Bathurst Resources Limited v L&M Coal Holdings Limited

IN THE SUPREME COURT OF NEW ZEALAND

I TE KŌTI MANA NUI

SC 29/2020
[2020] NZSC 73

BETWEEN	BATHURST RESOURCES LIMITED First Applicant
AND	BULLER COAL LIMITED Second Applicant
AND	L&M COAL HOLDINGS LIMITED Respondent

Court:	Winkelmann CJ, Glazebrook and Ellen France JJ
Counsel:	J E Hodder QC and R J Gordon for Applicants A R Galbraith QC and D R Kalderimis for Respondent
Judgment:	27 July 2020

JUDGMENT OF THE COURT

AThe application for leave to appeal is granted (Bathurst Resources Ltd v L&M Coal Holdings Ltd [2020] NZCA 113).

BThe approved question is whether the Court of Appeal was correct to dismiss the appeal.

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REASONS

To assist counsel in preparing for the appeal, the Court notes the following points:
(a)The principles of contractual interpretation have been set out by this Court in Firm PI 1 Ltd v Zurich Australian Insurance Ltd (Zurich).[1] We will not revisit those principles on this appeal.
[1]Firm PI 1 Ltd v Zurich Australian Insurance Ltd [2014] NZSC 147, [2015] 1 NZLR 432 at [60]‍–‍[63], [77]–[79], [84] and [88]–[93] per Arnold J for the majority (Elias CJ and William Young J reserving their positions).
(b)Zurich did not deal with the admissibility or otherwise of evidence of prior negotiations or subsequent conduct.[2] We will hear argument on these issues.
[2]On subsequent conduct, counsel should also address the comments of Thomas J in Gibbons Holdings Ltd v Wholesale Distributors Ltd [2007] NZSC 37, [2008] 1 NZLR 277 at [113].
(c)We will hear argument on the distinction between interpretation and implication and the appropriate test for the latter.

Solicitors:
MinterEllisonRuddWatts, Wellington for Applicants
Chapman Tripp, Wellington for Respondent

CaseChat Overview and Summary

In the Supreme Court of New Zealand, Bathurst Resources Limited and Buller Coal Limited sought leave to appeal against the decision of the Court of Appeal in relation to a dispute involving L&M Coal Holdings Limited. The primary focus of the case was to determine the correct interpretation of certain contractual terms and the admissibility of evidence relating to prior negotiations and subsequent conduct. The Court of Appeal had previously dismissed the appeal, and the applicants sought leave to appeal that decision.

The legal issues before the Supreme Court included the principles of contractual interpretation, particularly in light of the precedent set by the Court in Firm PI 1 Ltd v Zurich Australian Insurance Ltd, and the admissibility of evidence concerning prior negotiations and subsequent conduct. The Court was also asked to consider the distinction between interpretation and implication in contract law, and the appropriate test for implication.

The Supreme Court granted the application for leave to appeal, noting that the Court of Appeal's decision to dismiss the appeal would be the subject of the appeal. The Court highlighted that it would hear arguments on the admissibility of evidence relating to prior negotiations and subsequent conduct, and the distinction between interpretation and implication in contract law. The Court also noted that it would not revisit the principles of contractual interpretation established in Zurich, but would hear argument on the appropriate test for implication.

The final orders of the Court were that the application for leave to appeal was granted, and the approved question for the appeal was whether the Court of Appeal was correct to dismiss the appeal. The Court directed that the appeal would proceed on the basis of the points outlined in its reasons for judgment.

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established