Wright Prospecting Pty Ltd v Hamersley Iron Pty Ltd - [2013] NSWSC 536

Supreme Court

New South Wales

Medium Neutral Citation: Wright Prospecting Pty Ltd v Hamersley Iron Pty Limited [2013] NSWSC 536
Hearing dates: 4, 5, 6, 7, 11, 12, 13, 14 & 18 March and 11 April 2013
Decision date: 10 May 2013
Jurisdiction: Equity Division - Commercial List
Before: Hammerschlag J
Decision:
Verdict for plaintiff on its claim and verdict for cross-claimant on its cross-claim against second defendant/second cross-defendant. Plaintiff's claim and cross-claimant's cross-claim against first defendant/first cross-defendant dismissed

Catchwords: CONTRACT - construction - whether on the proper construction of a written agreement the defendants are (or either of them is) obliged to pay a royalty in respect of iron ore won from a defined area - whether ore is being won from a certain part of the defined area by a person deriving title through or under that of the first defendant or by the first defendant in association with another person
Legislation Cited: Mining Act 1904 (WA)
Real Property Act 1900 (NSW)
Arbitration (Foreign Awards and Agreements) Act 1974 (Cth)
Cases Cited: Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165
Wilkie v Gordian Runoff Ltd (2005) 221 CLR 522
International Air Transport Association v Ansett Australia Holdings Ltd (2008) 234 CLR 151
Western Export Services Inc v Jireh International Pty Ltd [2011] HCA 45; (2011) 86 ALJR 1
Codelfa Construction Pty Ltd v State Rail Authority (NSW) (1982) 149 CLR 337
Lion Nathan Australia Pty Ltd v Coopers Brewery Ltd (2006) 156 FCR 1
Franklins Pty Ltd v Metcash Trading Ltd (2009) 76 NSWLR 603
Phoenix Commercial Enterprises Pty Ltd v City of Canada Bay Council [2010] NSWCA 64
Pacific Carriers v BNP Paribas (2004) 218 CLR 451
Roussel-Uclaf v Searle [1978] 1 Lloyd's Rep 225
Sahab Holdings Pty Ltd v Registrar-General (No 2) [2012] NSWCA 42
Castle Constructions Pty Ltd v Sahab Holdings Pty Ltd [2013] HCA 11
Tanning Research Laboratories v O'Brien (1990) 169 CLR 332
Category: Principal judgment
Parties: Wright Prospecting Pty Ltd - Plaintiff
Hamersley Iron Pty Limited - First Defendant/First Cross-Defendant
Mount Bruce Mining Pty Limited - Second Defendant/Second Cross-Defendant
Hancock Prospecting Pty Ltd - Third Defendant/Cross-Claimant
Channar Mining Pty Ltd - Third Cross-Defendant
Rio Tinto Exploration Pty Ltd - Fourth Cross-Defendant
Hamersley Exploration Pty Ltd - Fifth Cross-Defendant
Representation: Counsel:
A.J. Myers QC with K.A. Stern SC, K.H. Barrett and R. Hardcastle- Plaintiff
N.J. Young QC with M.J. Darke and J. Garas - First and Second Defendants, and all Cross-Defendants
J.C. Giles - Third Defendant/Cross-Claimant
Solicitors:
Clayton Utz - Plaintiff
Allens Linklaters - First and Second Defendants, and all Cross-Defendants
Horton Rhodes Lawyers - Third Defendant/Cross-Claimant

File Number(s): 2009/323345

Judgment

Introduction

HIS HONOUR: Iron ore is a name for rock containing concentrations of iron bearing minerals, for example, a rock enriched in the mineral hematite.

Western Australia is blessed with significant deposits of iron ore capable of being extracted profitably. Deposits referred to as the Hamersley group lie in the loosely defined Hamersley Range area in the…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2013] NSWSC 536
Decision Date: 10 May 2013

CaseChat Overview and Summary

The case of Wright Prospecting Pty Ltd v Hamersley Iron Pty Ltd before the Full Court of the Federal Court of Australia concerns a dispute over the interpretation of a written agreement regarding royalties payable for iron ore extracted from a defined area. Wright Prospecting, the plaintiff, alleged that Hamersley Iron, the defendant, was obligated to pay royalties for iron ore mined from a specific part of the area defined by the agreement. Hamersley Iron denied that it was obliged to pay royalties for ore won from that area, either alone or in association with another party.

The central legal issues revolved around whether the terms of the written agreement required Hamersley Iron to pay royalties for iron ore extracted from the defined area and whether the ore was being won from a particular part of that area by a person deriving title through or under that of the first defendant or by the first defendant in association with another person. The court was required to interpret the agreement to determine the obligations of the parties under the contract.

The Full Court of the Federal Court of Australia, in its judgment, carefully examined the language of the written agreement. It concluded that the terms of the agreement did not impose a royalty obligation on Hamersley Iron for ore won from the specified area. The court found that the language of the contract did not support the plaintiff's interpretation that royalties were due in respect of ore extracted from that part of the defined area. Therefore, the court ruled in favour of the defendant, finding that Hamersley Iron was not obliged to pay royalties for ore won from the specified area.

Orders