Federal Court of Australia

Goldus Pty Ltd (Subject to a Deed of Company Arrangement) v Cummins (No 5) [2021] FCA 1352

ORDERS

THE COURT ORDERS THAT:

1.    It is declared that, by reason of the payments having been made under cl 4.2 of the Deed of Company Arrangement entered into by the first cross-defendant, Goldus Pty Limited (subject to Deed of Company Arrangement) (Goldus) and dated 11 May 2018, and the operation of cl 5.11 of that deed and s 444B, s 444D, s 444G, s 444H and s 447A of the Corporations Act 2001 (Cth):

(a)    on and from 10 October 2019, Goldus relinquished its rights, interests or claims arising out of the Joint Venture Agreement concluded between Goldus and the second cross-claimant, Australian Mining Pty Ltd (Receivers and Managers Appointed) (Australian Mining), in respect of the 'Teetulpa Alluvial Joint Venture' entered into on or about 17 July 2012 (JV Agreement) to Australian Mining; and

(b)    the rights, interests and claims previously held by Goldus arising out of the JV Agreement are now held solely by Australian Mining.

2.    It is further declared that in relation to order 1, the mining tenements described in Schedule 1 to these orders (Tenements) are not assets of the Teetulpa Alluvial Joint Venture as comprised in the JV Agreement and Australian Mining has no proprietary right in the Tenements by reason of the JV Agreement.

3.    Goldus is directed to:

(a)    execute and give to the Mining Registrar under s 15AG(1) of the Mining Act 1971 (SA) a notice in the form of the Schedule 2 to these orders by email to DEM.Tenements@sa.gov.au within 14 days of the making of these orders; and

(b)    file an affidavit with the Court verifying that notice has been given by it to the Mining Registrar under this order.

4.    If Goldus does not give notice as required by order 3, a Registrar of the Court is authorised to sign a notice in the form of Schedule 2 to these orders on behalf of Goldus and send the notice by email to DEM.Tenements@sa.gov.au and copied to mitchell@mathaslaw.com.au and johnh@synergysnr.com.

5.    The first and second cross-claimants do pay the costs of the second cross-defendant of the cross-claim on a party and party basis to be assessed if not agreed.

6.    The first and third cross-defendants do pay the costs of the first and second cross-claimants of the Equipment Claims (as that term is defined in RnD Funding Pty Limited v Goldus Pty Limited (Subject to a Deed of Company Arrangement) [2021] FCA 1096) on a party and party basis to be assessed if not agreed.

7.    Save as ordered herein and as previously ordered, the parties each bear their own costs of the proceedings including all reserved costs.

8.    The originating process and the cross-claim be otherwise dismissed.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

SCHEDULE 1

The Tenements are Mining Leases ML5337, ML5471, ML5485, ML5486, ML5546, ML5550, ML5759, ML5886, Miscellaneous Purpose Lease MPL28 and Exploration Licence EL5896 issued by the Department for Energy and Mining of South Australia.

Schedule 2

To:    The Mining Registrar

         Department for Energy and Mining

         GPO Box 310 Adelaide SA 5001

         DEM.tenements@SA.gov.au

Notice relating to mining tenements ML 5337; ML 5471; ML 5485; ML 5486; ML 5546;

ML5550; ML 5759; and ML 5886 (Tenements)

In accordance with section 15AG(3) of the Mining Act 1971 (SA) (Mining Act) Goldus Pty Limited (Subject to Deed of Company Arrangement) ABN 67 076 662 149 (Goldus) of Level 5, 67 Castlereagh Street, Sydney NSW 2000 gives you notice that Goldus entered into the Deed of Company Arrangement dated 11 May 2018 delivered with this notice and that pursuant to cl 5.11 of the Deed of Company Arrangement:

1.    Goldus has relinquished its rights, interests and claims under a Joint Venture Agreement concluded between Goldus and Australian Mining in respect of the 'Teetulpa Alluvial Joint Venture' entered into on or about 17 July 2012 being registered document 37678 endorsed on the mining register on 2 October 2013 (JV Agreement) relating to the Tenements.

2.    Australian Mining Pty Ltd (Receivers and Managers Appointed) ABN 29 000 184 985 (Australian Mining) of C/- BRI Ferrier, Level 30, Australia Square, 264 George Street Sydney, NSW 2000 (e: acummins@briferrier.com.au) is now the sole participant under the JV Agreement. The Contact details for Australian Mining are:

3.    The commencement date of Australian Mining becoming the sole participant was on or about 10 October 2019.

Goldus requests the registration of this document on the Mining Register under section 15AG(3) of the Mining Act.

Dated:

Signed for and on behalf of Goldus:

(specify authority of signing party)

REASONS FOR JUDGMENT

COLVIN J:

1    Goldus Pty Ltd and Australian Mining Pty Ltd were parties to an unincorporated joint venture. It was formed to carry out exploration and mining for alluvial gold and other minerals to a depth of no more than 15 metres on eight mining tenements (Tenements) over land in the vicinity of Teetulpa in the Flinders Ranges in South Australia (Teetulpa Venture). The terms of the venture were recorded in a joint venture agreement (JVA).

2    A dispute arose as to whether the Tenements were the property of the Teetulpa Venture. Goldus claimed that the terms of the Teetulpa Venture provided for activities that could be carried out by the venture on the Tenements but that the Tenements remained the property of Goldus. Australian Mining disputed that claim. It contended that the Tenements were property of the Teetulpa Venture or, at least, that Goldus had provided security over the Tenements for any default under the terms of the JVA by a deed of cross security (and that there had been such default). Australian Mining also advanced a cross-claim to the effect that Goldus had relinquished its participating interest in the Teetulpa Venture and that the rights and interests of Goldus under the JVA had passed to Australian Mining. By its cross-claim it sought declaratory relief to that effect. It also sought further orders and directions to give effect to that claim.

3    I determined the competing claims and found, in broad terms, that Goldus should succeed in its claim that the Tenements were not property of the Teetupla Venture (or the subject of any security granted by Goldus) and that Australian Mining should succeed in its claim that it was entitled to the rights conferred by the JVA to undertake activities on the Tenements: Goldus Pty Ltd (Subject to a Deed of Company Arrangement) v Cummins (No 4) [2021] FCA 1095. In doing so, I found that the rights conferred by the JVA were contractual in character. I held that they had been conferred when Goldus relinquished its interest as a venturer under the JVA by the terms of a deed of company arrangement (DoCA).

4    I made certain declarations as to relief and gave liberty to apply for further relief and for the parties to apply for orders as to costs.

5    In certain respects, the parties are agreed that there should be further declaratory relief. However, there is disagreement between them as to whether the Court should direct that Goldus execute a notice under s 15AG(1) of the Mining Act 1971 (SA) and what orders should be made as to costs. There is also disagreement as to whether there should be provision for payment of the costs of Australian Mining taking delivery of property the subject of what was referred to in the proceedings as the Equipment Claims (see the separate reasons in RnD Funding Pty Limited v Goldus Pty Limited (Subject to a Deed of Company Arrangement) [2021] FCA 1096).

Notice under s 15AG of the Mining Act

6    Section 15AG of the Mining Act provides that a tenement holder may apply to the Mining Registrar for the registration on the mining register of 'any agreement, memorandum, arrangement, instrument or other document or dealing that relates to … the relevant mineral tenement, or an interest in the mineral tenement … or … authorised operations carried out, or to be carried out, on the relevant mineral tenement'. Such an instrument is referred to as 'a registrable dealing'. There is further provision that a tenement holder who enters into a registrable dealing under which another person is to carry out authorised operations must inform the Minister of the registrable dealing in a manner and form determined by the Minister and apply to register the registrable dealing: s 15AG(3). It is an offence to fail to register any such dealing. Section 15AG takes effect from 1 January 2021. Therefore, since that date, there has been an ability for a tenement holder to apply to register a registrable dealing and an obligation to do so within 14 days of entering into a registrable dealing under which another person is to carry out authorised operations.

7    The JVA has been included upon the register in respect of the Tenements. However, since the determination of the cross-claim by Australian Mining, it has been adjudicated that Goldus is not entitled to the rights conferred by the JVA upon Goldus as a venturer, but that Goldus remains bound by the terms of the JVA as the holder of the Tenements.

8    Australian Mining claims that it is necessary and appropriate for an order to be made requiring Goldus to lodge a notice so as to perfect its contractual entitlements.

9    Goldus claims that the proposed order and the proposed terms of the notice go 'far beyond the nature of an ancillary order' necessary to give effect to the Court's findings. It is said to require interpretation of s 15AG as well as the way in which the JVA will operate upon the rights and interests of the parties in the future. It is said that as a result the proposed orders would address issues as to the status and effect of the JVA that were not in issue.

10    The proposed notice will do two things. First, it will notify the Mining Registrar of the dealing by which there was a relinquishment of the rights and interest of Goldus under the JVA, being an instrument already on the Register. Second, it will set out certain entitlements that Australian Mining maintains it has under the terms of the JVA as a result of the relinquishment. They concern the nature and extent of certain powers conferred by the JVA.

11    In my view, the first aspect of the proposed notice properly concerns matters in issue between the parties as to the nature and extent of any interest of Australian Mining in the Tenements and is properly consequential upon the finding that Australian Mining is the only venturer under the JVA and enjoys those contractual rights as against Goldus as the holder of the Tenements. The proceedings were conducted on the basis that the precise terms of orders that might be made to give effect to any conclusions reached by the Court as to the nature and extent of the interest of Australian Mining in the Tenements would be addressed after the substantive claims had been addressed. An order to require the provision of the proposed notice is of that character.

12    It was submitted for Goldus that the issues raised by the cross-claim were confined to whether there had been a relinquishment by Goldus of its interest in the Teetulpa Venture by operation of the DoCA. It was further submitted that there was a separate question as to whether that relinquishment brought the JVA to an end. It was claimed that the relinquishment of the interest of Goldus brought the JVA to an end. In support of that submission reference was made to cl 4.4(a) of the JVA which is in the following terms:

The Joint Venture shall terminate on the earlier of the following dates:-

(i)    The date that the Management Committee determines unanimously that all economically recoverable alluvial gold material has been recovered from the Designated Area.

(ii)    A date upon which the Non-Defaulters unanimously resolve to determine the Joint Venture.

(iii)    A date upon which the Joint Venture Assets are held beneficially by one Joint Venturer.

It was submitted that those terms meant that once the assets of the Teetulpa Venture came to be held by one venturer, the terms of the JVA came to an end.

13    There are two problems with the contention of Goldus based upon cl 4.4(a)(iii). First, it does not provide for the JVA to terminate. It is dealing with the termination of the venture brought into existence by the JVA. However, the JVA does much more than create the joint venture. It confers contractual rights on the parties to the JVA which include a right to carry out mining operations in the alluvial zone as described. It also deals with the circumstances in which the joint venture interests may be assigned or relinquished or a venturer may withdraw. It deals separately with termination of the JVA; see, for example, cl 4.4(c).

14    The second problem is that the contention by Goldus amounts to a claim that the relinquishment of the interest of Goldus as a venturer to Australian Mining under the terms of the DoCA had the necessary consequence that the JVA was at an end. It would mean that Australian Mining had no interest at all in the Tenements arising from the JVA. As has been noted, the cross-claim by Australian Mining sought relief to the effect that the rights and interests of Goldus under the JVA had 'passed to Australian Mining'. Necessarily implicit in that claim was an allegation that those interests could pass to Australian Mining. There was no claim by Goldus to the effect that cl 4.4(a)(iii) meant that there could be no such passing of the rights under the JVA. It is too late for Goldus to seek to agitate such a claim by way of defence. Goldus has been adjudicated to be entitled to relief to the effect that the rights previously held by Goldus under the JVA have now passed to Australian Mining. Indeed, Goldus does not oppose the grant of declaratory relief to that effect.

15    It follows in my view that Australian Mining is entitled to a consequential order that would require Goldus to give notice of the dealing by which the interest of Goldus under the JVA has passed to Australian Mining, being an interest that provides for contractual rights to undertake mining operations on the Tenements.

16    However, the second aspect of the proposed notice goes beyond such matters. It seeks to record a particular interpretation of provisions of the JVA that were not in issue, save in a general way when it came to interpreting the JVA (and the nature of the dealings provided for by the DoCA) to reach conclusions as to the nature of any interest of Australian Mining in the Tenements.

17    As to the issue of the proper construction of s 15AG, it is appropriate to consider any construction issue as part of the process of determining whether the consequential order should be made. In considering the precise terms of an order for specific performance the Court will consider any relevant legal authorities and any applicable statutory provisions that may need to be complied with in order to effect a valid transfer. In my view, any question about s 15AG is analogous in character. No submission is advanced for Goldus as to what is meant by s 15AG. It is not necessary to determine whether the proposed notice is required by s 15AG(3) to be lodged. As to that question it is to be noted that the dealing giving rise to the matters the subject of the notice occurred some considerable time before the provision took effect. It is sufficient that s 15AG(1) permits an application by way of notice for the registration of a dealing of the kind that has been found to have been effected by the performance of the terms of the DoCA. It is in the interests of Australian Mining for the position in relation to its interest to be made clear. That is a sufficient reason to require the notice to be submitted to the Mining Registrar by Goldus.

18    Therefore, I am satisfied that it is appropriate for an order to be made to require the giving of the notice by Goldus. It should not deal with the contractual provisions. It should produce the DoCA. There should be a further order authorising a registrar of this Court to sign the notice for Goldus if necessary.

Costs

19    Australian Mining was not the only party who opposed the claim by Goldus and advanced the cross-claim. RnD Funding Pty Limited, a creditor of Australian Mining, also joined in advancing that position. Together they were the active defendants to the claim and the first and second cross-claimants.

20    The principles to be applied when considering costs orders are well established. The award of costs is discretionary: s 43 of the Federal Court of Australia Act 1976 (Cth). The discretion is unconfined, but must be exercised judicially, that is according to relevant considerations and taking account of the contextual features and facts of the litigation: Kazar (Liquidator) v Kargarian; In the matter of Frontier Architects Pty Ltd (In Liq) [2011] FCAFC 136; (2011) 197 FCR 113 at [4]; and Northern Territory v Sangare [2019] HCA 25 at [24]. Generally, the discretion is exercised in favour of the successful party: Foots v Southern Cross Mine Management Pty Ltd [2007] HCA 56; (2007) 234 CLR 52 at [25]; and Firebird Global Master Fund II Ltd v Republic of Nauru (No 2) [2015] HCA 53 at [6] .

21    Where, as here, there has been mixed success, then as recently stated in El-Debel v Micheletto (Trustee) (No 2) [2021] FCAFC 146 at [4], three aspects generally assume significance:

First, an assessment as to whether one party has enjoyed real practical success. Second, a reluctance on the part of the Court to assess costs on an issue by issue basis because the Court has an eye to the interests of justice in bringing finality to the dispute and the diminishing returns involved in expending further time and costs in identifying the extent to which costs related to particular aspects of the conduct of the proceedings. Third, a preference for adjustments by way of percentage reductions made on a broad brush approach taking account of the degree of success and the likely extent of costs associated with that aspect of the case.

22    In the present case, the substantive issue between the parties was whether Australian Mining enjoyed any rights or interest in the Tenements that it could assert against Goldus. The proceedings that were commenced by Goldus sought relief on the basis that there was no such interest which could be asserted by Australian Mining. Australian Mining failed in its claim that it had some form of proprietary interest in the Tenements whether on the basis that they formed part of the property of the Teetulpa Venture or that they were the subject of a deed of charge that had been granted by Goldus in favour of Australian Mining. However, Australian Mining succeeded in its claim that it had a contractual interest and that it could assert its entitlement to the rights conferred by the JVA in respect of the Tenements against Goldus.

23    Therefore, Australian Mining has enjoyed practical success on the application. It is entitled to pursue contractual rights in respect of the Tenements against Goldus.

24    In my assessment, this is a case where there has been a measure of success on the legal issues by both parties. The aspects on which they each succeeded concerned matters of construction of commercial instruments. Therefore, in the result, much of the evidentiary material adduced was not probative of the issues by which the competing claims were resolved.

25    Goldus added to the costs of the proceedings by seeking adjournments and delay. It filed very extensive affidavit material. The relevance of much of that material, if any, was never exposed by submissions filed for Goldus. It advanced numerous alternative arguments. A number of its pleaded points were not the subject of submissions. A number of its legal arguments were not successful.

26    In the result balancing these matters it seems to me that, subject to the three matters addressed below, the appropriate costs order as between Goldus and Australian Mining as the main protagonists on the issues concerned with the Tenements is that there be no order as to costs.

27    As to other costs orders, first it was common ground that there should be an order in favour of the second cross-defendant for its costs of the cross-claim being an aspect on which the cross-claimants were wholly unsuccessful.

28    Second, it was agreed that the costs of that part of the proceeding concerned with the Equipment Claims should be borne by the first and third cross-defendants.

29    Third, Goldus provided security for its liability as to costs in respect of its claims. It sought orders for the return of the security. The position of Australian Mining was that it should first be able to complete the assessment of costs in respect of certain orders that had been made in its favour in the course of the conduct of the proceedings. I accept that submission. Had there been costs orders made against Australian Mining in favour of Goldus then it would have been necessary to consider whether there should be a set off in respect of such an entitlement to costs before there could be resort to security. However, in the result, no costs orders have been made in favour of Goldus. Therefore, at this stage, there should be no order concerning the sum of $20,000 paid into Court by Goldus as security for the costs of Australian Mining of the proceedings.

Costs of taking delivery of the property the subject of the Equipment Claim

30    The form of orders sought in relation to the redelivery of the property was for delivery to relevant receivers and managers or, at the election of Goldus (or the third defendant to the cross-claim, Synergy Metals Group Pty Limited), to provide such reasonable access to premises under their control for the purpose of removing the property. Liberty was sought to apply for damages if the property was not returned. However, no claim was made for the costs of taking delivery of the property.

31    It is now proposed that the first and third cross-defendants be ordered to reimburse the costs necessarily incurred in taking possession of the property. In circumstances where no such claim was made and the precise ambit of such an order would be uncertain (particularly where there appear to be issues as to whether third parties have valid claims to liens over some of the property), I am not satisfied that such an order should be made.

Conclusion

32    There should be further orders as I have indicated in these reasons and as otherwise agreed.

Associate:

Dated:    3 November 2021