Wright Prospecting Pty Limited v Hancock Prospecting Pty Limited [No 12]
[2014] WASC 149
•30 APRIL 2014
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CIVIL
CITATION: WRIGHT PROSPECTING PTY LIMITED -v- HANCOCK PROSPECTING PTY LIMITED [No 12] [2014] WASC 149
CORAM: LE MIERE J
HEARD: 8 APRIL 2014
DELIVERED : 30 APRIL 2014
FILE NO/S: CIV 1279 of 2001
BETWEEN: WRIGHT PROSPECTING PTY LIMITED (ACN 69 008 676 417)
Plaintiff
AND
HANCOCK PROSPECTING PTY LIMITED (ACN 69 008 676 417)
Defendant
Catchwords:
Application for orders to enforce final orders - Deed of assignment - Ambit of reservation of liberty to apply - Whether order is necessary - Whether a staged approach is necessary - Form of the deed of assignment - Plaintiff should be required to execute deed of assignment
Legislation:
Civil Judgments Enforcement Act 2004 (WA), s 101(1)
Result:
Application granted
Category: B
Representation:
Counsel:
Plaintiff: Mr A J Myers QC & Mr R J Brender
Defendant: Mr S Finch SC, Mr P J Brereton & Mr C Bova
Solicitors:
Plaintiff: Clayton Utz
Defendant: Corrs Chambers Westgarth
Case(s) referred to in judgment(s):
Abigroup Ltd v Abignano (1992) 39 FCR 74
Australian Hardboards Ltd v Hudson Investment Group Ltd [2007] NSWCA 104
Brown v Heffer (1967) 116 CLR 344
Cameron v Renouf [2008] WASC 60
Hancock Prospecting Pty Ltd v Wright Prospecting Pty Ltd [2012] WASCA 216
Hancock Prospecting Pty Ltd v Wright Prospecting Pty Ltd [2012] WASCA 216 (S)
McCulloch v Maryland (1819) 17 US 316
Thomas v Mowbray (2007) 233 CLR 307
Wright Prospecting Pty Ltd v Hancock Prospecting Pty Ltd [No 11] [2011] WASC 74
Wright Prospecting Pty Ltd v Hancock Prospecting Pty Ltd [No 9] [2010] WASC 44
LE MIERE J: These proceedings have been on foot since 2 March 2001. There was a lengthy trial in 2007 before Murray J. On 5 March 2010 Murray J delivered reasons for decision: Wright Prospecting Pty Ltd v Hancock Prospecting Pty Ltd [No 9] [2010] WASC 44. Following further submissions concerning the orders that should be made to give effect to his Honour's reasons for decision Murray J delivered supplementary reasons on 22 March 2011: Wright Prospecting Pty Ltd v Hancock Prospecting Pty Ltd [No 11] [2011] WASC 74.
Final Orders
On 22 March 2011 Murray J made orders which included a declaration that the plaintiff, WPPL, validly exercised its right under cl 4 of the partnership agreement between WPPL and the defendant, HPPL, dated 15 February 1984 (1984 agreement) by the service of a notice of exercise of option dated 11 December 1987 on HPPL. His Honour made a number of further orders. The relevant orders for the purposes of this application are as follows:
4.Subject to order 7, when requested by the plaintiff, the defendant shall do all things and execute all documents which are necessary for it to do and execute in order that applications may be made to:
4.1the Minister for State Development for his consent to the assignment to the plaintiff of all of the defendant's rights and obligations under the Iron Ore (Rhodes Ridge) Agreement made and executed on 12 October 1972 (State Agreement) including the rights of the defendant as grantee of an undivided ¼ share in the rights of occupancy granted by the State in respect of the temporary reserves particularised in Schedule 1 and section 3.02 of the State Agreement (Rights of Occupancy);
4.2Hamersley Resources Limited for its consent to the assignment by the defendant to the plaintiff of all of the defendant's 25% Share (as defined) in the joint venture the subject of the Rhodes Ridge Joint Venture Agreement dated 11 October 1972 (Joint Venture Agreement) and all property, real and personal, held, developed, constructed or acquired for the purposes of the Rhodes Ridge project (as that term is used within the definition of 'Project' on page 7 of the Joint Venture Agreement) by or on behalf of Hamersley Resources Limited, the plaintiff and the defendant as tenants in common under or pursuant to the Joint Venture Agreement or the Rhodes Ridge Management Agreement dated 11 October 1972 (Management Agreement) including, without limitation, all facilities and equipment located on the areas subject to the Rights of Occupancy and other areas the subject of further mining tenements granted by the State of Western Australia for the purposes of the Joint Venture and all of the rights and obligations of the participants under the Joint Venture Agreement, the Management Agreement, the State Agreement and all other agreements entered into by or on behalf of Hamersley Resources Ltd, the plaintiff and the defendant for the purposes of the Joint Venture;
4.3.to the Minister for Mines for his approval of the assignment from the defendant to the plaintiff of all the defendant's interest as grantee of an undivided ¼ share in the Rights of Occupancy;
4.4.to the Minister for Mines for his consent to the transfer from the defendant to the plaintiff of all of the defendant's 25% (25/100th) shares in the exploration licences particularised in Schedule 2 (Exploration Licences) and in such mining leases as are granted pursuant to applications lodged by Hamersley Resources Limited, the plaintiff and the defendant on 5 September 2005 for mining leases M46/437, M46/438, M46/439 and M46/440 (Mining Leases) and that the defendant do undertake all necessary and proper actions to support and facilitate the grant of the applications referred to in subparagraph 4.1 to 4.4 inclusive and to obtain the grant of the Mining Leases.
5.Immediately on receipt of the consents and approvals referred to in paragraph 4, or if such consents and approvals are not necessary, the defendant do all things and execute all documents which are proper and necessary for it to do and execute in order to:
5.1.assign to the plaintiff its rights, and for the plaintiff to assume the defendant's obligations, under the State Agreement including but not limited to the execution of a Deed of Covenant with the State and the plaintiff in a form that complies with the requirements of clause 25.04 of the State Agreement;
5.2.assign to the plaintiff all of the defendant's 25% interest in all its rights and obligations as a participant of the joint venture the subject of the Joint Venture Agreement and the Management Agreement (and all other agreements referred to in subparagraph 4.2 above) including in the joint venture, and all property, real and personal, the subject of the Joint Venture Agreement including but not limited to the execution of a deed of assignment in a form that complies with the requirements of section 11.01 of the Joint Venture Agreement and section 11.01 of the Management Agreement;
5.3.transfer to the plaintiff all of the defendant's interest as grantee of an undivided ¼ share of the Rights of Occupancy by execution of transfers of each of the Rights of Occupancy;
5.4.transfer to the plaintiff all of the defendant's 25% (25/100th) shares in the Exploration Licences by execution of transfers in the prescribed form in respect of each of the Exploration Licences;
5.5.transfer to the plaintiff all of the defendant's 25% (25/100th) shares in the Mining Leases by execution of transfers in the prescribed form in respect of each of the Mining Leases,
and that the defendant do undertake all necessary and proper actions to support and facilitate the execution and registration of such assignments and transfers, where and as required by law to give effect to them.
6.Liberty to apply as to the implementation of orders 4 and 5 is reserved to each party upon 7 days notice to the other.
I will refer to those orders as the Final Orders.
There was an appeal and cross‑appeal. On 30 October 2012 the Court of Appeal delivered reasons for dismissing the appeal and upholding the cross‑appeal in part: Hancock Prospecting Pty Ltd v Wright Prospecting Pty Ltd [2012] WASCA 216. Following further submissions concerning the orders to be made the Court of Appeal delivered supplementary reasons on 27 February 2013: Hancock Prospecting Pty Ltd v Wright Prospecting Pty Ltd [2012] WASCA 216 (S).
Notice of motion
Since the dismissal of the appeal on 27 February 2013 the parties have been communicating about giving effect to the Final Orders. By notice of motion dated 2 August 2012 WPPL applied for orders to enforce the Final Orders by requiring HPPL to execute a deed entitled Deed of Assignment of Rhodes Ridge Joint Venture Share. WPPL filed and served five outlines of submissions and HPPL filed and served three outlines of submissions before WPPL filed a further amended substituted notice of motion on 4 April 2014 in which WPPL seeks the following orders:
1.Pursuant to section 101(1)(a) of the Civil Judgments Enforcement Act 2004, within 7 days of the date of these orders, the Defendant, by its proper officer or its proper officers, execute the Rhodes Ridge Joint Venture Interest Deed of Assignment and Assumption annexed to this further amended substituted notice of motion and marked 'A'.
2.In the event of the Defendant's default in compliance with Order 1 above, or alternatively to Order 1 above, pursuant to section 101(1)(b) of the Civil Judgments Enforcement Act 2004 a Registrar of this Honourable Court be authorised to execute the Rhodes Ridge Joint Venture Interest Deed of Assignment and Assumption annexed to this further amended substituted notice of motion and marked 'A' instead of the Defendant.
The orders are opposed by HPPL.
The Deed of Assignment
The Rhodes Ridge Joint Venture Interest Deed of Assignment and Assumption (the Deed of Assignment) is a simple deed consisting of three clauses. The parties are HPPL and WPPL. Clause 1 contains definitions. Clauses 2 and 3 are as follows:
2.Assignment
2.1Assignment of right and interest in HPPL Share
In order to give effect to the Orders at Trial as varied by the Orders on Appeal:
(a)subject to the consents required under the Rhodes Ridge Joint Venture Agreement, the State Agreement and under the Mining Act 1978 (WA); and
(b)with effect immediately upon the last in time of those consents having been given,
HPPL assigns to WPPL the whole of HPPL's right, title and interest in the HPPL Share, free of all encumbrances except encumbrances arising by operation of law or pursuant to the Rhodes Ridge Joint Venture Agreement.
2.2HPPL's consent
HPPL consents to the assignments referred to in clause 2.1.
3.Instruments of transfer of mining tenements
HPPL must execute and deliver to WPPL or its solicitors, no later than the 10 Business Days after receiving them from WPPL or its solicitors, instruments of transfer in or substantially in the form set out in Schedule 1 for the registration of WPPL in the Mines Registry as the holder of all the interests attaching to HPPL's Share in:
(a)the Exploration Licences;
(b)the Mining Leases; and
(c)the Rights of Occupancy.
WPPL contentions
WPPL submits that the Deed of Assignment contains only what is necessary to implement the Final Orders, being:
(a)an assignment of the HPPL Share, effective on the last necessary consent being obtained (cl 2.1);
(b)an expression of HPPL's consent to those assignments (cl 2.2);
(c)an order for execution of identified documents of transfer to implement the assignment (cl 3); and
(d)definitions necessary to identify the content of cl 2 and 3 (cl 1).
WPPL submits that the court should order HPPL to execute the Deed of Assignment to give effect to order 4 and/or order 5 of the Final Orders.
In his supplementary reasons Murray J said at [37] that what he described as the speaking orders (orders 4 and 5 of the Final Orders) are:
in the character of a decree of specific performance of cl 4 of the 1984 agreement …, aided by the implication of the term, importing into the 1984 Agreement the duty of cooperation imposed upon both parties, but relative to this case, upon [HPPL], in the terms outlined in the judgment at [169].
At [169] of his reasons Murray J said that the party to whom notice of exercise of the option was given, relevantly HPPL:
would be required to provide its cooperative endeavour to enter into an agreement or other process by which the transfer was to be effected and, to the extent that it became necessary, that party would be required to give its cooperation and support to securing any third party consent, whether of a joint venture partner or the Minister, and whether that was required by some applicable contractual provision or because the person required to give consent wished to have the assurance that both HPPL and WPPL wanted the transaction proposed to it to occur.
At [38] to [44] of his supplementary reasons Murray J explained that the relevant agreement and statutory provisions required ministerial consent to allow the transfer of the Rhodes Ridge HPPL Interest to WPPL and that WPPL would require HPPL's co‑operation in this process. In relation to orders 4 and 5 of the Final Orders Murray J said:
The mechanics of the process of transfer are clearly governed by the relevant agreements and the rights of occupancy. The final orders of the court need not, in my view, descend to specifics about that. In general terms, what is required is that the [HPPL] should provide its cooperation to the processes required by the various instruments to which I have referred.
I have concluded that [WPPL's] proposed par 4 is unnecessary, but that rather than leave the orders generally silent as to the process by which various consents and approvals may be obtained, broadly speaking the orders which are pars 5 and 6 of [WPPL's] minute, should be made. I have therefore reformulated those orders to some extent and have renumbered the orders as 4 and 5 [43] ‑ [44].
Senior counsel for WPPL, Mr Myers QC, submitted that HPPL is required by orders 4 and 5 of the Final Orders to execute an instrument in the form of the Deed of Assignment because it is necessary for it to do so in order that the applications may be made to the Minister for State Development, Hamersley Resources Ltd and the Minister for Mines for their necessary consents and approvals and to effect the designated assignments and transfers upon the consents and approvals being given:
A provision such as clause 2.2, in conjunction with clause 2.1, is also necessary in the sense that, without that consent, [Hamersley] and the [Ministers] are not in a position to consider whether they will consent. They would reasonably require a clear definition of what is the nature and terms of the transaction to which their consent is required, [and] a clear signification of the consent by the respondent.
HPPL contention
HPPL submits that, upon a proper construction of orders 4 and 5 of the Final Orders, it is not required to execute an instrument in the form of the Deed of Assignment. HPPL submits that order 4 requires that, when requested by WPPL, HPPL shall do all things and execute all documents which are necessary for it to do and execute in order that applications may be made to the Ministers and Hamersley for the relevant consents and approvals. HPPL is obliged to undertake all necessary and proper actions to support and facilitate the grant of the applications and to obtain the grant of the mining leases. Order 5 requires that on receipt of the consents and approvals, HPPL must do all things and execute all documents which are proper and necessary for it to do and execute in order to effect the assignments and transfers and to support and facilitate the execution and registration of those assignments and transfers.
HPPL says that the sequential steps found in orders 4 and 5 addressed an issue arising from Brown v Heffer (1967) 116 CLR 344, 350. In his supplementary reasons Murray J said that in relation to what became orders 4 and 5 his views were most succinctly expressed in his judgment at [504] ‑[505] and [681]. His Honour said:
In short, the final orders are designed to express, in the context of the applicable agreements, what must be done in the performance of clause 4 of the 1984 Agreement to achieve the transfer to [WPPL] of the entire Rhodes Ridge interest held by [HPPL] [38]. (350)
At [506] of his reasons Murray J referred to:
… the decision of the High Court in Brown v Heffer, where reference was made (at 350) to the nature of the decree of specific performance which might be made in a case such as this where there are conditions precedent to the effective completion of the process of transfer required by the exercise of the option.
The passage from the joint judgment of the High Court in Brown v Heffer referred to by Murray J is:
The specific performance which will be granted before the Minister's consent has been obtained is not specific performance of the obligation to convey or transfer, for that obligation has not yet arisen: McWilliam v McWilliams Wines Pty Ltd (1). As Harvey CJ in Eq made clear in Egan v Ross (2) the decree that will be made will go no further than directing that the proper steps be taken for the purpose of obtaining the Minister's consent and, 'if that is obtained', to transfer the land to the purchaser.
Senior counsel for HPPL, Mr Finch SC, submitted that orders 4 and 5 of the Final Orders provide for a staged approach. The first stage is that HPPL do what is necessary in order that applications may be made by WPPL to the Ministers and Hamersley for the relevant consents and approvals. The second stage is that after the relevant consents and approvals have been obtained, HPPL must then execute the relevant assignments and transfers. HPPL submits that the Deed of Assignment seeks to change the Final Orders. The Deed of Assignment contains a conditional and deferred assignment of the relevant rights and interests before the relevant consents and approvals have been obtained. Mr Finch says that HPPL is not required to execute an assignment and transfer until after the relevant consents and approvals have been obtained. Further, Mr Finch says that there is no evidence that it is necessary for HPPL to execute such an instrument in order that applications may be made for the relevant consents and approvals.
Liberty to apply
In Abigroup Ltd v Abignano (1992) 39 FCR 74, the Full Court of the Federal Court held:
The reservation of liberty to all parties to apply to a court is a provision directed essentially to questions of machinery which may arise from the implementation of a court's orders. They include cases where a court may need to supervise the enforcement of orders after they have been made. They relate essentially to orders (not often to declarations) in practice in our experience. We agree with the submission of counsel for the appellant that orders of this kind relate to enforcement and not to statements of the rights of the parties. Historically orders reserving liberty to apply are for limited purposes. They arise, for example, upon a decree for specific performance where the unsuccessful defendant declines to sign all documents and do whatever is necessary to ensure that the contract the subject of the suit is performed. The reservation of liberty to apply ensures that the court may then make orders to secure that the relevant contract is enforced by the defendant by, for example, appointing the appropriate officer of the court to execute the necessary documents of conveyance so as to give title to the successful plaintiff. Historically the reservation by the Court of Chancery of further consideration of a decree was intended to cover the circumstance where following the pronouncement of the decree (a final decree) a further hearing was necessary for the court to deal with some outstanding issue sometimes requiring taking further evidence and making further declarations or orders. But this did not detract from the initial orders as being final orders. Rather it was a mechanism designed by the Court of Chancery to obviate the necessity of a further suit being instituted to deal with matters that were essentially consequential upon the making of the initial final decree (88).
In Cameron v Renouf [2008] WASC 60, Newnes J noted that in determining the ambit of a reservation of liberty to apply, it was necessary to have regard to the nature of the final orders made in the action. His Honour quoted from the decision of the Court of Appeal of New South Wales in Australian Hardboards Ltd v Hudson Investment Group Ltd [2007] NSWCA 104 that:
… what can be done under a reservation of liberty to apply depends on what needs to be done, in the particular case, to work out the particular orders that have been made. If an order is one the working out of which of its nature involves deciding complex questions, or questions that were not specifically raised at the time that the order was made, those questions can be raised and decided in the original suit pursuant to liberty to apply [56].
In Cameron v Renouf Newnes J observed that in Australian Hardboards:
The Court of Appeal noted ([64]) that applications under a reservation of liberty to apply are not necessarily limited to pure matters of machinery or matters that can be disposed of in a summary way. The court also pointed out that a reservation of liberty to apply must be understood in the context of contemporary practices and procedures of the court and (in NSW) by reference to s 56 of the Civil Procedure Act 2005 (NSW), the latter being to a similar effect to O 1 r 4B of the Rules of the Supreme Court 1971 (WA), namely, that the processes and procedures of the court are to be conducted so as best to ensure the just, efficient and timely determination of litigation at a cost affordable to the parties. In my respectful view, the same approach is to be taken to liberty to apply in this jurisdiction [32].
In Cameron v Renouf the trial judge had ordered that the defendant do all acts and things required to cause the property to be registered in the name of the plaintiffs. The defendant sought an order that the obligation to do all things necessary to cause the property to be registered in the name of the plaintiff did not include payment of the outstanding rates and taxes or procuring the discharge of any encumbrances against the certificate of title in respect of rates and taxes. Newnes J concluded:
The essential position is that the order for the principal relief requires Ms Renouf to transfer the Mullaloo property to the Camerons. In practical terms, effect cannot be given to that order while the rates and taxes remain outstanding. It is clear that the rates and taxes will not be paid until the liability for them, as between the parties, has been determined. In order to give effect to the principal relief, it is therefore necessary that that issue of liability be determined. I am satisfied that the determination of it falls within the reservation of liberty to apply, albeit the precise nature of the relief that should be granted upon its determination is a matter that may require further consideration [36].
In determining the ambit of the reservation of liberty to apply it is necessary to have regard to the nature of the Final Orders. The Final Orders require HPPL to provide its co‑operation to the processes required to obtain the necessary consents and approvals and to assign and transfer the relevant rights and interests. The orders did not 'descend to specifics' about 'the mechanics of the process of transfer'. Requiring HPPL to execute the Deed of Assignment falls within the ambit of the liberty to apply providing executing the Deed of Assignment is consistent with and gives effect to the Final Orders.
Is the order necessary?
HPPL submits that it is not necessary for HPPL to execute the Deed of Assignment in order that WPPL may make applications for the relevant consents and approvals. The word 'necessary' can have shades of meaning. In Thomas v Mowbray (2007) 233 CLR 307 at [101] Gummow and Crennan JJ referred to McCulloch v Maryland (1819) 17 US 316 where the Supreme Court of the United States said of the term 'necessary':
Does it always import an absolute physical necessity, so strong, that one thing to which another may be termed necessary, cannot exist without that other? We think it does not. If reference be had to its use, in the common affairs of the world, or in approved authors, we find that it frequently imports no more than that one thing is convenient, or useful, or essential to another. To employ the means necessary to an end, is generally understood as employing any means calculated to produce the end, and not as being confined to those single means, without which the end would be entirely unattainable. … [The word 'necessary'] has not a fixed character, peculiar to itself. It admits of all degrees of comparison; and is often connected with other words, which increase or diminish the impression the mind receives of the urgency it imports.
Gummow and Crennan JJ referred to the phrase 'reasonably appropriate and adapted' to achieve the designated purpose and noted that the phrase has its provenance in another well‑known passage in McCulloch:
The Court, in inquiring whether Congress has made a selection of constitutional means, is to compare the law in question with the powers it is intended to carry into execution; not in order to ascertain whether other or better means might have been selected, for that is the legislative province, but to see whether those which have been chosen have a natural connection with any specific power, whether they are adapted to give it effect; whether they are appropriate means to an end.
The meaning of 'necessary' depends on the context in which it is used. In the Final Orders it is used in an order of the court which is intended to require HPPL to provide its co‑operation to the processes required by the various instruments to obtain the relevant consents and approvals and effect the relevant transfers and assignments. The word 'necessary' is used to describe the connection between things to be done by HPPL and achieving the purpose of obtaining the necessary consents and approvals and effecting the relevant transfers and assignments. It does not mean essential. The execution of any instrument that is reasonably appropriate and adapted to obtaining the relevant consents and approvals and effecting the relevant transfers and assignments is 'necessary' for the purpose of the Final Orders.
There are no doubt other ways in which WPPL may go about obtaining the necessary consents and approvals. The requirement that the execution of the Deed of Assignment be necessary in the sense of reasonably appropriate and adapted to obtaining the relevant consents and approvals does not require a judicial evaluation of whether the means adopted by WPPL is the right or preferable way of achieving the desired purpose. It is sufficient if execution of the Deed of Assignment is reasonably appropriate and adapted to achieve that purpose. In my opinion the Deed of Assignment is reasonably appropriate and adapted to obtaining the relevant consents and approvals.
Is a staged approach necessary?
HPPL submits that the Final Orders prescribe a two stage approach. First, WPPL must apply for and obtain the consents and approvals contemplated by order 4. Secondly, and only after the consents and approvals have been given, HPPL must execute the transfer and assignments contemplated by order 5. The obligations imposed on HPPL by order 5, including the execution of the relevant assignment documents, is not triggered until after the consents and approvals contemplated by order 4 have been given.
I do not accept that argument. The Final Orders were not intended to 'descend to specifics' about 'the mechanics of the process of transfer'. The wording of order 5 recognises that HPPL cannot assign and transfer the specified rights and interests until the necessary consents and approvals have been obtained. Clause 2.1 identifies the assignments to which consent is sought. The deed is not, itself, upon execution an assignment. Mr Myers submitted, and I accept, that the assignment 'is subject to the sort of condition precedent to operation as an assignment of rights which was identified in Brown v Heffer and it is clearly subject to the consents required'. The deed is not effective as an assignment until the consents have been given.
The Final Orders do not preclude HPPL executing an instrument that has the effect that the specified rights and interests are transferred and assigned after the necessary consents and approvals have been obtained. An instrument in that form is consistent with and gives effect to the Final Orders.
Form of deed
HPPL submits that besides its objections to executing the Deed of Assignment to which I have referred, the form of the deed has two deficiencies. First, it makes no provision for HPPL to approve a deed in accordance with s 11.07(a) of the Rhodes Ridge Joint Venture Agreement. Secondly, the Deed of Assignment is inappropriate because it would potentially expose the partnership to a GST liability that is avoidable.
Rhodes Ridge Joint Venture Agreement s 11.07(a)
Section 11.07 of the Rhodes Ridge Joint Venture Agreement is in the following terms:
(a)Any sale, transfer or other disposition of all or any part of the Share of a Participant pursuant to this Article XI shall be effective only upon the execution and delivery by the purchaser or transferee and the other Participants of an instrument satisfactory to the parties evidencing the agreement of such purchaser or transferee (to the extent of the Share so purchased or transferred) to become a Participant, or if already a Participant, to increase its Share, to be bound by the provisions of this Agreement, the Management Agreement, the Iron Ore Agreement, the Mineral Lease and all Other Project Agreements, promptly to execute and deliver the Cross Charge required pursuant to Section 12.03 and to assume all of the liabilities and to perform all of the obligations and duties thereunder of the Participant whose Share, or part thereof, is to be sold, transferred or disposed of and evidencing the agreement of the other Participants that such purchaser or transferee (to the extent of the Share so purchased or transferred) shall be entitled to all of the rights and benefits of a Participant under the foregoing agreements.
…
HPPL submits that it has an interest to ensure that WPPL assumes HPPL's obligations in accordance with s 11.07(a) and that upon the proper construction of s 11.07(a), HPPL is a necessary party to the instrument contemplated by s 11.07(a) and the instrument must be 'satisfactory' to HPPL. HPPL says that it is not necessary or appropriate that it execute the Deed of Assignment unless and until an instrument contemplated by s 11.07(a) which is satisfactory to HPPL has been resolved.
I do not accept HPPL's argument for two reasons. First, it is not necessary that WPPL arrange the execution and delivery of an instrument contemplated by s 11.07(a) before HPPL do all things necessary to obtain the consents and approvals contemplated by order 4 and do all things necessary to effect the transfers and assignments provided for in order 5 of the Final Orders. The effect of s 11.07(a) may be that no transfer or assignment will be effective until the instrument contemplated by that article is delivered. However, orders 4 and 5 do not contemplate that HPPL is not required to do things necessary to obtain the relevant consents and approvals and effect the specified transfers and assignments until all other things necessary for the transfers and assignments to be effective have been done.
Secondly, I do not accept that on its proper construction s 11.07(a) requires that HPPL is a necessary party to the instrument contemplated by that article and the instrument must be 'satisfactory' to HPPL. The text of s 11.07(a) is against that construction. The parties in the phrase 'an instrument satisfactory to the parties' refers to the parties to the instrument. The parties to the instrument are the purchaser or transferee and the other Participants. The purchaser or transferee is WPPL. The other Participants are the Participants other than the transferor and the transferee and does not include HPPL.
That construction is consistent with the apparent purpose of the clause. The instrument is to evidence the agreement of the purchaser or transferee:
(1)to become a Participant, or if already a Participant, to increase its Share;
(2)to be bound by the provisions of this Agreement, the Management Agreement, the Iron Ore Agreement, the Mineral Lease and all Other Project Agreements;
(3)promptly to execute and deliver the Cross Charge required pursuant to s 12.03; and
(4)to assume all of the liabilities and to perform all of the obligations and duties thereunder of the Participant whose Share, or part thereof, is to be sold, transferred or disposed of and;
(5)evidencing the agreement of the other Participants that such purchaser or transferee (to the extent of the Share so purchased or transferred) shall be entitled to all of the rights and benefits of a Participant under the foregoing agreements.
The apparent purpose of s 11.07(a) is to ensure that the transferee is 'bound by the provisions of' the Rhodes Ridge Joint Venture Agreement and the other specified agreements and to evidence the agreement of the 'other Participants' that the transferee is entitled to 'all of the rights and benefits of a Participant'. The Participants whose consents are relevant for those purposes are the continuing Participants, not the transferor. Section 11.07(a) does not provide for an indemnity to the transferor or release the transferor from any obligations or liabilities. The transferor would provide for any appropriate indemnity as part of its transaction with the transferee.
GST
HPPL says that the form of the Deed of Assignment is inappropriate because it would potentially expose the partnership to a GST liability that is avoidable having regard to the terms of the private binding ruling from the Commissioner of Taxation dated 18 November 2013. It may be that HPPL can avoid GST if an instrument of assignment is drawn in a particular form. However, that does not make the Deed of Assignment not reasonably appropriate and adapted to obtaining the consents and approvals contemplated by order 4 and effecting the transfers and assignments provided for by order 5 of the Final Orders. The Deed of Assignment is a plain vanilla instrument of assignment. It does not cease to be reasonably appropriate and adapted to achieve the purposes of obtaining the necessary consents and approvals and effecting the contemplated assignments and transfers merely because some more exotic instrument would or may avoid the tax which will be payable if the transaction is effected by a plain, standard, assignment or transfer.
Conclusion
I am satisfied that determining whether HPPL should be required to execute the Deed of Assignment falls within the reservation of liberty to apply. I am satisfied that the Deed of Assignment is necessary in order that applications may be made for the consents and approvals contemplated by order 4 and to effect the assignments and transfers provided for in order 5 of the Final Orders. HPPL should execute the Deed of Assignment within a specified time and if it fails to do so a registrar of this court should be authorised to execute the Deed of Assignment in place of HPPL. I will hear the parties as to the form of the order and in particular the time within which HPPL should be required to execute the Deed of Assignment.
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CIVIL
CITATION: WRIGHT PROSPECTING PTY LIMITED -v- HANCOCK PROSPECTING PTY LIMITED [No 12] [2014] WASC 149 (S)
CORAM: LE MIERE J
HEARD: ON THE PAPERS
DELIVERED : 12 SEPTEMBER 2014
FILE NO/S: CIV 1279 of 2001
BETWEEN: WRIGHT PROSPECTING PTY LIMITED (ACN 69 008 676 417)
Plaintiff
AND
HANCOCK PROSPECTING PTY LIMITED (ACN 69 008 676 417)
Defendant
Catchwords:
Costs - Legal principles - Turns on own facts
Legislation:
Rules of the Supreme Court 1971 (WA), O 66 r 1(2), O 66 r 1(3)
Result:
Application for costs granted in part
Category: B
Representation:
Counsel:
Plaintiff: No appearance
Defendant: No appearance
Solicitors:
Plaintiff: Clayton Utz
Defendant: Corrs Chambers Westgarth
Case(s) referred to in judgment(s):
Hancock Prospecting Pty Ltd v Wright Prospecting Pty Ltd [2012] WASCA 216
Hancock Prospecting Pty Ltd v Wright Prospecting Pty Ltd [2012] WASCA 216 (S)
Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72
Wright Prospecting Pty Limited v Hancock Prospecting Pty Limited [No 12] [2014] WASC 149
Wright Prospecting Pty Ltd v Hancock Prospecting Pty Ltd [No 11] [2011] WASC 74
Wright Prospecting Pty Ltd v Hancock Prospecting Pty Ltd [No 9] [2010] WASC 44
LE MIERE J: On 5 March 2010 Murray J delivered reasons for decision: Wright Prospecting Pty Ltd v Hancock Prospecting Pty Ltd [No 9] [2010] WASC 44. Following further submissions concerning the orders that should be made to give effect to his Honour's reasons for decision Murray J delivered supplementary reasons on 22 March 2011: Wright Prospecting Pty Ltd v Hancock Prospecting Pty Ltd [No 11] [2011] WASC 74. An appeal was subsequently dismissed and a cross‑appeal allowed in part: Hancock Prospecting Pty Ltd v Wright Prospecting Pty Ltd [2012] WASCA 216 and Hancock Prospecting Pty Ltd v Wright Prospecting Pty Ltd [2012] WASCA 216 (S). By notice of motion dated 2 August 2012 the plaintiff, WPPL, applied for orders to enforce orders made by Murray J (Final Orders) by requiring the defendant, HPPL, to execute a deed entitled Deed of Assignment of Rhodes Ridge Joint Venture Share. WPPL filed and served five outlines of submissions and HPPL filed and served three outlines of submissions before WPPL filed a further amended substituted notice of motion on 4 April 2014 in which WPPL sought orders to the effect that HPPL give effect to the Final Orders by executing the deed described as Rhodes Ridge Joint Venture Interest Deed of Assignment and Assumption (the Deed of Assignment). On 30 April 2014 I gave reasons for ordering that HPPL execute the Deed of Assignment: Wright Prospecting Pty Limited v Hancock Prospecting Pty Limited [No 12] [2014] WASC 149. I made orders for the exchange of affidavits and submissions on the question of costs and ordered that the question of costs be dealt with on the papers. These reasons deal with the question of the costs of WPPL's notice of motion.
WPPL contentions
WPPL seeks orders that HPPL pay WPPL's costs of and incidental to the application. In essence, WPPL says that it was successful on its notice of motion and, in accordance with the usual order that costs follow the event, HPPL should pay its costs of the notice of motion.
HPPL contentions
HPPL submits that the court should make the following orders:
1.Save as provided for in orders 2 and 3 below, the Defendant to pay the Plaintiff's costs of the Plaintiff's Notice of Motion dated 2 August 2012.
2.The Plaintiff bear its own costs of and incidental to the preparation and reliance on the form of deed annexed to the:
a.Notice of Motion dated 2 August 2012;
b.Amended Notice of Motion dated 1 February 2013;
c.Substituted Notice of Motion dated 9 October 2013; and
d.Amended Substituted Notice of Motion dated 29 January 2014.
3.The Plaintiff pay the Defendant's costs thrown away by reason of the amendments to the Notice of Motion dated 2 August 2012 brought about by the filing of and reliance on the:
a.Amended Notice of Motion dated 1 February 2013;
b.Substituted Notice of Motion dated 9 October 2013;
c.Amended Substituted Notice of Motion dated 29 January 2014; and
d.Further Amended Substituted Notice of Motion dated 4 April 2014.
HPPL says that the basis of [2] and [3] of its proposed orders is as follows. First, WPPL should not be entitled to recover its costs of and incidental to the preparation of and reliance on the forms of deed annexed to each of the motions dated 2 August 2012, 1 February 2013, 9 October 2013 and 29 January 2014, being forms of deed which were abandoned by WPPL. Secondly, WPPL should be ordered to pay HPPL's costs of dealing with each of those deeds. HPPL relies upon the rule that an amending party is obliged to pay the other party's costs thrown away by reason of amendment, which HPPL says should apply by analogy to this application.
WPPL response
WPPL says that the usual rule as to costs thrown away as a result of an amendment to pleadings does not apply to this application. No indulgence was sought. Further, this is not a case where the plaintiff failed on a discrete issue or group of issues. WPPL says that it was entirely successful. WPPL says that it will be very rare that a successful party will be deprived of some or all of its costs, let alone be ordered to pay some of the unsuccessful party's costs and submits that that would generally require some form of misconduct: Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72 [69] (McHugh J).
Costs ‑ legal principles
The court has a discretion in relation to orders for costs. The rules guide the exercise of the discretion in normal cases. The general rule is that the successful party to an application recovers its costs. Ordinarily this is a just outcome because the party who turns out to have unjustifiably either brought another party before the court, or given another party cause to have recourse to the court to obtain his rights, should be required to recompense that other party in costs. A successful party may properly be deprived of an award of costs in appropriate circumstances or, in exceptional cases, may be ordered to pay the unsuccessful party's costs.
Order 66 r 1(2) of the Rules of the Supreme Court 1971 (WA) provides that if the court is of opinion that the conduct of a party either before or after the commencement of the litigation has resulted in costs being unnecessarily or unreasonably incurred it may deprive that party of costs wholly or in part and may further order him to pay the costs of an unsuccessful party either wholly or in part. Order 66 r 1(3) provides that where a party though generally successful in an action has, by the introduction of some issue or issues on which he has failed, increased the costs the court may order such party to pay the costs of such issue or issues. An issue does not mean the precise issue in the technical or pleading sense but any disputed question of fact or issue of law. A party will not get costs merely because of his or her success on particular issues.
Decision
WPPL unnecessarily added to the costs of the application by drafting forms of deed prior to the Deed of Assignment which did more than give effect to the Final Orders and gave rise to contentious issues. However, the primary grounds on which HPPL resisted executing any form of deed of assignment was that it was not required to sign any deed and secondly that the terms of article 11.07(a) of the Rhodes Ridge Joint Venture Agreement provided a reason not to sign any deed. HPPL was unsuccessful on those grounds which applied to the application from the outset. WPPL should have its costs of the application other than any costs in relation to the preparation, drafting and engrossing of the forms of deed which it did not press.
The costs order will be to the effect that the defendant pay the plaintiff's costs of the plaintiff's notice of motion except for the costs of and incidental to the preparation, drafting and engrossing of the form of deed annexed to the notice of motion dated 2 August 2012, amended notice of motion dated 1 February 2013, substituted notice of motion dated 9 October 2013 and amended substituted notice of motion dated 29 January 2014.
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