Abebe v Commonwealth

PANORAMIC RESOURCES LIMITED ACN 095 792 288 (ADMINISTRATORS APPOINTED) (RECEIVERS AND MANAGERS APPOINTED) Second Plaintiff

AND: THOMAS BIRCH AND JEREMY NIPPS IN THEIR CAPACITY AS JOINT AND SEVERAL RECEIVERS AND MANAGERS OF CERTAIN PROPERY OF PANORAMIC RESOURCES LIMITED ACN 095 792 288 (ADMINISTRATORS APPOINTED) (RECEIVERS AND MANAGERS APPOINTED) First Defendant

TRAFIGURA PTE LTD (A COMPANY INCORPORATED IN THE REPUBLIC OF SINGAPORE) Second Defendant

order made by: FEUTRILL J DATE OF ORDER: 1 May 2024

1. It be declared that the funds held in the administration accounts for the external administration of the second plaintiff, established and maintained by the first plaintiffs in accordance with section 65-5 of Schedule 2 - Insolvency Practice Schedule (Corporations) of the Corporations Act 2001 (Cth) are not 'Secured Property' within the meaning of that expression in the specific security deed made between the second plaintiff and the second defendant and dated 3 April 2021.
2. There be no orders as to the costs of the proceedings. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Introduction 1 These proceedings concern a contest between the administrators of Panoramic Resources Ltd and the receivers and managers of certain secured property of that company as to whether approximately AUD 20 million held in the company's bank accounts forms part of the secured property under the security agreement by which the receivers were appointed. The contest is to be resolved on the proper construction of the security agreement and largely turns on the meaning of 'Secured Property' as defined in the security agreement. In particular, whether the funds in the bank accounts were 'money … payable or otherwise distributable now or in the future in respect of the Mortgaged Shares, … the Mortgaged Contracts or the Intercompany Loans' within the meaning of that definition (emphasis added). That question boils down to the nature of the nexus between 'money … payable or otherwise distributable' and one or more of the Mortgaged Shares, Mortgaged Contracts or Intercompany Loans that is described by the relational expression 'in respect of'. 2 Under the security agreement Panoramic, as grantor, granted Trafigura Pte Ltd, as secured party, a security interest in property of which Panoramic is the legal and beneficial owner to secure the payment and performance of obligations by Savannah Nickel Mines Pty Ltd which Panoramic had guaranteed. The guarantee was given in an agreement by which Trafigura advanced funds to Savannah as pre-payments for the delivery of nickel concentrate produced from Savannah's mining operations. Savannah is a wholly owned subsidiary of Panoramic. 3 The dispute has arisen because the receivers contend that Panoramic received the money in the bank accounts from an equity raising by which it made offers to the public to acquire securities in Panoramic. The purpose of the equity raising was to finance the mining operations of Savannah. Panoramic intended to use the funds raised for that purpose. The receivers contend that the intention to use the 'money' for that purpose meets the description of 'in respect of' the Intercompany Loans because that term, as defined, relates to loans from Panoramic to Savannah and the funds raised were intended to be lent by Panoramic to Savannah under such a loan agreement. Alternatively, the 'money' was 'in respect of' the Mortgaged Shares or Mortgaged Contracts for the same reason because those terms, as defined, concern issued shares in Savannah or agreements relating thereto. 4 For the reasons that follow, I do not accept the receivers' construction of the security agreement and, in particular, that the expression 'in respect of' has the width that the receivers contend having regard to the purpose, object and context of the security agreement and the text of the applicable provisions. On the proper construction of the security agreement the funds in the bank account do not form part of the 'Secured Property'. A declaration to that effect will be made. There will be no order as to costs in accordance with the parties' agreement to that effect.

Background 5 Panoramic is a company that is listed on the ASX. As already mentioned, Savannah is a wholly-owned subsidiary of Panoramic. Savannah is the owner and operator of a nickel mining operation in the East Kimberley region of Western Australia. Its operation is known as the Savannah mine or Savannah project. PAN Transport Pty Ltd is a wholly-owned subsidiary of Savannah. Trafigura is a company incorporated in and according to the laws of the Republic of Singapore. 6 On or about 3 April 2021 Savannah, as seller, and Trafigura, as buyer, made a sales agreement for the sale and purchase of nickel concentrates (Products) from the Savannah mine (Commercial Contract). Separately, on 3 April 2021 Savannah, as seller, Panoramic and PAN Transport, as guarantors, and Trafigura, as buyer, made an agreement styled 'Prepayment Agreement' (referred to as the Facility Agreement). As explained in more detail later in these reasons, under the terms of the Facility Agreement, Trafigura was to make advances to Savannah that were, in effect, prepayments of the purchase price for Products delivered under the Commercial Contract. Trafigura was entitled to set off against amounts due as payments for Products amounts due from Savannah to Trafigura under the terms of the Facility Agreement. Advances made under the Facility Agreement were to be used solely for the corporate and working capital purposes of Panoramic and its subsidiaries as well as the development and associated costs of the Savannah project. Panoramic and PAN Transport guaranteed the performance of Savannah's obligations under the Facility Agreement. The Facility Agreement was later amended by an agreement dated 27 July 2023. 7 The performance of Savannah's obligations under the Facility Agreement and PAN Transport's obligations as guarantor under that agreement were secured under the terms of a general security deed dated 3 April 2021 made between Savannah and PAN Transport, as grantors of the security interest, and Trafigura, as the secured party (GSD). The performance of Panoramic's obligations as guarantor under the Facility Agreement were secured under the terms of a specific security deed dated 3 April 2021 between Panoramic, as grantor of the security interest, Trafigura, as the secured party (SSD). It is the secured property under the SSD that is the subject of the dispute in these proceedings. 8 Advances were made to Savannah under the terms of the Facility Agreement. As of 11 March 2024, the amount outstanding for advances, interest and other amounts payable was approximately AUD 57 million. 9 On 12 May 2021 Panoramic and its subsidiaries entered into a number of unsecured intercompany loans that are documented in loan agreements. Amongst others, Panoramic and Savannah made a loan agreement pursuant to which Panoramic agreed to make available advances of up to AUD 250 million in aggregate on certain terms and conditions (Panoramic-Savannah loan agreement). The terms and conditions included that Savannah was to make a request for an advance before Panoramic was obliged to make an advance, the facility was 'uncommitted' and Panoramic was under no obligation to provide funding to Savannah in response to a request. Advances were made under that agreement and, as of 11 March 2024, the amount outstanding under that loan was approximately AUD 233.44 million. 10 During the 2023 financial year operations at the Savannah mine were affected by damage to transport infrastructure in the East Kimberley caused by above average rainfall and the failure of the pressure head plate of the concentrate filter press at the Savannah mine. These events had an impact on logistics and production. The loss of production resulted in an estimated decrease in revenue of AUD 20 million and placed 'pressure' on Panoramic's working capital position. 11 On 26 July 2023 Panoramic announced to the ASX a fully underwritten placement of new fully paid ordinary shares in Panoramic to raise AUD 40 million before costs and a share purchase plan for the purchase of additional new fully paid ordinary shares in Panoramic. The placement of new shares was made to sophisticated investors and without issuing a prospectus. New shares issued under the share purchase plan were made through an offer to existing shareholders. A prospectus was issued for the shares to be issued under the share purchase plan. 12 An investor presentation for sophisticated investors and the prospectus were in evidence. The focus of the presentation is the Savannah project. The presentation represents that the funds raised (AUD 40 million) together with existing cash (AUD 14.2 million) would be used for payment of trade creditors (AUD 19.1 million), final invoice adjustment for concentrate sales for the 2023 financial year (AUD 5.1 million), exploration and drilling (AUD 1 million), tailings storage facility (TSF) wall lift (AUD 2.3 million) and working capital and costs of the equity raising (AUD 26.7 million). Similar representations and financial information was included in the prospectus. Any additional amount raised under the share purchase plan was intended to be used to further strengthen the balance sheet of Panoramic. 13 On 26 July 2023 Panoramic also announced to the ASX that amendments had been made to the Facility Agreement and Commercial Contract. The Facility Agreement was amended by an agreement dated 27 July 2023. The amendments were conditional upon Panoramic raising at least AUD 40 million through equity issued by 15 September 2023. Panoramic ultimately raised equity of AUD 44,260,687.75, including AUD 5,922,455.50 under the share purchase plan, through the issue of additional fully paid ordinary shares and other securities. 14 After raising the equity, Panoramic advanced AUD 19 million to Savannah. That sum was advanced in tranches of AUD 13 million on 3 August 2023 and AUD 6 million on 31 October 2023 under the Panoramic-Savannah loan agreement. 15 After accounting for the equity raised, the advances to Savannah and various other transactions in the ordinary course of Panoramic's business, at the time of the administrators' appointment, the balance of Panoramic's bank account was AUD 21,449,247.12. The administrators opine that all pre-appointment cash was received through the equity raising except for an amount of AUD 483,871. 16 Trafigura submits that the purpose of the equity raising was for Panoramic to raise funds that were to be used as working capital for the Savannah project. These funds were intended to be lent to Savannah under the Panoramic-Savannah loan agreement. In substance, Trafigura submits that the intention is inferred from the fact that AUD 19 million was transferred from Panoramic to Savannah shortly after Panoramic received funds from the equity raising and that the only substantive use to which the balance of the funds raised could have been put was to provide additional funding, through the intercompany loans, to Savannah as working capital for continuation of mining production. 17 Based upon the representations made in Panoramic's announcements to the ASX, the investor presentation and the prospectus, I infer that at the time Panoramic announced the equity raising, its board of directors had formed an intention to use the funds raised as represented in those documents. I also infer that the vast majority of working capital requirements were necessary for the Savannah project. However, the evidence, such as it is, does not go so far as to permit an inference to be drawn that the directors had formed an intention to provide a specific amount to Savannah for the working capital for the Savannah project. As to the amounts for trade creditors, adjustment for concentrate sales, TSF wall lift and exploration and drilling expenditure (to the extent that related to the Savannah project), it can be inferred that the board intended to provide those funds to Savannah as these all appear to be costs associated with the Savannah project. 18 Other than a general intention to use the vast majority of the funds raised to finance past and ongoing costs and expenses of the Savannah project, the evidence does not permit an inference to be drawn about the manner in which Panoramic intended to provide those funds to Savannah. It could have done so under terms of the Panoramic-Savannah loan agreement, but equally, the funds could have been provided in exchange for the issue of new shares in the capital of Savannah or the issue of some other form of securities. With the exception of AUD 19 million, there is no evidence of any request by Savannah for funds or agreement between Panoramic and Savannah to provide additional funds under the Panoramic-Savannah loan agreement. 19 As was made evident in the prospectus, the proposed allocation of the equity raising was 'a statement of current intentions as at the date of [the] Prospectus. As with any budget, intervening events and new circumstances have the potential to affect the manner in which the funds are ultimately applied. The Board reserves the right to alter the way in which the funds are applied on this basis.' A statement of intention is not a commitment to use the funds in the way represented. A mere statement of intention is manifestly open to change. 20 The question, therefore, is whether, on the proper construction of the SSD, by a mere statement of Panoramic's intention to use the vast majority of the funds obtained through the equity raising to finance the Savannah project all the funds thereby raised became part of the property secured under the SSD. 21 At the commencement of the administration, the administrators established an administration account for the purposes of Div 65 of Schedule 2 - Insolvency Practice Schedule (Corporations) of the Corporations Act 2001 (Cth). The administrators transferred amounts in the bank accounts operated by Panoramic into the administrators' account. It is the funds in the administrators' account that are the subject of the dispute in these proceedings.

Applicable principles of contractual interpretation 22 It was common ground that the applicable principles of contractual interpretation are set out in Wright v Lemon [2024] WASCA 19 at [529]-[538] (Buss P, Vaughan and Hall JJA agreeing). Relevantly, the principles were there summarised as follows: 529 The proper construction of a commercial contract is to be determined objectively having regard to its text, context and purpose or objects. The provisions of the contract are to be understood objectively by reference to what a reasonable businessperson would have understood them to mean. The hypothetical reasonable businessperson must be placed in the position of the parties. The court considers from that perspective the circumstances surrounding the contract and the commercial purpose or objects sought to be achieved by it. See Electricity Generation Corporation v Woodside Energy Ltd [[2014] HCA 7; (2014) 251 CLR 640 (French CJ, Hayne, Crennan & Kiefel JJ)]; Ecosse Property Holdings Pty Ltd v Gee Dee Nominees Pty Ltd; Rinehart v Hancock Prospecting Pty Ltd; Laundy Hotels (Quarry) Pty Ltd v Dyco Hotels Pty Ltd [[2023] HCA 6; (2023) 97 ALJR 194 [27] (Kiefel CJ, Gageler, Gordon, Gleeson & Jagot JJ)]. 530 In Electricity Generation Corporation [35], French CJ, Hayne, Crennan and Kiefel JJ made these observations in relation to ascertaining what the hypothetical reasonable businessperson would have understood by the terms of a commercial contract: [I]t will require consideration of the language used by the parties, the surrounding circumstances known to them and the commercial purpose or objects to be secured by the contract. Appreciation of the commercial purpose or objects is facilitated by an understanding 'of the genesis of the transaction, the background, the context [and] the market in which the parties are operating'. As Arden LJ observed in Re Golden Key Ltd [[2009] EWCA Civ 636 at [28]], unless a contrary intention is indicated, a court is entitled to approach the task of giving a commercial contract a businesslike interpretation on the assumption 'that the parties … intended to produce a commercial result'. A commercial contract is to be construed so as to avoid it 'making commercial nonsense or working commercial inconvenience'. (footnotes omitted) See also Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd [[2015] HCA 37; (2015) 256 CLR 104 [46] - [47] (French CJ, Nettle & Gordon JJ)]; Simic v New South Wales Land and Housing Corp [[2016] HCA 47; (2016) 260 CLR 85 [78] (Gageler, Nettle & Gordon JJ)]. 531 A commercial contract must be construed as a whole. The words of a clause in the contract are to be given the most appropriate meaning which they can legitimately bear. A court must have regard to all of the provisions of the contract with a view to achieving harmony among them. If more than one construction of a clause is open having regard to the text, context and purpose or objects of the contract as a whole, the court will prefer a construction that will avoid consequences which appear to be capricious, unreasonable, inconvenient or unjust. See Australian Broadcasting Commission v Australasian Performing Right Association Ltd [[1973] HCA 36; (1973) 129 CLR 99, 109 (Gibbs J)]; Zhu v Treasurer of the State of New South Wales [[2004] HCA 56; (2004) 218 CLR 530 [82] (Gleeson CJ, Gummow, Kirby, Callinan & Heydon JJ)]; Electricity Generation Corporation [35]. … 533 Where a word or an expression is defined in a commercial contract the court will give effect to the definition. The proper course is to read the text of the definition into the relevant clause and then to construe the relevant clause having regard to the contract as a whole. Ordinarily, the purpose of a definition in a commercial contract is to attribute the meaning agreed upon by the parties to the relevant word or expression and to avoid unnecessary and lengthy repetition of the text of the definition in the contract. See, generally, Halford v Price [[1960] HCA 38; (1960) 105 CLR 23, 26 - 29 (Dixon CJ).]; Kelly v The Queen [[2004] HCA 12; (2004) 218 CLR 216 [103] (McHugh J)]. 534 The surrounding circumstances known to the parties may be used in construing a commercial contract. However, the subjective intentions of the parties may not be used in construing the contract. See Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [[2004] HCA 52; (2004) 219 CLR 165 [40] (Gleeson CJ, Gummow, Hayne, Callinan & Heydon JJ)]; Victoria v Tatts Group Ltd [[2016] HCA 5; (2016) 90 ALJR 392 [51] (French CJ, Kiefel, Bell, Keane & Gordon JJ)]; Cherry v Steele-Park [[2017] NSWCA 295; (2017) 96 NSWLR 548 [57] - [65] (Gleeson & Leeming JJA)]. 535 The principles that apply in the construction of a contract apply to instruments generally (including deeds), subject to any particular rules of construction which have been developed in relation to a particular kind of provision or instrument. See Australian Broadcasting Commission (109); Total Transport Corporation v Arcadia Petroleum Ltd (The Eurus) [[1998] 1 Lloyds Rep 351, 362 (Staughton LJ)]; Royal Botanic Gardens and Domain Trust v South Sydney City Council [[2002] HCA 5; (2002) 240 CLR 45 [22] - [40] (Gleeson CJ, Gaudron, McHugh, Gummow & Hayne JJ)]. (emphasis in original) 23 To those principles I would add, relevantly, that where a commercial transaction is implemented by several contracts or documents, all of the contracts or documents may be read together for the purpose of ascertaining their proper construction and legal effect, at least where the contracts or documents are executed contemporaneously or within a short period of each other: EDWF Holdings 1 Pty Ltd v EDWF Holdings 2 Pty Ltd [2010] WASCA 78; (2010) 41 WAR 23 at [104] (Buss JA, Owen and Newnes JJA agreeing). Further, when construing a contract in context, as a whole, and consistently, preference is to be given to a construction that gives 'a congruent operation to the various components of the whole': Wilkie v Gordian Runoff Ltd [2005] HCA 17; (2005) 221 CLR 522 at [16] (Gleeson CJ, McHugh, Gummow and Kirby JJ).

Purpose, object, context and transaction as a whole 24 It was common ground between the parties that the purpose, object and context for the interpretation of the SSD was to be found within the four corners of that agreement read together with the other transaction documents executed contemporaneously with it. The suite of transaction documents executed on 3 April 2021 included the Facility Agreement, GSD and SSD.

Facility Agreement 25 The recitals to the Facility Agreement make reference to the Commercial Contract for the sale and purchase of the Products dated on or about the date of the Facility Agreement. Further, subject to the terms of the Facility Agreement, Trafigura agreed to make advance payments to Savannah primarily against deliveries of cargoes of Products. Additionally, that the Facility Agreement was 'supplemental to the Commercial Contract'. 26 Relevantly, there were terms of the Facility Agreement to the following effect (capitalised terms are defined in cl 1.1 (definitions) of the Facility Agreement). (1) Trafigura agreed to prepay to Savannah the purchase price for the Products by making an Initial Advance in an aggregate amount up to USD 30 million and working capital advances (WC Advances) in an aggregate amount up to USD 15 million: cl 2.1, cl 1.1 (definitions). (2) Savannah was to use the advances solely for the corporate and working capital purposes of Panoramic and its subsidiaries as well as the development and associated costs of the Savannah project located in the East Kimberley region of Western Australia: cl 2.2, cl 1.1 (definitions). (3) Trafigura was not obliged to make an advance unless certain conditions were satisfied. Amongst others, a condition was that Trafigura had received the GSD and SSD. Another condition was that, if the advance were made, repayments for two or more Initial Advances or four or more WC Advances would then be outstanding: cl 3.1, cl 3.3, cl 1.1 (definitions). (4) Subject to the terms of the Facility Agreement, Trafigura agreed to make an advance in an amount requested to Savannah: cl 4.1, cl 1.1 (definitions). (5) Savannah agreed to repay the advances together with interest and other amounts due under the Transaction Documents (defined to include the Facility Agreement, GSD and SSD) by making deliveries of Products during delivery periods set out in the Facility Agreement so as to enable Trafigura to deduct the amount due to it under the Transaction Documents from the amount due to Savannah under the Commercial Contract. However, if there were insufficient or no delivery of Products or, in certain circumstances at the election of Savannah, Savannah was to repay the amounts due under the Transaction Documents by payment in cash to Trafigura's nominated account in accordance with the payment schedule, in the case of the Initial Advance, or within 3 months after the advance, in the case of WC Advances: cl 4.4(a), cl 12, cl 1.1 (definitions). (6) In turn, Trafigura's obligation to pay for the Products under the Commercial Contract was to be satisfied and extinguished by deducting (or setting off) the payment due under that Commercial Contract from the repayments due to Trafigura from Savannah under the Facility Agreement: cl 4.4(c), cl 13, cl 1.1 (definitions). (7) Subject to certain terms, the outstanding balance of WC Advances could not exceed USD 15 million and there was a mechanism by which further WC Advances could be used to finance the repayment of earlier WC Advances: cl 2.1(b), cl 4.4(b), cl 1.1 (definitions). (8) Subject to certain terms, interest was payable on the outstanding balance of the advances: cl 5. (9) PAN Transport and Savannah promised not to incur or allow to remain outstanding any Financial Indebtedness other than certain Permitted Financial Indebtedness. The Permitted Financial Indebtedness included that arising under a loan or guarantee made by, relevantly, PAN Transport or Panoramic to Savannah: cl 10.4(c), cl 1.1 (definitions). (10) PAN Transport and Savannah promised not to do any of the following: (a) declare, make or pay any dividend, charge, fee or other distribution (or interest on any unpaid dividend, charge, fee or other distribution) (whether in cash or in kind) on or in respect of its share capital (or any class of its share capital); (b) repay or distribute any dividend or share premium reserve; (c) pay any management, advisory or other fee to or to the order of any of the shareholders of Savannah or PAN Transport; (d) redeem, repurchase, defease, retire or repay any of its share capital or resolve to do so; (e) repay or prepay any principal amount (or capitalised interest) outstanding under any Financial Indebtedness owing to Panoramic or any of its subsidiaries or PAN Transport or any of its subsidiaries; (f) pay any interest, fee or charge accrued or due under any Financial Indebtedness owing to Panoramic or any of its subsidiaries or PAN Transport or any of its subsidiaries; or (g) subscribe for shares issued by Panoramic or any of its subsidiaries or PAN Transport or any of its subsidiaries, unless no Termination Event is continuing and no Termination Event would occur upon the making of any such payment: cl 10.4(g), cl 1.1 (definitions). The circumstances that comprise a 'Termination Event' are described in cl 11.1. These include Panoramic ceasing to be the legal and beneficial owner of 100% of the issued voting capital of Savannah and non-payment of amounts due under a Transaction Document in certain circumstances: cl 11.1(k), cl 11.1(l). (11) Panoramic and PAN Transport irrevocably and unconditionally guaranteed Trafigura punctual performance by Savannah of all of Savannah's obligations under the Transaction Documents. The guarantee included Savannah's obligation to make repayments under the Facility Agreement by delivering Products and (or) payment of any amounts due to Trafigura in cash under the Facility Agreement: cl 8.1(a), cl 8.1(b), cl 1.1 (definitions). (12) If there were a change of control of Panoramic, then subject to certain terms, Trafigura was entitled to cancel the advances and declare the amounts outstanding due and payable after 180 days: cl 6.3, cl 1.1 (definitions). (13) If a Termination Event occurred, then subject to certain terms, Trafigura was entitled to terminate the Commercial Contract, cancel the advances and declare the advances and all other amounts due under the Transaction Documents to be immediately due and payable: cl 11.1(a), cl 11.1(k), cl 11.2, cl 1.1 (definitions). (14) The Facility Agreement was governed by English law: cl 25.1. 27 Broadly, the Facility Agreement makes provision for Trafigura to make an Initial Advance of up to USD 30 million and further advances of up to USD 15 million for working capital. Subject to certain terms, the evident intention of the parties was for Savannah to repay the Initial Advance and any WC Advances together with interest and other payments due by delivery of Products. However, if there were insufficient deliveries of Products or, in certain circumstances Savannah elected to do so, Savannah was to repay the advances in cash to Trafigura's nominated bank account in accordance with a payment schedule, in relation to the Initial Advance, and three months after the relevant advance in relation to WC Advances. 28 The Initial Advance was to be fully repaid within 5 years of the Initial Advance (in accordance with the payment schedule, by 31 July 2026). The aggregate of any WC Advances were to be fully repaid within 20 months of the Initial Advance: cl 4.1, cl 4.4(a), cl 1.1 (definitions, 'Initial Advance', 'WC Advance', 'Payment Date', 'Maturity Date', 'Availability Period'). Amongst other things, the effect of the agreement to amend the Facility Agreement made on 27 July 2023 was to change the definition of 'Maturity Date' from '18 months from the Initial Advance' to '31 December 2024' with respect to 'WC Advances'. In Panoramic's announcement to the ASX it represented that the consequence was to defer the Maturity Date by 12 months. Therefore, subject to raising AUD 40 million, which was done, the repayment time for the WC Advances was extended by 12 months.

General Security Deed 29 Under the terms of the GSD each of Savannah and PAN Transport as legal and beneficial owner of the 'Secured Property' which it owns grants Trafigura a security interest in that property to secure the payment of the 'Secured Money' (as defined): cl 3.1(a) of the GSD. 'Secured Property' is defined to mean the 'interest of each [of Savannah and PAN Transport] in any present and after-acquired property, including any PPSA retention of title property of [each of them], and including uncalled capital and called but unpaid capital from time to time and called but unpaid premiums from time to time on its shares.': cl 1.1 (definitions). Trafigura has a right to appoint receivers over the secured property if an 'Event of Default' subsists. 'Event of Default' is defined to mean a 'Termination Event' under the Facility Agreement: cl 9.11, cl 8.1(a), cl 1.1 (definitions). The GSD is governed by the laws of Western Australia: cl 18.15. 30 PAN Transport and Savannah are obliged to deposit with Trafigura the 'Title Documents' (as defined) to the 'Secured Property', including any shares: cl 3.3, cl 1.1 (definitions). PAN Transport and Savannah are entitled to receive use in the ordinary course of its business 'Permitted Distributions': cl 3.4. 'Permitted Distributions' is defined to mean 'any dividends or other distributions which is not restricted by the Facility Agreement: cl 1.1 (definitions). PAN Transport and Savannah are also entitled, subject to certain terms, to exercise the voting rights attached to those shares: cl 3.5, cl 1.1 (definitions). 31 Clause 3.6 provides that each of '[PAN Transport and Savannah] may acquire at its own cost any Mortgaged Right but must, on the earlier of such acquisition or receipt by [it] of a notice of any entitlement to any Mortgaged Right: (a) provide [Trafigura] with full details of that Mortgaged Right; and (b) deposit with [Trafigura] any Title Documents in respect of that Mortgaged Right'. 'Mortgaged Share' is defined to mean any share which forms part of the Secured Property. 'Mortgaged Right' is defined, relevantly, to mean 'any present or future right of [Savannah] arising from a Mortgaged Share to acquire (by purchase or otherwise) any property from [PAN Transport], whether shares (bonus or otherwise), warrants, options, notes, convertible securities or otherwise and however that right arises': cl 1.1 (definitions). PAN Transport was evidently a subsidiary of Savannah: cl 6.2(d) of the GSD. The shares in PAN Transport formed part of the secured property the subject of the charge Savannah granted. Those shares are evidently the Mortgaged Shares and can be the subject of the Mortgaged Rights under the GSD.

Specific Security Deed 32 The SSD contains similar, but not identical, terms to the GSD and follows a similar structure. Under the SSD Panoramic as the legal and beneficial owner of all of the 'Secured Property' grants to Trafigura a security interest in that 'Secured Property' to secure the payment of the 'Secured Money': cl 3.1 of the SSD. At any time while an Event of Default subsists Trafigura may appoint a receiver or a receiver and manager of the Secured Property or part of it. An 'Event of Default' is a 'Termination Event' as defined in the Facility Agreement: cl 8.1(a), cl 6.1, cl 1.1 (definitions). The SSD is governed by the laws of Western Australia: cl 17.15(a). 33 'Secured Money' is defined as meaning 'all money which [each of Panoramic, Savannah and PAN Transport] (whether alone or with another person) is or at any time may become actually or contingently liable to pay (including by acceleration) to or for the account of [Trafigura] (whether alone or with another person) for any reason whatsoever pursuant to or in connection with the Transaction Documents. It includes money by way of principal, interest, fees, costs, indemnities, charges, duties or expenses or payment of liquidated or unliquidated damages for which [Panoramic, Savannah or PAN Transport] is or at any time may become so liable, or as a result of breach of or default under any obligation by [Panoramic, Savannah or PAN Transport] in connection with the Transaction Documents': cl 1.1 (definitions). 34 The term 'Secured Property' is defined in cl 1.1 of the SSD to mean 'all of [Panoramic's] present and future interest in: (a) any shares in the capital of [Savannah]; (b) any Mortgaged Rights; (c) the benefit of any Mortgaged Contract; and (d) any Intercompany Loans and any rights under any document relating to an Intercompany Loan; and (e) any proceeds, money, dividends, distributions, return of capital, marketable securities or other property whatsoever now or in the future payable or otherwise distributable in respect of the Mortgaged Shares, the Mortgaged Rights, the Mortgaged Contracts or the Intercompany Loans whether by reason of a payment of a dividend, the making of a distribution of any kind, a rights issue, allotment, offer, conversion, substitution, consolidation, sub-division, redemption, option, bonus, warrant, cancellation, re-classification, reconstruction, amalgamation winding up or otherwise'. 35 'Mortgaged Right' is defined to mean 'any present or future right of [Panoramic] arising from a Mortgaged Share to acquire (by purchase or otherwise) any property from [Savannah] including additional marketable securities in [Savannah], whether shares (bonus or otherwise), warrants, options, notes, convertible securities or otherwise and however that right arises.' 'Mortgaged Contract' is defined to mean 'any agreement relating to the Mortgaged Shares the benefit of which forms part of the Secured Property'. 'Mortgaged Share' is defined to mean any share which forms part of the Secured Property. The shares that form part of the Secured Property are 'any shares in the capital of [Savannah]'. 'Intercompany Loan' is defined to mean 'any loan, advance or other financial accommodation provided by [Panoramic] to: (a) [Savannah]; or (b) PAN Transport': cl 1.1 (definitions) of the SSD. 36 It follows that the 'Secured Property' is comprised of a list of specific property in sub-paras (a) - (d) of the definition and a description in sub-paragraph (e) of various types of other property that is 'in respect of' that specific property.

Equitable mortgage of specific property 37 A common law mortgage involves the transfer of the legal title of the secured property from the mortgagor to the mortgagee. An equitable mortgage is a contract which operates as a security and is enforceable under the equitable jurisdiction of the Court. An equitable mortgage may be created by the mortgagor depositing the title deeds (or other instruments of title) with the mortgagee: see, generally, Fisher and Lightwood's Law of Mortgage, 3rd Australian Ed, Tyler, Young and Croft, 2014 LexisNexis Butterworths at [1.7], [1.12], [1.33]-[1.42]. In substance, an equitable mortgage involves an equitable assignment of the secured property from the mortgagor to the mortgagee and that assignment will be enforced in equity as a mortgage of the secured property. 38 As there cannot be a transfer (assignment) of future property a mortgage cannot be created over future property. However, the definition of Secured Property refers to present and future interest in the property described in that definition. A contractual promise to transfer future property for consideration is enforceable in equity as an equitable assignment when that property comes into the promisor's possession and passes an interest which attaches to the property when acquired: see, generally, Fisher and Lightwood's Law of Mortgage at [6.23]. 39 The heading of cl 3.1 in the SSD is 'Mortgage'. By way of comparison, the heading to cl 3.1 in the GSD (the equivalent provision) is 'Nature of charge'. Although the SSD provides that headings do not affect the interpretation of that agreement [cl 1.2(c)], use of the word 'mortgaged' in each of the definitions of 'Mortgaged Contract', 'Mortgaged Right' and 'Mortgaged Share' may be used to inform the meaning of those expressions and the nature of the security interest intended to be granted in the property so defined: Chartbrook Ltd v Persimmon Homes Ltd [2009] 1 AC 1101 at [17] (Hoffmann LJ). See, also, Barangaroo Delivery Authority v Lend Lease (Millers Point) Pty Ltd [2014] NSWCA 279 at [10]-[11] (Leeming JA, Beazley P and Tobias AJA agreeing); Commissioner of Taxation v Auctus Resources Pty Ltd [2021] FCAFC 39; (2021) 284 FCR 294 at [56]-[69] (Thawley J, McKerracher and Davis JJ agreeing). 40 It is not only the use of the word 'mortgaged' in the definitions that reflect an intention to create a mortgage. There are many other provisions that are consistent with that intention, at least, with respect to the specific property identified in sub-paras (a) - (d) of the definition of Secured Property. 41 Subject to certain exceptions, cl 3.3 of the SSD provides, relevantly, that Panoramic must promptly deposit with Trafigura all the 'Title Documents' which evidence any Secured Property as at the date of the SSD and such number of 'Transfers' in relation to the 'Mortgaged Shares' as Trafigura requires and, on the date of acquisition by Panoramic of any Secured Property after the date of the SSD, promptly deposit with Trafigura all the Title Documents which evidence that Secured Property and such number of Transfers in relation to the Mortgaged Shares as Trafigura requires. Trafigura may retain possession and control of the Transfers and Title Documents until Panoramic is discharged. 42 'Title Documents' is defined to mean 'a document: (a) that is or evidences title to that property; (b) used in the ordinary course of business as proof of possession or control, or the right to possession or control, of that property; or (c) authorising or purporting to authorise, whether by endorsement or delivery, the possessor of the document to transfer or receive that property, including [Panoramic's] counterpart or copy of any Mortgaged Contract'. 'Transfer' is defined in the SSD to mean 'a form (in registrable form) to transfer the interest of [Panoramic] in any Mortgaged Shares with the name of the transferee and the consideration for the transfer left blank, duly executed by [Panoramic]': cl 1.1 (definitions). 43 Clause 3.6 of the SSD is in the same terms as cl 3.6 of the GSD. It permits Panoramic to acquire at its own cost any Mortgaged Right. Panoramic must, 'on the earlier of such acquisition or receipt by [Panoramic] of a notice of any entitlement to any Mortgaged Right, promptly … deposit with [Trafigura] any Title Documents in respect of that Mortgaged Right'. 44 It follows that, by operation of cl 3.3 and 3.6 of the SSD, it is evident that the parties intended that Panoramic deposit with Trafigura a copy of 'any agreement relating to the Mortgaged Shares the benefit of which forms part of the Secured Property' (that is, any Mortgaged Contract) as well as the documents evidencing title to Savannah shares (Mortgaged Shares) and rights arising from those shares (Mortgaged Rights) that existed as of 3 April 2021 and any such documents that came into existence after that date. In the case of Mortgaged Shares, Panoramic was to deposit blank executed transfer forms for shares existing as of 3 April 2021 and shares issued after that date. These provisions reflect an intention to assign Panoramic's interest in the specific property to Trafigura and place Trafigura in a position in which it is able to deal with that property as mortgagor. Further, to the extent that the provisions concern future property, they operate as a contract to assign an interest in the specific property at the time that Panoramic becomes the legal or beneficial owner of that property. 45 Notwithstanding the evident intention to transfer the specific property to Trafigura as equitable mortgagee, cl 3.4(a) of the SSD provides, relevantly, that '[Panoramic] may receive and use in the ordinary course of its business any Permitted Distributions'. 'Permitted Distributions' are defined to mean 'any dividend or other distribution which is not restricted by the Facility Agreement': cl 1.1 (definitions). However, while an Event of Default (defined to mean a Termination Event as defined in the Facility Agreement) subsists, Panoramic was obliged to ensure that 'all distributions and other amounts payable in relation to the Mortgaged Shares are paid to [Trafigura] in accordance with the terms of the Transaction Documents': cl 3.4(b), cl 7.1, cl 1.1 (definitions). Further, unless an Event of Default subsists, subject to certain conditions, Panoramic is entitled to attend meetings and exercise voting rights attached to the Savannah shares: cl 3.5(a). However, where an Event of Default subsists, Trafigura has the entitlement to attend meetings and exercise voting rights: cl 3.5(b). 46 Therefore, cll 3.4 and 3.5 of the SSD are consistent with the concept of an equitable mortgage and the transfer of the beneficial interest in the property the subject of the mortgage from Panoramic (as mortgagor) to Trafigura (as mortgagee). To that end, cll 3.4 and 3.5, regulate the manner in which Panoramic, as mortgagor, is entitled to deal with rights associated with the beneficial interest in that property. 47 Although not defined as the 'Mortgaged Intercompany Loans', the concept of 'mortgage' and transfer of beneficial ownership of the debts and other rights the subject of the loans is also picked up in the description of the loans that form part of the Secured Property. Namely, 'any Intercompany Loans and any rights under any document relating to an Intercompany Loan'. Documents relating to an Intercompany Loan fall within the meaning of 'Title Documents'.

Personal Property Securities Act 48 The context in which the SSD was made includes the Personal Property Securities Act 2009 (Cth) which applies to a security interest in financial property and intangible property if the grantor is an Australian entity: s 6 of the PPSA. 'A security interest means an interest in personal property provided for by a transaction that, in substance, secures payment or performance of an obligation (without regard to the form of the transaction or the identity of the person who has title to the property)' (emphasis in original): s 12(1) of the PPSA. The expression 'personal property' is defined broadly as property other than land or a right, entitlement or authority that is granted by or under a law of the Commonwealth, a State or a Territory and declared by that law not to be personal property for the purposes of the PPSA: s 10 of the PPSA. Again, 'distributions' Panoramic received as creditor under Intercompany Loans are regulated by cl 3.4(a) of the SSD. 49 Panoramic is an Australian entity. The expressions 'financial property' and 'intangible property' are defined in ways that cover all forms of property referred to in the definition of Secured Property in the SSD: s 10 of the PPSA (definitions of 'financial property', 'currency', 'investment instrument', 'intangible property' and 'personal property'). The SSD is also a 'security agreement' as defined in s 10 of the PPSA. An equitable mortgage of personal property meets the description of a 'security interest'. The PPSA applies to the SSD. 50 The applicability of the PPSA to the SSD is of significance to the enforcement of the security interest granted under the SSD. Section 267 of the PPSA provides, in substance, that if a security interest is not perfected (within the meaning of that Act) at the time of an insolvency event, it is ineffective against the grantor's insolvency administrator. Separately, where the grantor is a company and the security interest is only perfected by registration, s 588L of the Corporations Act provides that a security interest that is not perfected within certain timeframes, even if perfected at the time of an insolvency event, is also ineffective against the grantor's insolvency administrator and the security interest vests in the company. 51 A security interest in a particular collateral is perfected if the security interest is attached to the collateral, is enforceable against a third party and a registration under the PPSA is effective with respect to the collateral, or the secured party has possession of the collateral, or, for certain kinds of collateral, the secured party is in control of the collateral: s 21 of the PPSA. The term 'collateral' means personal property to which a security interest is attached; that is, the secured property: s 10 of the PPSA. A security agreement is effective according to its terms and may provide for a security interest in after-acquired property which attaches without appropriation by the grantor: s 18 of the PPSA. The expression 'after-acquired property' means personal property acquired after a security agreement is made: s 10 of the PPSA. See, also, Ch 2, Ch 5 of the PPSA. 52 The effect of these provisions of the PPSA is that where the SSD refers to a security interest in 'future' property that is a reference to 'after-acquired property' for the purposes of the PPSA and the security interest in that future property attaches at the time Panoramic (as grantor) becomes the legal or beneficial owner of that property unless the parties agreed that the security interest should attach at a later time. Further, for the security interest to be effective, Trafigura was required to perfect (register) the security interest within 20 business days after SSD came into force or it would not be effective in the circumstances of an insolvency event relating to Panoramic. Trafigura registered the security interest under the SSD within the 20-business day period on 7 April 2021. 53 Reflecting the applicability of the PPSA, cl 17.16 of the SSD provides that, to the extent permitted, Trafigura is not required (as secured party) to give any notice to Panoramic (as grantor) under the PPSA (including notice of a verification statement). Further, cl 1.3(c) provides that 'account', 'attach', 'control', 'grantor', 'perfection', 'purchase money security interest', 'PPS lease', 'personal property' and 'verification statement' each has the meaning it is defined to have in the PPSA. 54 The terms 'purchase money security interest', 'PPS lease' and 'personal property' are not used in the SSD. The term 'verification statement' [cl 17.16] and possibly terms 'control' [cl 8.6], 'perfection' [cl 16.1(b)] and 'Grantor' (as defined in the SSD) are used in the SSD. Otherwise, the context in which the terms 'account', 'attach' and 'control' are used in the SSD indicate that these terms are not there used as defined in the PPSA. 55 Clause 6.1, which provides that Panoramic must ensure that the Secured Property is not encumbered except by 'Permitted Encumbrances', picks up aspects of the PPSA through the definition of 'Permitted Encumbrances' in the Facility Agreement. A 'Permitted Encumbrance' includes any 'Encumbrance' provided for by a transfer of an 'account', 'chattel paper', 'commercial consignment' or 'PPS Lease' as those terms are defined in the PPSA if the transaction does not secure payment or performance of an obligation: cl 1.1 of the Facility Agreement. Clause 22 of the Facility Agreement also contains a further assurance provision that requires, amongst others, Panoramic to co-operate with Trafigura to ensure the efficacy of the security interest granted under the SSD for the purposes of the PPSA. 56 Notwithstanding the infelicitous references to terms defined in the PPSA, cll 1.3(c), 6.1 and 17.16 of the SSD and cl 1.1 and cl 22 of the Facility Agreement are firm indications that the parties were cognisant of the application of the PPSA to the SSD. The PPSA forms part of the context in which the SSD is to be construed and it may be inferred that reasonable business-people in the position of the parties would have intended the SSD to operate harmoniously with applicable provisions of the PPSA.

Security interest 57 At the risk of some repetition, cl 3.1 of the SSD, with the text of relevant definitions inserted, is as follows: Panoramic as legal and beneficial owner of all of Panoramic's present and future interest in: (a) any shares in the capital of Savannah (Mortgaged Shares); (b) any present or future right of Panoramic arising from any Mortgaged Shares to acquire (by purchase or otherwise) any property from Savannah including any additional marketable securities in Savannah, whether shares (bonus or otherwise) warrants, options, notes, convertible securities or otherwise and however that right arises (Mortgaged Rights); (c) the benefit of any agreement relating to the Mortgaged Shares the benefit of which forms part of the Secured Property (Mortgaged Contract); and (d) any loan, advance or other financial accommodation provided by Panoramic to Savannah (Intercompany Loan) and any rights under any document relating to an Intercompany Loan; and (e) any proceeds, money, dividends, distribution, return of capital, marketable securities or other property whatsoever now or in the future payable or otherwise distributable in respect of the Mortgaged Shares, the Mortgaged Rights, the Mortgaged Contracts or the Intercompany Loans whether by reason of a payment of a dividend, the making of a distribution of any kind, a rights issue, allotment, offer, conversion, substitution, consolidation, sub-division, redemption, option, bonus, warrant, cancellation, re-classification, reconstruction, amalgamation, winding up or otherwise, (collectively, Secured Property) grants to Trafigura a security interest in that Secured Property to secure the payment of the Secured Money.

Overview 58 The question of construction turns on the breadth that is to be given to the expression 'payable or otherwise distributable in respect of' or 'in respect of' in sub-para (e). On Trafigura's preferred construction 'payable or otherwise distributable' qualifies 'other property whatsoever' and not 'in respect of'. On Trafigura's alternate construction, if 'payable or otherwise distributable' qualify 'in respect of', it submits that nonetheless the 'money' in Panoramic's bank account was 'payable or otherwise distributable in respect of the Mortgaged Shares, … Mortgaged Contracts or Intercompany Loans … by reason of … the making of a distribution of any kind, a rights issue, allotment [or] offer'. At the heart of the construction question is the nature of the nexus between the other property (proceeds, money, dividends, distribution, return of capital, marketable securities or other property whatsoever) and the specific property (Mortgaged Shares, Mortgaged Rights, Mortgaged Contracts and Intercompany Loans) that the parties intended by the expression 'in respect of'. 59 The parties' intention is to be found in the text of cl 3.1 informed by the nature of the specific property and the security interest in that property, the form of expression used to describe the nexus between the other property and the specific property and the commercial consequences that would flow from acceptance of Trafigura's preferred or alternate constructions in circumstances in which the PPSA apply to the SSD. Having regard to these matters, reasonable business-people would understand that the property secured under sub-para (e) is other property of a kind that is directly or indirectly connected by some rational link to the legal or beneficial ownership of one or more of the forms of specific property identified in sub-paragraphs (a) - (d). Put another way, while the nexus need not be direct or close and may be indirect or distant, the other property must in some rational sense have as its source Panoramic's rights or interests as legal or beneficial owner of the specific property. Here, there is a distinction between a proprietary interest in property and an economic interest in property. The nexus in sub-para (e) is directed to proprietary not economic interests. Thus, any form of association or connection between Panoramic's ownership of the other property and its ownership of the specific property is not sufficient.

Nature of the specific property and security interest 60 It is convenient to start with a consideration of the nature of the specific property and the security interest described in cl 3.1 read with the definition of Secured Property. In this regard, it is important to keep in mind that cl 3.1 provides that Panoramic grants the security interest 'as legal and beneficial owner' of all its 'present and future interest in' the specific property described in sub-paras (a) - (d). Thus, the terms 'Mortgaged Shares', 'Mortgaged Rights', 'Mortgaged Contracts' and 'Intercompany Loans' are shorthand definitions of proprietary rights or interests. 61 The structure of the definition of Secured Property is also important. The forms of specific property described in sub-paras (a) - (d) are conjoined by 'and' at the end of sub-para (c). That signifies, in effect, that these items form part of a group and first clause of the definition. The other property described in sub-para (e) is defined by reference to its connection with the specific property and it is conjoined separately to the specific property grouped in the first clause by a second 'and' at the end of sub-para (d). As explained later, the separation of the definition of Secured Property into two clauses dealing with specific and then other property is confirmed by the repetition of the concept of present and future property within sub-para (e) that would not be necessary if the other property described in that sub-para were captured by 'present and future interest in' where that expression is used in the chapeau of the definition. That is, the expression 'present and future interest in' in the chapeau refers to Panoramic's present and future interest in the specific property described in sub-paras (a) - (d) and not in the other property described in sub-para (e). Panoramic's present and future interest in the other property is addressed separately within sub-para (e) by the expression 'now or in the future payable or otherwise distributable in respect of'. Therefore, the structure of cl 3.1 (with the definition of Specific Property inserted) contains a first sub-clause that describes forms of specific property that are primary property followed by a second sub-clause that describes forms of other property that are secondary or ancillary property connected to the primary property. 62 Mortgaged Shares, as shares in the capital of Savannah, are a form of personal property. Shares are a bundle of rights (chose in action) and, as such, are property in which a security interest may be granted both under general principles and the PPSA. The forms of other property described in sub-para (e) are things that are typically derived from proprietary rights or interests in shares. As are dividends or other distributions that Panoramic may receive and use in the ordinary course of its business under cl 3.4(a). Likewise, 'distributions and any amounts payable in relation to the Mortgaged Shares' referred to in cl 3.4(b) are derived from proprietary rights or interests in shares. Therefore, cl 3.4 and the nature of proprietary interests in shares are firm indications that a particular focus of sub-para (e) is to capture payments or other distributions from Savannah to Panoramic derived from Panoramic's ownership of shares in Savannah as part of the 'Secured Property'. 63 Mortgaged Contract is an agreement relating to the Mortgaged Shares the benefit of which forms part of the Secured Property. Mortgaged Right is a right to acquire property from Savannah 'arising from a Mortgaged Share'. A contractual right to acquire shares in the capital of Savannah (e.g., acceptance of an offer to issue shares to existing shareholders) may be both a Mortgaged Contract and a Mortgaged Right. However, while the concepts of Mortgaged Contract and Mortgaged Right may overlap, they are not coterminous. Each is a different type of property with different limiting factors. In the case of Mortgaged Right, the limiting factors are that the right be 'to acquire any property from Savannah' and that right be 'arising from a Mortgaged Share'. In the case of Mortgaged Contract, the limiting factor is that the agreement be 'relating to the Mortgaged Shares'. In each case, it is the right (or benefit) that is the subject of the security as personal property and a chose in action in which a security interest may be granted under the general law and PPSA. 64 Notwithstanding the overlap and differences, the forms of other property described in sub-para (e) are all things that might be derived from: contractual rights (benefits) of an agreement 'relating to' shares in Savannah, in the case of Mortgaged Contracts; and any rights to acquire property from Savannah, including marketable securities, in the case of Mortgaged Rights. The right to receive certain property is the intangible property the subject of the specific property described in sub-paras (b) (Mortgaged Rights) and (c) (Mortgaged Contracts). The benefit derived from that right is the property so received which is the subject of the other property described in sub-para (e). 65 Rights under the Intercompany Loans are also personal property in which a security interest may be granted under the general law and the PPSA. Loans, advances and other financial accommodation generally involve a right on the part of the financier to repayment of an amount of money (a debt) with or without interest and on demand or subject to terms. The financier may also have rights under a document relating to the loan, advance or accommodation. The receipt of repayments of principal and interest under Intercompany Loans are Permitted Distributions that Panoramic is entitled to receive and use in the ordinary course of its business under cl 3.4(a) of the SSD. Therefore, as for Mortgaged Shares, the forms of other property described in sub-para (e) (proceeds, money … distributions … or other property whatsoever) are things that typically are derived from rights as a creditor under an Intercompany Loan and documents relating to such loans and such distributions are a specific focus of sub-para (e) and cl 3.4(a) of the SSD. 66 The nature of the security interest in the specific property, as a mortgage, is also significant because it reflects an equitable assignment to the mortgagee of the specific property. As the other property described in sub-para (e) are all things that can be derived from legal or beneficial ownership of the specific property, they are also things to which a mortgagee in possession or control of the specific property is or may be entitled.

Expression of nexus 67 The definitions of Mortgage Rights ('arising from'), Mortgaged Contracts ('relating to') and other property ('in respect of') use different forms of words to describe the nature of the nexus between the subject matters of those definitions. 68 While the use of 'relating to' in the definition of Mortgaged Contract and 'in respect of' in sub-para (e) of the definition of Secured Property may be assumed to have been deliberate and to signify some degree of difference in the nexus the subject of those definitions, for the purposes of this matter, that difference need not be explored. Each of the expressions 'relating to' and 'in respect of' are wide and the meaning of them is determined by the context in which they are used: Telstra Corporation Ltd v Australian Competition and Consumer Commission [2009] FCA 757; (2009) 179 FCR 437 at [163] (Lindgren J) and the authorities there cited. In particular, the expression 'in respect of' has a 'very wide meaning' and 'a chameleon-like quality' reflecting the context in which the expression is used. Nonetheless, the expression describes a nexus that will not exist 'unless there be some discernible and rational link' between one matter and the other: Technical Products Pty Ltd v State Government Insurance Office [1989] HCA 24; (1989) 167 CLR 45 at 47-48 (Brennan, Deane and Gaudron JJ). Further, the nexus must be relevant 'in the sense that it cannot be accidental or ... remote' and '[w]hat constitutes a sufficient connection or association is a matter for judgment depending on the facts of the case': Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; (1998) 194 CLR 355 at [87] (McHugh, Gummow, Kirby and Hayne JJ). See, also, Travelex Ltd v Federal Commissioner of Taxation [2010] HCA 33; (2010) 241 CLR 510 at [25] (French CJ and Hayne J); Australian Competition and Consumer Commission v Maritime Union of Australia [2001] FCA 1549; (2001) 114 FCR 472 at [68]-[69] (Hill J). 69 The expression 'arising from' is narrower and requires some causal connection, but the requisite nexus is a less proximate relationship than 'caused by'; it is sufficient if it originates in, springs from, or has its foundation in the matter: Quintano v BW Rose Pty Ltd [2008] NSWSC 793 at [7]-[8] (Brereton J) and the authorities there cited. See, also, Dickinson v Motor Vehicle Insurance Trust (1987) 163 CLR 500 at 505 (Mason CJ, Wilson, Brennan, Dawson and Toohey JJ). 70 It follows that 'in respect of' refers to a connection between legal or beneficial ownership of the Mortgaged Shares, Mortgaged Rights, Mortgaged Contracts or Intercompany Loans and the forms of other property described in sub-para (e). It does not refer to any form of association between the specific property and the other property no matter how distant or remote. It refers to other property of which Panoramic's legal or beneficial ownership is rationally linked to its legal or beneficial ownership of the specific property. Put another way, it refers to other property of which Panoramic would not be the legal or beneficial owner without having legal or beneficial ownership of the specific property. In that sense, the other property is directly or indirectly derived from legal or beneficial ownership of the specific property. It need not 'arise from' the specific property, in the sense of a causal relationship, the connection may be direct or indirect, close or distant, provided that the other property can fairly be described as one that is 'in respect of' legal or beneficial ownership of the specific property: see, e.g., Abebe v Commonwealth [1999] HCA 14; (1999) 197 CLR 510 at [29] (Gleeson CJ and McHugh J).

The text of sub-para (e) 71 The text of sub-para (e), as a whole, is also indicative of the other property being derived directly or indirectly from the legal or beneficial ownership of the specific property. 72 The expressions 'proceeds', 'dividends', 'distributions' and 'return of capital' all describe things that are derived from property. Further, in terms of the PPSA, 'proceeds' has a particular meaning. It describes proceeds of collateral to which a security interest is (or is to be) attached and means identifiable or traceable personal property of certain types that include: '(a) personal property that is derived directly or indirectly from a dealing with the collateral (or proceeds of the collateral)'; and '(e) if the collateral is [shares in a body] - any of the following: (i) rights arising out of the collateral; (ii) property collected on the collateral; (iii) property distributed on account of the collateral'. However, personal property is only 'proceeds' if, amongst other things, either the grantor has an interest in the proceeds or the grantor has power to transfer rights in the proceeds to the secured party: ss 10, 31, 140(2)(f) of the PPSA. While the word 'proceeds' is not defined in the SSD by reference to its meaning in the PPSA, 'proceeds' as defined in the PPSA falls within the ordinary meaning of that term and the PPSA definition underscores the derivative nature of 'proceeds'. 73 The word 'money' refers to a generally accepted medium of exchange for goods, services and the payment of debts. It describes tangible property such as coins, banknotes, other currency, bills of exchange and promissory notes. It also extends to intangible property such as bank account deposits. Bank deposits are a debt due from the financial institution to the account holder. In terms of the PPSA, 'money' falls within the meaning of 'financial property' as 'currency' and 'intangible property' as an 'ADI account': s 10 of the PPSA. 74 The expression 'marketable security' has the meaning which it is defined to have in the Corporations Act: cl 1.3(a) of the SSD. Therefore, that expression means 'debentures, stocks, shares or bonds of any Government, of any local government authority or of any body corporate, association or society, and includes any right or option in respect of shares in any body corporate and any interest in a managed investment scheme': s 9 of the Corporations Act. In terms of the PPSA, a 'marketable security' is a 'financial product' and may be an 'investment instrument': s 10 of the PPSA; ss 9, 761A, Pt 7.1 Div 3 of the Corporations Act. 75 Although in general 'money' or 'marketable securities' need not be derived from legal or beneficial ownership of property, they can be derived directly or indirectly from ownership of property. The expressions 'money' and 'marketable securities' are not used in isolation. They form part of a compendious phrase in which the other types of property identified are derivative. They are also used in a context in which the specific property connected to them by 'in respect of' includes shares and loans from which 'money' and 'marketable securities' can be derived. Therefore, the immediate context in which the expressions are used indicates that 'money' and 'marketable securities' are not intended to refer to those forms unconnected to legal or beneficial ownership of the specific property. Similarly, the immediate context indicates that the expression 'other property whatsoever' also describes other property that is derived directly or indirectly from the legal or beneficial ownership of the specific property. 76 On Trafigura's preferred construction 'now or in the future payable or otherwise distributable' qualifies 'other property whatsoever' and not 'in respect of'. That construction tends to weaken the link between the other property, such as money, and the specific property as it need only be 'money … in respect of the Mortgaged Shares … the Mortgaged Contracts or the Intercompany Loans'. However, I do not accept that construction. It is contrary to the natural and ordinary meaning and grammatical structure and syntax in sub-para (e) and results in a less congruent meaning of the definition of Secured Property as a whole. 77 Linking 'now or in the future payable or otherwise distributable' only to 'other property whatsoever' does not make sense. As already mentioned, the structure of the definition of Secured Property describes the specific property in sub-paras (a) - (d) conjoined by 'and', effectively grouped as a first clause, and separately conjoins the other property described in sub-para (e) with a second 'and' as a separate and second clause. The chapeau of the definition commences with 'all of [Panoramic's] present and future interest in' and then describes the four conjoined forms of specific property. Sub-paragraph (e) repeats or reintroduces the concept of present and future interest with the words 'now or in the future payable or otherwise distributable'. The repetition would not be necessary if all the other property described in sub-para (e) was intended to be captured by the equivalent expression in the chapeau. Therefore, 'now or in the future payable or otherwise distributable' must apply to all the other property described in sub-para (e). Thus, 'now or in the future payable or otherwise distributable' must qualify 'in respect of'. 78 Further, the words 'proceeds, money, dividends, distributions, return of capital, marketable securities' describe things that are 'payable or otherwise distributable'. The types of property are not limited to that list, but extend to any 'other property whatsoever'. Therefore, the natural and ordinary meaning of the text constrains the width of the other property described to that which is 'payable or otherwise distributable in respect of' one of the forms of specific property. 79 The link between the other property and 'payable or otherwise distributable' is also found in the expression 'whether by reason of a payment of a dividend, the making of a distribution of any kind, a rights issue, allotment, offer, conversion, substitution, consolidation, sub-division, redemption, option, bonus, warrant, cancellation, re-classification, reconstruction, amalgamation, winding up or otherwise'. That expression describes various ways in which the types of other property may be 'payable or otherwise distributable'. That expression is most obviously describing the manner in which dividends are 'payable' and 'distributions, return of capital, [or] marketable securities' are distributable, but the list of methods is unconfined by 'or otherwise'. In short, sub-para (e) does not confine the type of other property or the means by which it be 'payable or otherwise distributable'. Its limitation is that it be 'payable or otherwise distributable in respect of' one of the forms of specific property. 80 On Trafigura's alternate construction, even if 'now or in the future payable or otherwise distributable' qualifies 'in respect of', it submits that the funds in Panoramic's bank account fall within the broad meaning of 'money … payable or otherwise distributable in respect of the Mortgaged Shares … the Mortgaged Contract or the Intercompany Loans … by reason of … the making of a distribution of any kind, a rights issue, allotment, [or] offer'. It is 'payable or otherwise distributable in respect of' because Panoramic acquired the 'money' through the equity raising with the intention of lending it (paying it or distributing it) to Savannah under an Intercompany Loan. I also do not accept that construction. 81 As already mentioned, 'in respect of' describes a nexus between, relevantly, 'money' and Panoramic's legal or beneficial ownership of the Intercompany Loan. The payment by third parties of funds into Panoramic's bank account was not connected to Panoramic's legal or beneficial ownership of rights under the Panoramic-Savannah loan agreement. Likewise, these funds were not paid in connection with legal or beneficial ownership of shares in Savannah. Nor were the agreements for placements of securities in Panoramic 'agreements relating to' Panoramic's legal or beneficial ownership of shares in Savannah. The agreements were not connected to any rights of Panoramic as owner of shares in Savannah. Therefore, the 'money' is not 'distributable in respect of' any of those forms of specific property. 82 Further, the link Trafigura makes between 'money … payable or otherwise distributable' and 'by reason of …'the making of a distribution of any kind, a rights issue, allotment [or] offer' is illusory. As already mentioned, the expression 'whether by reason of' precedes a list of means by which the types of other property described may be 'payable or otherwise distributable'. The link is between the means by which Panoramic came to be the legal or beneficial owner of the other property and that other property. Therefore, the 'money' must have been 'payable or otherwise distributable' to Panoramic as legal and beneficial owner of the funds 'by reason of … the making of a distribution of any kind, a rights issue, allotment [or] offer'. It is not 'otherwise distributable' by Panoramic to Savannah 'in respect of … the Intercompany Loans … by reason of … the making of a distribution of any kind, a rights issue, allotment [or] offer'.

Commercial inconvenience and incongruence 83 Although not dispositive on its own, a further reason for rejecting Trafigura's preferred or alternate construction is that either would result in commercial inconvenience and incongruence in the operation of the provisions of the SSD and Facility Agreement insofar as these relate to the 'money' Panoramic received into its bank account from the third parties as a result of the equity raising. In short, on either of Trafigura's constructions, Panoramic would not have any express right to use 'money' received from the equity raising in the ordinary course of its business. As a consequence, that 'money' would be treated differently from dividends or other distributions received from Savannah and the ability of Panoramic to use it in the ordinary course of its business would be uncertain and doubtful under the provisions of the PPSA and depend on the circumstances in which it was received or used. 84 Clause 3.1 and the definition of Secured Property in the SSD largely reflect the language and concepts of the PPSA. The effect of cl 3.1 under the general law, in combination with the PPSA, is that the security interest is created in (attaches to) the 'future' (after-acquired) property at the time that Panoramic becomes the legal or beneficial owner of that property. Therefore, Trafigura has an immediate security interest in 'proceeds, money, dividends, distributions, return of capital, marketable securities or other property whatsoever' falling within the meaning of sub-para (e) at the time Panoramic receives that property if received after the SSD was made. 85 In accordance with general principles, if Panoramic paid 'money' out of that account to a third party and that third party that received those funds bona fide for value and without notice of the prior equity, that third party would take the funds free of the equitable interest. However, the provisions of the PPSA affect that general principle as it applies to personal property. 86 In the language of the PPSA, Panoramic's bank account is an 'ADI account', 'intangible property' and 'personal property': s 10 of the PPSA. In the circumstance of a transfer of funds out of Panoramic's bank account to a third party, there are different rules under the PPSA by which the transferee of the funds may or may not take them free of a perfected security interest. However, unless the transferee were a creditor receiving payment of a debt, it is doubtful that the transferee of the money would take it free of the security interest: Pt 2.5, Pt 2.7, s 69 of the PPSA. Nonetheless, if the funds were paid in exchange for some other form of property, then a security interest would attach to the property Panoramic acquired as 'proceeds'. But, if Panoramic paid the 'money' to a third party for services or goods that have been consumed, Trafigura's rights would be limited to the security interest in the funds transferred or its traceable proceeds. The uncertainty and difficulty regarding the nature of the security interest, if any, in 'money' Panoramic transfers to a third party does not arise where there is an express agreement that the money may be used in the ordinary course of Panoramic's business: s 19(3), s 32(1) of the PPSA. In that case, the transferee would take the 'money' free of any security interest. 87 On either of Trafigura's constructions, as soon as a third party paid for the issue of new Panoramic securities in the equity raising, the 'money' Panoramic received into its bank account fell within the meaning of Secured Property in sub-para (e). At that point a security interest would be created and attach to that money. However, unless that money also falls within the meaning of Permitted Distribution there would be no express right of Panoramic to use the funds in the ordinary course of its business. 88 Clause 3.4 of the SSD provides that Panoramic may receive and use in the ordinary course of its business any Permitted Distributions. 'Permitted Distribution' is defined to mean 'any dividend or other distribution which is not restricted by the Facility Agreement': cl 1.1 (definitions) of the SSD. Clause 10.4(g) of the Facility Agreement restricts, relevantly, Savannah declaring, making, or paying any dividend on its shares, or repaying any principal or interest on the Panoramic-Savannah loan unless no Termination Event is continuing and no Termination Event would occur upon the making of any such payment. The effect of cl 10.4(g) of the Facility Agreement and cl 3.4(a) of the SSD is that Panoramic may receive 'money' from Savannah and use it in the ordinary course of its business if that 'money' is for permitted payments of dividends on Mortgaged Shares or principal and interest under Intercompany Loans. 89 On Trafigura's preferred construction of sub-para (e), where the expression 'payable or otherwise distributable' qualifies 'other property whatsoever', the relevant part of the definition is to be read as 'money … in respect of the Mortgaged Shares, the Mortgaged Rights, the Mortgaged Contracts or the Intercompany Loans'. On that construction, receipt of 'money' a third party paid Panoramic in exchange for the issue of securities in Panoramic would not be a 'payment or other distribution' and therefore, would not be received as a 'dividend or distribution' of any kind whether or not restricted by the Facility Agreement. It would not be a Permitted Distribution. 90 On Trafigura's alternate construction, the relevant part of the definition is to be read as 'money … payable or otherwise distributable in respect of' and Trafigura contends that 'money' paid by third parties to Panoramic in exchange for the issue of Panoramic securities is 'payable or otherwise distributable' because Panoramic raised the funds with intention of paying or distributing them to Savannah. On that construction, the 'money' received from a third party would also not be received as a 'dividend or other distribution' within the meaning of cl 3.4(a) and the definition of Permitted Distribution. Rather, it would be 'payable or otherwise distributable' to Savannah 'in respect of' the Intercompany Loans or Mortgaged Shares or Mortgaged Contract. Therefore, it would not be received by Panoramic as a Permitted Distribution. 91 In any event, it is evident that 'Permitted Distribution' means, in effect, any dividend or other distribution from Savannah to Panoramic which is permitted by the Facility Agreement. Both the definition of 'Permitted Distribution' (not restricted) and cl 10.4(g) (no dividend or other distribution unless no continuing Termination Event) use forms of expression that contain double negatives. However, the definition uses the positive expression 'Permitted Distribution' which is in keeping with the substantive effect of the double negatives in the definition and cl 10.4(g) of the Facility Agreement. Clause 3.4(a) must also be read in the context in which the Secured Property includes shares in Savannah and loans made to Savannah and that the Facility Agreement, in effect, 'permits' payments of dividends and repayment of principal and interest unless there is a continuing Termination Event or the payment would result in a Termination Event. Put another way, 'Permitted Distributions' are dividends and other distributions of the kind described in cl 10.4(g) of the Facility Agreement that Savannah is permitted to make to Panoramic. 92 The association between 'Permitted Distributions' and payments from Savannah is also reflected in cl 3.4(b) which provides that '[Panoramic] must, while an [Termination Event] subsists, ensure that all distributions and any other amounts payable in relation to the Mortgaged Shares are paid to [Trafigura] in accordance with the terms of the Transaction Documents'. That is, if a payment or distribution were made in breach of the restriction in cl 10.4(g) of the Facility Agreement, the amount paid or distributed must be 'paid over' to Trafigura. 93 On any view, either of Trafigura's constructions of sub-para (e) would mean that 'money' Panoramic received from a third party in exchange for the issue of Panoramic securities would not be received as a 'Permitted Distribution'. Therefore, Panoramic would not have any express right to use the 'money' so received in the ordinary course of its business. 94 Consequently, Trafigura's constructions would result in incongruence in that there would be different treatment of dealings with 'money' falling within sub-para (e) depending upon whether or not the 'money' is received as a 'Permitted Distribution'. Differential treatment of dealings would also result in commercial inconvenience in that there would be an uncertainty and doubt regarding the extent to which a third party that has received payment of 'money' would take that money free of Trafigura's security interest. It may also result in the need to trace funds into the property of third parties and (or) property of Panoramic held as 'proceeds' from dealings with the 'money'. Further, while Trafigura's constructions may not be entirely 'uncommercial', it would be unusual for a security agreement not to contain a provision permitting the grantor, in the absence of a default event, to use or dispose of 'after-acquired' funds in the ordinary course of the grantor's business notwithstanding that a security interest may otherwise attach to those funds. If the parties had contemplated that 'money' derived from a source other than Savannah was a Permitted Distribution and were to form part of the 'Secured Property', there are good reasons to expect that there would have been an express provision permitting the use of the funds so derived in the ordinary course of Panoramic's business.

Disposition 95 Relevantly, Panoramic's present or future interest in any 'money … payable or otherwise distributable now or in the future in respect of the Mortgaged Shares, … the Mortgaged Contracts or the Intercompany Loans' means a payment or distribution of money that is in respect of Panoramic's legal or beneficial ownership of the Mortgaged Shares, the Mortgaged Contracts or the Intercompany Loans. Money a third party paid to Panoramic for the issue of securities in Panoramic does not meet that meaning. That Panoramic intended to provide that money to Savannah under the terms of the Panoramic-Savannah loan agreement or otherwise because of its economic interest in Savannah as its sole member is not linked to Panoramic's rights as owner. The money was not paid to Panoramic because of any right it had to receive those funds that was rationally connected with its rights as the legal or beneficial owner of shares in the issued capital of Savannah or as owner of the debt and creditor under the Panoramic-Savannah loan agreement. 96 Although none of the individual contracts were in evidence, I infer that placements (allotments) of securities were made to sophisticated investors and to other parties under the share purchase plan in accordance with contracts made with them. Payments made in exchange for the issue of securities in Panoramic were not received by Panoramic because of any right it had to receive those funds that were rationally connected with its rights as the legal or beneficial owner of shares in Savannah. Again, that Panoramic issued the securities and received the payments with the intention of providing the funds to Savannah because of Panoramic's economic interest in Savannah is not to the point. That is not a nexus between Panoramic's rights under the relevant agreements with third parties and Panoramic's rights as legal or beneficial owner of shares in Savannah. Therefore, such agreements to acquire securities issued in Panoramic were also not 'Mortgaged Contracts' within the meaning of that expression in the SSD. Thus, in any event, no 'money' Panoramic received was 'in respect of' any Mortgaged Contract for the purposes of sub-para (e) of the definition of Secured Property. I certify that the preceding ninety-six (96) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Feutrill.