Sino Iron Pty Ltd v Mineralogy Pty Ltd [No 3]
[2015] WASC 272
•30 JULY 2015
SINO IRON PTY LTD -v- MINERALOGY PTY LTD [No 3] [2015] WASC 272
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2015] WASC 272 | |
| Case No: | CIV:2164/2013 | 29 MAY 2015 | |
| Coram: | CHANEY J | 30/07/15 | |
| 11 | Judgment Part: | 1 of 1 | |
| Result: | Applications dismissed | ||
| B | |||
| PDF Version |
| Parties: | SINO IRON PTY LTD KOREAN STEEL PTY LTD MINERALOGY PTY LTD |
Catchwords: | Declarations Failure by defendant to perform declared obligation Supplementary orders Whether orders sought available to enforce declared right Orders sought raising issues not litigated in primary proceedings |
Legislation: | Nil |
Case References: | Radmanovich v Nedeljkovic [2002] NSWSC 212 Royal Insurance Company Limited v Mylius (1926) 38 CLR 477 Sino Iron Pty Ltd v Mineralogy Pty Ltd [No 2] [2014] WASC 444 Sino Iron Pty Ltd v Mineralogy Pty Ltd [No 2] [2014] WASC 444 (S) |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- First Plaintiff
KOREAN STEEL PTY LTD
Second Plaintiff
AND
MINERALOGY PTY LTD
Defendant
Catchwords:
Declarations - Failure by defendant to perform declared obligation - Supplementary orders - Whether orders sought available to enforce declared right - Orders sought raising issues not litigated in primary proceedings
Legislation:
Nil
Result:
Applications dismissed
Category: B
Representation:
Counsel:
First Plaintiff : Mr S K Dharmananda SC & Mr A K Sharpe
Second Plaintiff : Mr S K Dharmananda SC & Mr A K Sharpe
Defendant : Mr K Barlow QC & Ms R J Lee
Solicitors:
First Plaintiff : Allens
Second Plaintiff : Allens
Defendant : Michael John Dunham
Case(s) referred to in judgment(s):
Radmanovich v Nedeljkovic [2002] NSWSC 212
Royal Insurance Company Limited v Mylius (1926) 38 CLR 477
Sino Iron Pty Ltd v Mineralogy Pty Ltd [No 2] [2014] WASC 444
Sino Iron Pty Ltd v Mineralogy Pty Ltd [No 2] [2014] WASC 444 (S)
1 CHANEY J: On 27 November 2014, Edelman J delivered his reasons for decision (November reasons) following the substantive hearing of this action on 12 and 13 November 2014.1 The relief sought in the proceedings was a declaration as to the obligations of the defendant under particular provisions of two deeds to which the plaintiffs and defendant were parties and which relate to what is referred to as the Sino Iron Project.
2 Following delivery of his reasons, the parties filed submissions as to the appropriate form of orders to give effect to his Honour's judgment. On 6 February 2015, Edelman J made a declaration, having delivered reasons for his conclusion as to the form of the order in light of the parties' submissions (February reasons).2 The declaration made was in the following terms:
It is declared that, by reference to clause 20.1(a) of the Fortescue Coordination Deed dated 22 October 2008 between the plaintiffs, the defendant and CITIC Pacific Ltd, the defendant is obliged to make an application to the Minister for the Environment for the transfer to the plaintiffs of the status of proponent under Ministerial Statement 635 (as amended) and Ministerial Statement 822.
3 Notwithstanding that declaration, the defendant has not made the application to the Minister for the transfer of the status of proponent.
4 On 31 March 2015, the plaintiffs filed a chamber summons seeking an order, referred to as a supplementary order, that:
1. The Defendant by [the date to be inserted] 2015, sign and lodge with the Office of the Environmental Protection Authority an application to the Minister for the Environment for a transfer of the status of proponent of Ministerial Statement 635 (as amended) and Ministerial Statement 822 from the Defendant to the Plaintiffs, in the form provided in Exhibit A to the affidavit of Marshall Timothy McKenna sworn on 31 March 2015.
5 On 18 May 2015, the defendant filed a chamber summons seeking an order to the effect that, if the court did order the defendant to sign and lodge the application to the Minister for Environment as sought by the plaintiffs, then that order or any other order for the enforcement of the judgment of the court made on 6 February 2015 be suspended pending the decision of the Court of Appeal in CACV 37 of 2015. The reference to the appeal in CACV 37 of 2015 is a reference to an appeal which the defendant has lodged in relation to Edelman J's declaration made on 6 February 2015. The appeal has not yet been heard.
6 It is those two chamber summonses which now fall for determination. The applications would normally have been dealt with by the trial judge. However, shortly after delivering the February reasons, Edelman J was appointed to the Federal Court of Australia, and the applications were referred to me, no doubt because I have replaced Edelman J as case manager of other litigation between these parties in this court.
7 The applications before me, and the submissions of the parties in relation to them, essentially raise three questions. The first question concerns the extent of the court's power to make 'supplementary orders'. The defendant accepts that a court has power to make supplementary orders pursuant to an express, and sometimes implied, liberty to apply following trial judgment. It argues however that this is not a case in which the order sought by the plaintiffs may be made as a supplementary order.3 The second question is, if the court has jurisdiction to make the order sought, whether it should be made having regard to the circumstances of this case. The third is whether, if the orders are made, they should be suspended pending the outcome of the appeal against Edelman J's judgment.
8 For the reasons which follow, I have reached the conclusion that the order that the plaintiffs seek should not be made, having regard to the facts of the case. That conclusion renders it unnecessary to deal with the question of whether the court's power extends to such an order, and the question as to suspension of the order falls away.
9 In order to understand the conclusion which I have reached on the second question, it is necessary to review the history of the proceedings to date.
The claim for relief in the substantive action
10 In his November reasons, Edelman J set out the terms of the relief sought by the plaintiffs in their further amended statement of claim, which was in the following terms:4
A declaration that pursuant to clause 20.1 of the Fortescue Coordination Deed, clause 4A and schedule 8 clause 13.1 of the Korean Steel Takeover Deed and clause 7.3(g) of the Sino Iron Takeover Deed, Mineralogy is required to transfer the EPA Approval to Sino Iron and Korean Steel in accordance with condition 3-2 of the Ministerial Statements as outlined at [9] above by:
(i) signing a letter substantially in the form of that provided by CPM with its letter dated 23 November 2012 and lodging it with the Office of the Environmental Protection Authority; and
(ii) lodging with the Office of the Environmental Protection Authority documents substantially in the form of those provided by CPM with its letter dated 23 November 2012.
11 In addition to the declaration set out above, the prayer for relief in the plaintiffs' further amended statement of claim sought 'such further or other orders as the Court deems fit'.
12 Justice Edelman made three observations as to difficulties with the form of the proposed declaration.5 He recorded that senior counsel for each party had, during the hearing, sought leave to make further submissions as to the form of the order and, in view of the difficulties with the form of the order which he had identified, his Honour granted that leave.6
The parties' submissions as to the form of the order
13 The issue as to the form of the order was dealt with by Edelman J on the papers. The plaintiffs filed an outline of submissions on 13 January 2015. In that outline, the plaintiffs submitted that the following orders should be made:
(1) A declaration that Mineralogy is obliged to apply to the Minister for a transfer of the status of proponent of Ministerial Statement 635 (as amended) and Ministerial Statement 822 from Mineralogy to CITIC Pacific Mining Management Pty Ltd (CPMM) (as agent for Sino Iron and Korean Steel); and
(2) By 1 February 2015, Mineralogy must, sign and lodge with the Office of the Environmental Protection Authority the documents annexed and marked 'A', being an application to the Minister for a transfer of the status of proponent of Ministerial Statement 635 (as amended) and Ministerial Statement 822 from Mineralogy to CPMM.
14 The defendant opposed the making of orders in the terms sought by the plaintiffs. In its submissions filed 28 January 2015, it proposed a declaration in the following terms:
The Court declares that, pursuant to clause 20.1(a) of the Fortescue Coordination Deed dated 22 October 2008 between the plaintiffs, the defendant and CITIC Pacific Ltd, the defendant is obliged to make an application, pursuant to condition 3-2 of Ministerial Statement 635 published under section 45(5) of the Environmental Protection Act 1986, for the transfer to the plaintiffs jointly of the status of proponent under that Ministerial Statement (as amended) and under Ministerial Statement 822.
15 In his February reasons, Edelman J identified two essential issues in dispute concerning the form of the declaration. The first was the question of the person to whom a transfer should be directed in the application for transfer. The second was whether the declaration should provide specific details about the documents to be lodged with the Office of Environmental Protection as part of the application for transfer of the status of proponent and the timing for lodgement.7 In relation to the question of timing, which was specified in the second of the orders sought by the plaintiffs, Edelman J concluded that it was appropriate to exclude the date by which the obligation must be performed, saying that '[t]he immediate difficulty with this proposed part of the declaration is that it converts a declaration (which was sought at trial) into a mandatory injunction (which was not)'.8 His Honour noted that no submissions had been made at the trial concerning the timing of any obligation and that such submissions would need to have considered an implication of an obligation to perform cl 20.1(a) within a reasonable time. He observed that evidence may have been necessary concerning what time was reasonable.9
16 Justice Edelman then dealt with the question of whether or not an order should provide for the detail as to the manner in which the defendant must apply for the transfer of the status of proponent, being the balance of the second order sought by the plaintiffs. He concluded that that part of the declaration which the plaintiffs sought was not appropriate 'other than to provide the parties with liberty to apply in relation to future disputes concerning the implementation of the declaration'.10 He provided three reasons as to why the detail as to the manner of compliance with the contractual obligation did not form an appropriate part of the declaration. Those reasons included that: no argument had been directed at trial to the form of the application or the nature or content of documents that were proposed to be included and annexed to the declaration;11 that it was unclear the extent to which there was any substantive controversy about the nature and content of the documents, or the practical or legal significance of any controversy;12 and that the plaintiffs' documents were premised on the assumption that the transfer would be to Citic Pacific Mining Management Pty Ltd (CPMM), a company appointed by the plaintiffs to manage the day-to-day operations of the Sino Iron project, and not to the plaintiffs themselves.13
17 Notwithstanding the reference to providing the parties with liberty to apply, no liberty to apply was specified in the orders that were made the following day.
The evidence in this application
18 An affidavit of Marshall Timothy McKenna sworn 31 March 2015 deposes to correspondence by letter and email between CPMM or its solicitors to the defendant or its solicitors concerning the application for transfer of the status as proponent the subject of the declaration made by Edelman J. For various reasons, which it is not presently necessary to canvass, the defendant has to date declined to sign the documents necessary to make the application for that transfer.
19 The plaintiffs also relied upon two affidavits of Bruce Noel Watson sworn 20 March 2013 and 21 May 2015. Mr Watson deposes to various problems which, he contends, are faced by CPMM in relation to the efficient and economical operation of the mining operations of the Sino Iron project by reason of the fact that the plaintiffs do not hold the status of proponent under the Ministerial Statements. Those problems include an inability to expand a tailings storage facility, the inability to vary the existing requirement for waste water to be disposed of on site by obtaining a licence to discharge water off site, and an inability to change the way in which CPMM would satisfy certain environmental requirements under Ministerial Statement 635 to mitigate the effects of greenhouse gas emissions.
20 Certain objections to the affidavits of Mr Watson were taken by the defendant. It is not necessary to resolve those objections because, in reaching my conclusion, I have not placed any reliance upon the particular passages in the affidavits to which objection is taken.
21 The defendant read four affidavits for the purpose of the applications. The first is an affidavit of Kris Sjouke Byrne affirmed 14 May 2015. Mr Byrne is a solicitor acting for the defendant. His affidavit annexed the current pleadings of three different actions between the parties to this action (being two actions in this court and one in the Federal Court). Objection was taken to the whole of that affidavit on the basis of relevance. In response, the defendant contended that the existence and nature of other disputes between the parties are relevant to questions of balance of convenience. In my view, the context of this dispute between the parties is informed by the existence and nature of other related litigation, and the issues in that litigation, and Mr Byrne's affidavit is relevant to that context and to the question of whether orders in terms sought by the plaintiffs should be made.
22 The second affidavit relied upon by the defendant is an affidavit of Paul Edwin Robinson affirmed 15 May 2015. Mr Robinson's evidence was directed to responding to the three areas of difficulty to which Mr Watson deposed. He also addressed potential difficulties for the defendant in the event that the status of proponent under Ministerial Statement 635 is transferred to the plaintiffs. A number of objections were taken to Mr Robinson's affidavit. I would uphold the objections to [45], [46] and [55] on the basis that they are matters of submission rather than evidence and to [49], [56], [57] and [58] on the basis that they amount to expressions of opinion for which no adequate basis is disclosed. I would otherwise reject the objections to Mr Robinson's affidavit for the reasons contained in the defendant's response to objections dated 29 May 2015 in relation to each of the paragraphs objected to.
23 The third affidavit relied upon by the defendant is the affidavit of Michael John Dunham sworn 22 May 2015. In that affidavit, Mr Dunham, who is in-house counsel for the defendant, produced a minute of proposed amended pleading filed by the defendant in another action in this court, CIV 1808 of 2013. The plaintiffs in this action are the first and second defendants in CIV 1808 of 2013. Objection was taken to [5] to [9] of that affidavit, which comprised the substantive portion of the affidavit, on the same basis as the objections were taken to Mr Byrne's affidavit. For the same reasons as I rejected the objection in Mr Byrne's affidavit, I would not uphold the objections to Mr Dunham's affidavit.
24 The final affidavit relied upon by the defendants is an affidavit of Dominic Vincent Martino sworn 15 May 2015. Mr Martino is the Independent Chairman of Australasian Resources Limited (ARH). ARH and the defendant are each 50% shareholders in International Minerals Pty Ltd which, together with the defendant, is a proponent of an iron ore project known as the Balmoral South Iron Ore Project. Mr Martino annexed an affidavit, which he had sworn in proceedings in the Federal Court involving the parties to this action, that explained the relationship of the Balmoral South Iron Ore Project to the Sino Iron Project. Objections were taken by the plaintiffs to a number of paragraphs of Mr Martino's affidavit. Those objections related to questions of relevance or impermissible expressions of opinion. I would dismiss the objections as to relevance on the basis that the matters deposed to in the affidavit are relevant to questions of balance of convenience should they arise, but also to considerations as to whether the making of the mandatory order sought is appropriate having regard to the way in which the action proceeded to trial and judgment and the issues which are likely to arise for consideration in relation to any mandatory order. I also reject the objections of an inadequate basis for opinions expressed in [8], [13] and [14]. The basis of Mr Martino's observations can be found in the Federal Court affidavit (DVM3 to Mr Martino's affidavit). That is not the case in relation to an opinion expressed at [17] but I consider Mr Martino is able to speak of the importance of port access to the Balmoral South Iron Ore Project, given his involvement over a long period of time with the development of that proposal.
Should the supplementary orders be made
25 As noted above, the defendant accepts that the court has power to make supplementary orders in appropriate cases and that, for that purpose, there is often at least implied liberty to apply when a final declaratory judgment is given.14 It submits, however, that what is sought by the plaintiffs in its summons are not supplementary orders, but rather orders for specific performance or in the nature of a mandatory injunction, and that it is not appropriate for such an order to be made in the context of this case.15 That is a submission with which I agree.
26 The plaintiffs argue that the orders should not be classified as specific performance or a 'mandatory injunction', but are rather merely orders designed to give effect to the declaratory order made.16 However one describes the order sought, its substance and effect is to compel the defendant to perform what the court has determined to be its obligation arising as a result of the proper construction of the relevant contractual provision.
27 It would have been open to the plaintiffs in the original proceedings, to seek specific performance of the contractual obligation which it asserted or a mandatory injunction in addition to the declaration as to the proper construction of the agreement. Had it done so, a number of issues may have arisen on the pleadings in relation to those claims for relief. As Edelman J recognised, one issue would have been whether there was implied into the agreement a requirement to comply with the contractual obligation within a reasonable time, and if so what a reasonable time might have been.17 That is a matter upon which evidence may be required. A second issue that may have arisen is whether the plaintiffs are ready, willing and able to perform their obligations under the relevant contracts. It is to that point that the evidence relating to other litigation between these parties concerning the same or related agreements is directed. It is not difficult to imagine that, had the plaintiffs pursued specific performance or a mandatory injunction in the original proceedings, questions of the plaintiffs' own compliance with its contractual obligations, as reflected in other litigation, may have been raised by way of defence. In other litigation currently in progress between these parties, there are issues as to whether the contract the subject of the declaration even remains on foot. It is highly likely that, had these proceedings included a claim for specific performance, or a mandatory injunction, a defence would have pleaded that issue. In short, the proceedings at first instance could, most likely, have been far more complicated than they were, and involved far more evidence than was required, or indeed relevant, to the single question of construction.
28 In relation to an application for a mandatory injunction, questions of balance of convenience would arise. The evidence of Mr Watson as to difficulties arising from the defendant's failure to apply for a transfer are clearly relevant to that issue. The significance of those difficulties is challenged in Mr Robinson's affidavit. Resolution of evidentiary issues is not appropriate in the context of an application for mere supplementary orders. The issue of balance of convenience gives rise to questions of potential adverse effects on third parties such as ARH. Having regard to what is said to be an interrelationship between the Sino Iron Project and other proposed projects within the area covered by the State Agreement, the question of the balance of convenience may give rise to questions of public policy which affect discretionary considerations applicable to a mandatory injunction.
29 In my view, the orders now sought give rise to the difficulty identified by Edelman J in his February reasons, namely that the orders seek to convert a declaration, which was sought at trial, into a mandatory injunction which was not.
30 In Royal Insurance Company Limited v Mylius,18 Isaacs J said that every order for declaration carries with it liberty to apply and that if a defendant acts contrary to the court declaration, the court may, on proper application, enforce it. However, as Young CJ Eq observed in Radmanovich v Nedeljkovic:19
Liberty to apply does not enable a judge after a final order to completely review it. It is said over and over again in the cases, unfortunately in rather obscure language, that the court's power is limited under liberty to apply to the working out of the order that has been made. The court cannot under liberty to apply adjudicate on any question which it was not necessary to determine at the time of making the final decision, nor can it make any declaratory order, nor, I would have thought, an institutive order. There is no doubt at all that it can make executive orders, that is an order by way of remedy, or an order such as the appointment of a new trustee, or additional orders. This appears from cases such as Poisson and Woods v Robertson and Turvey (1902) 50 WR 260; Dowdle v Hillier (1949) 66 WN (NSW) 155 and Cristel v Cristel [1951] 2 KB 725.
31 Here, the question of enforcement of the contractual obligation the subject of the declaration necessarily carries with it questions which were not before Edelman J and which his Honour was not required to determine. In the circumstances, it is not appropriate to, in effect, reopen the trial in order to resolve those questions.
32 The application for supplementary orders should be dismissed. If the plaintiffs are to obtain orders of the type sought in their application, it is necessary for fresh proceedings to be commenced. That would enable all of the issues surrounding enforcement of the plaintiffs' declared contractual rights to be suitably identified and crystallised through proper pleadings. Whilst it might be thought that that burden on the plaintiffs is regrettable, it is the result of the election which the plaintiffs made not to seek executory orders in the original proceedings.
1Sino Iron Pty Ltd v Mineralogy Pty Ltd [No 2] [2014] WASC 444.
2Sino Iron Pty Ltd v Mineralogy Pty Ltd [No 2] [2014] WASC 444 (S).
3 ts 319 (28 May 2015).
4Sino Iron Pty Ltd v Mineralogy Pty Ltd [No 2] [2014] WASC 444 [247].
5Sino Iron Pty Ltd v Mineralogy Pty Ltd [No 2] [2014] WASC 444 [249] - [251].
6Sino Iron Pty Ltd v Mineralogy Pty Ltd [No 2] [2014] WASC 444 [252].
7Sino Iron Pty Ltd v Mineralogy Pty Ltd [No 2] [2014] WASC 444 (S) [6].
8Sino Iron Pty Ltd v Mineralogy Pty Ltd [No 2] [2014] WASC 444 (S) [19].
9Sino Iron Pty Ltd v Mineralogy Pty Ltd [No 2] [2014] WASC 444 (S) [19].
10Sino Iron Pty Ltd v Mineralogy Pty Ltd [No 2] [2014] WASC 444 (S) [21].
11Sino Iron Pty Ltd v Mineralogy Pty Ltd [No 2] [2014] WASC 444 (S) [22].
12Sino Iron Pty Ltd v Mineralogy Pty Ltd [No 2] [2014] WASC 444 (S) [24].
13Sino Iron Pty Ltd v Mineralogy Pty Ltd [No 2] [2014] WASC 444 (S) [26].
14 Defendant's outline of submissions dated 25 May 2015 [16]; ts 319 (28 May 2015).
15 Defendant's outline of submissions dated 25 May 2015 [1]; ts 320 (28 May 2015).
16 ts 305, 313 (28 May 2015); 307 (29 May 2015).
17Sino Pty Ltd v Mineralogy Pty Ltd [No 2] [2014] WASC 444 (S) [19].
18Royal Insurance Company Limited v Mylius (1926) 38 CLR 477, 497.
19Radmanovich v Nedeljkovic [2002] NSWSC 212 [8].
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