoW issue at trial), display diametrically opposed positions over the stay sought by Mineralogy.
Before proceeding too much further, it is opportune to revisit a component of my post-trial reasons dealing with this issue. Within the context of the overall trial this PoW issue was, as I observed then, in effect, a relatively small-level issue in scope at least (see sundry issue five, where my discussion commenced at [2414] of the post-trial reasons). For convenience, I incorporate and repeat [2414] - [2433] of those reasons below - noting that the mandatory final injunctive relief sought by the CITIC plaintiffs had always been the clear subject matter of prayer D since the first statement of claim of 19 October 2018 (folio 2) and remained pressed for by the CITIC plaintiffs under the consolidated further re-amended statement of claim of 30 December 2021 ('CONSOC') (folio 331).
The PoW issue was pleaded in the CONSOC, as discussed in [2418] of the post-trial reasons, by reference to the CITIC plaintiffs seeking an ordering by the Court that Mineralogy submit the PoW to obtain the approval of DMIRS or, alternatively, for relief that required Mineralogy to authorise the CITIC plaintiffs to submit the PoW to DMIRS on behalf of Mineralogy.
I point out, in what was a context of a necessary framing of the judgment orders giving effect to the post-trial reasons, upon the basis of rival minutes as exchanged between Mineralogy and the CITIC plaintiffs prior to 10 March 2023, that there was no debate by then over which of those two alternatives ought to be selected as the subject of the injunctive relief orders to be made concerning the PoW.
In other words, by the time judgment orders came to issue on 10 March 2023 in the wake of the published post-trial reasons, it had then become uncontroversial that the alternative of Mineralogy submitting the PoW for the obtaining of DMIRS's approval, was the appropriate PoW relief order 1.
Accordingly, in the absence of any voluntary undertaking as to it submitting the PoW, which I said in the post-trial reasons that I would have been inclined to accept from Mineralogy had it ever been offered (it was not), orders needed to be issued as regards progressing the submission for approval of the PoW (see [2433] of the post-trial reasons and the injunctive relief under order 1 of the judgment orders). Parts of those post-trial reasons upon the PoW issue, said this:
[2414]Discrete issues around the so-called Programme of Works (PoW) presented as another very minor aspect of the Primary Trial's disputes.
[2415]Essentially, such works are a series of proposed investigatory drilling exercises by Sino Iron and Korean Steel by way of multiple proposed exploratory holes sought to be drilled within M08/123, M08/124 and M08/125, but also, within other SLA specific areas - as already held by Sino Iron and Korean Steel as a result of their MRSLA tenure grants, including for the drilling in areas in the southern half of G08/53, which is proposed to be used as a part of an eventually expanded northern TSF.
[2416] It is accepted that if the works which are foreshadowed as a subject of the 2017 MCPs were ever to be undertaken, then such greater MCP proposed works would subsume and overtake what is the far more limited PoW investigation exercise - wholly confined to existing tenure areas as already granted and held as SLAs by Sino Iron and Korean Steel. But as is now more than well demonstrated, the proposed December 2017 MCPs have not progressed so far.
[2417]A PoW request made to Mineralogy at 23 April 2018 was for the purposes of seeking a submission of these, in effect, more limited interim measure drilling PoW to a relevant State regulatory authority for their permission. But the suggested PoW plan has also gone nowhere. It has not been supported by Mineralogy. The relevant State authority is the Department of Mines, Industry Regulation and Safety (or DMIRS, as it is known).
[2418]Advancing the PoW proposal of Sino Iron and Korean Steel for the Sino Iron Project - which Mineralogy has not agreed to - is a subject of the final injunctive relief as is sought under prayer D of the CONSOC - framed by reference to ordering Mineralogy to submit the PoW for the obtaining of the approval of DMIRS, or for Mineralogy to authorise CITIC to submit the PoW to DMIRS on behalf of Mineralogy.
[2419]The PoW of 23 April 2018 put to Mineralogy is exhibit 1612.
[2420]Proposed investigatory drilling works, as the subject of the PoW, are referred to within Mr Goodwin's primary witness statement of 20 October 2021 for the CITIC plaintiffs (exhibit H1). I refer to Mr Goodwin's observations at pars 99 and 104. He says there:
'Without regulatory approval, CPM cannot conduct the drilling proposed in the PoW.'
[2421]During Mr Goodwin's cross-examination at the Primary Trial, I do not recall him being contradicted, or being challenged in any way over that statement, albeit it is in respects, of course, a statement of law made by him. As earlier discussed, Mr Goodwin was an impressive, plain speaking, lay, technical witness called at the Primary Trial for the CITIC plaintiffs. In the end there was no real challenge put against his credit by Mineralogy (see ts 2274).
[2422]The Primary Trial focused overwhelmingly on the 2017 MCPs and at the expressed need for continuation plans of that scale for the Sino Iron Project to effectively be approved by the Minister - under the regime of the State Agreement - in order then to attain the status of 'approved proposals'.
[2423]A DMIRS approval needed for the PoW to proceed is a wholly different State regime. What was being sought for the PoW to advance was a State regulatory authority (DMIRS) approval, not the approval of the Minister under the State Agreement.
[2424]A legal basis for a suggested need for such an approval from DMIRS being first obtained for the PoW before being undertaken was not canvassed in any real depth at the Primary Trial - at least in comparison to the extent that executive approval of the Minister for the 2017 MCPs under the State Agreement was much more in focus in the wider context of the disputed tenure issues in the Primary Trial.
[2425]Mr Goodwin's primary witness statement returns to deal with works as they are proposed by way of investigative drilling under the PoW in relation to an expansion and construction of a new northern tailing storage facility at section D.1.3 of Mr Goodwin's primary witness statement and, in particular, under his observations at pars 406, 407 and 408. See also the CITIC plaintiffs' written outline of closing submissions (folio 471) at pars 226 - 230, and further at pars 338 - 342.
[2426]Specific pleas made towards the PoW under the CONSOC are at pars 159 - 164. Responding, Mineralogy's pleaded defence (6FAD) carries the same paragraph referencing designations as the CONSOC. Upon examination, the 6FAD plea refers back to and repeats matters as earlier stated under Mineralogy's defence at par 137fA, as regards it defending the non-advancement of the PoW on its part.
[2427]Essentially, the PoW resistance stance argument by Mineralogy, as put, was that there is an interdependency between the cooperation and assistance that Mineralogy was asked to provide to advance this interim PoW measure, with the contentious MCP and disputed extra tenure issues - that are more centrally in focus within the litigation.
[2428]I can accept that the discrete PoW issues associated with progressing the PoW for an approval by DMIRS, present as being relatively small, in overall comparison to the breadth of the other disputed trial issues raised by the wider aspects of the Primary Trial. It is likely that the PoW advancement issue would easily be subsumed and overwhelmed by the greater trial issues. Nevertheless, on my assessment, the interdependency defence that was put by Mineralogy against it advancing the PoW, is ultimately not sustainable.
[2429]As I have mentioned, the more limited drilling PoW which are sought to be undertaken are entirely proposed over tenure areas that are already granted to and held by Sino Iron and Korean Steel as SLAs under the existing tenure grant arrangements of the MRSLAs.
[2430]In considering the CONSOC subpars 162(a)(ii) and (b) assistance obligation pleas put against Mineralogy vis-à-vis advancing the PoW, my assessment is that all of the contractual 'assistance', or 'reasonable assistance' express term Project Agreement promises - made by and still binding upon Mineralogy (see par 8 of the CONSOC to identify such Project Agreements) - have obliged Mineralogy to provide its consent to CPMM (acting for Sino Iron and Korean Steel) submitting to DMIRS on their behalf, or for it to submit the proposed PoW to DMIRS for an approval - in the absence of any more substantive grievance identified over what is proposed by those drilling works. There is nothing else substantively raised against the PoW progressing, as I would discern. I would reject the interdependency defence to the MCPs arguments as unsustainable. The PoW are much smaller scale and wholly discrete. They do not carry with them any of the same controversies as present elsewhere within this trial, such as advancing over the MCPs, or providing the additional tenure areas sought compulsorily from Mineralogy.
[2431]As also mentioned, Mr Goodwin's observations concerning a need for the DMIRS regulatory approval, seen at par 104 of his primary witness statement, effectively stands as wholly uncontradicted. I note from the submissions that the legal basis for establishing a need for DMIRS approval for the PoW to proceed is said there to arise out of the specific conditions applicable by terms of the mining tenement leases, or on the terms of general purpose leases themselves. That aspect of the suggested legal requirement for approval for the PoW to be undertaken was not really ever a subject of much greater elaboration in the Primary Trial. Nevertheless, as I do accept Mr Goodwin's trial evidence more generally, I will also accept his essentially unchallenged evidence as to the need for obtaining this regulatory approval from DMIRS for the PoW to proceed, as so stated.
[2432]The injunctive relief sought under prayer D of the CONSOC is manifestly equitable relief. That is always discretionary, albeit principled in application.
[2433]Bearing in mind the relatively miniscule scope of this PoW advancement issue presenting within the context of the greater issue in dispute in the overall Primary Trial, I propose to afford, upon publication of these reasons, a very brief opportunity for Mineralogy, if it chooses, to volunteer an undertaking to the Court that broadly aligns to the CONSOC prayer D relief sought toward advancing the PoW for an approval from DMIRS. That would enable what is the relatively minor and discrete PoW issue to effectively be isolated away from the far more controversial and substantive tenure and MCP issues that presented for greater resolution within the Primary Trial. Of course, Mineralogy can be heard about this aspect of outcome, if it seeks that opportunity. Its ultimate position over the PoW may bear upon my ultimate costs orders concerning this Primary Trial's outcomes.

I would highlight as context towards the present opposed stay application made concerning compliance with order 1 of the judgment orders pending Mineralogy's appeal outcome that - unlike for the thwarted progress of the Mine Continuation Proposals ('MCPs'), which the CITIC plaintiffs had at trial sought Mineralogy's cooperation and assistance towards obtaining required ministerial approvals under the regime of the Iron Ore Processing (Mineralogy Pty Ltd) Agreement within sch 2 to the Iron Ore Processing (Mineralogy Pty Ltd) Agreement Act2002 (WA) - the PoW-required approval regime was very different.
Ministerial approval was never required for the PoW to progress. Rather, the terms of the tenement grants made to Mineralogy in respect of the relevant mining tenements as they were held by Mineralogy (but were later the subject of contractual arrangements perfect around then by Mineralogy for Sino Iron and Korean Steel under respective Mining Right and Site Lease Agreements ('MRSLAs')), gave rise to the need, fully accepted at the trial, for Mineralogy, as tenement holder, to either make the application itself to DMIRS, or for it to authorise CITIC to make that PoW approval application on its behalf.
As I observed at [2424] in the post-trial reasons, the legal basis within the tenement holding conditions for the need for the obtaining of such an approval from DMIRS for the PoW before the works were undertaken, was not canvassed in any depth at the trial. But there was no real dispute however, that this was the correct legal position (see evidence of the CITIC plaintiffs' witness, Mr Robert Goodwin, referred to at [2420] of the post-trial reasons - which was uncontradicted at the trial).

Appeal Merits

Towards me now assessing, as one stay factor consideration, the merits of Mineralogy's appeal against my mandatory order requiring Mineralogy to provide assistance to the CITIC plaintiffs - by submitting the PoW to DMIRS for approval - it is relevant to note that at the trial, Mineralogy's resistance stance had invoked what I referred to at [2427] of the post-trial reasons as an 'interdependency' argument (and see par 137(f)A of Mineralogy's sixth further amended defence of 16 February 2022 (folio 384)).
Essentially, this resistance platform, which I assume will be reventilated at the appeal - although I have seen no grounds of appeal ‑ was ventilated at the trial on a basis that the PoW interim measure was so aligned with, or was entangled so inseparably to, the contentious advancement of the MCPs (and thereby was tied to allied additional extra tenure acquisition premises underlying those MCPs being sought to be advanced to the Minister for approval), that all the deficiencies blighting progress of the MCPs carried over to blight the PoW proposal as well, in effect, by parity of reasoning.
In effect, it was being said in defence by Mineralogy regarding the PoW, at least as I perceived matters at the trial, that the deficiencies that Mineralogy came to expose around the MCPs, also spilled over to infect the PoW proposal of April 2018. As a result, such carried-over deficiencies surrounding the MCPs progressing, would also exonerate Mineralogy from an obligation of cooperation towards assisting any advancement of the PoW, as well. At the trial, I rejected that line of interdependency defence as put for the PoW. I assessed the progress of the PoW as raising more limited considerations - in particular by the PoW issue not being premised on Sino Iron and Korean Steel obtaining any more additional tenure areas from Mineralogy (unlike for the MCPs).
As a matter of further contextual interest, I would note that sundry trial issue number four, as canvassed in the post-trial reasons, had addressed the CITIC plaintiffs' application for further relief to compel Mineralogy to assist - in a proposed repurposing of three of Mineralogy's general purpose lease held tenements (see the post-trial reasons commencing at [2381]). In that distinct context, I did detect an acquisition controversy present surrounding the CITIC plaintiffs' claims to additional tenure areas from Mineralogy within general purpose lease 08/63. Consequently, for that issue I did decline there to grant the CITIC plaintiffs relief by reason of the nexus I had discerned between that surrender repurposing controversy to the trial's wider MCP compulsory extra tenure acquisition controversy (see the post-trial reasons at [2408] and see especially at [2406]). In other words, the interdependency defence as it was raised there by Mineralogy, was accepted.
In contrast, I assessed the PoW advancement controversy as being discrete. I came then to assess, in the end, that it carried with it no suggestions of any PoW exploratory drilling works being undertaken anywhere else than on areas that were the already held tenure areas - uncontroversially granted by Mineralogy to, and held by, Sino Iron and Korean Steel as 'Site Lease Area' (as defined in the MRSLAs) under the parties' early and subsisting contractual grant arrangements.
For the purpose of advancing the present stay application, senior counsel for Mineralogy drew particular attention to the terms of trial exhibit 1612. This was Mr Chen Zeng's PoW communication to the chairman of Mineralogy on 23 April 2018 ('23 April 2018 communication'), then seeking Mineralogy's assistance to either:
(a)submit the PoW to the Department of Mines, Industry Regulation and Safety for assessment; or
(b)authorise [CITIC Pacific Mining Management Pty Ltd] to submit the PoW to DMIRS on behalf of Mineralogy.
Advancing Mineralogy's stay application, senior counsel came to emphasise, in a context of what was being suggested as the Court's erroneous rejection at the trial of its interdependency defence arguments made as well for the PoW, that the terms of the second and last paragraphs of that 23 April 2018 communication would assist the merit of Mineralogy's appeal on the PoW issue. The second paragraph read:
This PoW is for urgent works associated with investigation requirements to aid in defining the proposed Mine Continuation Proposal development footprint and enable the progression of detailed engineering design. The proposed works will be carried out on mining tenements M08/123, M08/124, M08/125, M08/264, M08/265 and M08/266 and the southern portion of G08/53. (my emphasis in bold)
The concluding paragraph of Mr Zeng's 23 April 2018 communication had ended:
These investigative works, and the subsequent engineering and design works, are both on the critical path towards the major works described in the Sino Iron Mine Continuation Proposals, which have previously been provided to Mineralogy. … (my emphasis in bold)
Those as-now highlighted above components of the 23 April 2018 communication received a greater level of emphasis upon the stay application, than occurred at the trial. Only brief arguments were advanced in the course of the running of that trial upon the PoW issue.
It is of course correct that had the greater scale of works as are the subject matters of the MCPs (also put to Mineralogy) ever been approved and undertaken, then the far greater ambit of those MCP works would have effectively subsumed the scope of the lesser scale proposed PoW drilling investigation works - proposed for investigative hole drilling only within the tenure areas as are already held by Sino Iron and Korean Steel (see my observations at [2416] of the post-trial reasons).
Nevertheless, the CITIC plaintiffs', by their CONSOC, have sought an advancement of the PoW relief against Mineralogy from the commencement of the litigation - as a discrete component of their relief. PoW relief has always then been canvassed distinctly from the other MCP-related relief sought (see CONSOC pars 162 - 165).
The present stay application arguments of Mineralogy put a particular emphasis on the reference to 'purpose of the PoW', seen in the 23 April 2018 communication - by regard to the proposed MCP development footprint, now seen. A submission made by counsel for Mineralogy, in the context of the objective theory of contract, was that the terms of the 23 April 2018 communication itself would be evaluated objectively vis-à-vis that stated MCP-related purpose tied there to the PoW. Therefore, it was put that there had been no point in challenging the evidence at trial of the CITIC plaintiffs' witnesses, including Mr Goodwin, concerning, in effect, the character of the more limited works under the PoW as an interim measure - given the lack of progress advancing the MCPs.
However, with respect to this submission, there is, I would assess, a measure of contract conflation here - concerning what I would see as an attempted rationalisation of Mineralogy's arguments towards interdependency and the PoW after the outcomes of the trial.
As the post-trial reasons attempted to explain, I assessed that the relevant contractual obligations bearing upon Mineralogy were its various project agreement assistance obligations, invariably seen as promising to assist or provide reasonable assistance to Sino Iron and Korean Steel with the Sino Iron Project. That general assistance promise by Mineralogy was ascertainable in multiple contractual project agreements as perfected between the relevant parties and identified in the post-trial reasons. Mineralogy's contractual obligations ‑ by promising to assist, or to provide reasonable assistance to, Sino Iron and Korean Steel - did not emerge as a matter of contract from out of that 23 April 2018 communication by Mr Zeng. Those assistance obligations upon Mineralogy had come into existence long before than in the project agreements.
The 23 April 2018 communication of Mr Zeng, in effect, was a request made then to Mineralogy to provide its assistance to advance the PoW with DMIRS. It was not the relevant contract or any part thereof. The request sought then to invoke the assistance promised a lot earlier by Mineralogy vis-à-vis the PoW. At the time of that request, the PoW did carry some potential to be subsumed by the greater scale works as proposed to be carried out under the then stalled MCPs, if they ever proceeded. But that did not eventuate for the MCPs. There was a stalemate all round for the MCPs as well as for the PoW.
By the time proceedings issued in 2019 in the Federal Court of Australia, MCP approval had still not progressed. The MCPs had not even reached the relevant State minister - to view from an approval perspective or otherwise. There was then, in effect, a stalemate on all fronts concerning progression of the MCPs, as well as non-progression of the PoW to DMIRS for approval. That was the common inertia position on all fronts.
That was the general stalemate context in which relief was discretely sought when the civil proceedings were commenced, as evidenced under prayer D of the CONSOC concerning the PoW relief - the terms of which remained always unaltered from the first iteration of the CITIC plaintiffs' pleading.
That was the context in respect of which Mr Goodwin's uncontradicted trial evidence concerning a genuine need for these more limited works as an investigation drilling measure for the CITIC plaintiffs, was assessed then by me.
The PoW might well have dovetailed with the work in areas which were a subject of the greater MCP works, as proposed. But that potential did not detract from the discrete nature of what the PoW proposed to be advanced, if the MCP works remained stalled, as they did. There was that potential overlap on both proposals. But this did not show interdependency to the wider MCPs.
With those observations in mind, I turn back to the tripartite criteria to be weighed in this stay application made by Mineralogy.

The tripartite stay criteria

Does Mineralogy hold a reasonable prospect of succeeding?

By reference to the observations made above, I remain of a view concerning the merits of the appeal, for what it is worth as primary decision-maker, that my rejection of Mineralogy's interdependency defence as put towards the PoW, was right. There is, of course for me, an absence at this time of any grounds of appeal to view on the point. I hold, therefore, no insights towards Mineralogy's eventual written case on its appeal on the PoW issue - to reach a view that Mineralogy's prospects towards this issue present as strong or healthy. But, I should recognise also that I am, at least subconsciously, predisposed to that view as the trial judge.
For present purposes then, I shall proceed on a basis that Mineralogy might be able to fashion, in due course, some appeal error arguments along those lines as foreshadowed. I recognise the inescapable level of decision-maker and author's bias, having laboured initially over this PoW issue at first instance. Hence, I will weigh this potential merit factor as a neutral, presently.
More substantively then, towards my decision upon whether or not to extend the current interim stay upon the PoW orders any further, will be my evaluations over the two further key required stay criteria - by reference to the assessment of the balance of convenience and then, as to whether or not a refusal of a further stay may render the appeal subject matter nugatory. I turn to consider those two further and for me determinative, stay criteria.

Does the balance of convenience favour a grant or refusal of Mineralogy's stay application?

There is, of course, as must be recognised, a level of conceptual intersection between the two remaining issues for consideration upon this stay application.
Certainly, if it were the case that a failure to extend the interim stay any further was assessed to deliver a consequence of rendering Mineralogy's appeal moot, by reason of the destruction in the interim of the underlying subject matter of the appeal, then that would, of course, constitute a very powerful factor towards positively influencing an extended stay - to preserve the utility of an appeal until determined on the merits by the Court of Appeal.
But as I will explain, I am not of the end view that Mineralogy's compliance with order 1 of the judgment orders, by a submitting of the PoW to DMIRS, would deliver negative consequences against any later hearing of Mineralogy's appeal against that order.
Towards assessing a balance of convenience, my view is that there would be minimal, if any, real prejudice sustained by Mineralogy through it complying immediately with order 1 of the judgment orders ‑ pending its appeal on the PoW issue being heard and determined. As seen, order 1 only requires Mineralogy to submit the PoW to DMIRS for the purpose of obtaining approval for the investigative drilling works proposed.
Theoretically, submission of the PoW to DMIRS by Mineralogy may then result in a number of potentialities - including DMIRS's potential refusal of permission or, DMIRS's potential non-decision accompanied by a request for further information to be provided to assist its decision-making or, indeed, an eventual approval of that proposed PoW by DMIRS.
Of course, even the prospect of an approval by DMIRS of the proposed PoW is an outcome that is wholly distinct to, in its own right, a conducting and carrying out later on of those as-approved works themselves, pursuant to the approval. In other words, the hypothesised event of DMIRS's approval would not necessarily translate to an immediate effecting of those works. And, of course, there is a likely temporal gap between an approval and the commencement, then completion of, all the work under the PoW.
In this sphere, the uncontradicted evidence of the CITIC plaintiffs' trial witness, Mr Goodwin, explains it might take some time to obtain DMIRS's approval. At par 409 of his witness statement of 20 October 2021 ('primary witness statement') (see trial exhibit H1), Mr Goodwin said:
409.The final stage of preliminaries is the process of seeking and obtaining government approvals. The time that that it takes to obtain government approval is difficult to estimate. As noted in paragraph 394 above, based on my recent experience, a realistic estimate of the time required to obtain the necessary DMIRS approvals for the construction of a TSF facility is at least 6 months.
Then, post any assumed PoW approval given by DMIRS in due course, in terms of the duration of the carrying out of the PoW, as implemented, this could also take time. The PoW, as drawn, envisages an implementation period of approximately 13 months (at the time it was prepared assuming then, commencement in April 2018 and completion by May 2019).
If, per chance, DMIRS's assumed approval of a submitted PoW by Mineralogy (as ordered) were to be forthcoming from DMIRS within say, the next six months, it still then remains to be seen whether any of the work as so envisaged and approved under the PoW would have been commenced, let alone carried out to completion, prior to any joint hearing of the appeals as now commenced by both Mineralogy (against order 1 of the judgment orders) and the CITIC plaintiffs (against judgment orders adverse to them).
If, say, the PoW had not then been substantively commenced at the time of hearing of the appeals, but a DMIRS approval had, say, been by then obtained, it would still be open to Mineralogy to seek from the Court of Appeal a stay of the work itself - assuming it could establish some level of prejudice to itself or its tenements from that work.
So the question is how or why would Mineralogy possibly be prejudiced by it obeying order 1 of the judgment orders and by presently submitting the PoW to DMIRS. Or, how or why would Mineralogy be prejudiced by any later grant of an approval for the PoW by DMIRS or indeed, prejudiced by any subsequent carrying out of that investigatory drilling work post approval? The Mineralogy tenements at issue for the PoW are mining tenements, some parts of which have already been heavily investigated, indeed already commercially mined productively on an ongoing basis. The subject tenements as part of the Sino Iron Project, are far from virgin now.
Various arguments are put, as to potential prejudice, on behalf of Mineralogy on the application for an extension of the interim stay of order 1 of the judgment orders. It was said that Mineralogy would not be able to be restored to its original position if a stay were not granted. But investigative holes in the ground are routinely drilled and then later filled. There was even a possibility, it was said, of the Court of Appeal declining to hear Mineralogy's PoW appeal against order 1 of the judgment orders, on the basis that the subject matter of the appeal upon the issue may have been lost by then.
With respect, however, I cannot accept any of those arguments. Nor can I accept that Mineralogy might suffer adversely via some issue estoppel at the appeal - arising out of an implementation of order 1 of the judgment orders, thus inhibiting a viable determination of Mineralogy's appeal over the PoW issue.
Let it be assumed that at some point in future (roughly assessed by me at present to be at least a minimum period of 18 months away), the Court of Appeal came then to reach a different PoW interdependency conclusion. Even so, if order 1 of the judgment orders has been complied with in the interim by the submission of the PoW to DMIRS to consider, how has Mineralogy been prejudiced, say, by a DMIRS approval of the works that issued in the interim? That is not true prejudice. There is no suggestion Mineralogy would have submitted the PoW to DMIRS for approval voluntarily. It has been ordered to do that against its opposition - which is a matter of record. Obviously, Mineralogy would have acted under the compulsion of a court order. Mineralogy is entitled to challenge the making of the order on its appeal. That right is preserved because deeper PoW issues still remain at stake to be resolved, including its PoW damages breach exposure.

I cannot presently assess, as I am required to do, a serious prospect of the Court of Appeal declining to hear the PoW aspects of Mineralogy's appeal, if it had in the interim complied with order 1 of the judgment orders and submitted the PoW to DMIRS. Even if the works have begun upon such an approval, or even if the investigative drilling works were fully completed by then, the position is no different and the underlying PoW issue still remains live for a determination.
The success of the CITIC plaintiffs upon the PoW aspect of their claim at trial, has attributed to it the further and ongoing breach damages exposure consequences for Mineralogy. They will remain live as subject matter at the appeal. That damages hearing is now the subject of my programming orders towards its hearing (see orders 3, 5, 9 and 10 of the judgment orders). However, on 21 April 2023 I stayed that damages assessment hearing, pending determination of the appeals (see folio 517). That order became uncontroversial by the time it was made (see Sino Iron Pty Ltd v Mineralogy Pty Ltd [No 15] [2023] WASC 56 (S)).
I ordered then, in effect, without controversy as between the protagonists given their respective commencement of appeals against the judgment orders, that:
Programme of Works
1.The further conduct or disposition of the plaintiffs' claims for relief in paragraphs E, H and I of the Consolidated Further Re-Amended Statement of Claim dated 30 December 2021 (CONSOC) in so far as they relate to the plaintiffs' claims for breach of contract in relation to the Programme of Works, namely the claims made in CONSOC paragraph 172 together with paragraph 204(a) is adjourned:
(a)to a date to be fixed but not before the determination of proceeding CACV 35 of 2023 and proceeding CACV 37 of 2023 in the Court of Appeal of the Supreme Court of Western Australia; or
(b)until further order of the Court.

The CITIC plaintiffs' pending PoW damages claims, for breach of contract relief in respect of Mineralogy's ongoing failure to provide assistance, or reasonable assistance towards an advancement of the PoW to DMIRS for obtaining an approval assessment, remain fully alive for their required future determination, albeit deferred, until the outcomes of the appeals.
Deferring those PoW damages issues carries with it the insight that PoW appeal merits arguments would remain alive - notwithstanding any carrying into effect by Mineralogy of order 1 of the judgment orders, by its required submission of the PoW to DMIRS for consideration towards approval.
Senior counsel for Mineralogy was also dismissive of the potential scale of any substantive PoW breach damages exposure for Mineralogy - even were the primary findings of breach and a rejection of Mineralogy's defence based upon its interdependence arguments, upheld on the PoW appeal.
However, at present, Mineralogy's breach damages potential exposure from a quantum perspective, cannot be so casually downplayed. By the case of the CITIC plaintiffs, they have been thwarted for over five years since April 2018 towards reaching a position of even obtaining approval from DMIRS to implement the PoW, let alone doing that work. A cost increase for the PoW in that interim period looks likely. That would be problematic to Mineralogy from an increased cost of works exposure perspective. The submission of the PoW to DMIRS will remain stalled until order 1 of the judgment orders is met.
Moreover, Mr Goodwin's evidence as to the urgency of the PoW, at par 100 of his primary witness statement of 20 October 2021, was this:
By the PoW, CPM sought permission for 'urgent works associated with investigation requirements to aid in defining the proposed Mine Continuation Proposal development footprint and enable the progression of detailed engineering design' to be carried out on mining tenements within the Site Lease Area on M08/123, M08/124, M08/125, M08/264, M08/265, M08/266 and the southern portion of G08/53. CPM proposed (among other things) drilling works for the mine pit expansion and geotechnical investigations for the proposed TSFs. (my emphasis in bold)
Mr Goodwin had also explained at par 98, that the mine pit expansion and a construction of additional tailings storage facility capacity as sought under each of the MCPs had required, and still requires, investigative works be undertaken before those works can be designed and planned. He proceeded to explain at par 99:
In light of Mineralogy's ongoing refusal to submit the MCPs for approval, on 23 April 2018, as an interim measure, CPM provided a Program of Works Application (PoW) to Mineralogy and requested that Mineralogy submit it to DMIRS, or authorise CPM to do so, in order to allow those investigative works to be performed.
He added:
If the MCPs had been approved, the PoW would not have been required.
In relation to investigative work on the northern tailings storage facility area, Mr Goodwin added at par 408:
Without the approval of the PoW and the completion of these investigative works, the commencement of any other preliminary work (including any that may not be contingent on the results of geotechnical and geohydrological investigation) would not save any time.
More than five years has elapsed after April 2018 to the present. Until order 1 of the judgment orders is complied with, even a first step towards obtaining DMIRS's consideration of the PoW for approval, necessary for them to proceed, is yet to happen.
More delays towards obtaining a DMIRS approval, in my view, are not to be so casually brushed aside.
An immediate compliance with order 1 of the judgment orders by Mineralogy, on my assessment, carries little, if any, ultimate downside for it - notwithstanding its pending appeal on the PoW issue.
At worst, some investigatory drilling might come to be undertaken on Mineralogy's mining lease areas (granted as exclusive Site Lease Areas to Sino Iron and Korean Steel under their respective MRSLAs). But these are mining tenement areas already much turned over and investigated - as one would only expect on the now established Sino Iron Project context of a currently operating and intensive magnetite ore extraction operation across three operative mining leases.
Likewise, the investigative drilling work proposed in respect of an expansion of the northern tailings storage facility will be, via the PoW, only carried out upon the existing Site Lease Area. That could hardly be prejudicial to Mineralogy.
On the contrary, a derivation of greater, relevant geological data accessed as a result of those investigations, could positively enhance both an expansion of the mining pit areas and the capacity expansions need for a northern tailings storage facility.
None of that proposed PoW investigative activity looks to be frivolous or extravagant in character. To delay it any further could unnecessarily prejudice not only the interests of the mine operators, but also, derivatively, those who enjoy benefits of the Sino Iron Project's successful operation into the future - by a receipt of valuable royalties from ongoing or indeed increased magnetite production, including Mineralogy and the State.
In short therefore, upon the question of the balance of convenience, my evaluation upon this factor is that it overwhelmingly favours an immediate implementation of the relief obtained on the PoW issue by the CITIC plaintiffs as respondents on this issue, notwithstanding Mineralogy's pending appeal.

Will Mineralogy's appeal against order 1 of the judgment orders be rendered nugatory or moot if order 1 is fully complied with by Mineralogy prior to a hearing in determination of Mineralogy's appeal on the PoW issue?

In short, my answer to this question is 'no'.
Under par 80 of its written submissions of 6 April 2023, Mineralogy contends that there is some risk that there will be no PoW controversy left to be considered by the Court of Appeal - with that part of its appeal to be then assessed (post a submission to DMIRS of the PoW, or upon an approval by DMIRS of the PoW) as purely hypothetical, and thereby to be dismissed for that reason alone.
Mineralogy also contends it cannot be restored to its original position if its ultimate appeal against order 1 of the judgment orders is successful. That, it says, is because a submission of the PoW to DMIRS is something irreversible, and would set in motion a statutory process that cannot subsequently be deterred.
It also says DMIRS is not a party to this proceeding and so, cannot be enjoined pending the appeal. However, that submission is plainly incorrect. The State is a party to this litigation as third defendant and consequently will be a party to the appeal. If, say, some presently unforeseen circumstances were to arise then around the PoW approval, the potentiality for injunctive relief to be obtainable at the appeal, if needed, is not closed off as against either the assessment by DMIRS of the PoW for the purpose of a potential approval or for a restraint of works themselves if commenced - were such restraints ever to be shown as appropriate by Mineralogy, say upon new information emerging.
Assuming that a DMIRS approval does issue in the interim, that potentiality does not resolve the underlying appeal issue controversy - that will still need to be evaluated - over the underlying contractual dispute about whether or not Mineralogy is in breach of promised assistance obligation to Sino Iron and Korean Steel. That is, by Mineralogy in breach failing to provide its assistance or reasonable assistance towards the advancing of the PoW towards a consideration by DMIRS, for the purpose of obtaining the required approval from DMIRS for that investigative drilling work.
The CITIC plaintiffs' action for damages for breach around the PoW stalemate, arises out of what is now a five-year long denial of Mineralogy's assistance to any progressing of the PoW towards a receipt and an evaluation by DMIRS. The PoW quantum determination of damages phase for trial is still pending, albeit now deferred pending the appeal, under my orders of 21 April 2023.
It is likely, bearing in mind inflation, that any contemporary implementation (once approved) of the PoW will be (subject of course to the evidence on this issue at the quantum hearing) at a higher cost than the cost had such works been carried out five years earlier.
It remains to be seen whether any associated greater consequential economic loss damages may be proved by the CITIC plaintiffs, arising out of a five year (plus) unnecessary delay in the PoW reaching DMIRS to consider it for approval. A damages determination is likely to involve expert evidence towards a possible counterfactual scenario of the cost for a April 2018 related implementation of the PoW, by contrast to the delayed, more contemporary implementation of those works.
All that, of course, assumes that DMIRS approves the PoW in due course - once it receives the submission by Mineralogy of the PoW. Time will tell in terms of whether such a PoW approval is forthcoming from DMIRS. Nevertheless, if submission of the PoW were to be met with concerns from DMIRS that required further information, then at least an order 1 (of the judgment orders) driven compliance delivery of the PoW by Mineralogy to DMIRS to consider, would have advanced matters somewhat towards the approval - by clarification of a need for that required further information to be provided - in some contrast to the existing PoW inertia, with DMIRS not even receiving the PoW to consider for approval so far.
In short, therefore, the suggestion by Mineralogy that the subject matter of Mineralogy's PoW appeal against order 1 of the judgment orders would be rendered nugatory in an absence of a stay granted up to the result of its PoW appeal, is unpersuasive.

Conclusions

Taking account of the tripartite stay considerations now identified and as assessed by me as relevant to the present application as advanced by Mineralogy against its immediate compliance with order 1 of the judgment orders, then even making the assumption that Mineralogy can fashion some arguable basis to show error enough to eventually reverse orders 1 and 3 of those judgment orders, nevertheless the issues underlying the PoW appeal are not rendered moot or nugatory. Weighing that consideration along with the balance of convenience favouring the CITIC plaintiffs, requires, in the end, that Mineralogy's stay extension application be dismissed.
That order will issue upon publication of these reasons to the parties.
Prima facie, costs should also follow in this event upon the stay application heard on 20 April 2023 and favouring the CITIC plaintiffs as the successful respondents in resisting the stay sought by Mineralogy. The parties should confer over costs orders and submit rival proposed minutes within seven days of being provided with these reasons or, preferably, an agreed minute upon costs orders - but I will not raise my hopes too high over that potentiality.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
PP
Associate to the Honourable Justice K Martin
2 JUNE 2023