Tenney v Matthews - [2016] SASC 34

SUPREME COURT OF SOUTH AUSTRALIA
(Civil)
TENNEY v MATTHEWS & ORS
[2016] SASC 34
Judgment of The Honourable Justice Bampton
10 March 2016
CONTRACTS - GENERAL CONTRACTUAL PRINCIPLES - DISCHARGE, BREACH AND DEFENCES TO ACTION FOR BREACH
Plaintiff and defendants were joint venturers involved in property and prospecting ventures seeking to exploit mineral deposits in the south east of South Australia – the parties were in dispute between 2008 and 2010 – following a mediation in the District Court in May 2010 the parties executed a number of agreements whereby they agreed to settle all matters in dispute and separate their interests – pursuant to the settlement the plaintiff was to receive various interests and rights – the defendants were to receive in return the payment of $520,000 from the plaintiff – that amount with interest was to be paid in instalments over a 10 year period pursuant to a vendor loan given by the defendants – plaintiff provided security for the vendor loan over all his interest existing and acquired by the settlement agreement – plaintiff alleges breaches of the settlement agreement and seeks damages of $2,318,750 from the defendants – defendants deny there has been any breach of the settlement agreement and counterclaim in respect of alleged breaches of the vendor loan agreement seeking damages in the amount of the loan plus interest plus enforcement of their security over a mining lease owned by the plaintiff.
HELD:
1. The plaintiff’s claim is dismissed as there has been no breach of the settlement agreement.
2. Defendants have established that the loan agreement has been breached by the plaintiff and are entitled to damages in the sum of $520,000 plus interest.
Mining Act 1971 (SA) s 6, s 9, s 9AA, s 20, s 21, s 22, s 26, s 34, s 35, s 39, s 73A, s 73B; Mining Regulations 2012 (SA) reg 12, reg 29, referred to.
Boral Resources (SA) Ltd v Matthews (2006) 94 SASR 411; Cudla Mudla Pty Ltd & Ors v Tenney [2013] SAERDC 1, considered.

TENNEY v MATTHEWS & ORS
[2016] SASC 34
Civil
BAMPTON J
Overview
The parties, other persons and entities, the Mining Act 1971 (SA), and the mining interests
The parties to the proceedings
Other persons and entities referred to in the evidence
Mining Act 1971 (SA)
Miner’s right
Mineral claims
Pegging
Mining lease
Extractive minerals lease (EML)
Mining tenement
Exempt land
Waiver of exemption (waiver)
Caveat

The mining interests
Papineau Rocks
EML 6168
Piece 102
The Pimple
Johnson’s
Green Granite mine
Mount Monster Quarry (Mount Monster)

Events leading to the entering into of the settlement agreement
Warden’s Court Action No. 292 of 2009 (ERD-13-8)
Warden’s Court Action No. 312 of 2009
Mount Gambier Magistrates Court proceedings (MTGCI-09-491)
District Court proceedings (DCCIV-09-1300)
The settlement agreement
The Settlement Deed
The Agreement for Sale and Purchase
The Loan Agreement and the Supplementary Deed
The stamp duty dispute
Warden’s Court proceedings and ERD Court proceedings
Warden’s Court proceedings and ERD Court Action No. 207 of 2012

The application in the District Court proceedings
Mr Tenney’s claim
The counterclaim
The evidence
Mr Tenney’s evidence
Claiming Papineau Rocks
Piece 102 mineral deposit
Papineau Quarries Pty Ltd
Johnson’s
Green Granite
The settlement
EML 6168

Peter Goldfinch
Dennis Martin
The purported valuation evidence
The defendants’ evidence
Adrian Gregurke
Stephen Matthews
EML 6168
The pegging by Mr Martin
Johnson’s
Green Granite
The settlement agreements

Plaintiff’s submissions
Defendants’ submissions
Analysis
The alleged delay in transfer of EML 6168
The EML 6168 caveat
Green Granite mine
Johnson’s
Piece 102 mining rights
Could Mr Tenney have exploited the mining tenements?
Papineau Quarries
Mount Monster mineral claim and the water licence
Findings summary
The counterclaim
The security
Overview

Mr Tenney, an earthmover, had a business plan to corner the aggregate market from the Tollgate to the Victorian border.
In happier times between 2003 and 2008, Mr Tenney, Mr and Mrs Matthews (the Matthews) and Mr and Mrs Gregurke (the Gregurkes) were joint venturers involved in property and prospecting ventures seeking to exploit mineral deposits located over certain land in the south east of South Australia.
The joint venturers hoped deposits of rhyolite and limestone could be sold to the road construction industry to be used in the production of bitumen road aggregates or concrete aggregates. They also had high hopes that deposits of green granite would be bought by a specialist paving company to pave North Terrace or by the developers of the Cape Jaffa Marina to build a breakwater.
The relationship between the parties soured and between 2008 and 2010 they were in dispute. Mr Tenney commenced District Court proceedings in July 2009[1] against the Matthews and the Gregurkes’ family company Cudla Mudla Pty Ltd (Cudla Mudla) seeking specific performance of an agreement concerning rights to extract the minerals (the District Court proceedings).
[1] DCCIV-09-1300.
Following a mediation in the District Court proceedings in May 2010, the parties executed a number of documents whereby they agreed to settle all of the matters in dispute and separate their interests.
Pursuant to that settlement Mr Tenney was to receive various interests and rights. In return, the Matthews and Cudla Mudla were to receive the payment of the sum of $520,000 from Mr Tenney. That amount, with interest, was to be paid in instalments over a 10 year period pursuant to a vendor loan given by the Matthews and Cudla Mudla.
Mr Tenney seeks damages of $2,318,750 against the Matthews and the Gregurkes in respect of alleged failures by them to comply with their obligations pursuant to the settlement agreement.
The Matthews and the Gregurkes deny that they have breached any agreement with Mr Tenney and that he is entitled to any damages sought.
The Matthews, the Gregurkes and Cudla Mudla have counterclaimed seeking orders against Mr Tenney and Mr Tenney’s company, RAT Excavations Pty Ltd (RAT Excavations),[2] in respect of alleged breaches of a loan agreement.[3] They seek damages in the amount of the loan plus interest and enforcement of their security over a mining lease owned by Mr Tenney.[4]
The parties, other persons and entities, the Mining Act 1971 (SA), and the mining interests
[2]    RAT is an acronym for Ross Andrew Tenney.
[3]    Cross-action (Counterclaim) dated 8 May 2014.
[4]    RAT Excavations is named as a party purely because it is Mr Tenney’s company and a party to some of the relevant 2010 agreements.
The parties to the proceedings
The parties to the proceedings are:
·Ross Andrew Tenney who is the plaintiff and first defendant by counterclaim in these proceedings.
·RAT Excavations which is the company owned by Mr Tenney and is the second defendant by counterclaim.
·Stephen Matthews who is the first defendant and first plaintiff by counterclaim.
·Marion Matthews who is Stephen Matthews’ wife, the second defendant and second plaintiff by counterclaim.
·Adrian Gregurke who is the third defendant and third plaintiff by counterclaim.
·Denise Gregurke who is Adrian Gregurke’s wife, the fourth defendant and fourth plaintiff by counterclaim.
·Cudla Mudla which is the family company of the Gregurkes, the fifth plaintiff by counterclaim.
Other persons and entities referred to in the evidence
Jerry Rebbeck (Mr Rebbeck) was the owner of land situated at Keilira near Kingston (the Rebbeck land) sold to Mr Tenney and/or nominees.
Andrew Desyllas and Maneroo Investments Pty Ltd (Maneroo Investments) became registered proprietors of allotments of land following the subdivision of the Rebbeck land.
Dennis Martin (Mr Martin) is the holder of Mineral Claim Number 4235 located in Piece 102 registered on 5 May 2010.
Peter Goldfinch (Mr Goldfinch) is the owner of the land on which the Green Granite mine is located.
Brian Johnson is the owner of land on which Johnson’s Quarry is located.
Papineau Quarries Pty Ltd (Papineau Quarries) is the company established by Mr Tenney, the Matthews and the Gregurkes as the operating company of the mining operations that the parties were to undertake together. The purpose of the company was to share the benefits of EML 6168 and the mineral deposit on Piece 102 between Mr Tenney, the Matthews and the Gregurkes.
Mining Act 1971 (SA)
The Mining Act 1971 (SA) (the Act) defines the subject matter of the relevant agreements between the parties.
Miner’s right
A miner’s right authorises the holder of the right to prospect for minerals and to peg out a mineral claim in accordance with the regulations under the Act.[5] This is no longer required by the Act but was required at the time when certain prospecting took place in this matter. Section 20 of the Act now gives a general right to prospect for minerals.
Mineral claims
[5] Mining Act 1971 (SA) s 22 as in force prior to 1 July 2011.
Part 4 of the Act provides for mineral claims. Section 21 provides that a person may establish a mineral claim by pegging that claim in accordance with the Act.
Pegging
Regulation 12 of the Mining Regulations 2011 (SA) sets out the requirements for a valid pegging in accordance with s 21 of the Act. It requires a person to physically peg out an area of land by securely placing a post in the ground at each corner of the relevant area. Each post must be devoid of marks or writing that refers to a previous pegging. The date of the pegging and the name and address of the person making the claim must be clearly shown. The direction of the boundaries of the claim must also be clearly indicated. In order to establish a mineral claim an application must be made to a mining registrar.[6] A mineral claim is not transferrable.[7]
Mining lease
[6] Mining Act 1971 (SA) s 21(6).
[7] Mining Act 1971 (SA) s 26.
The purpose of a mining lease is to confer upon the holder a right to carry out mining operations on the relevant land covered by the lease and to dispose of minerals extracted from that land.[8]
[8] Mining Act 1971 (SA) s 39(1).
A mining lease confers an exclusive right upon the holder of the lease to conduct mining operations for the recovery of minerals from the land comprised in the lease and, unlike a mineral claim, is assignable.[9]
[9] Mining Act 1971 (SA) s 26.
A mining lease can be granted by the Minister to the holder of a registered mineral claim under s 34 of the Act. An application for a mining lease must be made under s 35 of the Act.
Extractive minerals lease (EML)
An EML is a prescribed lease provided for by s 34 of the Act.[10] An EML entitles the lessee to carry out mining operations specified in the lease for the recovery of extractive minerals. Extractive minerals is defined in the Act as:[11]
extractive minerals means sand, gravel, stone, shell, shale or clay, …
Mining tenement
[10] Mining Regulations 2011 (SA) Regulation 29(b).
[11] Mining Act 1971 (SA) s 6.
Section 6 of the Act provides that a “mining tenement” includes a mining lease or a mineral claim.
Exempt land
Section 9 of the Act prescribes land that is exempt from mining operations. Relevantly, s 9(1)(d) of the Act states that land that is situated within 400 metres of a building or structure used as a place of residence shall be exempt from mining operations provided that a waiver of exemption has not been given under s 9AA.
Waiver of exemption (waiver)
A person who has the benefit of an exemption in relation to land may, upon request, grant a waiver which permits mining operations on otherwise exempt land.[12] The waiver has the effect that such land is no longer exempt land for the purposes of the Act.[13]
Caveat
[12] Mining Act 1971 (SA) s 9AA.
[13] Mining Act 1971 (SA) s 9AA(11).
Section 73A of the Act provides for the registration of caveats over land. A person claiming a legal or proprietary interest in a mining tenement may lodge with a mining registrar a caveat forbidding the registration of any transfer or other instrument affecting the mining tenement or interest.
The mining interests
Papineau Rocks
This is the rhyolite mine, which following subdivision of the Rebbeck land is situated at Pieces 24 and 25, DP 60514, Hundred of Minecrow. This was referred to in evidence alternatively as Papineau Rocks, Papineau Quarry or Papineau. For clarity, I will refer to it only as Papineau Rocks.
EML 6168
Papineau Rocks is subject to EML 6168.
Piece 102
Following subdivision of the Rebbeck land, the Matthews became the registered proprietors of an allotment comprising Pieces 102, 103 and 104 Filed Plan 42333 in the Hundred of Minecrow. Piece 102 is defined in the settlement documents as this allotment.
By reference to a Mineral Tenements Reference Map, Piece 102 is located approximately 1.5 km to the west from EML 6168 and is subject to Mineral Claim 4235 registered to Mr Martin. [14]
[14] Exhibit P17.
Piece 102 is exempt land by virtue of s 9(d)(i) of the Act as it is situated within 400 metres of a building used as a place of residence, namely the Matthews’ home.
The Pimple
“The Pimple” is the rhyolite deposit on Piece 102 subject to Mr Martin’s mineral claim.
Johnson’s
This is a limestone quarry situated on land owned by Brian Johnson approximately 20 km east of Robe. Johnson’s is subject to Mineral Claim 3464 pegged in 2004 by Mr Tenney and Mr Matthews. At the time of entering into the settlement agreement, the Mineral Claim was held by RAT Excavations and Mr Matthews.
The claim has not been converted into a lease because of an objection from the District Council of Robe.
Green Granite mine
Green Granite mine is situated on land at Padthaway owned by Mr Goldfinch. Mr Matthews, on behalf of Papineau Quarries, negotiated an option to purchase a sublease for this mine from Mr Goldfinch in 2005 for $20,000 paid by Mr Gregurke. The sublease expired in 2009.
Mount Monster Quarry (Mount Monster)
This is a stone reserve at Keith. At the time of entering into the settlement agreement, the Mount Monster mineral claim was held by RAT Excavations and Mr Matthews.[15] There is no pleaded case regarding Mount Monster.
[15] Mr Matthews pegged a claim over the reserve in March 2004. At the time of pegging Mr Matthews noted other posts that suggested that someone had also attempted to peg a mineral claim. As it transpired, Boral Resources had pegged a claim in February 2004 which was registered on 11 June 2004. Mr Matthews obtained a declaration from the Warden’s Court that Boral’s pegging of the claim was invalid due to defects in the pegging. Boral’s appeal to the Environment, Resources and Development Court (the ERD Court) against the declaration was dismissed, as was its appeal to the Full Court against the ERD Court’s dismissal of it appeal: Boral Resources (SA) Ltd v Matthews (2006) 94 SASR 411.
Events leading to the entering into of the settlement agreement
In about 2003, Mr Tenney and Mr Matthews became acquainted. Mr Matthews told Mr Tenney about a mine that his father (Mr Matthews’ father) had spoken of. The mine, Papineau Rocks, was located on the Rebbeck land. A joint venture was formed with Mr Gregurke. Land was purchased and subdivided, and the Matthews became the owner of Piece 102. Mr Tenney and Mr Matthews became the joint lease holders of EML 6168.
The parties also hoped to exploit the deposits located at Green Granite, Johnson’s and Mount Monster.
In the years that followed, there were proceedings in the Warden’s Court, the Environment, Resources and Development Court (the ERD Court), the District Court and the Mount Gambier Magistrates Court.
Warden’s Court Action No. 292 of 2009 (ERD-13-8)
Mr Matthews commenced Warden’s Court Action No. 292 of 2009 against Mr Martin by filing a plaint note on 13 August 2009 in respect of Mr Martin’s pegging of Piece 102. This action was transferred to the ERD Court and became ERD Action No. 8 of 2013.
As a large part of the pegged claim was exempt land Mr Martin also made application in the proceedings for a waiver.
Mr Matthews gave evidence that a waiver was not granted to Mr Martin. Mr Martin withdrew his application for a waiver, whereupon Mr Matthews said the proceedings were finished.
Mr Matthews was obliged pursuant to the settlement agreement to discontinue his plaint against Mr Martin.
Warden’s Court Action No. 312 of 2009
This application was brought by Mr Martin. It concerned the issues of whether a valid notice of entry had been given regarding Piece 102 to the Matthews and the Matthews’ notice of objection to entry.
Mr Matthews was obliged pursuant to the settlement agreement to withdraw his notice of objection to Mr Martin’s notice of entry. By reference to Exhibit P2, a Warden’s Court Record of Outcome, the objection was withdrawn on 30 June 2010.
Mount Gambier Magistrates Court proceedings (MTGCI-09-491)
The Gregurkes brought an action in debt against Mr Tenney in the Mount Gambier Magistrates Court on 9 November 2009. The claim for $37,750 was dismissed on 20 September 2010 with no order as to costs.
The Gregurkes were required to discontinue the proceedings in accordance with the settlement agreement.
District Court proceedings (DCCIV-09-1300)
On 17 July 2009, Mr Tenney commenced the District Court proceedings against the Matthews and Cudla Mudla seeking specific performance of an agreement the parties reached in December 2003. In October 2010, a District Court Master noted that the matter had resolved and adjourned for two months allowing time for a notice of discontinuance to be filed.
The settlement agreement
The various disputes between the parties culminated in the settlement agreement being entered into following a mediation in 2010.[16] The parties entered into a number of agreements to give effect to the terms of the settlement agreement. Accordingly, the agreement is recorded in the Settlement Deed, an Agreement for Sale and Purchase, a Loan Agreement, an Option Agreement, and a Supplementary Deed (the settlement agreements).
[16] Master Rice’s ex tempore reasons delivered 4 April 2012 in DCCIV-09-1300 (Decision No. 22 of 2012).
The Settlement Deed
The Settlement Deed was executed on 30 May 2010. The parties to the Settlement Deed are all of the parties to these proceedings.
I will refer to Mr Tenney and RAT Excavations as “Tenney”.
I will refer to Stephen and Marion Matthews as “the Matthews” unless it is important to indicate which person I am referring to, and William and Denise Gregurke and Cudla Mudla as “the Gregurkes” unless it is important to indicate who I am referring to.
The defendants are defined by the Settlement Deed to mean the Matthews and Cudla Mudla. I indicate that when I refer to the defendants in these reasons I mean the Matthews and the Gregurkes, the named defendants in this action.
The recitals to the Settlement Deed record that the parties have had dealings in relation to and/or have interests in Mount Monster and Johnson’s.
The defendants submit that the words “and/or” make clear that the parties agree that they do not necessarily have any particular interest in that subject matter.
The Settlement Deed records that Johnson’s means a mineral claim held by RAT Excavations and the Matthews.
The Settlement Deed provided that the settlement date was to be 7 June 2010 or such other date that the parties may agree to in writing. The Settlement Deed provided that the defendants shall sell for the sum of $520,000 and transfer all of their interests in the following to Tenney:[17]
·Their shares in Papineau Quarries;
·Mount Monster;
·Johnson’s; and
·EML 6168.
[17] Exhibit D1, page 4.

The Settlement Deed is to be construed as a whole in its commercial context. Having regard to the recitals and definitions it is clear that what is to be transferred is any interest in the subject matter listed. The parties have expressly recited for example that they may only have had dealings rather than a current interest in Johnson’s.
By clause 3(b) the Matthews grant to Tenney “the rights to any mineral claim over and to mine on Piece 102”. However, at the time of the Settlement Deed all parties were aware that the Matthews held no mineral claim over Piece 102 but that they were involved in a dispute with Mr Martin over a claim he had pegged over the land, which was the subject of the Warden’s Court proceedings referred to above.
By clause 3(c) Mr Matthews also agreed to withdraw his objections in the Warden’s Court in Action No. 312 of 2009 brought by Mr Martin and withdraw his claim in Action No. 292 of 2009.
The Matthews were to grant to Tenney the rights to any mineral claim over, and to mine on, Piece 102, save and except for within 300 metres of the house, without interference, including the provision of all consents required from, and waiver of the entitlements to any royalties by, the Matthews as landowner.
Tenney and the Matthews and Cudla Mudla were to enter into an agreement for the sale and purchase of the interests defined in clause 3(a) and settlement was to be subject to such agreement being executed by the settlement date.
Pursuant to clause 3(e) of the Settlement Deed, the Matthews and Cudla Mudla were obliged to provide vendor finance to Tenney in the sum of $520,000 (the vendor loan). This was on the basis that Tenney would provide security for the vendor loan over all his interests existing and acquired by the Settlement Deed over Papineau Quarries, EML 6168 and the rights over Piece 102.
Pursuant to clause 3(m), Tenney agreed that he would “maintain and renew” EML 6168 for the term of the loan agreement.
Pursuant to clause 3(e)(i), Tenney agreed to grant a security for the vendor loan over the whole of EML 6168. His existing interest at the time of entry into the Settlement Deed was one half of the lease and he acquired the other half by operation of the Settlement Deed.
Pursuant to clause 3(f) of the Settlement Deed, the Matthews agreed to grant Tenney an option to purchase all of the land, including the house and improvements, comprised in Piece 102 on the basis that:
1If the option was exercised within three and a half years of the date of the Settlement Deed the purchase price would be $400,000;
2If the option was exercised after three and a half years the price would be fixed at the mid-way between two valuations to be obtained from Elders Real Estate and Landmark Real Estate or an equivalent valuer.
Mr and Mrs Gregurke and Tenney were to discontinue the Mount Gambier Magistrates Court action on the basis that each party would bear their own costs of the action.
The parties agreed to do all such things and execute all such further documents as shall be necessary to give effect to the Settlement Deed, including any documents necessary to ensure that Adrian Gregurke and Marion Matthews cease to be directors and/or officers of Papineau Quarries.
The Matthews were to, when required and requested by Tenney, assign all documents necessary to transfer their interest, including any mineral claim granted, in relation to Mount Monster and Johnson’s to Tenney. The Matthews agreed to refer to Tenney any person or company who made an enquiry or who expressed interest in the mining of Piece 102 and/or the land subject to EML 6168.
It was agreed that the mediation entered into by the parties pursuant to the mediation agreement dated 3 May 2010 would remain open for the purposes of any issues arising in relation to the associated agreements.[18]
[18] Exhibit D1, clause 12(a).
The Settlement Deed was signed by Mr Tenney both for himself and as a director of RAT Excavations. The Matthews and Mrs Gregurke each signed as parties. Mr Gregurke signed both for himself and as sole director of Cudla Mudla. The parties agreed that each of the Matthews, Gregurkes and Tenney were to pay one third of the legal costs of preparing the associated agreements.
By virtue of clause 3(j) the parties agreed the terms of the Settlement Deed are binding upon them notwithstanding the negotiation of various subsidiary agreements.
The parties entered into an Agreement for Sale and Purchase which was fully executed on 23 August 2010.[19]
[19] Statement of claim, [7]; Defence, [7.3].
Mr Tenney, the Matthews and the Gregurkes entered into a Loan Agreement on 23 August 2010.
Mr Tenney and the Matthews entered into an Option Agreement on or about 23 August 2010 which pertains to clause 3(f) of the Settlement Deed whereby the Matthews granted to Tenney an option to buy all of the land including their house comprised in Piece 102.
Mr Tenney, the Matthews and the Gregurkes entered into a document entitled “Supplementary Deed” on 23 August 2010.
The Agreement for Sale and Purchase
This agreement required the Matthews and the Gregurkes to assign their shares and all benefits, rights, and entitlements accrued or attaching to such shares in Papineau Quarries to Tenney. Mrs Matthews and Mr Gregurke were also required to resign their positions in Papineau Quarries. Clause 2 required the Matthews and the Gregurkes to transfer and assign all of their rights, entitlements and interests in Mount Monster, Johnson’s and Green Granite (the mining tenements) and EML 6168 to Tenney in consideration of Tenney paying the purchase price.
Tenney agreed to accept the transfer and assignment of the shares and the interests in the mining tenements and EML 6168 free of any Charge Interest with effect from the completion date.
The parties agreed that in consideration of Tenney paying the purchase price the Matthews would grant to Tenney all and any rights that they hold, both now and in the future, in respect to any mineral claim over Piece 102, 103 and 104 without any interference whatsoever. The Matthews were to grant to Tenney the rights to conduct mining operations on Piece 102, 103 and 104 and obtain for Tenney’s own use and benefit any minerals without any interference. Tenney agreed not to mine within 300 metres of the house situated on the land.
Clause 4.1 states that Tenney agreed to pay $520,000 on the commencement date in consideration of receiving the interests in the mining tenements and the transfer of shares.
The Loan Agreement and the Supplementary Deed
The parties to the Loan Agreement are the Matthews and Mr and Mrs Gregurke as lenders and Mr Tenney as borrower.
This agreement refers to the Agreement for Sale and Purchase to identify the security granted under the Loan Agreement.
The loan was to be repaid by Mr Tenney over a 10 year period by way of 10 equal instalments of $52,000 plus interest calculated at a rate of 9.5 per cent per annum. Repayments were to commence on 30 June 2011 and were to be made on 30 June each year thereafter. The Supplementary Deed amended the date on which Mr Tenney was to make the first repayment of the loan to 30 July 2011, with the other repayments to be made annually thereafter.
Clause 16.1 of the Loan Agreement is an “entire agreement” clause, which records that “this agreement contains the entire agreement between the parties in respect of its subject matter”.
Clause 15 provides that time is of the essence. In accordance with the agreement as varied, repayments and interest were due on 30 July 2011 and every 30 July thereafter for a total of 10 repayments.
Clause 8 provides for default and termination. Clause 8.2 defines events of default. Clause 8.2.1 provides for “payment default” as follows:
If the borrower fails to pay any instalment of interest or instalment of the principal sum within 30 days of the relevant payment date or fails to pay any other money payable under this agreement on the due date for payment of that money and such failure continues for more than 30 days.
Clause 8.2.9 provides that an event whereby the security given under the agreement becomes unenforceable is an event of default.
Clause 8.1 provides that in the event of default all amounts outstanding under the Loan Agreement become immediately payable.
Clause 7.1 provides that in order to better secure the obligations of the borrower under the Loan Agreement, Mr Tenney charges and secures all of the rights and entitlements granted to him under clauses 2 and 3 of the Agreement for Sale and Purchase in favour of the Matthews and Mr and Mrs Gregurke.
Clauses 2 and 3 of the Agreement for Sale and Purchase relate to the “Mining Tenements” and the granting of mining rights to Mr Tenney. Clause 4.3 provides that in security for the loan, Mr Tenney was to charge and secure all of the rights and entitlements in relation to Papineau Quarries, EML 6168 and Pieces 102, 103 and 104 in favour of the Matthews and Mr and Mrs Gregurke until all monies owing under the loan had been repaid in full.
Clause 11 of the Loan Agreement provides that a certificate given by the defendants that default has been made under the Agreement shall be prima facie evidence as to the making of such default.
The stamp duty dispute
Following the execution of the settlement agreements there was a dispute about how much stamp duty (which was not addressed in the settlement negotiations) should be paid and by whom, which delayed the settlement date.
Warden’s Court proceedings and ERD Court proceedings
Before the commencement of this action, the parties were involved in proceedings in both the Warden’s Court and the ERD Court. These proceedings involved the same issues as this action and both Warden’s Court and ERD Court determined that they lacked jurisdiction to deal with the claims.
Warden’s Court proceedings and ERD Court Action No. 207 of 2012
On 19 October 2011, Cudla Mudla and the Matthews filed a plaint note in the Warden’s Court complaining that Mr Tenney had defaulted under the Loan Agreement and making application for transfer of EML 6168 to them.
The Warden determined that the application involved a monetary claim beyond the jurisdiction of the Warden’s Court and transferred the matter to the ERD Court. The Senior Judge of the ERD Court referred the matter back to the Warden’s Court noting that the matters the parties sought to litigate namely the enforcement of security given for a loan were not matters which could be litigated in the Warden’s Court or the ERD Court.[20]
[20] Cudla Mudla Pty Ltd & Ors v Tenney [2013] SAERDC 1 at [13].
The application in the District Court proceedings
Mr Tenney attempted to argue in the District Court proceedings that the settlement reached by the parties in 2010 was not binding. That application proceeded to argument before a District Court Master on 4 April 2012. The Master observed in his reasons that the parties had settled their dispute and had put into effect the terms of the settlement. The Master stated that he was not in a position to, nor was it relevant for him to determine, the disputes between the parties regarding the settlement. The Master said that Mr Tenney’s complaints came within clause 5(b) of the Settlement Deed whereby he could pursue a claim relating to any breach or enforcement of the Settlement Deed. The Master stated that the causes of action raised in the District Court proceedings had merged in the settlement and no further action could be taken in the District Court proceedings.[21]
[21] Master Rice’s ex tempore reasons delivered 4 April 2012 in DCCIV-09-1300 (Decision No. 22 of 2012).
On 4 April 2012, the Master dismissed the District Court proceedings in accordance with the terms of the Settlement Deed. Thereafter, Mr Tenney issued these proceedings in 2013.
Mr Tenney’s claim
Mr Tenney alleges the defendants failed to comply with the Agreement for Sale and Purchase by:
·the Matthews delaying in the transfer of EML 6168;
·the defendants wrongfully placing a caveat over EML 6168;
·the Matthews and Cudla Mudla failing to transfer an interest in Green Granite;
·the Matthews failing to transfer an interest in Johnson’s; and
·the Matthews failing to transfer an interest in Piece 102.
Mr Tenney claims that because of these alleged delays and failures he has suffered losses in the form of:
·a delay in his ability to exploit mining rights; and
·pecuniary losses in relation to Green Granite, Johnson’s and Piece 102.
The defendants deny any breach of the Settlement Deed or the Agreement for Sale and Purchase and allege that:
·EML 6168 was transferred at the conclusion of a dispute between the parties regarding the stamp duty;
·they have complied with their obligations under the Agreement for Sale and Purchase in every respect; and
·Mr Tenney has not identified any relevant assignable interest held by any of the defendants in relation to Piece 102, Johnson’s or Green Granite which has not been assigned or transferred to him.
The counterclaim
The defendants’ and Cudla Mudla’s counterclaim relies on the terms of the Loan Agreement (as varied by the Supplementary Deed). They alleged that Mr Tenney did not pay the instalment due on 31 July 2011 pursuant to the Loan Agreement or thereafter. It is alleged that the failure constitutes an event of default for the purposes of the Loan Agreement. The defendants and Cudla Mudla claim that, by reason of the default, upon service of the notice of default on him Mr Tenney became liable to repay the whole amount of the loan together with interest and indemnity costs.
The evidence
Mr Tenney, who was self-represented at trial, gave evidence. He subpoenaed Mr Goldfinch and called Mr Martin to give evidence.
Mr Matthews and Mr Gregurke each gave evidence. No other evidence was called by the defendants.
Mr Tenney’s evidence
Claiming Papineau Rocks
Mr Tenney wanted to gain an advantage by cornering “the aggregate market in the bottom end of South Australia”. In around 2003, he and Mr Matthews looked at several sites and decided that Mount Monster, Johnson’s and Papineau Rocks “were worthy of taking up in that plan”.
At a time when he was earth moving with Mr Matthews on a property between Kingston and Millicent, a mines compliance officer told Mr Tenney about Papineau Rocks. Mr Tenney denied it was Mr Matthews who told him about Papineau Rocks and maintained it was the mines compliance officer. This rhyolite quarry was located on the Rebbeck land. After looking at Papineau Rocks with Mr Matthews, Mr Tenney said he asked Mr Rebbeck whether he could peg a claim. Mr Rebbeck agreed and Mr Tenney pegged a claim in his name as he had a miner’s right and Mr Matthews did not.
In cross-examination, Mr Tenney denied he and Mr Matthews approached Mr Rebbeck together in relation to pegging the claim but eventually conceded that Mr Matthews had in fact accompanied him.[22] Mr Tenney also attempted to deny that he and Mr Matthews pegged the Papineau Rocks site together but under cross‑examination agreed that Mr Matthews had in fact pegged the claim with him.[23] It is of note that Mr Tenney cross-examined Mr Matthews on the basis that they had pegged the claim together and had made a ‘handshake deal’ in relation to the pegging.
[22] T162.
[23] T163.
The claim pegged on the Papineau Rocks site was converted into EML 6168. The mining lease pertaining to EML 6168 was executed on 21 December 2004.[24]
Piece 102 mineral deposit
[24] Exhibit D9
Mr Rebbeck told Mr Tenney and Mr Matthews about another rhyolite deposit on the Rebbeck land, close to the house on the property a kilometre away from Papineau Rocks. This mineral deposit is now known as Piece 102. Mr Tenney said he again asked Mr Rebbeck if he could peg a claim over the deposit. Mr Rebbeck would not agree, saying “the only way you’ll be able to do that Ross, is to buy the whole property”.
Mr Rebbeck wanted $1.4 million for the Rebbeck land. Mr Tenney said he signed for the property, “solely and I took the risk. Mr Matthews was with me it freaked him out but I signed for it”.
Mr Tenney said he signed the agreement to purchase the Rebbeck land in the name of Ross Tenney and nominees. Mr Tenney denied the suggestion that it was Mr Matthews who suggested that they buy the Rebbeck land together and sell off parts to other people to reduce the cost.
Mr Tenney said he and Mr Matthews were short $500,000 to $600,000 to buy the Rebbeck land. He said they began looking for a third partner and approached Mr Gregurke. Mr Tenney denied he knew that the Gregurkes were selling their farm at the time he approached them about joining in the mining venture. It was, however, Mr Gregurke’s evidence that Mr Tenney borrowed some of the proceeds of the sale of his farm and that he approached him about the mining venture because he knew he had funds following the sale.[25]
[25] T252.
The Gregurkes contributed approximately $96,000 to the purchase of the Rebbeck Land. Tenney said he contributed $110,000 to $115,000 and that Mr Matthews’ contribution was around $400,000 as he bought the house on 198 acres.
Following the purchase, the Rebbeck land was subdivided and a new Certificate of Title for Pieces 102, 103 and 104 was issued on 22 June 2007.[26]
[26] Exhibit P3.
Mr Matthews found two buyers for allotments of the subdivided Rebbeck land. An allotment was sold to Mr Desyllas and another to Maneroo Investments. The Matthews purchased the allotment which included the house situated near the deposit on Piece 102.
Mr Tenney maintained that he mortgaged a property and put between $100,000 and $115,000 in to help Mr Matthews purchase his land. Mr Tenney said Mr Matthews’ obligation was that if he, Mr Tenney, on-signed half of the interest in EML 6168 to him, Mr Matthews was to peg a mineral claim on Piece 102 in the names of Tenney and Matthews for the benefit of Papineau Quarries.
Having asserted that he bore all the risk in relation to the purchase of the Rebbeck land, Mr Tenney under cross-examination agreed that:
·the Gregurkes had paid the deposit toward the Rebbeck land purchase and further funds totalling $96,000;[27]
·the Matthews had borrowed and contributed funds in the sum of $400,000;[28] and
·significantly, the property had been purchased in the name of Mr Tenney and/or nominees because it was always anticipated that others would participate in the purchase.[29]
[27] T166.
[28] T166.
[29] T167.
Mr Tenney said he knew that Mr Martin had pegged a claim on Piece 102 in around 2008.
Mr Tenney agreed that the best part of the mineral deposit on Piece 102 is north east of the house located on Piece 102. He marked with an ‘X’ where the majority of the minerals are located on Exhibit P17, the Mineral Tenement Reference Map.
Papineau Quarries Pty Ltd
Papineau Quarries was established in 2003 by Mr Tenney, the Matthews and the Gregurkes[30] as part of the arrangement by which they planned to exploit the minerals and share the benefits of the mining operations. Each of Mr Tenney, the Matthews and the Gregurkes were to own a one-third share in the company and share in one third of the profits each.
Johnson’s
[30] Exhibit D6.
In 2004, by which time Mr Matthews had obtained a miner’s right, Mr Tenney and Mr Matthews pegged a claim in their names over Johnson’s. They have been unable to convert the claim into a lease due to an objection by the District Council of Robe. Mr Tenney said the granting of a lease is still in process. Mr Tenney agreed that to the extent anyone has a claim on the land it is in his name.
Mr Tenney agreed that a mineral claim cannot be transferred and therefore there is nothing for Mr Matthews to transfer to him in respect of the Johnson’s interest.[31] Mr Tenney agreed that he had not since the 2010 settlement forwarded any documents to Mr Matthews for him to sign in relation to Johnson’s.
Green Granite
[31] T213.

In about 2005, as part of the joint venture, an option to purchase a sublease over Green Granite mine was purchased from Mr Goldfinch. Mr Tenney argued that the sublease was never put into the company and it was withheld from the company. Mr Tenney said it was meant to be purchased in the name of Papineau Quarries but that Mr Matthews did not put the option in the company’s name. Mr Tenney agreed that Mr Gregurke used his money to pay for the option. Mr Tenney denied instigating the purchase and denied requesting the funds from Mr Gregurke or telling him that the option needed to be purchased urgently.[32] Having denied instigating the purchase, Mr Tenney then said he had suggested the purchase. He gave confusing evidence denying knowledge of the transaction asserting that Mr Gregurke was supposed to give him the funds:[33]
… so I could stick it into Papineau Quarries as a loan from me, to Papineau Quarries therefore I’d give Bill Gregurke the money.
…
No, I asked him did he want to invest in it and put into the company, therefore he was the third share of the input/output profit and loss.
Mr Tenney said he did not know how long the option was for nor had he ever seen the option.
[32] T216.
[33] T217.
This evidence conflicts with Mr Gregurke’s[34] and Mr Matthews’ evidence to the effect that Mr Tenney was intimately involved in the transaction.
The settlement
[34] T258.
Mr Tenney said there were disputes between the joint venturers about what the parties were contractually obliged to do in relation to their mining interests.
It is to be noted that in 2009 Mr Matthews issued the application in the Warden’s Court against Mr Martin in respect of Mr Martin’s pegging of Piece 102 and, under a month later, Mr Martin made his own application to the Warden’s Court. The Gregurkes also issued the Mount Gambier Magistrates Court proceedings against Mr Tenney in 2009.
Mr Tenney said that after getting legal advice from Wallmans, the District Court proceedings were commenced. Mr Tenney said the parties were encouraged to settle by a District Court Master and settlement negotiations took place. The result of those negotiations is the Settlement Deed and associated agreements.
Tenney said that the settlement agreements required the Matthews and the Gregurkes to:
1transfer half of EML 6168 to Tenney;
2give a waiver of exemption to Tenney in relation to Piece 102;
3pay one third each of any debts owing to Papineau Quarries Pty Ltd at that time;
4transfer the water licence on Piece 102 to Tenney;
5remove themselves as bank signatories for Papineau Quarries Pty Ltd;
6give a mortgage of Certificate of Title from the ANZ Bank to Tenney;[35]
7convene a meeting of the directors of Papineau Quarries Pty Ltd for resignations and voting of single directorship;
8“to deal with things necessary in relation to Mount Monster, Johnson’s and the Green Granite to get them ready”[36] to transfer to him; and
9inform Tenney of any inquiries received in relation to Piece 102.
[35] T98.
[36] T95.
Mr Tenney said that he was required to repay the vendor loan in instalments beginning 12 months after the Matthews and the Gregurkes had met these requirements. He said that settlement was to be 7 June 2010. Mr Tenney was to have documents sent to Matthews and Gregurke for completing the waiver.
Mr Tenney said that the Agreement for Sale and Purchase was signed by Tenney and the Gregurkes on 8 June 2010. He said that the Matthews signed it sometime later. He said the delay was because Mr Matthews wanted the Supplementary Deed drawn up.
Mr Tenney confirmed he was friends with Mr Martin and that in 2010 he wanted (and still wants) to peg a claim on Piece 102 for himself.
It was put to Mr Tenney in cross-examination that a term of the Settlement Deed required Mr Matthews to do certain things to help Mr Martin. Mr Tenney disagreed. Mr Tenney was asked to consider clause 3(c) of the Settlement Deed which provides that Mr Matthews shall withdraw his objection to Mr Martin’s plaint in Warden’s Court Action No. 312 of 2009 and withdraw his claim against Mr Martin in Warden’s Court Action No. 292 of 2009. When asked whether doing these things was to Mr Martin’s advantage Mr Tenney did not answer.
I find that Mr Tenney’s evasiveness on this topic leads to the inference that he perceived it as detrimental to his own case to agree with the proposition that the discontinuance of the Warden’s Court proceedings and withdrawal of objection by Mr Matthews was to Mr Martin’s benefit.
Mr Tenney said that he provided the Matthews with a waiver document for them to sign. The waiver was sent to the Mines Department with a copy of the Agreement for Sale and Purchase. Mr Tenney said that the Mines Department would not recognise the settlement, the transfer of EML 6168 or waiver until someone paid the stamp duty.
There was a dispute between the parties as to who had to pay stamp duty as it was not provided for in the settlement agreements. There was a separate dispute between the defendants and Revenue SA as to the amount of stamp duty payable. Once the disputes were resolved, Tenney, the Matthews and the Gregurkes agreed to pay one third each. Mr Tenney said he was the last to pay his share of the stamp duty because he is a contractor who does not get paid weekly. He said he paid as soon as the funds were available to him.
Mr Tenney contended that even if there was no waiver with respect to Piece 102, he could have pegged the entire property if he wanted to as the waiver was only necessary to allow him to mine within 400 metres of the house:
I could have pegged the whole property, straight over the top of the house and everything.
Mr Tenney argued that because no valid waiver was given the defendants could not caveat the property.
Mr Tenney believed that the Matthews and the Gregurkes were shareholders of Papineau Quarries until June 2010 when he realised that they were never shareholders.
As part of the settlement it was agreed that Mr Tenney would become the sole owner of Papineau Quarries. The defendants would transfer their shares and resign their positions with the company. Mr Tenney agreed that the defendants provided him with documents which indicated they were transferring their shares to him and documents that indicated they were resigning from their positions as directors or secretary. He said:[37]
I do agree that we went through the throws of resignations, transfers of supposed shares, disattaching them from the company because at the time I was under the belief that they were lawful owners of the shares and had signed the company charter (sic).
[37] T177.
Other than the waiver incorrectly being registered against EML 6168, Tenney agreed that the Extract from Mining Register in relation to EML 6168 correctly records the things which have been registered in relation to EML 6168.[38]
[38] Exhibit D10.
Mr Tenney agreed that Mr Matthews’ half share in EML 6168 was transferred to him, albeit late. The Extract from Mining Register records the date of transfer as being 5 July 2011.
Mr Tenney agreed that clause 12 of the Settlement Deed provided for the mediation between the parties to stay open for the purposes of any issues arising in relation to the settlement agreements. He reluctantly agreed that the parties kept mediating the disagreement about who should pay the stamp duty.[39]
[39] T195.
Mr Tenney agreed that the Magistrates Court proceedings commenced by Mr and Mrs Gregurke against him were discontinued as required by the Settlement Deed.
Mr Tenney asserted that a bank document[40] referring to Papineau Quarry (Papineau Rocks) was a reference to Piece 102.[41] When cross-examined, he acknowledged that Papineau Rocks in fact related to EML 6168 then gave an explanation for his earlier answer which appeared to be that entirely unexploited minerals on Piece 102 amount to a quarry.[42]
[40] Exhibit P19.
[41] T156.
[42] T161.
Mr Tenney attempted to deny that he removed Mr Matthews as a director of Papineau Quarries in 2008 by blaming Mr Gregurke despite being shown a document that demonstrated he had voted in favour of the removal.[43]
[43] T173.
After repeated questioning Mr Tenney did concede that he had an obligation to pay the settlement sum.[44]
[44] T129.
Throughout his evidence Mr Tenney said the Gregurkes and Matthews did not own any shares in Papineau Quarries. This was contradicted by ASIC records[45] and a deed signed by Mr Tenney recording that they were in fact shareholders.[46] It was contrary to his acceptance of transfers of shares from the defendants and contrary to the uncontested evidence that the Matthews and Gregurkes had contributed large sums of money to the venture and that the sole method of distributing any income was via shares in the company.
[45] Exhibit D6.
[46] Exhibit D14.
As submitted by the defendants, it was effectively Mr Tenney’s evidence that the Gregurkes had paid $100,000 in cash and received nothing whatsoever in return:[47]
They didn’t have any rights in the operating company. They didn’t have no rights in piece 102. They only had rights in the company if they owned the shares.
[47] T100.
Mr Tenney gave evidence about his obligation to pay instalments under the Loan Agreement. He said that the settlement agreements contained a clause which meant he was not required to pay until 12 months after certain steps had been taken.[48] He conceded that this was merely what he believed his obligation was:[49]
[48] T100.
[49] T229.
QYour evidence yesterday, I think it was your evidence, it may have been a submission you made to the court, but you suggested yesterday that you didn’t have to pay any amount under the loan agreement until 12 months after you received everything that you say you should have.
AThat’s what I believe, yes.
QThat’s what you believe.
And he conceded that the Agreement for Sale and Purchase:[50]
QDoesn’t say anything about 12 months after something happened.
AIt doesn’t appear to, no.
EML 6168
[50] T230.
The lease to EML 6168 was originally in the name of RAT Excavations and later in the name of Mr Tenney and Mr Matthews. Mr Tenney said that Matthews placed a caveat on EML 6168 to block a transfer of lease to him that Mr Matthews had signed.
Mr Tenney agreed that all parties were bound by the settlement agreements. Clause 3(e)(i) of the Settlement Deed states that Tenney will provide security for the vendor loan over all his interest existing and acquired by this Deed over Papineau Quarries, EML 6168 and the rights over Piece 102.[51] Mr Tenney said that this was only if due process was followed.[52] He said that he has asked the Mines Department to remove the caveat over EML 6168 but has not brought a Warden’s Court action to have it removed.
[51] Exhibit D1.
[52] T223.
Mr Tenney has not taken up the Option Agreement within the three and a half years that he had to purchase Pieces 102, 103 and 104.
Mr Tenney agreed that under the agreements he had to pay the purchase price of $520,000 and the Loan Agreement provided that he had 10 years to make the repayments of 10 annual instalments with 9.5 per cent interest per annum. He agreed that the Loan Agreement recorded that the 10 annual instalments were to commence on 30 June 2011.[53] He agreed that the Supplementary Deed changed the date of first payment to 30 July 2011. He agreed that nowhere in the agreements does it say that payment is due 12 months after something else happened.
[53] Exhibit D3
Mr Tenney acknowledged he had received a notice of default, that he did not pay the amount in that Notice and that he has not paid anything under the Loan Agreement.
Mr Tenney gave evidence that a water licence was not transferred as provided for in the Settlement Deed.
Mr Tenney said that Papineau Quarries looked for a third party to pay to operate the quarry subject to EML 6168. When it was put to him that no one was prepared to do a deal he said they obtained a quote to crush 20,000 tonnes of rhyolite for $150,000. He suggested to Mr Matthews and Mr Gregurke that they all take out a personal loan so that they would be able to “achieve an experimental run of 20,000 tonnes on 6168”. However, Mr Matthews and Mr Gregurke did not want to borrow any more money so the deal fell through.
Mr Tenney said he, Mr Matthews and Mr Gregurke met with a representative of Agricola with a view to Papineau Quarries entering into an agreement with Agricola. He denied contacting the Agricola representative after that meeting and trying to sign a side deal with respect to EML 6168. Mr Tenney also denied that the Agricola representative was initially interested but lost interest after speaking with Mr Tenney.
Mr Tenney agreed that he, Mr Matthews and Mr Gregurke also spoke to a representative of Ready Mix. He denied that he tried to contact the Ready Mix representative separately and after that contact the representative went from being interested to not being interested.
Mr Tenney was steadfast in his view that the defendants had not done what was required of them pursuant to the settlement agreement. His evidence was discursive and at times evasive and inaccurate. Mr Tenney contradicted himself on certain topics and was pugnacious when his evidence was challenged in cross‑examination. Even allowing for the fact he was unrepresented, Mr Tenney interjected inappropriately, in particular during significant cross-examination of his witnesses or examination in chief of Mr Matthews and Mr Gregurke.
I am unable to rely on Mr Tenney’s evidence. I prefer Mr Matthews’ evidence and Mr Gregurke’s evidence to Mr Tenney’s evidence on all issues in dispute.
Peter Goldfinch
Mr Goldfinch is the holder of the Green Granite mining lease. He said that Mr Matthews had paid $22,000 for an option over a sublease to explore the possibility of selling the stone in the market. Mr Goldfinch said the option had to be exercised within a certain period or it would lapse. He said that as it was not exercised in this time period it lapsed. However, he conceded in cross‑examination that he could be wrong about the option not being exercised and he did remember there might have been a few trials extracting the stone but he could not remember details.
Mr Goldfinch was not 100 per cent sure if Mr Matthews telephoned him saying he wanted to take up the sublease. At first he could not recall being telephoned by Mr Matthews at a time when the option had expired to enquire whether he would sell his lease. When it was suggested to him that his response to Mr Matthews was that he had already given the sublease to his son Alan, he said he did remember some talk about his son:
When you mentioned Alan to me, my son, I remember that being part of the conversation and that means that if Mr Matthews mentioned Alan, there’s only one way he would have known about that and that was through speaking to me and he must have said something about the lease to me for me to mention Alan’s going to market it, but that means also that he would never have exercised the option to become a sublease.
I accept Mr Goldfinch as an honest witness but one whose memory of events was affected by time. His memory was jogged on occasions but he struggled to piece together the details of what he was being asked. His evidence is not of assistance.
Dennis Martin
Mr Martin has pegged a claim on Piece 102. He said he served a notice of entry on the landowner, Mr Matthews, prior to pegging his claim. He said there was an old pegging on the property dated 2004 that had expired. He knew that Tenney, Matthews and Gregurke were in business together and looking to exploit Piece 102 before he pegged that claim.
After he pegged the claim, the mines compliance officer was called by Mr Matthews. Mr Martin said his pegs disappeared and he never saw them again. There was a dispute in the Warden’s Court and the ERD Court. The notice of entry was initially disputed by Mr Matthews. The Warden’s Court ordered that the notice be re-issued and Mr Martin was then allowed to peg the claim. The mineral claim over Piece 102 was subsequently registered on 5 May 2010.
Mr Martin has sought a waiver from Mr Matthews to allow him to mine up to 300 metres from the house on Piece 102 but no waiver has been given. Mr Martin agreed that he cannot sell or assign his mineral claim but said that he could assign a lease if one were granted. Mr Martin said he is able to convert the claim into a lease but he cannot mine within 400 metres of the house on the land.
Mr Martin asserted that, even though he was aware that Mr Tenney, the Matthews, and the Gregurkes intended to exploit the mineral deposit on Piece 102, Mr Gregurke telephoned him wanting his opinion about what would happen if they did not peg a claim on Piece 102. He went on to explain how he came to learn about the value of the deposit:[54]
AThe only thing that made me think it was valuable to start with was the first time that I actually went to the property and the guys were showing me around and showing me where they were going to go and peg and all that sort of justify and a guy called Geoff Oliver turned up. He had a green Ford, I always remember it, he had a tartan blanket in the boot and he showed us some material they had actually taken and polished and when we went.
QIs that from the rhyolite deposit.
AThat was from that rhyolite deposit and he was comparing it with other stone. It was all new to me, I was like, okay, and he mentioned a figure of possibly – possibly 3,800 for a cubic metre which is about 2.7 tonnes of material if it was in good condition. So, but he said that is only - that is a possible figure, he didn’t say that was a definite. That was the first time that I realised that these guys were sitting on something quite valuable.
[54] T69.
As it transpired, Mr Martin pegged his claim without ever speaking to Mr Matthews about his intention to do so. The only inference to be drawn from this is that he intended, and intends, to exploit the deposit on Piece 102 in his own right. Mr Martin, whilst stating Mr Gregurke was angry with him for pegging the claim, in my view quite disingenuously, said he could not understand why Mr Gregurke no longer spoke to him.
When it was put to him that the telephone call with Mr Gregurke did not ever occur, Mr Martin said:[55]
He called me out of the blue and unfortunately for me the record was destroyed, I had a malfunctioning air conditioner that destroyed all my Telstra records. I actually had the date marked out when he spoke to me after I realised there was something wrong.
[55] T84-85.
In cross-examination, he denied that he had an agreement in 2010 with Mr Tenney to the effect that Mr Tenney would obtain Mr Matthews’ agreement to certain things that helped him in relation to the claim on Piece 102. He also said he was not aware there was an agreement in 2010 whereby Mr Matthews agreed to do something. He was, however, aware of it “way later”.
Mr Martin’s evidence is not of assistance in resolving the issues in dispute and I indicate that I prefer Mr Matthews’ and Mr Gregurke’s evidence to that of Mr Martin on all topics.
The purported valuation evidence
Mr Tenney attempted to adduce valuation evidence from Mr Goldfinch and Mr Martin. I received the evidence de bene esse. I indicate that neither witness is qualified to give such evidence and I disregard their evidence in this regard entirely.
The defendants’ evidence
Adrian Gregurke
Mr Gregurke is a grain harvesting contractor. He has known Mr Tenney since the early 1980s and Mr Tenney’s uncle is his brother-in-law. Mr Gregurke was introduced to Mr Matthews by Mr Tenney in 2003.
Mr Gregurke said he was approached by Mr Tenney and Mr Matthews with a deal whereby they would start up a quarry business to mine rhyolite. Mr Gregurke would receive a one-third share of the operating company, Papineau Quarries. He said that the directors of the company were Mr Tenney and Mr Matthews but they tried to make decisions about the company’s affairs jointly, even though it did not always turn out that way.

Mr Gregurke contributed $96,400 for the parties to be able to purchase the Rebbeck land and for that he and his wife received one share in the company each. The purchase of the land was facilitated by Andrew Desyllas and Maneroo Investments buying allotments of the land following subdivision. Mr Gregurke said he has never had any interest in the land.
He said, to his knowledge, the only money in the Papineau Quarries operating account was the $800 he and his wife contributed.
Mr Gregurke said that he and the Matthews and Mr Tenney attempted in late 2004 and 2005 to get a contractor involved to operate the quarry on EML 6168 on their behalf.
Mr Gregurke said he received a phone call from Mr Tenney one night regarding the Green Granite mine sublease saying they needed “to lock down this granite because they could sell it and it will be a really good deal”. After being told it would cost $20,000 plus GST, Mr Gregurke and his wife decided to “put some money into this venture as an adjunct to EML 6168”. Mr Gregurke said that Mr Tenney then came to his house one night and said that if the $22,000 was not paid by the next night the deal would be off. In response, on 30 June 2004, Mrs Gregurke went to Millicent to organise money from Cudla Mudla to be transferred to Mr Goldfinch. The Green Granite mine sublease was in Mr Matthews’ name and there was an understanding that any money made through the sale of the granite blocks would be channelled through Papineau Quarries. However, no money was ever made.
Mr Gregurke’s understanding was that they had purchased a sublease and then they had an option. The sublease ran for three years and the option ran for two years. At the end of that option period they had the chance to buy an extended lease. This was never done and the period expired five years after 30 June 2004.
Mr Gregurke was not involved in Johnson’s or Mount Monster.
Mr Gregurke gave evidence that the parties approached Rock & Crete Crushing Services, Boral and Ready Mix about operating the quarry on EML 6168 on their behalf. He said that the people they spoke to sounded reasonably interested but was told by Mr Matthews that they changed their mind because of the side deal that Tenney tried to do. They tried to find someone to run the quarry from 2004 to part of 2006. He said that everything the Matthews and Gregurkes tried to do was shot down by Mr Tenney.
Mr Gregurke said that pursuant to the settlement agreements the half share in EML 6168 was transferred from Matthews to Mr Tenney. The shares in Papineau Quarries were transferred from the Matthews and Gregurkes to Mr Tenney. Mr Gregurke withdrew himself as signatory to Papineau Quarries and resigned as a director.
Mr Gregurke said he has not received any payment in connection with the Loan Agreement.
Mr Gregurke denied he had a telephone conversation with Mr Martin in relation to Piece 102 and said the least he would ever have done is told Mr Martin that he should get his skates on “and go and hurry up and peg a mining claim on Steve Matthews’ property”.[56]
[56] T264.
He said that the Gregurkes signed all the settlement agreements in the first five or six days in June. He fulfilled all of his obligations later in June when they returned from a holiday in Queensland:[57]
… which was resign as a director of the company and resign as a signatory to the cheque account was done and DeGaris lawyers did the divestiture of our shares.
[57] T265.
He said that the Matthews wanted a Supplementary Deed regarding the sale of their property drawn up. That deed was signed in July or August 2010.
The Gregurkes contributed $8,300 in stamp duty as well as money for the mediator and money for Wallmans to get the documents drawn up.
Mr Gregurke agreed that he and the Matthews placed a caveat over the entire lease of EML 6168.
Mr Gregurke said that as sole director, Mr Tenney was the person who was required to call a meeting of Papineau Quarries. He said they have resigned their positions and transferred their shares and that the only thing that was not done was the calling of a meeting by Mr Tenney.
I accept Mr Gregurke as an honest and reliable witness. He had a good memory of events that he was involved in, as well as details of sums of money and other contributions that he made to the joint venture.
Stephen Matthews
Mr Matthews is now employed as a fly in fly out miner. He lives on Piece 102, a farming property of a little under 200 acres used to run sheep and cattle. Piece 102 contains a large house, a shed and a swimming pool, all located centrally on the property.
Mr Matthews said he really did not know Mr Gregurke until 2003 and has known Mr Tenney since the late 1990s. Mr Matthews formerly worked as an earthmoving contractor and in 2002 was working on the same site as Mr Tenney. The two of them arranged to meet with Mr Rebbeck and look at the quarry known as Papineau Rocks. They asked Mr Rebbeck if they could peg a claim to which he said yes. Mr Rebbeck told them about another deposit behind the house on the Rebbeck land called “The Pimple” but said “it’s only a few truckloads”. He said that it was obvious to him and Mr Tenney that it was quite a substantial deposit and they asked if they could peg that deposit as well. Mr Rebbeck said “No, but I’ll sell you the property for 1.2 million, walk in walk out”.
Mr Tenney and Mr Matthews agreed with a handshake that they would share equally in Papineau Rocks. Mr Tenney and Mr Matthews then went with a mines compliance officer, to look at the quarry. They returned at a later date and pegged the claim.
On the map, Exhibit P17, Mr Matthews marked with an ‘X’ where the Pimple was located and an ‘H’ where the house was located on what was, prior to subdivision, the Rebbeck land.
After considering how they could purchase the property for $1.4 million, Mr Tenney and Mr Matthews decided they would attempt to buy the property as “and or nominees”. Mr Gregurke first loaned Mr Tenney the money to purchase an option to buy the property. Later, when it became clear there would be a shortfall, Mr Tenney, the Matthews and Mr and Mrs Gregurke all contributed to the purchase and formed the company, Papineau Quarries, which would have the sole right to operate the quarry. Mr and Mrs Gregurke would be one-third shareholders with the Matthews and Mr Tenney.
Mr Matthews said that he contributed $393,000 to the purchase of the land. Maneroo Investments paid $550,000 (plus stamp duty) for 1,000 acres and Andrew Desyllas paid $120,000 for about 800-900 acres.
Papineau Quarries was formed in late 2003. The subdivision plan was not finalised until late 2007 because there were two small parcels of land which did not have their own title. Mr Tenney ended up receiving these two parcels of land which he on-sold in 2007.
EML 6168
EML 6168 was granted in the name of RAT Excavations. Mr Matthews said that he and Mr Tenney had an agreement on a handshake whereby Mr Tenney transferred half of EML 6168 to Mr Matthews and no money changed hands. He said that EML 6168 is the best bitumen road aggregate in South Australia, if not Australia.
While EML 6168 was held by Mr Tenney and Mr Matthews, the operating company was Papineau Quarries. They attempted to get someone in to operate the quarry on their behalf and pay royalties but had no success. Mr Matthews believes that at least two of the companies refused to go through with any deal because Mr Tenney had attempted to do a side deal with those companies, where they would “pay him personally some extra above what they paid to Papineau Quarries”.[58]
[58] T305.
Mr Matthews said that he was the one who attempted to sell or commercialise EML 6168 over a period of three years. He had huge phone bills and was hosting potential buyers. At the end of that period he said he was almost broke and had to find a job.
The pegging by Mr Martin
Mr Matthews said that after the Rebbeck land was subdivided, Mr Martin pegged a claim on the land. However he did not ever see a notice of entry from Mr Martin informing him of his intention to peg a claim.
Mr Matthews’ son found one of the pegs when they were rounding up some sheep and showed it to Mr Matthews. Mr Matthews called the Department of Mines and was told that there was an application for a mineral claim in the name of Mr Martin. Mr Matthews asked for a mines compliance officer to come out and have a look as he believed the pegs had not been placed properly and he had not been served notice.[59]
[59] T309.
Mr Matthews took his dispute to the Warden’s Court. The Warden gave Mr Martin permission to re-peg his claim. Mr Martin served a fresh notice of entry and got a surveyor to peg the claim for him. Mr Martin has not obtained a waiver from Mr Matthews despite taking the matter to the ERD Court in an attempt to obtain the waiver.[60]
Johnson’s
[60] T311.
The mineral claim at Johnson’s was pegged jointly by Mr Tenney and Mr Matthews. Mr Matthews undertook a mining and rehabilitation plan and submitted it to the Department of Mines hoping to get a mining lease. The District Council of Robe objected to the proposal due to concerns of damage to the dirt road that accesses the mine. The Council will not grant the mining lease until the Council’s concerns can be addressed.
Green Granite
The Green Granite mine, owned by Mr Goldfinch, contains around 200,000 tonnes of granite of substandard quality. Mr Matthews negotiated an option to take a sublease over the mine for $20,000. This $20,000 was borrowed from Mr Gregurke and it was intended that the mine would be operated on behalf of Papineau Quarries. The option was to run for two years. Near the end of those two years, Mr Matthews said he signed the sublease and sent a copy to Mr Goldfinch. He then had the sublease for a further three years. The sublease gave him access to the material at the Green Granite mine. They had to pay $1 per cubic metre for any material they took from the quarry. He said they took a block of two cubic metres and sent it to Best Pavers, a company in Adelaide, in the hope that they would purchase some of the material. Best Pavers did not purchase any of the material, nor did anyone else in the time that they had the sublease. The sublease expired in the middle of 2009. Mr Goldfinch did not want to renew the sublease.
The settlement agreements
Mr Matthews said that he signed the waiver over Piece 102 and returned it to his lawyers.[61] He said he has done all things under the 2010 agreements “to the best of our ability”.[62]
[61] Exhibit D13.
[62] T317.
He said there was a delay in transferring his interest in EML 6168 because the Department of Mines would not register the transfer until stamp duty was paid. The Matthews were asked by Wallmans Lawyers to pay one third of the stamp duty. They eventually paid one third of the total stamp duty which was assessed to be $22,825.69.[63]
[63] Exhibit P15.
Mr Matthews accepted that Mrs Matthews did not sign the waiver.
A document titled Standard Transfer Form was signed by Mr Matthews on 6 July 2010, transferring one ordinary share to Ross Tenney.[64] Mr Matthews said that he handed this document to his lawyers to send to ASIC. A document titled Standard Transfer Form was signed by Mrs Matthews on 12 June 2010, transferring one ordinary share to Mr Tenney.
[64] Exhibit D25.
Mr Matthews said that recalled Mrs Matthews signed a document resigning as a director of Papineau Quarries on 6 July 2010. He could not shed any light on why the date on the document was not filled in.[65]
[65] T302.
Mr Matthews said the Option Agreement entered into in 2010 gave Mr Tenney an option to purchase the Matthews’ property, Piece 102, at a reduced rate of $400,000. Mr Tenney did not take up that option.
Mr Matthews said no payment has been received from Mr Tenney under the Loan Agreement.
Mr Matthews gave clear evidence consistent with the available contemporaneous documentation. He was able to recall the various dealings that the parties had with each interest and gave consistent evidence in all respects. I accept his evidence.
Plaintiff’s submissions
In closing, Mr Tenney asked me to consider that he has always acted with honour and integrity towards Mr Matthews. He believed he had an obligation to work in the best interests of Papineau Quarries as a company director. He submitted that if the Court were to find against him, he should be given an opportunity to assign, transfer or dispose of his assets for the highest amount achievable given that when administrators are appointed they take a fair bite of the pie.
He said that he takes full responsibility for his signature and all the documents that were signed. He pleaded for what he believed was fair and just.
Mr Tenney said that if Matthews no longer wanted to have anything to do with the mineral claim on Johnson’s then he could write to the Mines Department and they would cancel it.
He asked the Court to read the case of Boral Resources (SA) Ltd v Matthews.[66]
[66] (2006) 94 SASR 411, referred to in footnote 14 above.
As Mr Tenney did not have the benefit of legal assistance he was given the opportunity following oral closing submissions to consider the defendants’ written submissions and submit responding submissions. Mr Tenney did not avail himself of this opportunity.
Defendants’ submissions
The defendants made oral and written submissions. They submitted that the settlement agreements resolved disputes that the parties had from 2008 to 2010 and that the defendants have done everything they were required to do under those agreements. They submitted that the agreements were made between parties who had had close dealings with one another for seven years and were separating their interests by those agreements, which were essentially a buy-out.[67] Their submission was that where the agreements deal with the same subject matter, the Court should, wherever possible, attempt to give effect to the terms of each of the agreements. They said this was particularly important in the context of the dispute over the security to be given over EML 6168.
[67] T346.
The defendants submitted that Mr Tenney inaccurately recalled significant matters about the history of dealings in certain mining tenements and significant details of important documents. They said that Mr Matthews and Mr Gregurke had very good memories supported by contemporaneous documents. They said that Mr Matthews gave far more detailed evidence than any other witness. They submitted that Mr Gregurke did not have the same level of recollection but that was not surprising given the role that he played as a financial partner.
They submitted that the evidence of Mr Goldfinch was that there was an option to take up a sublease over his property. Mr Matthews gave evidence that it was taken up but it had expired by 2010.
The defendants submitted that Mr Martin has no prospect of being granted a waiver to allow him to mine on Piece 102. They submitted that the agreements required Mr Matthews to withdraw his objection to Mr Martin’s claim and that was done. Their submission was that this precludes Mr Tenney from claiming he was unaware of Mr Martin’s claim at the time of the agreements and that Mr Martin is the true obstacle preventing Mr Tenney from doing anything in relation to Piece 102.
The defendants submitted that where mining tenements are referred to in the agreements, the assignment is of any existing interest. It is not a promise that a particular interest does exist.
In regard to EML 6168, the defendants submitted that the evidence shows Mr Matthews tried to register the transfer to Mr Tenney in 2010 and while the transfer was ultimately registered in 2011, it was backdated to 2010. The transfer was not registered at the time because of the dispute over who would pay stamp duty. They submitted that in the absence of any provision about stamp duty in the agreements, the parties mediated their dispute and eventually Mr Tenney accepted the transfer. They submitted that Mr Tenney has not shown any connection between the alleged delay and the alleged loss even if the defendants had breached their obligation by reason of delay.
The defendants submitted that given Mr Tenney could not come up with $90,000 (being principal and interest) at the time of the first instalment, it is inherently unlikely that he could have obtained finance and exploited the mineral claim on EML 6168 at that time.
They submitted that the caveat was properly lodged in accordance with the agreements and was not causative of any loss.
In relation to the waiver over Piece 102, they submitted that the defendants have registered the waiver as required. They submitted that even though it was registered over the wrong interest in error, they had done all that was required of them and any error was made by the Mines Department. In relation to Johnson’s, the defendants submitted that Mr Matthews has no assignable interest, this was known to the parties at the time of the agreements, and that there was no loss suffered by Tenney.
They submitted that they held no interest in Green Granite mine at the time of the agreements, this was known to Mr Tenney, and there is no evidence of any loss suffered by him.
Finally they submitted that the failure to call a meeting as required under the deed was not pleaded, did not invalidate the transfer of shares and could not be causative of any loss.
Analysis
The alleged delay in transfer of EML 6168
Mr Tenney alleges that as the 50 per cent interest in EML 6168 “was not formally transferred” to him until 5 July 2011 and a caveat was lodged over the whole of the lease he has suffered pecuniary loss which he estimates to be $85,925.34. Mr Tenney pleads in the statement of claim that at the time of the Settlement Deed his bank had a positive attitude regarding loan finance. He alleges that the delay in the transfer caused his bank to change its attitude from positive to “negative some time thereafter” and he was unable to obtain finance after 5 July 2011.
The Agreement for Sale and Purchase was signed on 23 August 2010 and on 6 July 2010 Mr Matthews signed an Instrument of Transfer – Lease seeking to transfer his 50 per cent interest in EML 6168 to Mr Tenney.[68]
[68] Exhibit D11.
Mr Tenney’s solicitors lodged the transfer document with Primary Industries and Resources SA (PIRSA) on 27 August 2010. The document records that “the consideration paid to me in respect of this transfer is $ [pursuant to Agreement for Sale and Purchase dated 2010]”.
In September 2010, PIRSA informed Mr Tenney’s solicitors that the Mining Registrar would not register the transfer without the payment of stamp duty. Stamp duty was assessed by Revenue SA on the basis that the Agreement for Sale and Purchase contract had a value of $520,000 and the shares had a value of $100 each.[69]
[69] Exhibit P15.
Unfortunately, stamp duty had not been addressed by the parties during the settlement negotiations.
Following the Mining Registrar’s refusal to register the transfer, the parties agreed the proportion of stamp duty each would pay. The defendants also sought a review of the amount of stamp duty payable. That issue was finalised by May 2011 and the defendants paid their share of the duty. The transfer was registered once Mr Tenney, who was the last to pay, paid his share of the stamp duty in July 2011.
As submitted by the defendants, Mr Tenney did not use the delay occasioned by the stamp duty issue as a basis to attempt to rescind or terminate any of the agreements. Rather, he accepted performance of Mr Matthews’ obligation to transfer his interest in EML 6168 later than the date provided for in the Agreement for Sale and Purchase.
There is no evidence that Mr Tenney made any attempts to exploit EML 6168 prior to its transfer despite there being circumstances in which it was clear the lease would be transferred to him. He did not prepare to exploit the land nor did he seek Mr Matthews’ permission to commence to exploit it.

There is also no evidence of Mr Tenney taking any steps to exploit EML 6168 after transfer. Mr Tenney adduced no evidence regarding his financial position. In circumstances where he has not made any payment under the Loan Agreement, this leads to the inference that Mr Tenney was not in a position to exploit the land in July 2011 and was not in a position to do so in June 2010. This inference is strengthened by the fact that Mr Tenney said in evidence that, at the time he entered into the settlement agreements in 2010, he was not in a financial position to even make the first repayment under the Loan Agreement. It should also be noted that Mr Tenney has not generated any income from the various mining leases he has an interest in over the past 12 years.
I find Mr Matthews, upon entering into the settlement agreements, attempted to transfer EML 6168 to Mr Tenney.
As the stamp duty payable on the settlement had been overlooked in the settlement agreements, it was an issue the parties had to resolve as between themselves and with Revenue SA.
The transfer was effected as soon as the stamp duty was paid in full. That did not occur until Mr Tenney paid his share of the stamp duty.
Responsibility for the delay in registration rests with Mr Tenney and the defendants. They all neglected to address the issue of stamp duty during settlement discussions and that caused the Mining Registrar to refuse to register the transfer.
I find that there was no conduct on the part of the defendants in the time taken to effect the transfer that in any way constituted a breach of the Settlement Deed as regards the transfer of EML 6168.
Further, there is no evidence demonstrating Mr Tenney suffered any loss as a result of the time taken to effect the transfer. In circumstances where Mr Tenney adduced no evidence regarding his alleged inability to obtain finance or the reasons for any such inability, I cannot conclude that he was in a position to obtain finance in June 2010 or that that position had changed by July 2011.
Mr Tenney’s claim in relation to the alleged delay in relation to the transfer of EML 6168 is not made out.
The EML 6168 caveat
On 6 July 2010, Mr Matthews executed a withdrawal of caveat over EML 6168.[70] On 13 August 2010, a further caveat was lodged over EML 6168 by the Matthews and Cudla Mudla.[71]
[70] Exhibit D15.
[71] Exhibit D16.
Clause 3(e) of the Settlement Deed, clause 4.3.1 of the Agreement for Sale and Purchase and clause 7.1 of the Loan Agreement all record Mr Tenney charging and securing EML 6168 in favour of the defendants.
The Settlement Deed expressly states at clause 3(e)(iv), “Tenney and the defendants shall enter into a loan agreement and / or security documentation in relation to the vendor loan…”.
The defendants were entitled to caveat EML 6168 to protect their security interest in EML 6168.
Mr Tenney has not attempted to remove the caveat pursuant to s 73B of the Act nor has he identified any duty or obligation which would prevent the defendants from lodging a caveat.
The caveat was lodged in accordance with the provisions of the Act and correctly describes the interest held by the defendants.
It should also be noted that Mr Tenney admitted in evidence that he has in the past attempted to assign EML 6168 against Mr Matthews’ wishes and without warning to Mr Matthews.[72]
[72] T221.
Section 73A of the Act provides that “a person claiming a legal or proprietary interest in a mining tenement may lodge with a Mining Registrar a caveat forbidding the registration of any transfer or other instrument affecting the mining tenement or interest”.
The caveat records that “by virtue of: the provisions of a sale agreement between the tenement holder, Ross Andrew Tenney and the Caveators in which the tenement EML 6168 is offered as security subject to the terms of the said agreement”.
Mr Tenney argued that the caveat was too broad because it is not limited to the Matthews’ 50 per cent interest in EML 6168. The Act, however, does not provide for the caveating of a 50 per cent interest in a mining lease. The Act makes clear that a person claiming any interest may lodge a caveat which forbids the registration of any transfer or other instrument affecting the whole of the mining tenement. Further, the Settlement Deed contains a promise by Mr Tenney to grant security over the whole of EML 6168.
The security given by Mr Tenney under the Loan Agreement and the Agreement for Sale and Purchase includes interests received by Mr Tenney under the Agreement for Sale and Purchase and pursuant to that agreement he received Mr Matthews’ half share in EML 6168.
The defendants, as persons claiming a “legal and proprietary interest” in a mining tenement pursuant to s 73A of the Act, namely EML 6168, were entitled to secure by caveat performance by Mr Tenney of his promise contained in the Settlement Deed.
As submitted by the defendants, if the caveat was invalid due to its breadth it should have been rejected by the Mining Registrar rather than registered. Mr Tenney could also have sought an order from the Warden’s Court for removal of the caveat.
The defendants pointed out that in July 2011 Mr Tenney’s solicitors received notice of the registration of the 2010 caveat from PIRSA.[73] The solicitors did not take issue with the registration of the caveat over the whole of EML 6168.
[73] Exhibits P6 and D10.
The “Extract from Mining Register: Instruments” records that the caveat was not registered until 5 July 2011.[74] Mr Tenney alleges[75] that he suffered loss because his prospects of obtaining finance were positive when he entered into the Settlement Deed in May 2010 and changed to negative sometime thereafter and by July 2011 he was unable to obtain finance. The difficulty with this allegation is that the alleged change in the bank’s attitude occurred before registration of the caveat not after its registration in July 2011.
[74] Exhibit D10.
[75] Statement of claim at paragraph 17.1(b).
Mr Tenney has failed to prove the caveat was improperly registered over EML 6168. He has also failed to establish that he has suffered any loss occasioned by the alleged “undue lodgement of caveat”.
Green Granite mine
Mr Tenney alleges that the Matthews have breached clauses 2, 11.1.4 and 17 of the Agreement for Sale and Purchase by failing to assign their interest in the Green Granite mine to him. Mr Tenney claims damages in the sum of $720,000 being the sale price Mr Goldfinch has put on the lease.
Mr Matthews and Mr Gregurke each gave evidence that an option was entered into to take a sublease over an existing mining lease over Green Granite mine in 2004. The option lasted for two years and if taken up granted a sublease of three years. Accordingly, if the sublease was taken up, it expired at the latest in 2009.
Mr Matthews recalled in some detail an attempt to exploit the Green Granite mine. The evidence is clear in that there was no sublease by the time of the 2010 settlement agreements. I am satisfied that at the time the parties entered into the settlement agreements none of the defendants held any interest of any kind in Green Granite mine.
I reject Mr Tenney’s evidence in relation to the purchase of the option. Mr Tenney asserted he was unaware of the purchase of the option. Both Mr Matthews and Mr Gregurke gave evidence that Mr Tenney had originally suggested the purchase and had sought funds from Mr Gregurke to facilitate it.
There is no evidence that Mr Tenney has requested that the Matthews execute any document to effect assignment of any alleged interest in Green Granite mine.
The evidence regarding Green Granite is that it was not successfully exploited during the period of the business venture between Mr Tenney, the Gregurkes and the Matthews. Further, Mr Tenney has not adduced any evidence regarding the loss he alleges he suffered.
I infer that Mr Tenney would not be able to exploit the mine in 2010 or now, particularly having regard to his evidence concerning his financial position.
I find there has been no breach of the Agreement for Sale and Purchase as alleged with respect to Green Granite mine.
Johnson’s
Mr Tenney alleges the Matthews have breached clauses 2, 11.1.4 and 17 of the Agreement for Sale and Purchase by failing to transfer or assign their interest in Johnson’s to him.
Mr Tenney accepted throughout the trial that his name appeared on the Johnson’s mineral claim and that he and Mr Matthews had pegged it. He cross‑examined Mr Matthews on that basis. Accordingly, he already has the legal benefit of the relevant “interest”, insofar as it exists. A mineral claim does nothing more than give a right to proceed to seek a mining lease. Mr Tenney and Mr Matthews jointly hold Johnson’s mineral claim.
It was known to all parties at the time that the settlement agreements were entered into that a mineral claim is not transferrable. Mr Matthews cannot effect transfer of the mineral claim which is prohibited by s 26 of the Act.
Mr Matthews gave evidence that Mr Tenney has taken no steps to procure his consent to any purported assignment of the mineral claim.[76]
[76] T330.
Both Mr Matthews and Mr Tenney gave evidence that the Johnson’s mineral claim cannot be converted to a mining lease because of opposition from the District Council of Robe. In addition, as pointed out by the defendants, any claim would now require consent of the land owner to be converted to a lease, and there is no evidence of any such consent.[77] Accordingly, the mineral claim has no real value to Mr Tenney regardless of whether he is the sole holder of it because there is no evidence to suggest that there is any possibility of it being converted into a mining lease in the future.
[77] Exhibit P13.
Further, Mr Tenney has made no attempt to obtain any agreement from Mr Matthews in relation to his interest in the mineral claim over Johnson’s.
Finally, there is no evidence whatsoever in relation to any alleged loss in connection with Johnson’s. I find there has been no breach of the Agreement for Sale and Purchase as alleged with respect to Johnson’s.
Piece 102 mining rights
Mr Tenney alleges he has suffered loss and damage as a consequence of the Matthews’ breach of clause 3.1 of the Agreement for Sale and Purchase by failing “to grant a free and unrestricted right to him to exploit the Piece 102 mining rights, insofar as, at all material times” Mr Martin “had and has, effectively and irrevocably, pre-empted such a right”.
The Matthews gave Mr Tenney the waiver (in a form supplied by Mr Tenney’s solicitors), dated 6 July 2010, permitting Mr Tenney to mine on Piece 102 save for within 300 metres of the Matthews’ residence from 8 June 2010. The waiver was accepted for registration by the Mining Registrar and, by reference to the Extract from Mining Register,[78] was endorsed on the Register on 5 July 2011, albeit on the wrong mining tenement.[79]
[78] Exhibit D10.
[79] Exhibit D10.
By reference to the Warden’s Court record in DCADD-09-312, a Warden noted in his order on 30 June 2010 that:[80]
Mr Matthews advised the court that he is not continuing with his objection to entry and withdraws his objection…Mr Matthews informs the court that he is going to permit the mining activity and the parties have reached an agreement that mining not occur within 300 metres of the residence on the subject property. Mr Matthews will forward written confirmation of the withdrawal of his objection.
[80] Exhibit P2.
It is abundantly clear that the reason Mr Tenney cannot mine Piece 102 is the existing mineral claim by Mr Martin.
The parties were well aware of Mr Martin’s claim at the time they entered into the settlement agreements.
As submitted by the defendants, rather than attempting to remove Mr Martin’s claim, by the settlement agreements Mr Tenney required the Matthews to take steps favourable to Mr Martin’s claim by granting the waiver.
The Agreement for Sale and Purchase defines the “Land” to include Pieces 102, 103 and 104 (that is, the Matthews’ property). The agreement then provides:[81]
[the Matthews] grant to Tenney (or such entity Tenney nominates) all and any rights that they hold … in respect to any mineral claim over the Land without any interference whatsoever.
(Emphasis added)
[81] Agreement for Sale and Purchase, clause 3.1.1.
Mr Martin is the only person who held any rights in respect of any mineral claim over the land at the date of the Agreement for Sale and Purchase.
I agree with the submission of the defendants that the words “all and any rights” provides for the possibility that the Matthews had no relevant rights to grant to Mr Tenney at that time. The evidence before me demonstrates that the Matthews’ only rights are as owners of the land.[82]
[82] Exhibit P3.
The Matthews are also obliged in accordance with the Agreement for Sale and Purchase to:
·    permit Mr Tenney to carry out mining operations on the Land and not interfere with him pegging a claim on the Land;[83]
·    waive any entitlement to royalties in respect of the Land;[84]
·    consent to Mr Tenney registering a profit a prendre interest on the Certificate of Title to the Land;[85] and
·    covenant and agree that they will not dispose of the Land without protecting Mr Tenney’s rights under the agreement.[86]
Mr Tenney did not adduce any evidence of any breach of any of these obligations by the Matthews.
[83] Agreement for Sale and Purchase, clause 3.1.2.
[84] Agreement for Sale and Purchase, clause 3.1.3.
[85] Agreement for Sale and Purchase, clause 3.1.4.
[86] Agreement for Sale and Purchase, clause 3.1.6.
The Agreement for Sale and Purchase further provides that:[87]
[the Matthews] agree that they will, when required and requested to do so by Mr Tenney, as soon as practicably possible, sign all documents necessary to exercise his rights referred to in clauses 3.1.2 and 3.1.3 above.
There is no evidence that Mr Tenney has made any such request or presented any such documents contemplated by clauses 3.1.2 and 3.1.3. Further, Mr Tenney acknowledged in cross-examination that he had not made any such request.
[87] Agreement for Sale and Purchase, clause 3.1.5.
Mr Tenney’s allegation that the Matthews had breached their obligations in respect of the waiver documentation is not made out. Mr Matthews signed the waiver prepared by Mr Tenney’s solicitors and it was accepted for registration by the Mining Registrar.
Further, Mr Tenney has not produced any evidence demonstrating he has been prevented from doing anything by reason of any failure by the Matthews to provide a waiver.
The waiver permits mining operations in accordance with clause 3.2 of the Agreement for Sale and Purchase which states:
Tenney acknowledges and agrees that he … must not cause any part of the Land within a circumference of 300 metres of the house that is situated on the Land and occupied by Matthews to be mined.
The waiver permits mining operations to within 300 metres of the house and states the reason that the land would ordinarily be exempt land pursuant to s 9(1)(d)(i) of the Act is that the land is within 400 metres of the residence. The waiver further records in the attached schedule that the Matthews agree that Mr Tenney may carry out mining operations up to 300 metres from the residence.
Having regard to the evidence, I am satisfied that the Matthews have not breached any of the obligations in clause 3 of the Agreement for Sale and Purchase with respect to Piece 102. I find that the Matthews did what was required of them by virtue of Mr Matthews’ execution of the waiver prepared by Mr Tenney’s solicitors.
It is very clear that Mr Tenney has not carried out any mining operations on Piece 102 as he has not been in a financial position to do so and because Mr Martin has pegged a claim over Piece 102.
Bearing in mind Mr Martin’s claim it is important to note that clause 3(c) of the Settlement Deed obliges Mr Matthews as follows:[88]
·to withdraw his objection in Warden’s Court Action No. 312 of 2009 brought by Mr Martin;
·to withdraw his claim against Mr Martin in Warden’s Court Action No. 292 of 2009.
[88] Settlement Deed, clause 3(c).
The withdrawal of objection and discontinuance of the Warden’s Court proceedings both benefit Mr Martin.
I find that the Matthews have complied with the obligations in clause 3(c).[89] Mr Tenney was well aware of Mr Martin’s claim[90] at the time he executed the Settlement Deed. The evidence demonstrates that Mr Tenney entered into an agreement which improved Mr Martin’s position in respect of his claim rather than promoting removal of the claim.
[89] Exhibit P2.
[90] Exhibit P1.
As contended by the defendants, for Mr Tenney to now complain about the alleged cost of removing Mr Martin’s claim flies in the face of his voluntary entry into an agreement which burdened the Matthews with the task of assisting Mr Martin in maintaining that claim.
It is abundantly clear that the parties contemplated that Mr Martin’s claim would remain in place while they discharged their obligations.
As highlighted by the defendants, the lack of any rational relationship between the alleged breach of the Agreement for Sale and Purchase in relation to Piece 102 and the alleged loss can easily be demonstrated. If Mr Tenney owned the whole of the Piece 102 land freehold at the date of the settlement agreements, he would still have to convince Mr Martin to give up his claim.
Mr Tenney settled his dispute with the defendants on a basis which assists Mr Martin. I do not accept that Mr Tenney’s and Mr Martin’s interests are not aligned. Whilst I make no finding about that relationship, I query just what that relationship is having regard to:
·Mr Martin being the holder of the mineral claim pertaining to Piece 102;
·Mr Matthews’ discontinuance of Warden’s Courts proceedings against Mr Martin and withdrawal of objection in Mr Martin’s Warden’s Court proceedings; and
·The granting of the waiver to Mr Tenney.
I find Mr Matthews withdrew his objection in Warden’s Court Action No. 312 of 2009 brought by Mr Martin.[91] Further, upon Mr Martin withdrawing his application for a waiver, ERD Action No. 8 of 2013 (formerly Warden’s Court Action No. 292 of 2009) finalised.
[91] Exhibit P2.
I find the Matthews granted a waiver in favour of Mr Tenney.
I find there has been no breach of the Agreement for Sale and Purchase as alleged with respect to Piece 102.
Could Mr Tenney have exploited the mining tenements?
Mr Tenney alleges that, but for the alleged breaches by the defendants, he would be profitably exploiting various mining tenements.
During the period from 2003 to around 2007, when Mr Tenney, Mr Matthews and Mr Gregurke were working together, there was no commercial exploitation of EML 6168 or any other mining tenement. Despite Mr Matthews putting in about three years of concentrated effort, the parties were unable to garner any interest in the mine. Both Mr Gregurke and Mr Matthews gave evidence to the effect that they regarded Mr Tenney’s involvement as a critical factor in their inability to commercialise EML 6168. Mr Tenney has not been able to exploit EML 6168 since the transfer of Mr Matthews’ interest to him.[92]
[92] Exhibits D10 and D12.
Mr Tenney’s evidence regarding his financial position indicates that he is not in a financial position to exploit any of the mining interests. Mr Tenney said he could not make the first loan repayment of $52,000 plus interest in July 2011, or at the time that the agreements were entered into. He said he could not pay his share of the stamp duty on EML 6168 until July 2011. Mr Tenney also gave evidence that he requires finance to do anything with the mining tenements. There is no evidence that he is able to obtain finance. Further, Mr Tenney did not take up the option to purchase the Matthews’ property pursuant to the Option Agreement.
Additional evidence leading to the inference that Mr Tenney has not been, and is not in, a financial position to exploit the mining tenements is that Mr Gregurke had to pay the deposit for the Rebbeck land in 2003 and pay for the option for the sublease from Mr Goldfinch in 2004. Mr Gregurke also gave evidence that it took four years for Mr Tenney to repay a loan of $10,000 made in 2003.[93]
[93] T252.

The inference to be drawn from these circumstances is that Mr Tenney could not have exploited EML 6168 or any of the other mining tenements at any relevant time.
Papineau Quarries
The defendants have removed themselves as directors and as secretary of Papineau Quarries. Mr Gregurke ceased to be a director on 23 August 2010 and Mr Matthews on 5 May 2008. Mrs Matthews ceased to be a secretary on 23 August 2010. The only current director of Papineau Quarries is Mr Tenney.
The Matthews and Mr and Mrs Gregurke are all listed as former shareholders of Papineau Quarries having each held one single share. Mr Tenney is the only current shareholder and holds all six shares.[94] Accordingly, the defendants have removed themselves as shareholders of Papineau Quarries.
[94] Exhibit D6.
Mount Monster mineral claim and the water licence
Mr Tenney gave evidence that Mr Matthews has failed to transfer his interest in the Mount Monster mineral claim. As referred to above, s 26 of the Act prohibits the transfer of mineral claims. Mr Tenney also asserted that a water licence pertaining to Piece 102 should have been transferred to him. The only references to a water licence in the settlement agreements are found in the Settlement Deed and the Agreement for Sale and Purchase. By the Settlement Deed the Matthews agreed to make no claim on any water licence in relation to Piece 102. The Agreement for Sale and Purchase records that the Matthews agree that they will make no claim on any water licence (including a water licence registered in the names of Mr and Mrs Rebbeck) connected with Piece 102 and transfer to the extent they were able their entitlement to any water licence. As neither of these issues were pleaded I will not consider them further.
Findings summary
My findings are:
·There was no conduct on the part of the defendants in the time taken to effect the transfer that in any way constituted a breach of the Settlement Deed as regards the transfer of EML 6168;
·Mr Matthews, upon entering into the settlement agreements, attempted to transfer EML 6168 to Mr Tenney;
·Mr Tenney has received Mr Matthews’ interest in EML 6168;[95]
[95] Exhibits D10, D11, and D12.
·There has been no breach of the Agreement for Sale and Purchase as alleged with respect to Green Granite mine;
·There has been no breach of the Agreement for Sale and Purchase as alleged with respect to Johnson’s;
·Mr Matthews withdrew his objection in Warden’s Court Action No. 312 of 2009 brought by Mr Martin.[96] Upon Mr Martin’s withdrawal of the application for a waiver, ERD Action No. 8 of 2013 (formerly Warden’s Court Action No. 292 of 2009) finalised;
·The Matthews did what was required of them by virtue of Mr Matthews’ execution of the waiver prepared by Mr Tenney’s solicitors;
·The Matthews granted a waiver in favour of Mr Tenney;
·Upon registration of the waiver, Mr Tenney received the rights in relation to Piece 102 provided for in the Agreement for Sale and Purchase;
·There has been no breach of the Agreement for Sale and Purchase as alleged with respect to Piece 102;
·Mr Tenney has received all of the shares in Papineau Quarries;[97]
·Mr Tenney has received the resignation of the defendants as directors or officers of Papineau Quarries;[98]
·Mr Gregurke confirmed that he has removed himself as a signatory of the company bank accounts, and there is no evidence that Mr Matthews is a signatory or was a signatory in 2010;
·The Court proceedings involving the defendants and Mr Tenney in 2010 have been discontinued;
·There has been no breach of any of the settlement agreements by the defendants.
[96] Exhibit P2.
[97] Exhibits D6, D7, D25, and D27.
[98] Exhibits D6, D7, D8, and D26.
There is no evidence that the defendants have at any time failed or refused to do anything requested of them by Mr Tenney or his solicitors. The evidence demonstrates that the defendants’ solicitors repeatedly asked Mr Tenney for details of his allegations that they have not met their obligations, and he has not supplied those details.[99] In a letter dated 17 May 2012, the defendants’ solicitors said with respect to each supposed interest which Mr Tenney alleges has not been transferred:[100]
…if you produce the relevant documents for us to execute which will provide you with a formal transfer or assignment of any of my clients’ rights … we will, as previously undertaken to you, forthwith execute those documents to give effect to any transfer which is capable of vesting the said [interest] … from my clients … to you.
The evidence is that Mr Tenney has failed to produce any such document.
[99] Exhibit D20, and D21.
[100] Exhibit D21, page 1.
Having made the above findings, I dismiss Mr Tenney’s claim.
The counterclaim
Mr Tenney is bound by the terms of the Loan Agreement. Pursuant to the Supplementary Deed, the date agreed for the first repayment pursuant to the Loan Agreement was 30 July 2011. There is no dispute that Mr Tenney has not paid any amount pursuant to the Loan Agreement. There is no dispute that Mr Tenney was served with a notice of default. Mr Tenney has committed an act of default as defined by the Loan Agreement and accordingly the whole amount outstanding under that agreement is immediately due and payable together with interest.
Mr Tenney agreed in cross-examination he has never paid any amount at all under the Loan Agreement. He did not dispute that he did not make any repayment and received the notice of default.
There is no basis for Mr Tenney’s suggestion that his obligation to pay only arose 12 months after certain events took place. Mr Tenney conceded in cross‑examination that there is no such term in any of the settlement agreements. Further, I have found that the defendants have, in any event, performed all of their obligations.
My findings with respect to the Loan Agreement are:
·The parties are bound by the Loan Agreement;
·Mr Tenney has made no payments as required by the Loan Agreement;
·Mr Tenney has committed an act of default as defined by the Loan Agreement;
·Pursuant to the terms of the Loan Agreement the Matthews and Gregurkes are entitled to recover the principal of $520,000 plus interest at a rate of 9.5 per cent to the date of judgment.
The security
Pursuant to clause 3(e)(i) of the Settlement Deed Tenney provided security for the vendor loan over all of Tenney’s interest existing and acquired by the Settlement Deed. By clause 7.1 of the Loan Agreement, Mr Tenney agreed in order to better secure his obligations under the Loan Agreement to charge and secure all the rights and entitlements granted to him under clauses 2 and 3 of the Agreement for Sale and Purchase in favour of the Matthews and Mr and Mrs Gregurke. At the time of entering into the settlement agreements Mr Tenney had an existing 50 per cent interest in EML 6168 and he acquired the other 50 per cent by the Settlement Deed. Accordingly I find that the Matthews and Mr and Mrs Gregurke have security over the whole of EML 6168.
I will hear the parties regarding consequential orders and costs.