Southern Resources Limited & Ors v Technomin Australia

[1990] HCATrans 174

HIGH COURT OF AUSTRALIA

IN Chambers

MR JUSTICE TOOHEY

SOUTHERN RESOURCES LIMITED AND OTHERS

and

TECHNOMIN AUSTRALIA N.L.

TRANSCRIPT OF PROCEEDINGS

PERTH

10.09 AM, TUESDAY, 14TH AUGUST 1990

Soutech 1 14.8.90

IZ, BR4. 10.09

TOOHEY J: Be seated, please. Call the matter, please.

Mr Martino?

MR MARTINO:  Your Honour, I appear on behalf of the respondent

who's application this is.

TOOHEY J:	Mr Meadows?
MR MEADOWS:	May it please your Honour, I appear for the
applicants.

MR MARTINO: Your Honour, the respondent would like the

special leave application heard in Sydney on the 7th of

September

TOOHEY J: Melbourne, I think it is.

MR MARTINO:  Melbourne?

TOOHEY J: Yes.

MR MARTINO: - - and the applicants would like it heard in

Perth, I think, on the 26th of October, when the special leave

sittings will be heard in Perth. It's a period of some seven

weeks.

TOOHEY J:	You mean in all, or between, or - -
MR MARTINO:	From the 7th of September until the 26th of
October.
TOOHEY J:	Well, I'm not clear whether you're presenting Mr
Meadows case as well as your own, Mr Martino.	Perhaps you had
better tell me what your case is.

MR MARTINO: Yes. Well, our case is that the respondent has a

substantial deficit in working capital - in excess of $2

million - and it wants to be able to sell this asset, which is

negotiated to sell for a price the equivalent of $6 million, its entitlement to a royalty, which it has previously	and that would make it financially viable and healthy again so
it can get on with its business. It can't do that for so long as the applicants are seeking to challenge its entitlement to the royalty.

If we say that a delay in hearing the matter, of some

seven weeks, involves a delay of seven weeks in the respondent

being able to sell the royalty, then the interest payments on

its deficit and working capital alone, which is in excess of

$2 million, would exceed the travelling costs that the

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Soutech 2 14.8.90

appellants are ~oncerned about, and of course the applicants

will only have to bear those travelling costs themselves if

they lose the application or the subsequent appeal. So it's

only - -

TOOHEY J; I'm not asking you to anticipate Mr Meadows'

argument, but are you suggesting that its the applicants - -

the applicants' concern arises out of travelling costs, rather

than the time needed to prepare the special leave application?

MR MARTINO: That's what I am anticipating. Certainly that

proposition, the concern about .travelling costs, appears from correspondence and from an affidavit filed in opposition to

this application.

TOOHEY J: Has there been any step taken - and again, perhaps

this is a question in the end that I'll have to direct to Mr

Meadows - to settle the index?

MR MARTINO: It's being settled now.

TOOHEY J: Settled, is it?

MR MARTINO: Yes. Your Honour, the last point I wish to make

is that really where and when an application is heard really

depends on circumstance generaliy. For example, if this

application had been made in January, it wouldn't have been

suggested that we should wait until October, and travelling

costs would necessarily have been involved.

The appeal was commenced, I think, on the 8th of July.

If the index had been settled sooner, we would have been proceeding to Melbourne on the 7th of September and, really, we say that given the relative insignificance of the costs, the fact that the applicants won't have to bear them if they

win, and the importance of the matter to the respondent, then

it's more appropriate in the circumstances of this case that

the matter be dealt with on the 7th of September.

TOOHEY J: Yes, thank you. Mr Meadows?

MR MEADOWS:	The position which the applicants have taken from
matter heard out of the state is simply not warranted, given	the outset is that the extra expense involved in having the
that the matter can proceed in Perth at the October sittings.
We put it to the respondent right at the outset that, if the respondent was prepared to bear the extra cost, then we would have no objection to the matter being heard elsewhere.
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Soutech  14.8.90
TOOHEY J:	You mean bear the extra cost in any event?

MR MEADOWS: Yes. There is an affid~vit which has been filed,

sworn by Michelle Susan Hullett·, which sets out some estimated costs that would be associated with having it heard

in Melbourne as opposed to Perth, extra costs.

TOOHEY J: Is that a recent affidavit?

MR MEADOWS:  Yes. It should have been filed yesterday.

TOOHEY J: Filed where?

MR MEADOWS: can I take instructions? With the registry - -

TOOHEY J:	Down in the Supreme Court?
MR MEADOWS:	Yes.
TOOHEY J: Yes.	I don't think it's reached us.

MR MEADOWS: Maybe I·could just hand you a copy. It's very

short, your Honour. It schedules to it the correspondence and

TOOHEY J: The reference to counsel fees is presumably a

reference to additional fees - -

MR MEADOWS:	Yes.
TOOHEY J:	- - incurred by reason of travel?
MR MEADOWS:	And time out of the office.
TOOHEY J:	And the time out of state.

MR MEADOWS: These are the sort of figures that were put up

with the submission for video conferencing as representing the additional costs that justified the use of that technique. So our position is very simple, your Honour; that is, that if those costs were paid in any event, then we wouldn't have any

matter is going to be heard in October in any event, the	objection to it being heard in Melbourne, but given that the	incurring of such costs by the applicants would not be
warranted otherwise.
TOOHEY J: You don't say anything about the respondent's
position, as Mr Martino has described it - namely, that its
financial position is in some jeopardy by reason of delay, and
I'm not using "delay" in a pejorative sense, but by reason of
time running on.
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Soutech 14.8.90

MR MEADOWS: The position so far as the applicants are

concerned is that the judgment has been paid, the royalties

are being paid on an ongoing basis, and all that the

respondent is talking about - and we're in no position to

contradict anything that's there - is that it's in the market

to sell its asset in the form of this royalty ongoing over the

life,of_the mine, and this is holding it up in proceeding with

some negotiation to sell that particular asset.

TOOHEY J:  You mean there was no stay of execution at all?

MR MEADOWS: There was no stay of execution. All that we

would say about that, your Honour, is that a six or seven week

delay, as it is, in being able to proceed with the sale of

that asset isn't really something which is directly
threatening the existence of the company, and it's not

suggested that it is.

TOOHEY J: Mr Meadows, you haven't suggested that it would be

impracticable for the applicant to meet a special leave

hearing in Melbourne?

MR MEADOWS:  No, we don't suggest that - either from a point

of view of being prepared, or ability to pay those costs.

TOOHEY J:	Or the logistics of preparing an application.	Yes.
Thank you.

Mr Martino, do you say anything by way of reply?

MR MARTINO:  Only one thing, and it's not really by way of

reply. The applicants are in the happy position that there are, I think, five of them, so the costs can be apportioned

between them all.

TOOHEY J:	Mr Meadows says that the judgment has been paid - -
MR MARTINO:	Yes.
TOOHEY J:	- - and that really this is related to the sale of

an asset. Is that a fair description of the situation?

MR MARTINO: Yes, it is, although in response to that, I would

submit that where there's a substantial deficiency in working capital, then there is a call to realise capital. There are

borrowings that need to be repaid. They can't be repaid on

the evidence from the royalty payments, and the due date for

repayment is the 30th of September. The respondent so far has

been able to negotiate extensions, but it is in an unhealthy

position and - -

TOOHEY J:	The due date for what, is the 30th of September?
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Soutech	14.8.90

MR MARTINO: Repayment of the $2 million loan. The evidence

shows that the respondent previously had a repayment date for that loan of the 30th of June, and it negotiated an extension.

As Mr Meadows says, it's not our case that liquidational

proceedings of a disastrous nature are threatened against the

respondent, but it does have this substantial sum that it

needs to repay and six or seven weeks could, at the end of the

day, be the period that causes serious consequences.

TOOHEY J:  Because, I take it you're saying, of the inability

to dispose of the asset?

MR MARTINO:  And hence to repay the $2 million loan that is

due for repayment.

TOOHEY J: Yes. All right. Thank you.

This matter seems to be dictated by largely commercial

considerations. There's no suggestion that there are any personal difficulties involved by reason of any order that

might be made or not made. I'm satisfied that the respondent

has made out a reasonable case for a hearing in Melbourne in

accordance with the summons ·for directions.

Mr Meadows suggests that the additional seven weeks is not going to be crucial but that in any event to direct a hearing in Melbourne will involve his clients in additional costs. That is true. On the other hand, if the application

is successful and the appeal is ultimately successful, those

costs will be recouped.

In the circumstances, it seems to me that a case has been made out for an expedited hearing of the matter, and that

inevitably means a hearing somewhere other than in Perth.

Since the index has been settled and there's no

suggestion that the applicants would be under great difficulty in having special leave books prepared, it seems to me that,

subject to hearing counsel as to the terms of the order, an

order in terms of paragraphs 1, 2 and 3 of the summons would

be appropriate. Now, unless counsel wish to address me on the

details of those paragraphs, I propose to make an order in the

terms of the summons.

In that event, there will be an order in the terms of the

summons. We will now adjourn.

ORDERS ACCORDINGLY

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Soutech TOOHEY J 14.8.90