Federal Court of Australia

Mining Standards International Pty Ltd v Atlantic Nickel Mineracao Ltda (No 4) [2025] FCA 777

ORDERS

THE COURT ORDERS THAT:

1.    The applicant have leave to amend its statement of claim substantially in accordance with “SCR11” attached to the affidavit of Mr Stephen Charles Russell of 30 April 2025.

2.    The applicant is to pay the respondent’s costs thrown away by the making of the amendments.

3.    The costs of the application be each parties’ costs in the proceedings.

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

REASONS FOR JUDGMENT

DERRINGTON J:

Introduction

1    The application before the Court is made pursuant to r 16.53 of the Federal Court Rules 2011 (Cth) (the Rules). It seeks orders that Mining Standards International Pty Ltd (MSI) have leave to amend the Amended Statement of Claim (the ASOC) in the form of the Second Amended Statement of Claim (the FASOC) that is annexed to the affidavit of a Mr Stephen Russell filed 30 April 2025 (Russell Affidavit) (together, the Application). Atlantic Nickel Mineração Ltda (Atlantic Nickel or MMB) opposes the amendments proposed by MSI for a number of reasons.

2    Although the extent of the amendments appear, at first, to be relatively modest, it is undoubted that their impact upon the proceedings could be more substantial. Nevertheless, the hearing of the matter is not to occur for some time and, any alterations to the work required to bring the matter to trial, can be accommodated well within that period.

Background

3    The carriage of the present proceedings, albeit of some antiquity, can be briefly stated.

4    On 1 November 2021, MSI filed an Originating Application and Statement of Claim: Mining Standards International Pty Ltd v Atlantic Nickel Mineracao Ltda (No 2) [2024] FCA 666 [90] (Mining Standards (No 2)). On 18 March 2022, it filed the ASOC, and, some two months later, on 30 May 2022, it was granted leave to serve the ASOC and originating application on Atlantic Nickel in Brazil: Mining Standards International Pty Ltd v Atlantic Nickel Mineracao Ltda [2022] FCA 623 (Mining Standards (No 1)).

5    Atlantic Nickel filed a conditional appearance on 2 February 2023. In early April 2023, it filed a Defence and Statement of Cross-Claim which relevantly joined Messrs Martin Madden, Scott Langdon and Richard Tucker of KordaMentha Restructuring (Receivers) to the proceedings.

6    On 25 May 2023, Atlantic Nickel filed an Amended Defence. It may be observed that Atlantic Nickel has also amended its cross-claim on several (six) occasions, most recently on 28 April 2025, and the pleadings on the cross-claim have not yet closed.

7    It is not inappropriate to note that this action has been characterised by numerous interlocutory applications. It is also relevant that discovery has not yet been completed.

The general nature of the claim

8    In broad terms, MSI claims that (a) it entered into an agreement to buy the “Assets” of Atlantic Nickel for approximately US$50m in or about November 2017; (b) Atlantic Nickel and the Receivers engaged in conduct which, effectively, prevented it from completing that agreement; and, therefore, (c) it has several causes of action in respect of which it is entitled to recover substantial damages. The intricacies of those claims have been articulated elsewhere: see, eg, Mining Standards (No 1) [4] – [28] and Mining Standards (No 2) [14] – [25], [90] – [96]: and, at least for present purposes, may be distilled into the following propositions and observations.

9    Atlantic Nickel is the owner of the Santa Rita nickel mine in Bahia, Brazil (the Mine).

10    At all relevant times, Atlantic Nickel was indebted to Banco Bradesco S.A. (Bradesco).

11    In or about October 2015, the Receivers were appointed to the property of the shareholders of Atlantic Nickel (being Mirabela Nickel Ltd (MBN) and Mirabela Investments Pty Ltd (MBI)).

12    The Receivers proceeded to conduct a sale process in respect of those shares (or “quotas”), as well as a loan by MBN to Atlantic Nickel (the Assets). Two preferred bidders emerged: MSI and Appian Capital Advisory LLP (on behalf of the Appian Natural Resources Fund (Appian)).

13    By 10 November 2017, a written agreement had been executed between the Receivers, Atlantic Nickel, MBN and MBI, and MSI for the sale of the Assets to MSI (the Sale Agreement). The terms of that agreement are not in dispute. They defined, inter alia, a number of conditions precedent to the sale, including, relevantly, MSI (a) obtaining the consent of Bradesco; and (b) acquiring finance (the Conditions). Other terms imposed a general regime of cooperation.

14    On 22 November 2017, the Receivers and MBN and MBI issued a notice to MSI purporting to terminate the Sale Agreement. Some five days later, the Receivers, MBN and MBI and Atlantic Nickel entered into a contract to sell the Assets to Appian for roughly US$65m. It appears that that sale completed on or about 27 July 2018: Mining Standards (No 2) [34].

15    By the ASOC, MSI contends, inter alia, that the Sale Agreement obliged (a) Atlantic Nickel, MBN and MBI to “provide all reasonable assistance requested by MSI to satisfy the conditions precedent”; and (b) each of the parties to the Sale Agreement to “use all reasonable endeavours to ensure that each condition precedent was satisfied”. It is said that Atlantic Nickel failed to comply with those obligations. That allegation undergirds the claim(s) that Atlantic Nickel:

(1)    breached the terms of the Sale Agreement (see ASOC [131] – [137]);

(2)    further or alternatively, engaged in conduct which induced a breach of contract by the Receivers, MBN and MBI (see ASOC [138] – [143]);

(3)    further or alternatively, engaged in “unconscionable conduct” in contravention of s 21 of the Australian Consumer Law (being Schedule 2 to the Competition and Consumer Act 2010 (Cth)) (see ASOC [145]); and

(4)    further or alternatively, was involved in the “unconscionable conduct” of the Receivers, MBN and MBI (see ASOC [144] and [146]).

16    That conduct, it is alleged, deprived MSI “of the opportunity to complete the [Sale Agreement] and become the owner of the Assets” (ASOC [147]). The “value” of the opportunity so lost by MSI is said to be some US$745m, because (a) the “Assets were and are worth approximately US$795m”; and (b) MSI was required to pay US$50m under the Sale Agreement to acquire them (ASOC [148] and [27(a)]). Relevantly, MSI alleges that such quantification of the Assets is evidenced by those facts pleaded at subparagraphs [148(a)] – [148(e)] of the ASOC, namely:

148.    The value of the opportunity lost by MSI, referred to in paragraph 147, amounts to approximately US$745m, in that the Assets were and are worth approximately US$795m as evidenced by the following matters:

(a)    In November 2017, the Santa Rita Nickel Mine:

(i)    was one of the largest open pit nickel sulphide mines in the world, also hosting deposits of copper and cobalt sulphides;

(ii)    was a fully permitted, formerly producing nickel mine which was ready to be re-started;

(iii)    offered additional global supply for Class I nickel products, which were in global demand;

(iv)    had benefited from US$1 billion in prior investment; and

(v)     had an estimated nickel production capacity of 6.5 million tonnes per annum.

(b)     In October 2017, Trafigura [being Trafigura Pte Ltd]:

(i)    had completed technical due diligence in connection with its proposed financing of MSI’s acquisition of the Assets under the MSI Asset Sale Agreement; and

(ii)     informed MSI, the Receivers and the Sellers [being MBN and MBI], by its letter dated 23 October 2017, as was the fact, that it had a strong interest and intention to finance MSI’s acquisition of the Assets in a sum up to US$50 million.

(c)     At or shortly after completion of the Appian Sale Agreement, Trafigura entered into the following agreements with MMB:

(i)     a three-year offtake contract for the acquisition by Trafigura of a portion of the production from the Santa Rita mine; and

(ii)     an agreement for the provision by Trafigura of finance of US$40.8m for the operations of the Santa Rita mine.

(d)     Shortly after completion of the Appian Sale Agreement, MMB recommenced mining operations.

(e)     On 13 September 2020, MMB and Appian:

(i)     declared commercial production; and

(ii)     announced that the mine had an after-tax net present value of US$795 million.

17    Though the ASOC is far from an exemplar of the art of pleading, it sufficiently raises the claim that MSI lost the opportunity to acquire the Assets (ASOC [147]), such opportunity being worth US$795m (ASOC [148]). That is the only sensible way in which to read the claim for damages.

The proposed amendments to the ASOC

18    The Application was filed on 30 April 2025. Prima facie, it seeks to overcome an allegation by Atlantic Nickel that the extant pleading failed to sufficiently particularise MSI’s claim for loss of opportunity. While the extent of correspondence exchanged by the legal representatives of Atlantic Nickel and MSI is not before the Court, the Russell Affidavit appends an email from the former (King & Wood Mallesons) to the latter (Russells) of 17 April 2025 that asserts that “[t]he proposed amendments to the ASOC do not sufficiently overcome [Atlantic Nickel’s] concerns as to the pleading of a loss of opportunity claim and indeed introduces some additional matters of concern”. Amongst other things, such correspondence is illustrative of a degree of acceptance that the revisions proposed to the ASOC sought to elaborate upon existing causes of action; it is the extent of that elaboration that undergird the objections to the Application.

19    It is appropriate, at this juncture, to set out the terms of the proposed amendments advanced in the FASOC. They have been drafted in the following terms:

147A.    Had MMB:

(a)    complied with its obligations under clauses 2.2, 2.6 and 10 the MSI Sale Agreement pleaded in paragraph 21;

(b)    complied with its obligations under the implied obligation to act with fidelity to the bargain, pleaded in paragraph 138;

(c)    not induced the Receivers’ and Sellers’ breaches of the MSI Sale Agreement;

(d)    not contravened section 21 of the ACL; and

(e)    not participated in the Receivers contravention of section 21 of the ACL,

then:

(f)    the parties to the MSI Sale Agreement would have used reasonable endeavours to:

(i)    ensure satisfaction of the Finance Condition; and

(ii)    obtain the consent of Bradesco;

(g)    the conditions precedent would have been satisfied by the parties or alternatively waived by MSI;

(h)    Trafigura would have financed MSI to complete the MSI Sale Agreement on the following principal terms:

(i)    US$25million loan for a term of 36 months at an interest rate no greater than the London Inter-Bank Offered Rate + 5%;

(ii)    US$25.3 million by way of call option premia for concentrate to be delivered upon the Santa Rita Mine being returned to production;

Particulars

Call options at USD $14,000 per Mt and premia on the following basis (MSI.001.041.5044):

(i)    alternatively, MSI would have obtained finance sufficient to complete the MSI Sale Agreement from any one or more of the following:

(i)    Trafigura, up to US$25 million on the same terms as above with a mix of loan and options;

(ii)    Maple Rock, up to US$10 million on substantially the same terms as its Term Sheet (MSI.001.008.2157);

(iii)    White Energy/Brian Flannery, up to US$40 million on substantially the same terms as the Term Sheet (MSI.001.041.5015); and

(j)    the parties would have completed the MSI Sale Agreement and MSI would have become the owner of the Assets.

147B.    Further, following completion of the MSI Sale Agreement, MSI would either itself have, or caused MMB to:

(a)    enter into an offtake agreement with Trafigura for 100% of the production of the Santa Rita Mine for a term of 36 months on substantially the same terms as ‘Trafigura’s Indicative Terms for Ni concentrates offtake’ (MSI.001.037.8222) which Mr Economou sent to Mr Milbourne, Mr Mundim and Mr Navarro on 10 February 2017;

(b)    raise further capital of between about US$90 million and US$130 million to fund the return to operations of the Santa Rita Mine:

(i)    in the amount of up to not less US$40 million, from the sale in 2018 and by no later than February 2019, of movable assets and equipment owned by MMB, the subject of a valuation report by Mynarski, obtained by MMB in or about October 2017 (MSI.001.032.9558), but withheld by MMB and the Receivers from MSI and U&M Mining (ATN.100.003.5244) despite the requests pleaded in paragraphs 112 and 113;

(ii)    in the amount of not less than US$40 million, from the sale in 2018 and by no later than February 2019, of excess land owned by , the subject of a valuation report by Mynarski, obtained by MMB in or about October 2017 (MSI.001.032.9327);

(iii)    in the amount of not less US$10 million, from an advance on the sale of the first cargo shipment of 1,000 Mt of concentrate in or about late 2018 or early 2019;

(iv)    to the extent necessary, a working capital facility of up to US$40 million from Trafigura on substantially the same terms as the facility made available to MMB in 2018 and 2019;

(v)    realising receivable cash from Votorantim of approximately US$4 million and PIS/COFINS (federal tax recoveries) of approximately USD $2.3 million, as MMB did from December 2018 to December 2019;

(c)    retain management and technical personnel to convert mining operations to contract mining with U&M Mineração S.A. and/or Fagundes Constucao Mineração S.A., with the latter of which MMB has contracted the mining operations at the Santa Rita mine;

(d)    recommence open cut mining at the Santa Rita Mine to produce and sell concentrate:

(i)    between (at the latest) July 2019 and September 2019, about 1,000 Mt per month; and

(ii)    from October 2019 to June 2022, about 1,200 Mt per month, and continue mining operations at the Santa Rita Mine;

(e)    in the alternative to (d):

(i)    between (at the latest) July 2019 and September 2019, about 1,000 Mt per month; and

(ii)    from October 2019 to June 2022, about 1,200 Mt per month,

and continue mining operations at the Santa Rita Mine;

(f)    as soon as cashflow permitted, undertake drilling and other geotechnical investigations to explore the feasibility of underground mining, to improve mining productivity, and further to define the resource;

(g)    receive income and generated profits from the sale of concentrate pleaded in (d) or alternatively (e) above.

147C.    Further:

(a)    from recommencing mining operations at the Santa Rita Mine, there would have been a market for the sale and purchase of the Assets; and

(b)    MSI would have offered and completed a sale of the Assets:

(i)    by 31 December 2021; or

(ii)    alternatively 31 December 2023.

(Emphasis in original).

20    In a vacuum, paragraphs [147A] to [147C] posit a chain reaction. Specifically, it is said that if Atlantic Nickel did not engage in the conduct of which MSI complains, then the events defined by subparagraphs (f) to (j) of paragraph [147A] would have come to pass (including, ultimately, the completion of the Sale Agreement and the transfer of ownership of the Assets to MSI). If the Sale Agreement was so completed, then MSI (itself or through Atlantic Nickel) would have done those acts identified in paragraphs [147B] (including, relevantly, “recommenc[ing] open cut mining at [the Mine] to produce and sell concentrate”). If mining operations recommenced at the Mine, then there would have been a valuable market for the sale of the Assets, in which MSI would have offered and sold the Assets (FASOC [147C]). In other words, but for Atlantic Nickel’s conduct, MSI would have completed the Sale Agreement, acquired ownership of the Assets (and the Mine), restored the operability of the Mine and, ultimately, sold the Assets.

21    The FASOC also seeks to amend the drafting of paragraph [148] of the ASOC and introduce a further paragraph [148A]. The amendments proposed are in the following terms:

148.    The value of the opportunity lost by MSI, referred to in paragraphs 147 to 147C or 147A and 147C, amounts to approximately US$745m, in that the Assets were and are worth approximately US$795m as evidenced by the following matters:

(a)    In November 2017, the Santa Rita Nickel Mine:

(i)    was one of the largest open pit nickel sulphide mines in the world, also hosting deposits of copper and cobalt sulphides:

(ii)    was a fully permitted, formerly producing nickel mine which was ready to be re-started;

(iii)    offered additional global supply for Class I nickel products, which were in global demand;

(iv)    had benefited from US$1 billion in prior investment; and

(v)    had an estimated nickel production capacity of 6.5 million tonnes per annum.

(b)    In October 2017, Trafigura:

(i)    had completed technical due diligence in connection with its proposed financing of MSI’s acquisition of the Assets under the MSI Asset Sale Agreement; and

(ii)    informed MSI, the Receivers and the Sellers, by its letter dated 23 October 2017, as was the fact, that it had strong interest and intention to finance MSI’s acquisition of the Assets in a sum up to US$50 million.

(c)    At or shortly after completion of the Appian Sale Agreement, Trafigura entered into the following agreements with MMB:

(i)    a three-year offtake contract for the acquisition by Trafigura of a portion of the production from the Santa Rita mine; and

(ii)    an agreement for the provision by Trafigura of finance of US$40.8m for the operations of the Santa Rita mine.

(d)    Shortly after completion of the Appian Sale Agreement, MMB recommenced mining operations.

(e)    On 13 September 2020, MMB and Appian:

(i)    declared commercial production; and

(ii)    announced that the mine had an after-tax net present value of US$795 million.

Further particulars of MSI’s loss and damage will be supplied after the provision of expert evidence.

148A.    The degree of likelihood that MSI would have exploited the lost opportunities pleaded in paragraphs 147 to 147C, is as follows:

(a)    to become the owner of the Assets, about 95%:

(b)    to recommence operations at and generate income from the Santa Rita Mine, about 95%;

(c)    to sell the Assets, about 95%.

(Emphasis in original).

22    It is appropriate to note that the valuation of the lost opportunity is unchanged in the FASOC.

The catalyst for the FASOC

23    As has been briefly alluded to, the catalyst for the making of the Application appears to lie in certain correspondence sent by the solicitors for Atlantic Nickel in the closing weeks of 2024. Therein, it is said by Mr Stewart KC for MSI, certain complaints were made as to the case that is pleaded in paragraphs [147] – [148] of the ASOC. That is, it may be added, understandable.

24    To adopt the language of the submissions of Mr Stewart KC, “[t]he proposed amendments add four paragraphs which further outline the nature of the valuable opportunity of which MSI was deprived” and, thereby, ostensibly seek to remedy the deficiencies defined by Atlantic Nickel. Conversely, it is said by Mr Hickey KC for Atlantic Nickel that the FASOC (a) impermissibly introduces a new opportunity (or opportunities) that is time-barred and, in any event, does not arise out of the same or substantially the same facts as the existing claim for relief; (b) is likely to cause prejudice, embarrassment or delay; and (c) does not plead the necessary material facts to give Atlantic Nickel adequate notice of MSI’s alleged causation hypothesis.

Relevant principles

Amendment of pleadings

25    The principles that bear upon an application for leave to amend a pleading are well-known: see, eg, Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175; Tamaya Resources Ltd (in liq) v Deloitte Touche Tohmatsu (A Firm) (2016) 332 ALR 199. It is not doubted that the Court’s power under r 16.53 of the Rules is broad and has the distinctly remedial objective of ensuring that any defect(s) in the relevant pleading is cured and that the “real issues” between the parties are properly agitated. Though the power is discretionary, leave is often granted unless the proposed amendment is futile, such that the issue sought to be added is unlikely to succeed, the amendment is likely to be struck out or would cause substantial prejudice or injustice to the opposing party in a way that cannot be compensated by costs: Caason Investments Pty Ltd v Cao (2015) 236 FCR 322, 326 – 327 [19] – [21] (Caason); see, generally, Chadwick v New South Wales (Amendment Application) [2022] FCA 438 [16].

Pleading principles

26    There was no real dispute between the parties as to the principles that govern the pleading of claims for damages consequent upon the loss of a commercial opportunity. They were set out in paragraphs [13] to [15] of the written submissions filed by MSI. As Atlantic Nickel did not seek to contradict those principles, they can be set out in full as follows:

13.    The functions of pleadings are to state the material facts with sufficient clarity, to define the issues for trial, and to inform the other party of the case to be met. A plaintiff must plead all material facts to constitute the cause of action, including any counterfactual on which that plaintiff relies to establish the requisite causal link between identified loss or damage and the cause of action (Berry v CCL Secure Pty Ltd 271 CLR 151; [2020] HCA 27 (Gageler and Edelman JJ) at [72]). In so doing, it is necessary (Graham & Linda Huddy Nominees Pty Ltd v Byrne [2016] QSC 221 (Jackson J) at [50]-[51]):

(a)    to plead that the loss suffered is a loss of a valuable commercial opportunity, identifying the opportunity with some particularity;

(b)    to plead what the plaintiff would have done, where what the plaintiff would have done if the defendant had not been in breach of duty is a necessary causal condition to deciding factual causation;

(c)    to plead the percentage or proportion of the opportunity that was lost (This requirement is arguably peculiar to the Uniform Civil Procedure Rules 1999 (Qld), which were the applicable rules in Graham & Linda Huddy Nominees Pty Ltd v Byrne);

(d)    where the lost opportunity pleaded is 100%, it is to be expected that the plaintiff will allege with some particularity the facts by which that certain outcome would have been achieve.

14.    There is a distinction between the fact of loss, and the value of loss. A claim for loss of an opportunity represents a claim for the value of an opportunity to receive an expected benefit; it is not a claim for the value of the expected benefit itself. The opportunity to receive an expected benefit is the probability that the benefit would accrue in the manner expected (Lloyd v Belconnen Lakeview Pty Ltd [2019] FCA 2177 at [345], [347] (Lee J)).

15.    Finally, when approaching pleadings in the context of proceedings that are case managed, the significance and degree of any deficiencies in a pleaded counterfactual may be ameliorated to some extent where orders are made for the delivery of lay and expert evidence, which identifies the evidence by which the parties intend to prove their pleaded cases and further define the issues (Sanrus Pty Ltd v Monto Coal 2 Pty Ltd (No 7) [2019] QSC 241 (Sanrus) at [24]-[25], [28] – [30]).

(Footnotes included).

27    As Mr Hickey KC very properly drew to my attention in the course of the hearing, the logic of Jackson J in Graham & Linda Huddy Nominees Pty Ltd v Byrne [2016] QSC 221 (Graham & Linda Huddy Nominees) has not been wholly accepted in this Court. In that case, it was said:

[49]    Given that so many cases of a commercial character are likely to fall within the scope of the changes in principle brought about by Sellars as to the relevant type of damage, proof of causation and measure of loss discussed above, it may be of assistance to articulate some relevant propositions.

[50]    First, it is necessary for a plaintiff who alleges loss of a valuable commercial opportunity to plead that the loss it has suffered is a loss of a valuable commercial opportunity, identifying the opportunity with some particularity. Second, it is also necessary that the plaintiff pleads what it would have done, where what the plaintiff would have done if the defendant had not been in breach of duty is a necessary causal condition to deciding factual causation. Third, it is necessary for a plaintiff who alleges such a loss to plead the percentage or proportion of the opportunity that was lost, in assessing value on the possibilities, in order to plead the amount of the damages claimed, as is specifically required. Fourth, where a plaintiff alleges a loss of a 100 per cent possibility or the certainty that they would have obtained the hoped for or expected benefit under a transaction which did not occur, it is to be expected that the plaintiff will allege with some particularity the facts by which that certain outcome would have been achieved.

[51]    There are two additional points. In a number of recent cases, courts have considered the extent of the proof and pleading required by way of causation and loss where a plaintiff alleges that as a result of the defendant’s breach of contract, negligence or misleading conduct the plaintiff would not have entered into the actual transaction that was entered into. Where the plaintiff alleges that they would have entered into no transaction on the one hand, or a different transaction on the other hand, the pleading should clearly allege the counterfactual scenario. In a similar vein, in my view, where a plaintiff alleges loss of a valuable commercial opportunity, the plaintiff should in most cases also allege the extent of the loss it says it suffered on the possibilities. It is not sufficient for a plaintiff simply to allege a 100 per cent possibility of obtaining the hoped for or expected benefit, leaving it open to contend that the issue to be decided by the court is the actual degree of likelihood anywhere between 100 per cent and 1 per cent. To require a plaintiff to formulate its case with all reasonable precision does not detract from the power of the court to grant relief generally other than that specified in the pleadings, subject to the application of rules of procedural fairness.

28    In Lantrak Holdings Pty Ltd v Yammine [2023] FCAFC 156 (Lantrak), both Lee and Jackman JJ expressed reservations as to the strictness of that reasoning. At [17], Lee J said:

[17]    As I explained in Lloyd v Belconnen Lakeview Pty Ltd [2019] FCA 2177; (2019) 142 ACSR 445 (at 533 [350]), it is necessary in a loss of opportunity case to specify the relevant opportunity, the material facts relied upon, and the amount of damages claimed. Usually, and ideally, this is done by a proper pleading of the type identified by Jackson J in Graham & Linda Huddy Nominees Pty Ltd v Byrne [2016] QSC 221 (at [50]–[51]), but at the very least, it is necessary to apprise the party meeting a loss of opportunity case of the case being run at the commencement of the case and the material facts relied upon in a way sufficient to provide procedural fairness. Not only was this not done, but given the pleading and written opening, it was not attempted and, unsurprisingly in these circumstances, no direct evidence was adduced by the Yammine Parties as to these matters.

29    And, at [289], Jackman J observed:

[289]    In my respectful view, the reasoning of Jackson J in Graham & Linda Huddy Nominees Pty Ltd v Byrne, to which I have referred above, represents a counsel of perfection, and would not usually need to be followed to the letter in order to ensure procedural fairness. In the typical case, procedural fairness is met by compliance in the pleading with the first two of Jackson J’s four requirements, and the other elements of a case based on a loss of a valuable commercial opportunity can then be set out and amplified in the claimant’s opening, evidence and closing submissions. …

30    For present purposes, I agree with the observations of Lee and Jackman JJ in Lantrak. On that basis, in this Court, it is sufficient in pleading a case of a lost valuable commercial opportunity, for the plaintiff to plead that the loss that it has suffered is of a valuable commercial opportunity and identifying the opportunity with some particularity. Necessarily, it follows that the plaintiff must also plead “what it would have done, where what the plaintiff would have done if the defendant had not been in breach of duty is a necessary casual condition to deciding factual causation”: Graham & Linda Huddy Nominees [50]. Although it might be useful for a plaintiff to provide an indication of the degree of likelihood of the relevant steps being pursued to fruition, that is, necessarily, difficult to prognosticate to any degree of certainty in a pleading. In other words, it could amount to no more than an educated guess.

Should the amendments proposed by the FASOC be allowed?

Preliminary: The nature of the proposed amendments in the context of the ASOC

31    It is undoubted that the ASOC pleads a case that MSI suffered a loss of a valuable commercial opportunity. It is also undoubted that the pleading is not a model of clarity in relation to the precise nature of the “opportunity” that was lost. To adopt the language of paragraphs [147] – [148] of the ASOC, it is said that (a) MSI “suffered loss and damage”; (b) that loss and damage comprised the “loss of the opportunity to complete the [Sale Agreement] and become the owner of the Assets”; and (c) the “value” of the opportunity lost was directly referable to the after-tax net present value of the Mine as at 13 September 2020 (therefore accounting for the manner in which the Assets were dealt with following their sale to Appian in July 2018: ASOC [147(B)]). By pleading that it had been deprived of ownership of a mine that had (a) recommenced mining operation in or about 2018 (ASOC [148(d)]); and (b) declared commercial production, and was valued at US$795m, on 13 September 2020 (ASOC [148(e)]), the nub of the case advanced by MSI appears to be that it had ultimately lost the opportunity to put the Mine into that very state.

32    In that sense, the ASOC appears to plead that MSI suffered loss because Atlantic Nickel, by its conduct, deprived it of the opportunity to acquire ownership of the Assets in or about November 2017 (the relevant lost opportunity) which is worth US$795m because, if borne out, MSI would have operated and developed the Mine for a period of approximately three years from that date.

33    This temporal division in the ASOC is important and should be kept steadily in mind. On one hand, the opportunity said to have been lost by MSI is defined, necessarily, by events occurring, ex hypothesi, prior to the completion of the Sale Agreement (in or about November 2017). On the other hand, the value of the opportunity so lost is largely defined, as per paragraphs [148(c)] to [148(e)] of the ASOC, by events occurring after the completion of the Sale Agreement.

34    The FASOC makes allegations which, perhaps most controversially, enlarge the latter of those timeframes (FASOC [147B] – [147C]). In this respect, they are not simply elaborations on the precise loss pleaded, though they expand upon the same type of loss already claimed. That is, in some respects, the proposed amendments rely upon the “loss” pleaded in paragraph [147] of the ASOC, but then seek to particularise the extent to which it caused detriment to the interests of MSI after 2017 (i.e., by identifying the full extent of the harm said to flow from the alleged lost opportunity, such as the inability of MSI to ultimately sell the Assets: see FASOC [147C]).

35    Paragraph [147A] comprises an elaboration of the existing loss of opportunity case. When read rationally, there is nothing in it which would cause confusion or uncertainty as to the case being advanced. It is simply a further particularisation of the existing allegation that, had Atlantic Nickel not engaged in the conduct alleged, MSI would have completed the Sale Agreement and acquired the Assets. That is, paragraph [147A] identifies how the counterfactual to the lost opportunity that is pleaded by paragraph [147] of the ASOC would have, on MSI’s submission, come to pass (note Jackson J’s fourth proposition in Graham & Linda Huddy Nominees [50]).

36    It is obvious that caution has been sewn throughout the drafting of paragraph [147A], such as its identification that alternative financiers may have been required if MSI’s preferred financier – Trafigura Pte Ltd (Trafigura) – ultimately proved unwilling to finance MSI (to complete the Sale Agreement). There is nothing startling or controversial about that. Instead, it is merely a consequence of an attempt to identify, with some particularity, the steps that could have been taken by MSI, but did not, as a result of the alleged wrongful conduct of Atlantic Nickel.

37    Indeed, where a party has been deprived of a commercial opportunity, and is then required to plead their associated loss or damage, there is no difficulty in alleging a range of alternative steps to some degree. After all, the aggrieved party is necessarily put in the position of having to hypothesise what would have occurred but for the wrongful conduct. In doing so, the path to the alleged loss needs to be generally articulated, but not necessarily precisely defined. The present circumstances offer a good example. MSI required finance to acquire the Assets: see, eg, Mining Standards (No 2) [17]. Trafigura, having expressed a “strong interest and intention to finance MSI’s acquisition of the Assets in October 2017” (at least per the ASOC [148(b)(ii)]) was the most likely participant. However, it is possible that alternative financiers might have been found. MSI was, at least on its case, prevented from pursuing the opportunity to acquire such finance and, thus, the question of whether Trafigura would have funded the acquisition was not tested. In these circumstances, it is well within the bounds of realistic outcomes, at least hypothetically, that an alternative financier could have been found. Whether MSI will be able to establish that is a matter of evidence for the trial, but it is, at this stage, entitled to make an alternative plea that it would have obtained finance sufficient to complete the Sale Agreement from Trafigura or, if it was not prepared to fund such venture, an alternative financier. At trial, the Court is required to assess the likelihood of these matters eventuating.

38    Paragraph [147B] is slightly different. It alleges that, subsequent to the completion of the Sale Agreement, certain steps would have been taken by MSI (directly or through Atlantic Nickel) to return the Mine to operation (such as the raising of capital and the acquisition of expertise: FASOC [147B(b)] and [147B(c)]) which would, in turn, generate income and profit (FASOC [147B(g)]). This bears homogeny with certain subparagraphs of paragraph [148] of the ASOC, which, inter alia, plead to the operation of the Mine (ASOC [148(d)]) as well as its productivity in 2020 (ASOC [148(e)]). Of course, that paragraph was expressly directed to evidencing the “value” of the Assets; however, as noted, the quantification of the claimed lost opportunity was asserted as being referable to the value of the Mine after it had recommenced mining operations and commercial production. In this sense, paragraph [147B] of the FASOC can be understood as more fulsomely articulating how the lost opportunity that is explicitly pleaded by paragraph [147] meets the valuation ascribed to it by paragraph [148] (i.e., by bearing out the manner in which MSI would have managed and developed the Mine following its acquisition in 2017).

39    Paragraph [147C] is slightly different again. It alleges that MSI would have sold the Assets by 31 December 2021 or 31 December 2023 (FASOC [147C(b)]). In so doing, it goes beyond the precise loss pleaded in the ASOC and, in effect, extends the date for valuing the lost opportunity to the end of 2021 or 2023. As discussed below, it is this lack of direct referability of paragraph [147C] to the ASOC that appears to have caused Atlantic Nickel some degree of consternation.

40    More specifically, and to adopt the language of its written outline, Atlantic Nickel asserts that MSI should not be granted leave to amend the ASOC in the form of the FASOC because:

(a)    the amendments have the effect of introducing a new alleged lost opportunity; namely, the opportunity to subsequently sell MSI’s interest in MMB [Atlantic Nickel] after acquiring the shares. They also have the effect of introducing a new claim for relief, or a new foundation in law for a claim for relief, for which the limitation period has expired, in circumstances where the new case does not arise out of the same facts or substantially the same facts;

(b)    in their proposed form, the allegations are likely to cause prejudice, embarrassment and delay in the proceeding, and they fail to plead the causation counterfactual with the necessary particularity.

The first complaint: The FASOC introduces a new cause of action that is time-barred

41    It was said by Mr Hickey KC that (a) paragraphs [147C] and [148] of the FASOC, when read together, appear to plead that MSI had been deprived of the “opportunity to subsequently sell the Assets after acquiring ownership”; (b) that was “a new and different opportunity from the opportunity currently pleaded in [147]”; and (c) that “new” opportunity introduced a new cause of action that was time-barred and, in any event, comprised “a new claim for relief, or a new foundation in law for a claim for relief” that was “not merely a particularisation of the existing loss of opportunity case” and did “not arise out of the same or substantially the same facts as the existing claim” (in this latter respect, see r 16.53(2) of the Rules). For the reasons below, although there is some prima facie force in that submission, it should ultimately be dismissed.

42    The first complaint is largely concerned with the drafting of paragraph [147C] of the FASOC. In substance, that paragraph does no more than identify the extent of the damage that is said to have been caused by Atlantic Nickel’s allegedly wrongful conduct. To be clear, the underlying causes of action remain the same. The parties in respect of which the conduct occurred remain the same. The legal rights and obligations in respect of which the conduct occurred remain the same. The alleged consequences of the conduct, being the loss of the opportunity to acquire the Assets, remain the same, and the nature of the resulting damage, being the loss of the value of the Mine (after it had recommenced mining operations and commercial production), remains the same. All that differs is the particularisation of the extent of the damage arising from those defined consequences. As presently pleaded, the claim identifies the relevant loss and damage as the loss of the value of an opportunity that is to be quantified with regard to the circumstances of the Mine, the steps taken to recommence its mining operations, and its reaching commercial production in late 2020 (ASOC [148(a)], [148(d)] and [148(e)]). At its core, the new pleading advances a claim premised upon the same lost opportunity, the quantification of which relies on those matters cited above and a continuation of the Mine’s operations for a period stretching beyond September 2020. In that sense, it builds upon that which has already been alleged.

43    This is not a case where the amendments sought to be made allege a different contractual or statutory obligation or tortious duty, nor does it allege a new or different breach(es) or wrongful conduct, causative of damage. Nor does it seek to change the allegations as to the consequences of the loss, to the extent that it is alleged that MSI was prevented from completing the Sale Agreement and acquiring the Assets (and, in turn, a mine that would become operational). Whilst the ASOC claims that those consequences culminated in the deprivation of the value of the Mine some three years after its theoretical acquisition in 2017, the FASOC seeks to broaden the claim to accommodate certain events that transpired at a later date. At its core, paragraph [147C] does no more than broaden the valuation of the opportunity said to have been lost by MSI to account for certain events that would allegedly have come to pass by late 2021 or 2023.

44    In that sense, whilst the causation counterfactual set out in paragraph [147C] (but for Atlantic Nickel’s conduct, MSI would have completed the Sale Agreement, acquired ownership of the Assets, developed and operated the Mine and sold the Assets by December 2021 or December 2023) is one which is, necessarily, more tenuous than that defined by the ASOC, it nevertheless is derivative of the same lost opportunity identified in that pleading. As has been mentioned, the ASOC raises, as a material fact, the operation of the Mine following the putative date of its acquisition by MSI and it being brought into commercial operation. In this respect, the FASOC offers little in the way of change to the general facts which are already raised by the pleading.

45    On the above analysis, no new cause of action is raised by the FASOC. In reaching this view, I have relied upon the careful and thoughtful analysis undertaken by Brown J of a similar issue in McQueen v Mount Isa Mines Limited (2018) 3 Qd R 1, 25 – 27 [63] – [73] (see also Mt Isa Mines Limited v CMA Assets Pty Ltd [2016] QSC 260 [20] – [30], [38]; Hyacinth Developments Pty Ltd v Scenic Rim Regional Council [2018] QSC 230 [42] – [46]).

46    This conclusion, it should be noted, appears somewhat at odds with the language of paragraph [148A] of the FASOC, which alleges “MSI would have exploited the lost opportunities pleaded in paragraphs 147 to 147C” (emphasis added). However, and as acknowledged by Mr Stewart KC, that language is “a mistake. It shouldn’t be the plural, it should simply be “opportunity”.” This concession adequately disposes of any suggestion that the FASOC, by paragraph [148A], sought to allege a number of unidentified “opportunities” had been lost. Any pleading that is filed and served should reflect the proposed correction to the FASOC’s infelicitous language.

47    To the extent that the FASOC could be said to introduce any new cause of action (or claim for relief), it is nigh impossible, for the reasons given at [42] supra, to support the submission that it did not arise out of “substantially the same” facts as pleaded by the ASOC (as that language has been understood: see, eg, Clasul Pty Ltd v Commonwealth of Australia [2014] FCA 1133 [41] – [51]; Clurname Pty Ltd v Mcgraw-hill Financial, Inc [2017] FCA 1319 [123] – [124]).

48    It follows that the first complaint made by Atlantic Nickel should be rejected. As such, there is no need to determine whether the proposed amendments ought only to be allowed to operate from the date of any amendment.

The second complaint: The FASOC is likely to cause “prejudice, embarrassment or delay”

49    All or part of a pleading will be liable to be struck out if it is, inter alia, likely to cause prejudice, embarrassment or delay in the proceeding (r 16.21(1) of the Rules; see, eg, KTC v David [2022] FCAFC 60 [120] (KTC)). On the view of Atlantic Nickel, the FASOC is one such pleading; this futility, it was said, was sufficient to dissuade the Court from granting leave to amend: see Caason 327 [21]. Several examples were cited by Mr Hickey KC in support of such position.

50    First, it was said that paragraph [148A] of the FASOC was ambiguous given the reference to the term “opportunities”. That ambiguity has been addressed above (see supra [46]).

51    Second, it was noted that paragraph [147A(i)] alleges that MSI may alternatively have obtained finance (sufficient to complete the Sale Agreement) from any one or more of certain identified financiers. In this context, Atlantic Nickel complains that there is no allegation that it precluded MSI from obtaining finance from financiers apart from Trafigura, such that “it is unclear how [147A(i)] represents a different outcome in a counterfactual scenario where [Atlantic Nickel] had not been in breach”. That complaint should be rejected. MSI’s case is that if the alleged wrongful conduct not occurred, then it could have, inter alia, obtained finance from a variety of sources so that it could complete the Sale Agreement. That is all that needs to be pleaded in respect of this aspect of causation in relation to the alleged lost opportunity. It is the pleading of but one part of a relevant counterfactual. It is also sufficiently clear that the allegation being made is that, as a consequence of Atlantic Nickel’s conduct, those identified sources of finance were not open to MSI. To the extent there is any difficulty with that allegation, then further particulars could reasonably be requested and provided.

52    Third, it was said that there is some inconsistency between the allegations that (a) Trafigura would have financed the completion of the Sale Agreement on terms which included “call option premia for concentrate to be delivered upon [the Mine] being returned to production” ([147A(h)]); and (b) MSI (itself or through Atlantic Nickel) would have, following completion of the Sale Agreement, entered into an offtake agreement with Trafigura for 100% of the production of the Mine for a term of 36 months ([147B(a)]), and raised further capital from an advance on the sale of the first cargo shipment of the Mine’s product in late 2018 or early 2019 ([147B(b)(iii)]). In the first instance, the second and third allegations are said to be inconsistent because it is not clear how finance could be raised using the first shipment from the Mine if it was already the subject of an offtake agreement: “MSI could not have entered into an advance sale of the first shipment when it had already committed 100% of production to Trafigura”.

53    That complaint tends to assume a number of factors which are not established on the material. In particular, the terms of any alleged offtake agreement between MSI and Trafigura are not before the Court. As such, it is not possible to ascertain whether there is any inconsistency. It should be stressed that that may be a matter for a strike out application (under r 16.21 of the Rules) if the pleading remains in the form that it is and if evidence is subsequently produced of the alleged inconsistency. However, that cannot be resolved at this stage of the proceeding.

54    It can be accepted there is some prima facie difficulty as between the allegations in paragraphs [147A(h)] and [147B(a)], where reference is made to (a) the financing of the acquisition of the Mine; and (b) the ongoing finance arrangements for its recommencement and operation. It appears, however, to be sufficiently clear that what is being alleged is that the financing of the acquisition and ongoing operation expenses would be supported by the collateral of the produce from the Mine’s operation. It is not possible at this stage to ascertain whether Trafigura would provide additional funding for the Mine’s ongoing operation in reliance on its original off-take agreement; whether that is so is a question for the evidence. It would appear that the answer to that issue could be dependent upon which of the financing alternatives referred to in paragraphs [147A(h)] and [147A(i)] is established. If it is the latter, there may well be greater scope for the off-take agreement to support the ongoing financing requirements than if it were the former.

55    Though the FASOC in this respect is consistent with its overall poor quality, it does not reach the level of being unintelligible, such that leave should be refused. As indicated, the meaning is clear enough. Again, in cases of this nature, where the applicant is required to establish what would have happened had the alleged wrongful conduct not occurred, some degree of latitude as to the likely potential outcomes is ultimately permissible.

56    Fourth, it was said that paragraph [147B(f)] is “impermissibly vague”. Such criticism is not, necessarily, unwarranted. The allegation is cast in general terms and amounts to the assertion that, as soon as business circumstances permitted, investigations would be made to explore the greater utilisation of the Mine. However, in the context of the articulation of the hypothetical scenario which MSI claims it would have encountered but for the alleged conduct of Atlantic Nickel, that particularisation is sufficient. It is undoubted that clarification or elaboration upon this point must occur by way of statements from witnesses and/or expert reports. However, in the context of the claim as articulated, it is sufficiently clear to enable Atlantic Nickel to know the case that it has to meet. To the extent it is unclear, it will necessarily become more apparent when MSI’s evidence is filed. Alternatively, the allegation could be clarified by particulars.

57    Fifth, it was said that paragraph [147C] is likely to cause delay because of the forensic difficulty that Atlantic Nickel will encounter in attempting to prepare responsive evidence to such a broad allegation. Again, there is some substance in the complaint. As pleaded, the allegation may be that the sale of the assets could have occurred at any time up until 31 December 2023. In the course of submissions, Mr Stewart KC appeared to assert that the pleading meant that those two dates, being 31 December 2021 or 2023, were the dates by which the putative sale could have taken place. Any lack of clarity in the FASOC is thereby dispelled, and it would be appropriate for this loose language to be clarified in the pleading that is filed and served. No doubt, any lack of clarity will be dispelled by the delivery of expert reports in due course.

The third complaint: The FASOC fails to apprise Atlantic Nickel of the case it has to meet

58    It is undoubted that any pleading must, pursuant to r 16.02(1)(d) of the Rules, state material facts that are necessary to give the opposing party fair notice of the case to be made against them at trial. It is also a requirement that the facts be pleaded with a degree of specificity that is sufficient to convey the case that the party has to meet: KTC [114], citing Allstate Life Insurance Co v Australia and New Zealand Banking Group Ltd (1994) 217 ALR 226.

59    Atlantic Nickel alleges that the FASOC does not meet those criteria. In particular, it is said that it “does not contain the necessary material facts to give [Atlantic Nickel] adequate notice of MSI’s alleged causation hypothesis”. For example, Atlantic Nickel first complains that paragraph [147A(f)] “does not plead the ‘reasonable endeavours’ MSI alleges the parties to [the Sale Agreement] would have used” to satisfy the Conditions (emphasis in original).

60    It is not unfair to say that such concern flows from a rather obtuse reading of the pleading. As the foregoing discussion makes clear, the nature of the case advanced by MSI is articulated with sufficient clarity. To the extent any uncertainty exists, it can be resolved by the request of appropriate particulars. Further, in the context of a long pleading detailing the identified alleged defalcations by the parties to the Sale Agreement, the reasonable endeavours required of the parties to allow MSI to complete the Sale Agreement are, with respect, fairly self-evident.

61    Atlantic Nickel also complains that MSI does not specify the dates upon which the conditions precedent to the Sale Agreement would have been satisfied, nor the date upon which the Sale Agreement would have been finalised. Again, these criticisms go to an adequacy of particulars rather than the adequacy of the material facts alleged. Any concern as to what is encapsulated by the material facts alleged can be remedied by a request for further and better particulars.

62    By paragraphs [23(c)] and [23(d)] of its written outline of submissions, Atlantic Nickel asserts:

(c)    [147B(d)] – This paragraph alleges simply that MSI would have ‘recommence[d] open cut mining at the Santa Rita Mine to produce and sell concentrate’. Paragraph [147B(e)] pleads an alternative timeframe and volume. However, this paragraph is devoid of other material facts such as: on what basis would the decision to recommence mining have been made; why the amount of 1,000 Mt per month (increased to 1,2000 Mt per month) would have been mined; and for how long mining would have been conducted.

(d)    [147B(g)] – The FASOC does not identify the income and profits generated, when that income would have been received, and for how long the income would have been received. Income and profit are also likely to be distinct items in MSI’s counterfactual scenario given the loans and other expenses it is alleged MSI would have incurred prior to production (paragraphs [147A(h)-(i)], [147B(b)(iv)], [147B(c)], [147B(d)-(e)]). This will be particularly relevant if, as is suggested by [148A(b)], MSI is in fact alleging that it lost the opportunity to generate this revenue and income.

63    These complaints are obdurate. At best, they relate to matters of particulars, but are more likely questions of evidence. It must also be appreciated that, in complex litigation of this nature, issues such as the timing of decisions and the like will be the subject of substantial evidence and, to some degree, expert opinion. If, at a later stage, and before the trial occurs, the case is not clarified, Atlantic Nickel has numerous avenues to ventilate any concerns.

64    Atlantic Nickel also raised concern as to “a gap” between (a) the opportunity said to be lost by MSI; and (b) the claimed value of such opportunity. At paragraphs [46] to [49] of the ASOC, MSI alleges that a draft valuation prepared by PPB Advisory in November 2017 – that being contemporaneous with the time at which MSI alleges that the Sale Agreement was breached – was “substantially complete” and “substantially accurate” and valued the Mine, at that time, at US$161m. That valuation, it was said, was inconsistent with the allegation that the opportunity to acquire ownership of the Assets was worth US$795m by September 2020 (being reflective of the after tax net present value of the Mine on 13 September 2020). This inconsistency arises, on Atlantic Nickel’s submission, because the FASOC does not link the actual after tax net present value of the Mine (US$161m) with the price that MSI would have obtained but for the alleged wrongdoing of Atlantic Nickel (US$795m, noting the elaboration in paragraph [147C]).

65    Though it is undoubted that some differential in value is prima facie apparent, it is not without logical explanation. No doubt the increase in the alleged value of the Mine could be caused by many circumstances, including the fluctuation in the price of nickel, being either the spot price or future price. It may also have been caused by an increase in investment in the Mine. It may also have been caused by a reliance upon different valuation methodologies (that, in turn, rely upon different conditions and variables). Overall, there is, with respect, no inconsistency. The allegations as to the value of the Mine are clearly made and are oft explained in expert evidence.

66    It may be added that a perhaps more curious aspect of the FASOC is the absence of any “link” between the value of the lost opportunity (being referable to the value of the Mine in 2020: see FASOC [148]) and the antecedent events pleaded in paragraph [147C] of the FASOC.

67    Atlantic Nickel made the further submission that granting leave to amend at this stage would put it at a disadvantage because of the proximity of the trial. That trial is to occur 10½ months after the date of the hearing. The suggestion that Atlantic Nickel, which appears to be better placed than any other party in relation to the Mine’s attributes at the relevant times, could not arrange a valuation of the Mine at the particular dates, is, with respect, rather unlikely.

Conclusion

68    The Application should be allowed. MSI has leave to amend its pleading in substantially the same form as appears in the Russell Affidavit (subject to the considerations noted above).

Costs

69    The parties chose not to address the question of costs nor did they ask for leave to make further submissions on that question following judgment.

70    In the circumstances, it is appropriate that MSI pay any costs thrown away by reason of the making of the amendments. Whilst the Application needed to be brought and Atlantic Nickel might ordinarily expect to recover its costs, its conduct vis-à-vis the Application needs to be taken into account. Had the Application indicated that MSI would be seeking the costs of it, an order for costs against Atlantic Nickel would certainly have been entertained as a reflection of the nature of a number of the submissions which it advanced. As it was, MSI asked that the parties’ costs of the Application be their costs in the proceedings. That is an appropriate order.

Associate:    

Dated:    15 July 2025

SCHEDULE OF PARTIES