Breach of contract - Construction and interpretation of contract - Use of pre-contractual and post-contractual conduct in aid to construing terms of the contract - Implied terms - Breach of confidence - Whether information was confidential - Whether unconscientious use of information occurred - Breach of fiduciary duty - Misleading and deceptive conduct

First Defendant : Mr G R Donaldson SC & Mr S K Dharmananda

Second Defendant : Mr G R Donaldson SC & Mr S K Dharmananda

1 In these proceedings, Derek Noel Ammon (Mr Ammon), a geologist, mining engineer and metallurgist, currently engaged in the generation of new mining projects, makes various claims against Consolidated Minerals Limited (ConsMin) and Pilbara Iron Ore Pty Ltd (PIO). ConsMin is a listed company engaged in the development and operation of projects for the mining of various metals including iron. PIO is an unlisted company which was, at the time of its incorporation, a wholly-owned subsidiary of ConsMin. The issued shares in PIO are now held as to 50% by ConsMin and as to the other 50%, by Fortescue Metals Group Ltd (FMG), which is also a listed company engaged in the development of projects for the mining of iron ore.

2 It is not easy to identify or summarise the claims advanced by Mr Ammon with any precision. The document to which one would ordinarily look for that purpose, his statement of claim, is 137 pages long. It is prolix, repetitive and confusing. In one area, being the area dealing with the claims Mr Ammon advances for misleading and deceptive conduct, it is so vague and incomprehensible, that during the course of the opening on behalf of Mr Ammon, I was required to request his counsel to deliver a further document clearly enunciating the causes of action relied upon so that I and the defendants could know the case that was being advanced. The statement of claim is a paradigm example of the oft observed inverse relationship between the length of a pleading and its performance of the two basic functions required of it - namely, to define the issues to be determined at trial, and to apprise the other parties of the case to be met.

3 Because of the deficiencies of the statement of claim, the identification of the particular claims advanced by Mr Ammon has to be undertaken drawing upon composite sources including the pleading, the opening address of counsel, the written particularisation of the misleading and deceptive conduct claim delivered after the opening address, and the closing address of counsel. It will be necessary to refer in much greater detail to the precise manner in which Mr Ammon enunciates his claims later in these reasons, but for present purposes it is sufficient to identify the broad categories of claims which he advances. They are:

(a) claims for breach of contract said to arise from a written agreement entitled 'Heads of Agreement' (HoA) entered into between Mr Ammon and PIO and two agreements characterised as the 'First Agreement for Exclusive Access' and the 'Second Agreement for Exclusive Access' said to have been entered into by Mr Ammon and ConsMin;

(b) breach of a duty of confidence said to be owed to Mr Ammon by both ConsMin and PIO in respect of an array of information, including the information contained in a document characterized as the 'Ammon Report';

(c) breach of fiduciary duties said to be owed to Mr Ammon by each of ConsMin and PIO; and

(d) misleading and deceptive conduct on the part of each of ConsMin and PIO.

In addition, a claim for breach of copyright was pleaded and maintained, but ultimately abandoned in the course of closing submissions.

4 As I have mentioned, Mr Ammon is qualified in three scientific disciplines. He holds the degree of Bachelor of Science in Geology from the University of Western Australia and the degree of Bachelor of Engineering in Mining Engineering from the West Australian School of Mines. He also holds the degree of Bachelor of Science in Extractive Metallurgy from the West Australian School of Mines. His occupational experience includes periods of employment with Cliffs Robe River Iron Associates at Cape Lambert in their iron ore preparation plant, in the course of which he was exposed to iron ore in the form of pisolite. Pisolite iron ore is usually encountered in deposits which are near to the surface, and are often associated with paleo-channels, which are water courses which ran in prehistoric times.

5 Mr Ammon also spent a period employed by Hamersley Iron, in which he was involved in the exploration and mining of iron ore. He then worked for a period at Teutonic Bore mine site, employed by Seltrust Mining, during which he was mainly involved in the operation of the ore treatment plant. He also worked for a period as a contract geologist on the Mount Whaleback open cut iron ore mine at Newman. In addition, he has worked in a variety of other mining environments, including mines extracting gold and base metals other than iron.

6 In addition to periods of time when he has been employed by others, Mr Ammon has undertaken activities on his own behalf relating to the research and assessment of possible mining projects. He describes that activity as 'project generation' geology. He has undertaken that type of endeavour in relation to a number of different types of minerals, including coal, manganese, nickel, mineral sands, iron ore, chromite and others, but has a particular interest in iron ore and coal.

7 Mr Ammon is a director of Iron Ore Holdings Ltd, a public company which listed in about May 2005. That company is involved in the development of pisolite iron ore prospects at Yandi, which is in the same mineral field as the land the subject of these proceedings.

8 For reasons which I will set out in detail, I am unable to accept Mr Ammon's evidence unless it is corroborated by another witness or a contemporaneous document. It was clear from an early stage of his cross-examination that he saw the witness box as a place from which to argue his cause, rather than give evidence of fact. In the course of his evidence, he seized every opportunity to promote his cause and denigrate that of his opponents. An early example was provided when, in answering a question as to the period of time over which he had studied to achieve his degree in metallurgy, he offered a gratuitous denigration of the qualification obtained in that field by Mr Smith, who was a witness to be called on behalf of ConsMin. Even though Mr Ammon did not know Mr Smith at all, he ventured the opinion that he had an 'inferior type engineering degree', which was entirely unresponsive to the questions he was being asked.

9 Examples of Mr Ammon's enthusiasm for the promotion of his own cause at the expense of the truth emerged during the course of his evidence in respect of his qualifications. The detailed curriculum vitae which was tendered in evidence on his behalf referred to a period during which he was employed by Kalgoorlie Consolidated Gold Mines as a graduate underground mining engineer. In the document he described his work as:

Full-time, hands on 'at the face' practical training program which mining engineers must [complete] under the Western Australian Mines Regulations Act, as part of the Western Australian First Class Metalliferous Mine Managers Certificate of Competency certification process. All appointees to the statutory positions of Underground Manager and Deputy Underground Manager in the State of Western Australia must hold a valid Western Australian First Class Metalliferous Mine Managers Certificate of Competency.

10 That terminology is apt to create the impression that Mr Ammon had obtained the relevant qualification, when in fact, as emerged in cross-examination, he did not complete the programme or obtain the relevant qualification. Another example is provided by Mr Ammon's description of his work while in Hong Kong as mining engineering work. But in fact the project on which he was engaged in Hong Kong was the building of tunnels in which to install sewerage pipes. When it was put to him that that was not mining, he gave the evasive answer 'not in West Australian terms, no'. The reason I describe that answer as evasive is because, quite plainly, tunneling for the purpose of installing sewerage piping is not mining in anybody's terms.

11 Mr Ammon's description in evidence of the work undertaken by a project generation geologist provides a useful context for the evaluation of a number of propositions which lie at the heart of his claims. In the written curriculum vitae tendered in evidence, he provided a detailed description of the methodology which he had employed as a project generation geologist. After undertaking research in relation to the ground in question, he asserts that the next step is 'securing the ground' which he described in the following terms:

Once a prospect of interest has been identified, mineral rights to the ground have to be secured by application through the relevant procedures as outlined [in] the West Australian Mines Act.

12 The next step in the methodology employed by him is the preparation of a report for review by senior industry professionals, after which comes the phase of 'marketing', which he described in the following terms:

Once mineral rights have been legally secured and a geological report has been prepared, the project then has to be sold to potential investors.

13 In the course of his oral evidence, he confirmed that the methodology employed by him involved first securing all the ground in which he had an interest prior to soliciting investment in the project. In the course of that evidence, he agreed with the proposition that he had always understood that if an area of ground was not protected by a mining tenement, then there was no legal security over that ground or, as he put it:

Well, if you own the ground, you own the ground. If you don't, you don't.

14 The evidence given by Mr Ammon in relation to his role at Iron Ore Holdings was evasive. When asked if he was the managing director of that company, he replied, 'I wish. I think I'm the technical director, subject to board approval'. When asked if there was a managing director, he replied, 'I'm not too sure. I don't think we do have an actual managing director'. When asked if he was the principal executive of the company, he replied, 'I am the executive director'. When asked again if he was the principal executive of the company, he replied, 'So it would seem'.

15 The evidence he gave as to the engagement of an expert witness, Mr Piestrzeniewicz, who gave evidence in support of his case, was also evasive. Mr Piestrzeniewicz was engaged to provide an opinion in relation to certain issues in the month preceding the trial. Notwithstanding the recency of his engagement, when asked how Mr Ammon had come to identify him as a witness, the answer he gave was, 'I presume because he has got a pisolite background.' When asked who had decided to engage Mr Piestrzeniewicz, he replied:

I guess it must have been me.

... Well, that's my best recollection.

16 When asked if he had discussed the choice of expert witness with his legal advisers, Mr Ammon replied, 'I guess I must have'. However, when it was put to him that it was him who had chosen Mr Piestrzeniewicz, he denied that proposition and asserted that he and his legal advisers 'went through the whole telephone book'. However, after suggesting that he needed legal advice in relation to his evidence, he accepted that he had not gone through the telephone book to identify Mr Piestrzeniewicz, but asserted that he and his solicitor had gone through the telephone book to find a technical witness and could not find any. When asked why he was finding these questions so difficult, he replied to cross-examining counsel that he was suspicious of his motives.

17 Mr Ammon asserted that he and his solicitor had made a number of telephone calls to persons whose names they found in the yellow pages telephone book. However, he could not recall when those calls were made, or how many had been made or to whom, even though they had been made very recently. The terms in which Mr Ammon gave evidence on this topic reinforced my general impression that his evidence was tailored to support his case, and that he was quite willing to depart from the truth if he thought that would support his cause. I will refer later in these reasons to other aspects of Mr Ammon's evidence which reinforce my conclusion as to its unreliability.

18 In September 2001, Mr Ammon visited the WA Department of Mineral and Petroleum Resources, as it was then called (Mines Department), for the purposes of his general research in respect of potential mining projects. There he inspected a map entitled 'Iron Ore Deposits of the Pilbara Region'. Upon examining the map, he saw that a number of identified iron ore deposits were not within the boundaries of current mining leases, and were therefore unclaimed at the time the map had been prepared. Part of that map, with some annotations added by Mr Ammon, was included in the document which he later prepared entitled 'Mindy Mindy Creek Iron Ore Project' and which was characterised throughout the trial as 'the Ammon Report'.

19 From his review of that map, Mr Ammon identified that there was a known deposit in the Mindy Mindy Creek area which was not then the subject of any existing mining tenement. He conducted further research into that deposit from the information publicly available at the Mines Department. That information revealed that the deposit had been investigated in the past by two companies prospecting for iron ore: firstly, by Australian Steel and Mining Corporation Pty Ltd, and later by the OREX Joint Venture. Later still, Hamersley Iron had conducted exploratory work in the area and the results of that work were available for public inspection at the Mines Department and were reviewed by Mr Ammon. BHP had also produced a report of its exploratory activity in the area between 1993 and 1996, which was publicly available and was reviewed by Mr Ammon.

20 Based on his review of those materials, he concluded that the previous exploratory work had identified two prospective resources in the area. One comprised hematite ore, which is commonly described as 'hard rock', being still in the place in which it was originally formed. The other prospective resource comprised pisolite ore, which is detrital in the sense that it is formed by pieces of hematite breaking off and rolling into stream beds where they can conglomerate and remain in the beds of the draining system. So, as he explained in evidence, pisolite ore is often referred to as a 'channel iron deposit' because it has been deposited in a water course and lies in the channel of that water course.

21 Mr Ammon's review of the public data available at the Mines Department enabled him to conclude that in the Mindy Mindy Creek area, the pisolite ore appeared as mesas elevated above the surrounding terrain, which had been lowered by weathering and erosion over time. Because the pisolite ore was harder and more resistant to erosion than the surrounding terrain, in a number of places it had been left exposed above the surface of the surrounding terrain, appearing as mesas or outcrops.

22 Mr Ammon was generally aware from his knowledge of the iron industry that, although pisolite ore had not been regarded as desirable in the past, it had become highly sought, with qualities that enabled it to be shipped directly to prospective purchasers overseas without prior beneficiation or refinement. Mr Ammon was also aware that Hamersley Iron was mining pisolite ore from its Yandicoogina Mine which was about 20 or 30 kilometres from the Mindy Mindy Creek area. Because of Mr Ammon's knowledge of the way in which pisolite ore was deposited, he formed the view that the ancient water courses might also contain deposits which had not been identified. He regarded those areas as prospective.

23 Mr Ammon also formed the view that the identified deposits were not of a grade or magnitude which would have been attractive to prospective miners in the past, but, because of recent changes in the market for iron ore, would now be potentially attractive. He also appreciated that, because of the proximity of this deposit to other mining operations and railways in the area, extraction of the ore could be economically viable because of his belief that costs could be reduced by utilising existing infrastructure.

24 From reading the report prepared by the OREX Joint Venture, Mr Ammon also understood that in tertiary geological times, the Mindy Mindy Creek flowed into Weeli Wolli Creek to the north-west. However, as a result of geological movement, that flow was severed, or 'beheaded' with the result that Mindy Mindy Creek now flows in a north-easterly direction into the Fortescue River. The Weeli Wolli Creek area is part of the area in which pisolite ore is now mined by BHP and Hamersley Iron.

25 In the course of his researches, Mr Ammon also identified an article by Hall and Kneeshaw entitled 'Yandicoogina - Marillana Pisolitic Iron Deposits' published in 1990 in a work entitled 'Geology of the Mineral Deposits of Australia and Papua New Guinea'. Figures from that article, slightly modified by Mr Ammon, were included by him in the Ammon Report. Although the article by Hall and Kneeshaw was directed to the deposits in the Yandicoogina - Marillana area, their general description of the features of those deposits was regarded by Mr Ammon as potentially applicable to the deposits in the Mindy Mindy Creek area. Amongst the phenomena reported by Hall and Kneeshaw, was what Mr Ammon described as the 'iceberg' effect, whereby the iron deposits superficially visible in the form of mesas or outcrops are the tip of a much larger deposit lying beneath the surface of the surrounding terrain. Mr Ammon observed the same phenomenon described in respect of the Yandicoogina deposit in the 'Register of Australian Mining 2001/2002'.

26 After conducting the research and forming the views to which I have referred, on 8 November 2001, Mr Ammon applied for exploration licence (EL) 47/1140. The exploration licence covered 19 graticular blocks (being an area one minute in latitude by one minute in longitude). The maximum number of graticular blocks which could have been applied for in that licence was 70. In the event that an EL is granted, annual rental fees and minimum expenditure commitments are assessed by reference to the area of the subject of the licence, and are approximately $1000 per graticular block. Mr Ammon gave evidence to the effect that he only applied for 19 blocks because of difficulties he would have faced in meeting those financial commitments if he had applied for a greater area.

27 Mr Ammon's evidence was that he applied for EL47/1140 in order to secure the ground and was aware at the time he did so that all the ground outside the area for which he had applied was not secured and open to anyone else.

28 Mr Ammon's evidence was that he chose the configuration of EL47/1140 and the 19 blocks which comprise it, after drawing all the potential graticular blocks on the published geological survey map of the Roy Hill area. A version of that map, with graticular blocks annotated upon it, was in evidence. That map shows a total of 25 graticular blocks which are shaded, six being double hatched, and 19 being single hatched. Mr Ammon's evidence was that he would have liked to have applied for all 25 blocks which he had marked, but after marking them, realised that he could only afford 19 blocks, and therefore restricted his application to those 19. However, because there is a minimum annual expenditure commitment of $20,000 for each EL, whatever its area, of which Mr Ammon was aware, the difference in cost between an EL covering the 19 blocks for which he applied and an EL covering the 25 blocks would have been in the vicinity of $5000 per year. That is a relatively small amount. Because of my general skepticism in respect of his evidence, I do not accept that he would have applied for an area covering 25 blocks but was discouraged from doing so because of expense. That conclusion is reinforced by the observation that some months after applying for EL47/1140, Mr Ammon moved to Hong Kong where he earned a substantial income. Notwithstanding that income, he took no step to apply for an EL covering the additional blocks which he says he marked on the map because he would have liked to claim them or, indeed, any area additional to the area of EL47/1140. Mr Ammon gave evidence to the effect that he was thinking of pegging additional ground. However, he never did so, and because of my reservations about Mr Ammon's evidence generally, I do not accept that evidence. I think it more likely, and I find, that Mr Ammon thought at all material times that he had identified and captured the only significant prospective ground within the 19 graticular blocks he applied for as EL47/1140.

29 After applying for EL47/1140 and before leaving for Hong Kong, Mr Ammon wrote and produced the Ammon Report. Differing versions of that document were produced in evidence, one being coloured and others not coloured. Mr Ammon is adamant that the versions which he produced for prospective investors in the project contained coloured maps, and that seems inherently likely, given that Mr Ammon engaged a contractor to assist him in the preparation and printing of the maps and diagrams in colour.

30 As I have mentioned, the document is entitled 'Mindy Mindy Creek Iron Ore Project'. The first page of text of the document is headed 'Acknowledgement', under which the following appears:

This document was prepared by Mr Derek Ammon. Mr Ammon holds a 100% interest in E47/1140 which covers the Mindy Mindy Resource described within this report. Mr Ammon freely acknowledges that most of this report consists of extracts of other peoples work and that it contains substantial verbatim extracts from documents previously published by other authors.

31 The next page of text is entitled 'Project Summary'. Because of the significance of the arguments which were said to turn upon the construction to be given to the Ammon Report, and in particular this section of it, I will set out the text of the summary in full:

The Mindy Mindy Creek iron-pisolite deposits are located in the eastern Hamersley Ranges of the Pilbara Region, Western Australia, about 70km north-west of the town of Newman on the Roy Hill (SF 50-12) 1:250 000 scale map sheet. Most of the resource is found within the beheaded portion of Mindy Mindy Creek about 20 km to the east of Hamersley Iron's Yandicoogina iron-pisolite mining operation and about 25km south-west of BHP's Newman to Port Hedland iron ore railway line.

In 1972 OREX identified a possible resource of 79,000,000t of iron pisolite (>55% Fe) on TR 4515H covering the downstream half of Mindy Mindy Creek. In 1993 Hamersley Iron identified an additional possible resource of 8,000,000t of iron-pisolite (>55% Fe) on E47/633 covering the upper half of the Creek. In 11-2001, E47/1140 covering the entire length of Mindy Mindy Creek, including both the OREX and Hamersley Iron pisolite resources was lodged by Mr. Derek Ammon.

The pisolites outcrop as [sic] a series of mesas, 15m to 25m thick, which dominate the valley of Mindy Mindy Creek. The mesas represent the eroded remnants of a large palaeo-drainage system which in tertiary geological time was part of the Yandicoogina-Marillana-Welli [sic] Wolli drainage system which now hosts the massive 4,700,000,000t 'Yandi' iron-pisolite currently being mined by BHP and Hamersley Iron.

All of the 87,000,000t resource identified to date is found in the above ground mesa portion of the resource. This point is of major significance because 90% of the total tonnage and all of the high grade ore (>58% Fe) found within the adjacent Yandicoogina-Marillana-Weeli Wolli Creek iron-pisolite orebody, of which Mindy Mindy Creek was once a part, is found below ground level i.e. immediately beneath the outcropping mesas and below the superficial gravel's of the surrounding creek bed. These resources can literally be likened to icebergs with 10% (= 87,000,000t ?) of the resource clearly visible above ground level in the form of mesas while the remaining 90% of the resource lies concealed below ground level.

While the subsurface potential of the Mindy Mindy Creek orebody has not yet been systematically drill tested limited reconnaissance exploration drilling by BHP in 1995 within part of the creek on the extreme northwest edge of the licence intersected 12m of high grade iron pisolite ore (57.5% Fe) from 10m depth clearly demonstrating the subsurface potential of this resource.

The key to this projects viability is presence of both BHP and Hamersley Iron's high quality, iron ore railway line infrastructure right on the projects doorstep. Under the terms of there [sic] lease agreements both BHP and Hamersley Iron are obliged to provide third party access to there [sic] iron ore rail and port facilities at commercial rates. The presence of this infrastructure will not only save years off start up time and reduce start up capital costs by hundreds of millions of dollars but will also ensure that even relatively small orebodies found within trucking distance of the railway lines can be mined very profitably. With a [sic] operating margin of around $A20-25/t FOB even a relatively modest 2,000,000t per year operation could be expected to generate a pretax profit in order of $A50,000,000 per year. In short we don't need to find a large orebody in order to make this project financially attractive.

Pisolitic iron ores of export quality (>55% iron) are highly sort [sic] after by steel makers as sinter feed for conventional blast furnaces because of there [sic] excellent sintering characteristics, high iron content after calcine and there [sic] low silica & aluminium content hence there will be few problems in either sourcing project funding or finding buyers for the product.

That page is followed by a picture of an iron mesa.

32 The detailed report is preceded by a contents page and then commences with a page headed '1.0 Introduction'. The text on that page commences with the following paragraph:

The Mindy Mindy Creek iron-pisolite deposits are located in the eastern Hamersley Ranges of the Pilbara Region, Western Australia, about 70km north-west of the town of Newman on the Roy Hill (SF 50-12) 1:250 000 scale map sheet. The resource is currently held under E47/1140 in the name of the Mr. Derek Ammon (Fig-1, p2).

33 The figure to which reference is made is the version of the map 'Iron ore deposits of the Pilbara region' to which I have earlier referred, showing tenement boundaries in the area, including the boundaries of tenement EL47/1140.

34 The introduction repeats a number of the assertions made in the Project Summary, including the assertion that most of the resource is found within the beheaded portion of Mindy Mindy Creek which was, in tertiary geological time, part of the Yandicoogina-Marillana-Weeli Wolli drainage system.

35 Later sections of the report deal with the tenement and previous exploration history of the area. Reference is made to the tenements previously granted to various companies, and summaries are provided of the exploration work carried out by those companies and their results. That material is drawn from the data which is publicly available at the Mines Department and to which I have referred. Included in that material is a figure showing the location of the identified deposits within the palaeo channel, which is, on the diagram, shown as heading northwest 'to Weeli Wolli Ck'. At the conclusion of that section of the report, there is reference to the current tenement position, in the following terms:

In November 2001, E47/1140 covering the pisolite resources identified by OREX and Hamersley Iron on TR 4515H and E47/633 (formerly TR4518H) respectively was lodged in the name of Mr Derek Ammon.

36 The next section of the Ammon Report deals generally with the nature of Yandicoogina iron pisolite deposits and their geology. Included in that section is a map of the Yandicoogina deposit and a cross-section showing the structure of that deposit, both of which were taken by Mr Ammon from the article by Hall and Kneeshaw.

37 The next section of the Ammon Report is headed 'Mindy Mindy Pisolite Resource Potential'. After referring again to the 'iceberg' theory, this section of the report concludes with the following paragraph:

Clearly the entire length of the Mindy Mindy Creek palaeochannel, and the beheaded section of the creek in particular, is highly prospective for subsurface, high grade, pisolite resources, and hence there is very good potential for a resource far greater than the 87,000,000t of possible ore identified above ground to date.

38 The next sections of the report deal with native title and environmental issues. The report concludes with the page headed 'Conclusions' in which the assertions made in the Project Summary in respect of economic viability, deriving from the 'iceberg' phenomenon and the availability of infrastructure provided by others are repeated.

39 Various documents are attached to the Ammon Report, including the article by Hall and Kneeshaw, and an extract from the publication 'Register of Australian Mining 2001/02'.

40 While Mr Ammon was working on the Ammon Report, he telephoned Mr Bob Vivian, the exploration geologist at ConsMin. Mr Ammon had heard that ConsMin was looking for a mine manager for their newly opened Coobina chromite mine. In the course of the telephone conversation, Mr Ammon referred in very general terms to the Mindy Mindy Creek project, and inquired whether ConsMin would be prepared to offer him the mine manager's job as part of the consideration for participation in the Mindy Mindy Creek project. Mr Vivian transferred the call to Mr Alan Quadrio, the Operations Manager at ConsMin, who was responsible for employing the Coobina mine manager. Mr Quadrio told Mr Ammon that he was not interested in linking the position of mine manager to any other project, and therefore rejected Mr Ammon's proposal.

41 As I have mentioned, Mr Ammon engaged a contractor to assist him in the preparation and printing of the Ammon Report. That contractor was Mr Dean Francis. Mr Francis told Mr Ammon that he was interested in the economic potential of the project. Mr Ammon responded in terms to the effect that he was interested in identifying investors to take an interest in the project, either by way of assisting with a float or perhaps in a joint venture. Mr Francis told Mr Ammon that he would not himself be interested in participating, but that he knew a person who might be interested and who had made a lot of money out of a previous float of an Internet related business.

42 Mr Francis gave him an address for that person, but at trial Mr Ammon was unable to recall the address. On 15 February 2002, Mr Ammon delivered an envelope containing the Ammon Report and a letter to an address in the Spearwood/South Fremantle area. Mr Ammon's copy of the letter does not identify the name of the person or the address to which it was delivered. The first paragraph of the letter includes the sentence:

As a favour to Mr Francis in return for his excellent service under pressure, I have enclosed a copy of the MINDY MINDY IRON ORE PROJECT DESCRIPTION for your attention.

43 In the course of his oral evidence, Mr Ammon ultimately accepted that the assertion that he was doing Mr Francis a favour was not true. The letter went on to state that the prospective investor would need $2,000,000 in cash up front in order to be a serious contender for the project. The letter contained no assertion or claim of confidentiality.

44 In his oral evidence, Mr Ammon initially stated that he had rejected an offer from the person concerned because 'I didn't like the terms he was offering'. However, he was unable to recall any of the terms proposed, except that the person concerned wanted control of the project.

45 Mr Ammon also said in evidence that he never knew the name of the person concerned even though, on his evidence, they had negotiated terms. His evidence was that he had spoken to him face to face at the time of delivering the envelope, but that he was under the impression that the person wished to remain anonymous. Mr Ammon could not identify any reason for the prospective investor's desire for anonymity. Mr Ammon said he thought there were subsequent telephone calls, but he could not remember any of the topics discussed in the course of those calls. He accepted that he never recovered the envelope with the Ammon Report in it, or made any attempt to recover it.

46 So, on Mr Ammon's evidence, he delivered an envelope containing a copy of his report to a person whose name he never knew, but with whom he conducted negotiations which he could not recall, but whose proposal he rejected, after which he made no attempt to retrieve the report which he asserts was highly confidential. In my view, that evidence is inherently implausible. It does, however, reveal Mr Ammon's indifference as to the confidentiality or security of the information contained in the Ammon Report, which he had given to this unknown person and never retrieved.

47 In the course of cross-examination on this subject, Mr Ammon asserted:

[B]ut for the last day and a half I have been intensely cross-examined and after a while it tends to scramble the brain, as it is designed to do. Now, you're saying, 'Remember these precise dates' and what have you. I mean, there's only a certain length of time you can put up with this before you start forgetting things and saying silly things, because you're rattled.

48 In fact, at that point Mr Ammon had been cross-examined for less than a day. I attribute Mr Ammon's assertions to a realisation that the evidence he was giving was implausible and incorrect.

49 Mr Ammon was then cross-examined on the fact that there appear to be a number of different versions of the Ammon Report in existence. During the course of that evidence, Mr Ammon stated that he had made changes to the report even after he had entered into the HoA with ConsMin. When asked to explain that conduct, he said:

The bottom line is these things are a work in progress and you go through and you check the English, you try and modify it as you go through. This was - the numbers actually issued for commercial purposes I think were three and I may well have tinkered with this a couple of years down the track without any real intent of publishing it or sending it off to any future buyers because the project has gone. It just caught a ...

50 Later in his evidence he sought to justify changing the document because of the possibility that, under the HoA, the project could revert to him after five years. Although nothing appears to turn on the changes, Mr Ammon's differing and implausible explanations for them give me another reason to doubt his evidence generally. I do not accept Mr Ammon's explanations for the changes he made to the document.

51 In early March 2002, Mr Ammon rang Mr Peter Beilby, who he understood to hold a senior position at Portman Ltd, a mining company. Mr Ammon had worked for Mr Beilby many years earlier. Mr Ammon asked Mr Beilby whether Portman might be interested in investing in an iron ore project. Mr Beilby responded affirmatively.

52 Mr Ammon sent a copy of the Ammon Report to Portman Ltd, under cover of a letter dated 11 March 2002 addressed to Mr Ian Burston, the managing director of Portman Ltd. The letter commenced:

I am the owner of EL47/1140 containing the Mindy Mindy Creek Iron Pisolite Resource. The licence is currently proceeding through the Native Title Act under 'expedited procedure' and I am now seeking expressions of interests from persons or companies who may have an interest investing in a potentially large iron ore mining operation.

53 The letter contained no claim to confidentiality. Mr Ammon did not receive any response from Portman Ltd. He never attempted to retrieve the Ammon Report from Portman Ltd.

54 On 11 March 2002, Mr Ammon delivered to ConsMin an envelope containing a copy of the Ammon Report under cover of a letter dated 11 March 2002 addressed to Mr Kiernan, the managing director of ConsMin. The letter was in exactly the same terms as the letter to Mr Burston of Portman Ltd.

55 Mr Kiernan cannot recall whether or not he read the Ammon Report at the time that it arrived. If he did so, he would have flicked through it for no more than a couple of minutes. He referred the letter and accompanying report to Mr Vivian. Mr Vivian said in evidence, and I accept, that he read the Ammon Report as referring only to deposits that lay within Mr Ammon's tenement. On 13 March 2002, Mr Vivian sent an email to Mr Kiernan advising that the deposit appeared to be of initial interest from two viewpoints. Firstly, it had a delineated resource of 87,000,000 tonnes at approximately 57% Fe and 11% LOI (loss on ignition) and secondly, that the document stated that typically substantially larger and richer tonnages underlie the mesa deposits. There is nothing in this email to suggest that Mr Vivian formed a view of the prospective project extending beyond Mr Ammon's tenement.

56 Mr Kiernan then instructed Mr Vivian to proceed and, on the afternoon of 14 March, Mr Vivian telephoned Mr Ammon and expressed interest in the project. They arranged to meet the following day.

57 On 15 March 2002, Mr Vivian and Mr Ammon met for about 30 minutes at ConsMin's offices. During the course of the meeting, Mr Ammon gave to Mr Vivian copies of some of the reports that he had obtained from the Mines Department, which were prepared by companies who had previously explored the ground; namely, OREX, Hamersley and BHP. Mr Ammon took the Roy Hill map to the meeting with him and pointed out a number of deposits shown on the map to Mr Vivian.

58 Mr Vivian's evidence, which I accept, was to the effect that so far as he was concerned, all discussion which took place at the meeting related to the area within Mr Ammon's tenement. Mr Ammon asserts, and Mr Vivian denies, that there was discussion about Mindy Mindy being part of the Yandicoogina-Marillana-Weeli Wolli palaeo drainage. I have many reasons to doubt Mr Ammon's evidence, but no reason to doubt Mr Vivian's evidence, which I accept in this regard. Mr Ammon's evidence of a lengthy conversation between himself and Mr Vivian in which he pointed out the connection between the Mindy Mindy Creek deposits and the palaeo drainage channels heading north-west towards the Yandi mines of BHP and Hamersley Iron is, I think, an invention designed to support his claim. I think it much more likely that any conversation at this first meeting would have been focused on Mr Ammon's tenement, EL47/1140. He was well aware that he had no security over any other ground. It is improbable that he would have specifically drawn attention to the value of other ground over which he had no security at such an early stage of his dealings with ConsMin. If Mr Ammon considered the ground beyond EL47/1140 was prospectively valuable, in accordance with the methodology he described, he would have secured that ground for himself before commencing the marketing of the project. I find that he did not believe that any of the ground outside EL47/1140 was sufficiently prospective to justify claiming and that he did not say anything on that subject to Mr Vivian.

59 There was no discussion at this meeting about confidentiality, nor any request by Mr Ammon that ConsMin execute a confidentiality agreement.

60 On 16 March 2002, Mr Ammon travelled to Hong Kong to take up employment.

61 It seems that Mr Vivian referred Mr Ammon's report to Mr Colin Smith, the chairman of ConsMin. Mr Smith has extensive experience in the minerals industry, including five years in which he was the general manager of operations for Hamersley Iron Ltd in the Pilbara.

62 After reviewing the Ammon Report, Mr Smith sent a memorandum dated 27 March 2002 to Mr Kiernan. In the memorandum, he expressed the view that Mr Ammon's comments about gaining access to the Mount Newman or Hamersley rail systems, and blending lesser grade ore with Newman or Hamersley's higher grade ore were 'dreamland stuff'. He also expressed the view that the 87,000,000 tonnes of identified resource was 'probably fairly much worthless' but that the potential value in the project was associated with the presence or otherwise of an underlying higher grade pisolitic material similar to that discovered at Yandicoogina. However, he expressed doubts arising from the fact that BHP and Hamersley had both relinquished tenements covering Mindy Mindy and in that context, observed that Mr Ammon 'only acquired the ground in November 2001'.

63 The terms of the document are consistent with Mr Smith's evidence to the effect that he construed the Ammon Report as only applying to Mr Ammon's tenement. I accept that evidence.

64 Mr Smith recommended that ConsMin obtain an opinion from a geologist experienced in iron ore as to the possibility of deeper higher grade mineralisation and if that opinion was positive, to proceed to buy their way into the project by spending $200,000 on drilling and metallurgical analysis.

65 After Mr Kiernan read Mr Smith's views, he instructed Mr Vivian to ask Mr Ammon for permission to send a geologist to evaluate his tenement and for an option or first right of refusal.

66 In an email sent to Mr Ammon in Hong Kong on 17 April 2002, Mr Vivian asked Mr Ammon to telephone him to discuss the Mindy Mindy project. It seems that they may have had a short discussion by telephone, after which Mr Vivian sent a further email to Mr Ammon advising that ConsMin wished to send a geologist to 'look at the ground and review the literature on it'. However, before taking that step, the email advised that ConsMin wished to have an option or a first right of refusal. Mr Vivian proposed an option period of 60 days.

67 By email of the same day, Mr Ammon replied advising that he had no difficulty with ConsMin looking at the ground, with or without the 60-day exclusive option, provided that the native title claimant was contacted before ConsMin went to the site. Mr Ammon offered ConsMin a 90-day/three month exclusive option for $25,000.

68 On 22 April 2002, there was an exchange of emails between Mr Ammon and Mr Vivian in relation to native title issues. In the course of his email to Mr Vivian, Mr Ammon wrote:

You are welcome to carry out any work on the lease approved by the council, no deals will be done with any third party for 60 days as from today 22-04-2002 in order to ensure you you [sic] have a fair go (there is no charge for this), if however you want first right of refusal ie the right to match any other offer made, you will have to pay for it as outlined in last email for the simple reason that it gives you a huge commercial advantage at my expense, the other interested parties would soon lose interest once they found out some [sic] else had first right of refusal ie how long would you stay interested if I gave Portman Mining first right of refusal.

For your peace of mind the 5 project descriptions I sent out all went out at the same time and while all five parties contacted me quickly expressing interest (iron ore mines don't turn up every day) we both know it could take years for a deal to go through.

69 There are a number of aspects of those assertions which were quite untrue and must have been known by Mr Ammon to be untrue. At that stage, there were no interested parties other than ConsMin, and Portman had expressed no interest whatsoever. Mr Ammon had not sent out five project descriptions, only three. One of those was sent to a person whose name he never knew and in respect of whom he could remember nothing of substance in relation to any negotiations by the time of trial.

70 When confronted with these obvious lies in the course of cross-examination, Mr Ammon steadfastly refused to acknowledge that they were deliberate falsehoods. The exchange was as follows:

'For your peace of mind the five project descriptions I sent out' - pausing there, that's a lie?---It's sales pressure, mate.

Yes, that's untrue. You didn't send out five?---No, that's not correct.

'Four went out at the same time.' That's not true either because two went out at the same time and one went out a month earlier, 'and while all five parties contacted me quickly' - pausing there, that's a lie?---It's not correct.

Yes, well, it's a lie?---That's your term.

Do you know what a lie is?---It's not correct.

You knew it to be incorrect?---It's not correct. It's simply a sales pitch.

It's not correct and you knew it to be incorrect. Is that so?---No, I'm not agreeing with you on it, sir.

You thought it was true?---I thought it was a fair comment to make in the circumstances.

What, it's fair? It's fair to say things that are false and you know to be false?---This sort of proposition is very common in business to gain competitive advantage.

71 Mr Ammon's prevarication when confronted with obvious lies is another reason why I do not accept his evidence generally, unless it is either inherently plausible or corroborated by other credible evidence.

72 At about this time (probably on 16 April 2002), Mr Vivian telephoned Mr Martin Reynolds of Mackay and Schnellmann Pty Ltd, geological and mining consultants. Mr Vivian advised Mr Reynolds that ConsMin wanted him to have a look at the ground on Mr Ammon's tenement. The two men met on 23 April 2002 to discuss the project. In the course of that meeting, Mr Vivian gave Mr Reynolds the Ammon Report and the other documents that he had been given by Mr Ammon.

73 By letter dated 24 April 2002, Mr Reynolds provided a quotation for the consultancy project, which was accepted two days later by Mr Vivian on behalf of ConsMin.

74 In the course of undertaking preparatory work for the site visit, Mr Reynolds apparently came to the view that Mr Ammon's tenement, EL47/1140, did not cover the entire area with potential for economic mineralised deposits and that there was ground adjacent to Mr Ammon's tenement which was open to claim. Accordingly, on 29 April 2002, prior to his site visit, he recommended to Mr Vivian that ground adjacent to Mr Ammon's tenement be claimed by ConsMin. Mr Vivian communicated that recommendation to each of Mr Smith and Mr Kiernan. Both men supported Mr Reynold's recommendation and Mr Vivian was instructed to implement it.

75 Each of Mr Vivian, Mr Smith and Mr Kiernan gave evidence to the effect that prior to the recommendation from Mr Reynolds, they had not appreciated from reading the Ammon Report that there was a prospect of economic mineralisation on ground not covered by Mr Ammon's tenement but adjacent to it. I have no reason to reject that evidence, which is consistent with the contemporaneous documents, and I accept that it was Mr Reynolds who first appreciated that the material provided by Mr Ammon, perhaps augmented by his own knowledge and reviews of geological mapping, raised the prospect that ground not covered by Mr Ammon's tenement might also contain economically viable deposits of iron ore.

76 There was considerable argument at trial directed to the findings that should be made with respect to the extent of the contribution made by Mr Reynolds to the conclusion that ground outside EL47/1140 was sufficiently prospective to justify claiming it. Each party submitted that I should draw an inference adverse to the other from the failure to call Mr Reynolds to give evidence. Mr Ammon put his submission on the basis that Mr Reynolds was ConsMin's consultant at the time of his report. ConsMin put its submission on the basis that Mr Reynolds has recently been a consultant to Iron Ore Holdings.

77 I do not consider it is necessary to attempt to suppose what Mr Reynolds might have said had he been called, as the relevant facts appear to me to be clear. They are:

(a) The Ammon Report did not expressly refer to the prospectivity of ground outside EL47/114, nor was an inference of such prospectivity obvious on the face of the report.

(b) The Ammon Report did contain information as to economic prospectivity of the ground within EL47/1140 which would put an astute and technically qualified reader of that report on to enquiry as to the prospectivity of the ground adjoining EL47/1140.

(c) Mr Reynolds was such an astute and qualified reader who, prompted by the Ammon Report, gave consideration to the prospectivity of ground adjoining EL47/1140, and based on the information contained within that report, perhaps augmented by his own views and limited personal research, concluded that the adjoining ground was sufficiently prospective to justify claiming it.

(d) But for the Ammon Report neither Mr Reynolds nor ConsMin or PIO would have concluded that the ground adjoining EL47/1140 was sufficiently prospective to justify claiming it.

(e) None of Mr Ammon, or any of the personnel within ConsMin, had formed the view that the ground outside EL47/1140 was sufficiently prospective to justify claiming it before Mr Reynolds expressed that view.

78 So, the view that the ground outside EL47/1140 was sufficiently prospective to justify claiming it was first formed by Mr Reynolds, but he would not have formed that view unless he had been provided with the Ammon Report. The precise extent of the independent thought or research brought to bear on the subject by Mr Reynolds does not seem to me to matter.

79 Consistently with the instructions he had been given by Mr Smith and Mr Kiernan, Mr Vivian instructed Mr Ian Faris, the tenements manager for ConsMin, to undertake the work necessary to apply for tenements on ground adjoining Mr Ammon's tenement EL47/1140. At Mr Kiernan's suggestion, Mr Vivian also asked Mr Faris to find out whether a company could be formed in the name 'Pilbara Iron Ore', which could then apply for those tenements. At that time, it was ConsMin's standard practice to utilise private company subsidiaries to handle discrete mining projects. Accordingly, PIO was incorporated in early May 2002.

80 Mr Faris and Mr Vivian worked together to determine the precise boundaries of the ground for which ConsMin would apply. They drew plans for one application for an exploration licence covering 26 graticular blocks to the north and west of Mr Ammon's tenement and another covering 9 graticular blocks to the east of Mr Ammon's tenement. In addition, applications were prepared for two prospecting licences covering a long narrow strip of land between the graticular blocks the subject of ConsMin's applications, and the ground the subject of tenements held by others. That land came to be free from mining claims because of a change in datum points adopted by the Mines Department in December 2000, which led to a slight misalignment between blocks which were the subject of previously granted tenements, and the blocks used for these applications.

81 ConsMin's applications for those tenements, which became EL47/1191, EL47/1192, PL47/1156 and PL47/1157 were lodged at the Mines Department on 9 May 2002. ConsMin did not tell Mr Ammon that they were making these applications, although the lodgment of an application for a mining tenement is of course a public process which could have been detected by Mr Ammon from Hong Kong had he chosen to use Tengraph, the Internet search facility offered by the Mines Department. In fact, Mr Ammon became aware of PIO's applications through this means not later than the end of May 2002.

82 Mr Reynolds made a visit to the site on 15 May 2002. After that visit, he advised Mr Vivian that he had seen iron outcrops outside Mr Ammon's tenement area beside the access route to the tenement held by Mr Ammon and expressed the view that the palaeo drainage responsible for the deposit of the mineral most likely extended to the north-west of Mr Ammon's tenement.

83 Mr Reynolds produced a report of his investigations dated 17 May 2002. In that report, he confirmed his oral advice to Mr Vivian to the effect that, in his view, there was an area to be interpreted as a palaeo channel immediately to the north-west of Mr Ammon's property, connecting the Yandicoogina-Marillana drainage system with Mindy Mindy Creek, which, in his view, had potential for channel iron deposits. He further recorded that he had observed outcrops in that area during his site visit. In his view, by analogy with the Yandicoogina-Marillana deposits, the conceptual potential size of the deposits within Mr Ammon's tenement and in the area to the north-west was in the order of 1,800,000,000 tonnes, half of which was within Mr Ammon's tenement.

84 In the detailed section of his report, Mr Reynolds ventures two alternative opinions as to the ancient configuration of the palaeo drainage system in the area. The detailed geological hypotheses advanced by Mr Reynolds go well beyond any proposition contained in the Ammon Report and clearly represent his own thinking.

85 Mr Reynolds also reported upon the hard rock iron deposits located to the south of Mr Ammon's tenement. He expressed the view that only about half of that deposit was within Mr Ammon's tenement. However, in Mr Reynolds' view, the hard rock deposit was an unattractive exploration target because it was small with little or no potential for increment in size, was located in rugged terrain and had a high phosphorus content.

86 Mr Reynolds' report contains a detailed summary of the previous investigations carried out by tenement holders in the area.

87 Mr Reynolds also expressed views in relation to what Mr Ammon had characterised as the 'iceberg' theory and expressed the view that the ratio of concealed to visible ore in the Yandicoogina-Marillana area is more likely 3:1 than the 10:1 ratio proposed by Mr Ammon. In Mr Reynolds' view, it was dubious to apply any multiplier to the quantified mesa material in the Mindy Mindy Creek area. In general, Mr Reynolds' view was that the area was prospective and in his report, he confirmed his earlier recommendation to the effect that areas adjacent to Mr Ammon's tenement should be claimed by ConsMin, and further recommended that negotiations should be undertaken with Mr Ammon to acquire an interest in EL47/1140. In Mr Reynolds' view, once such an interest had been obtained, further exploration of the area should be undertaken.

88 On 18 May 2002, Mr Ammon sent an email to Mr Vivian inquiring as to the progress in ConsMin's evaluation of the site. Mr Vivian replied by email dated 20 May 2002 in which he requested a 90-day extension of time under an exclusive option commencing on the expiry of the previously agreed 60-day period in return for a consideration of $10,000.

89 Mr Ammon responded to that email by an email dated 21 May 2002. In response to the proposed 90-day extension, he wrote:

Before I can decide on an extension I would need to know what activities have you undertaken on the lease so far and what activities do you intend to carry out on the lease in the 90-day period just requested, I would also like some feed back as to the land council's response to your activities.

90 Mr Ammon's reference to the 'lease' is plainly a reference to EL47/1140. It is clear from the terminology which he used in this email, that, so far as he understood, the land the subject of their negotiations, and in respect of which an extension of time was sought, was the land the subject of his tenement.

91 On 22 May 2002, Mr Faris sent an email to Mr Ammon dealing with native title issues. Mr Ammon responded by email the following day (23 May 2002), in which he advised that he was prepared to agree to extend his undertaking not to enter into any agreement with any other party in relation to EL47/1140 for a further 90 days at the rate of $5000 per 30 days.

92 In the course of advancing that proposal, he wrote:

Considering the size of the asset being offered and the fact that your main competitor for the project (at this stage) was less than pleased with the 60 day agreement I gave you last time and may well walk when he finds out about the 90 agreement offered (I certainly would) I don't think you have any grounds for complaints with the $A5000 per 30 days asking price.

93 This assertion was plainly a deliberate lie, which Mr Ammon accepted in the course of cross-examination. ConsMin had no competitors for the project. Mr Ammon also accepted that if he owed ConsMin a duty to act honestly and in good faith (corresponding to the duty which he alleges ConsMin owed him), he was not fulfilling that duty when he wrote that email.

94 On 23 May 2002, Mr Faris replied to Mr Ammon's email, generally accepting his terms for the extension, but proposing that it be structured on the basis of a 60 day extension at $5,000 per 30 days, and 'an ongoing option for $A5,000 per 30 day period until the Native Title problems are resolved'. Mr Ammon accepted that revised proposal by receiving payments made in accordance with its terms.

95 Mr Ammon asserts that in the latter part of May 2002 he entered into telephone discussions and email correspondence with Mr Kiernan. He says that in the course of those communications, Mr Kiernan indicated to him that ConsMin was incorporating PIO in order to hold the iron ore assets for their joint venture. Mr Ammon said that he understood that as a result of this statement he was going to have an interest in PIO.

96 Mr Kiernan denies that any such communications took place. Mr Kiernan was a credible witness whose testimony was consistent with the contemporaneous documents. To the extent that his testimony conflicts with Mr Ammon's, I have no hesitation in accepting Mr Kiernan's evidence in preference to that given by Mr Ammon. In this particular instance, the evidence given by Mr Ammon is inherently implausible because at the time he says this conversation took place, there had been no discussion whatever as to the form in which ConsMin would invest in tenement EL47/1140 and, in particular, no discussion of a joint venture.

97 Mr Ammon also asserted in evidence that after he became aware that PIO had applied for EL47/1191 and EL47/1192, he contacted Mr Kiernan for an explanation - either by telephone or by email. He says that he complained that ConsMin's actions in applying for the tenements adjacent to his were a breach of commercial confidence. He says that he received a response, which he believes was by an email which he cannot now locate, to the effect that the applications had been made for and on behalf of the joint venture that was under negotiation between ConsMin and Mr Ammon. He says that he understood this response to mean that although ConsMin was pegging the ground (through PIO), there was no problem because it was all going to be part of the Mindy Mindy Joint Venture which they had commenced negotiating.

98 These assertions were emphatically denied by Mr Kiernan in his evidence. Mr Kiernan's denials are entirely plausible, and I have no hesitation in accepting them. The email traffic between Mr Ammon and ConsMin has apparently been preserved in full and is consistent and sequential. I do not accept Mr Ammon's assertion that emails covering such an important issue have 'gone missing'. Further, as I have already observed, there simply were no joint venture negotiations at this stage. If, as Mr Ammon asserts, he believed that ConsMin had acted improperly in applying for those tenements, it is highly improbable that he would simply have allowed the matter to rest on the basis that he would be given an interest in those tenements in the course of some future commercial negotiations, which had not yet commenced.

99 Mr Vivian said in cross-examination that he became aware, at some point, that there was 'a problem' with Mr Ammon in relation to tenements EL47/1191 and EL47/1192. However, he was only aware of that as a result of something he was told by 'fellow employees' he did not identify. There was no complaint made to him and he was not a party to any discussions with Mr Ammon on the subject, and he was extremely vague as to when he might have become aware of 'the problem'. I think it is most likely that Mr Vivian was recalling the problem which arose with Mr Ammon during the latter part of 2003, rather than any issue during mid-2002. The vagueness and hearsay nature of his evidence on this topic leads me to the conclusion that it does not provide any significant support for Mr Ammon's version of events.

100 On 10 December 2003, Mr Ammon made a statutory declaration in support of a caveat which he lodged against PIO's tenement EL47/1191. In that statutory declaration, Mr Ammon relates the course of events with respect to the negotiations between ConsMin and himself leading to the execution of the HoA. In that statutory declaration, he makes no reference whatever to the communications which he now says took place between himself and Mr Kiernan in the latter part of May and early June 2002, in which Mr Kiernan advised him that the two tenements, including EL47/1191, had been acquired partly on his behalf. If those conversations had taken place, it is extraordinary that they would have been omitted from a statutory declaration in which Mr Ammon claimed an interest in those tenements. In my view, it is clear that the assertions which Mr Ammon now makes as to the conversations and emails which passed between himself and Mr Kiernan are a recent invention, specifically designed to bolster his case.

101 The evidence establishes that the first commercial negotiations between Mr Ammon and ConsMin in relation to the acquisition by ConsMin of an interest in EL47/1140 commenced on 11 June 2002 when Mr Ammon sent an email to Mr Neil Greygoose, the company's secretary and chief financial officer of ConsMin, to which Mr Ammon attached two alternative proposals. The first proposal was advanced under the heading 'Fund New Float'. The first three terms of that proposal were as follows:

1. Provide $A500,000 to pay the cost of floating E47/1140 (currently in my name) and E47/1191 (currently in your name) into a new company listing on the ASX.
2. Consolidated Minerals would receive 20% of the new shares for providing the startup seed capital and E47/1191; I would receive 40% of the new shares in return for E47/1140, which contains all of the currently known resource; the remaining 40% would be issued to the general public.
3. Assuming an initial issue of 100,000,000 shares at $A 0.20 each, Consolidated Minerals would receive: 20,000,000 shares; I would get 40,000,000 shares and the general public would get the remaining 40,000,000 shares issued at $A0.20 (or better depending on the market) raising $A8,000,000 to evaluate the resource.

102 I digress to observe that the terms of this offer are not consistent with any understanding by Mr Ammon to the effect that he had a beneficial interest in EL47/1191, and are only consistent with an understanding that the tenements were fully owned by the respective parties in whose names they were registered.

103 The second proposal was advanced under the heading 'Five Year Option for ConsMinerals to Purchase'. The terms of that proposal were as follows:

1. $A250,000 for the first-12-months,
2. $A1,000,000 for the remaining 48 months if required.

1. $A25,000,000 in cash
2. 10,000,000 shares in Consolidated Minerals
3. $A2.00 per tonne production royalty on all iron ore sold by Consolidated Minerals ie E47/1140, E47/1191 and other leases subsequently applied for by Consolidated Minerals for the purposes of iron ore mining.

104 It was submitted on behalf of Mr Ammon that the terms of this offer reflect his understanding that he had a present entitlement to the benefit of ore produced from EL47/1191. I do not accept that submission. Other terms of the offer included demands for $25,000,000 in cash. Plainly, Mr Ammon had no understanding of a present entitlement to that amount. The terms of the royalty are, in my view, simply a proposal which would provide a future revenue stream to Mr Ammon and cannot be construed as reflecting upon any understanding as to present entitlements. The reference to EL47/1191 is in an offer for the outright sale of EL47/1140 to ConsMin. So the royalty stream from that tenement would flow at a time when Mr Ammon had no ownership of it. It follows that Mr Ammon's reference to a royalty stream EL47/1191 in this context does not support any inference that he believed he had any entitlement to an interest in that tenement.

105 A third page attached to the email set out a number of general conditions. The first of those was as follows:

1. Both the offers described above consist of the right to explore and evaluate all pisolite resources found on E47/1140 only, both offers specifically excluded the Mindy Mindy bedded hematite deposit located to the south of the lease, or any other iron resource found on E47/1140, which remain the personal property of Derek Ammon.

106 I digress to observe that the terms of this condition are only consistent with an appreciation or understanding that the only rights which Mr Ammon had available to transfer were rights to mine on tenement EL47/1140. The terms are entirely inconsistent with any appreciation or understanding on his part to the effect that he had present rights in respect of any other tenements.

107 Term 3 of the general conditions gives rise to the same inference. It was as follows:

1. The current 60 day agreement is: that I will not enter into any legally binding arrangements with regard to E47/1140 with any third party for the duration of the agreed period.

108 Term 5 of the conditions said to apply to the second alternative offer; namely, the option to buy, was expressed in the following terms:

1. At the end of the five years you must buy or walk ie if you don't exercise the option to buy, all leases held or applied for in relation to this project, plus all accumulated technical data must be returned to me free of charge without encumbrance.

109 It was submitted on behalf of Mr Ammon that this term reflects an understanding on his part to the effect that he had a present interest or entitlement to all tenements held in relation to the project. I do not accept that submission. The term proposed was a term to the effect that, if ConsMin elected not to proceed with the project generally, Mr Ammon should receive the project in its entirety. Viewed in that way, the proposal tells one nothing about his understanding of the entitlements which he had at the time he advanced the proposal.

110 Mr Greygoose provided a hardcopy of the email and attached terms to Mr Kiernan. Mr Kiernan's view of Mr Ammon's proposal is succinctly revealed in the words which he endorsed on it by hand at the time he passed it on to Mr Smith when he wrote:

111 Mr Kiernan also directed an email be sent to Mr Ammon advising that he was reconsidering ConsMin's position in relation to Mr Ammon's various proposals.

112 On 12 June 2002, Mr Ammon sent an email to Mr Faris dealing with native title issues. That email refers twice to EL47/1140, and makes no reference to the tenements for which ConsMin had applied, even though Mr Ammon was, by then, well aware of ConsMin's applications. Again, the terms of this email are entirely consistent with an understanding by Mr Ammon to the effect that his only interest was in EL47/1140 and that he had no interest or entitlement to the tenements for which ConsMin had applied.

113 Nor was there any different understanding within ConsMin. On 13 June 2002, Mr Smith provided a memorandum to Mr Kiernan, responding to Mr Kiernan's implicit request for advice in relation to Mr Ammon's proposals. Mr Smith's memorandum commences with the observation:

Ammon is not off with the pixies.

He is one.

114 The terms of the memorandum are only consistent with an understanding by Mr Smith to the effect that Mr Ammon had full ownership of EL47/1140, but ConsMin had full right, title and ownership to the tenements for which it had applied. For example, the memorandum contains the following paragraph:

But importantly we should through or with Ammon, get the process moving, ie the cultural clearance(s). Even if we start with only the Ammon property. (NB: Ammon's greed has put paid to that approach and we must therefore concentrate on our own property. If that proves successful we become well placed in negotiations opposite Ammon.)

115 On 18 June 2002, Mr Kiernan sent an email to Mr Ammon in which he advanced a counter-offer to the offers advanced by Mr Ammon on 11 June 2002. One of Mr Kiernan's introductory observations was in the following terms:

1. Ownership is in fact an exploration licence application.

116 The use of the singular suggests that it was common ground that the negotiation was for an acquisition by ConsMin of Mr Ammon's interest in his tenement.

117 The counter-offer advanced by ConsMin included the following terms:

1. $250,000 payment for 5 year option payable on execution of documentation.
2. Consolidated Minerals will fund all exploration and engineering activities up to full feasibility study with a minimum commitment of $1m within 30 months of documentation.
3. The respective ownerships of your ground at this point would be

118 Again, the terms of the offer are only consistent with a negotiation directed toward the acquisition by ConsMin of an interest in Mr Ammon's tenement. Mr Ammon accepted that view of the negotiations in the course of his cross-examination (although later in his evidence he equivocated in that regard).

119 Another term of ConsMin's counter-offer was as follows:

1. Should Consolidated Minerals decide not to proceed then total ownership would revert to yourself along with copies of all data.

120 Mr Ammon suggested in the course of his evidence that 'total ownership' was taken by him to be a reference to the entire project, and therefore to incorporate ConsMin's tenements. However, I do not accept that he held that view then or that it is a reasonable construction of the email. That is because the term follows other terms in which joint ownership of Mr Ammon's tenement was proposed. In that context, the expression 'total ownership' is to be taken as a reference to the ownership of Mr Ammon's tenement.

121 Mr Ammon replied to ConsMin's counter-offer in an email to Mr Kiernan of 24 June 2002. The email is headed:

The use of that heading, in the singular, is consistent with a negotiation which was limited to Mr Ammon's tenement.

122 The first paragraph of Mr Ammon's email contains proposals which link the payment of money from ConsMin to the grant of 'the licence'. Plainly the licence being referred to is EL47/1140 (which had not then been granted), which Mr Ammon accepted in his evidence. In that context, the following exchange occurred:

So it's got nothing to do with any other tenement. It's you get your money when 1140 is granted?---1140 is the only tenement I had legal claim to. That's the only tenement I can sell and that's---

123 Mr Ammon proposed two slightly modified terms in this email as follows:

1. $A5,000 per 30 days, paid in advance, starting from the end of the 60 day agreement, until the licence is granted.
2. $250,000 payment for 5 year option payable within 7 calendar days of the licence being granted.

It is clear from these terms that the only reference to any tenement in Mr Ammon's counter-proposal is to his tenement EL47/1140.

124 Mr Ammon otherwise accepted the terms proposed by ConsMin, which he incorporated into his response.

125 Mr Greygoose responded to Mr Ammon's email, advising that in his view the amendments proposed were sensible and that ConsMin accepted them. The email enquired whether Mr Ammon would like ConsMin's tenement solicitors, Blakiston & Crabb, to draw up documents at ConsMin's cost. Mr Ammon accepted that offer by email of the same date (24 June 2002).

126 On the same day, Mr Ammon sent a further email to Mr Kiernan, attaching an electronic file which contained an email exchange relating to native title matters between Mr Doug Stewart and Mr Ammon. In the course of that email exchange, Mr Stewart had asked for Mr Ammon's contact details, in order that documents concerning an objection to the expedited procedure, relating to tenement EL47/1140, could be sent to him. Mr Ammon replied in these terms:

Consolidated Minerals and my self have entered into a legally binding agreement in regards to E47/1147, part of that agreement gives Consolidated Resources the right to negotiate a legally binding agreement on my behalf in regards to Native Title matters, hence effective immediately, could you please direct all native title enquiries in regards to E47/1147 to:

Consolidated Minerals

Clearly, the reference to EL47/1147 is a typographical error, which should be read as a reference to EL47/1140. However, read in that way, it confirms that Mr Ammon's understanding of the agreement into which he had just entered was that it related only to tenement EL47/1140.

127 The same inference can be drawn from Mr Ammon's letter to the Mines Department of 26 June 2002, in which he advised:

Consolidated Resources and myself have entered into a legally binding agreement in regards to E47/1140, part of that agreement gives Consolidated Minerals the right to manage the affairs of [the] lease on my behalf, hence, effective immediately, could you please direct all enquiries concerning the above application to:

Mr Ian Faris

Consolidated Minerals

128 Mr Ammon sent a copy of that letter to Mr Kiernan. The same inference should be drawn from the terms in which Mr Ammon communicated with Mr Greygoose in an email of 27 June 2002, in which he advised:

To save your solicitors time when drawing up the contracts, I take this opportunity to remind you, that you have been offered the Mindy Mindy pisolite resource to explore and mine, the Mindy Mindy bedded hematite resource in the southern portion of the lease is not part of the deal, the contracts will have to clearly reflect this.

129 The reference to 'the lease' is plainly a reference to Mr Ammon's EL47/1140. The terms of this correspondence therefore reinforce my conclusion that all parties were well aware that the transaction which they had negotiated was limited to the acquisition of an interest in Mr Ammon's tenement by ConsMin/PIO.

130 That conclusion is further reinforced by the terms of a letter from Mr Faris of ConsMin to the Mines Department of 2 July 2002. In that letter, Mr Faris enclosed a statement of the financial capabilities of PIO in support of its application for tenements EL47/1191, EL47/1192, P47/1156 and P47/1157. The letter dealt separately with EL47/1140 and advised the Mines Department that ConsMin was currently finalising an agreement with Mr Ammon in relation to that tenement. The letter went on to request that the financial and technical capability statements be treated as applying to EL47/1140 as well, as ConsMin proposed to treat the five tenements 'as a single project'. Mr Ammon submits this latter reference shows that ConsMin regarded him as having an interest in all tenements. However, when the letter is read as a whole, it seems to me to support exactly the opposite inference; namely, that ConsMin were requesting the Mines Department to regard the tenements as one group for regulatory compliance purposes, notwithstanding their different ownerships.

131 And the same inference is properly drawn from an email to Mr Ammon of 11 July 2002 from Ms Christine Lovitt, a partner in the law firm, Blakiston & Crabb, in which she advised Mr Ammon that she had been instructed by ConsMin:

[T]o prepare an Agreement documenting the terms recently agreed with you in respect of your Mindy Mindy tenement.

132 Plainly, that email can only be read as a reference to Mr Ammon's tenement EL47/1140. Mr Ammon never took any step to correct the assertion that the agreement related only to that tenement. Rather, he acknowledged receipt of the email and advised Ms Lovitt that he would make contact again after examining the document enclosed with the email. Negotiations then took place between Mr Ammon and Ms Lovitt with respect to the precise terms of the proposed agreement. In the course of those negotiations, there was correspondence relating to the identification of the hard rock deposit, the interest in which was to be retained entirely by Mr Ammon. In the course of that correspondence, Mr Ammon was sent a map prepared by Mr Reynolds, which clearly showed that the hard rock resource was not entirely within tenement EL47/1140. However, Mr Ammon made no attempt to claim any interest in any land beyond EL47/1140 at the time the agreement was under negotiation. To the contrary, Mr Ammon proposed that the area of his retained interest be designated by reference to five graticular blocks falling within his tenement, and not going beyond it. Again, this is only consistent with an appreciation that the agreement under negotiation was restricted to the ground the subject of tenement EL47/1140.

133 In the event, Mr Ammon reached agreement with Ms Lovitt as to the terms of the HoA on 21 August 2002. Arrangements were then made for Mr Ammon and Mr Kiernan to meet in Hong Kong on 3 September 2002, as Mr Kiernan would be in Hong Kong that day in order to attend a conference in Shanghai.

134 Mr Ammon and Mr Kiernan met for the first time in the lounge of the Marriott Hotel in Hong Kong on 3 September 2002. Mr Kiernan's evidence, which I accept, was that there was no prior arrangement to execute the agreement at that meeting, but Mr Ammon proposed they execute the agreement there and then. At Mr Kiernan's request, they were joined briefly by Ms Lydia Hart, Mr Kiernan's secretary, who was present only for the purpose of witnessing Mr Ammon's signature. During the course of the meeting, Mr Kiernan agreed to amend the agreement to increase the amount of royalty to be paid to Mr Ammon from 1.25% to 2.5%. Mr Kiernan said, and I accept, that he agreed to that amendment after Mr Ammon had pointed out that the royalty stream payable under the Hancock and Wright Royalty Agreements was 2.5%, and had suggested that he should get the same.

135 Mr Ammon stated in evidence that he complained vehemently to Mr Kiernan about ConsMin's conduct in applying for tenements EL47/1191 and EL47/1192. He was not certain whether this conversation took place before or after Mr Kiernan had agreed to amend the royalty rate. Mr Kiernan emphatically denies that any such conversation took place.

136 I accept Mr Kiernan's evidence as to the course of the discussions in Hong Kong. In addition to the general concerns I have in relation to Mr Ammon's credibility, his evidence as to a complaint about ConsMin's alleged misuse of confidential information is inconsistent with other evidence which he gave, and with all of the contemporaneous documents. His oral evidence was to the effect that Mr Kiernan had caused him to understand, in the course of conversations and email communications which had taken place in late May and early June, that the tenements held in ConsMin's name were to be held on his behalf and included within the agreement which they had negotiated. His evidence was that he had negotiated the HoA in that belief (notwithstanding all the documentary evidence to the contrary to which I have referred). On Mr Ammon's version of events, there would be no reason for him to complain about ConsMin's conduct at the time of executing the HoA. To the contrary, on his evidence as to his communications and understanding at the time, the actions of ConsMin had expanded the area of ground in which he had negotiated an interest, to his benefit.

137 Mr Ammon's assertion to the effect that he complained vehemently to Mr Kiernan about ConsMin's misuse of confidential information at the time it applied for tenements EL47/1191 and EL47/1192, in the course of their meeting in Hong Kong, is also entirely inconsistent with an email which he sent to Ms Lovitt on 8 August 2002 - less than one month prior to his meeting with Mr Kiernan, in which he wrote:

[T]o this point I have relied on Consmineral's undertaking to negotiate in good faith and so far I have not been disappointed.

138 It is impossible to reconcile that statement with his assertion in evidence to the effect that he had previously complained to Mr Kiernan of misuse of confidential information and that he repeated that complaint in the meeting held on 3 September 2002.

139 For these various reasons, I reject Mr Ammon's assertion that at the time he executed the HoA, he believed that it extended to and included the tenements for which PIO had applied and which adjoined his tenement. I find that at the time he executed the HoA, Mr Ammon believed that it only extended to tenement EL47/1140 and any other tenements later acquired by and on behalf of the joint venture. That finding is of course irrelevant to the construction of the HoA, but it is relevant to Mr Ammon's claims in equity and for misleading and deceptive conduct.

140 I will defer detailed consideration of the precise terms of the HoA executed in Hong Kong until that portion of these reasons in which I address the arguments that have been advanced by the parties as to the proper construction and effect of that Agreement.

141 At some point, almost certainly prior to execution of the HoA, Mr Kiernan instructed Mr Faris to make application for additional unclaimed ground surrounding tenement EL47/1140 in order to square off the area. Mr Kiernan and Mr Faris discussed the areas in question and agreed as to the configurations of the tenements to be sought. On 5 September 2002, PIO lodged applications for exploration licences which became EL47/1124 and EL47/1225. The former comprised six graticular blocks on the eastern side of EL47/1140, and the latter four graticular blocks to the south west of that tenement.

142 By email of 9 September 2002, Mr Faris advised Mr Ammon of the applications for the tenements and suggested that they should be available to be viewed on the Internet search facility provided by the Mines Department.

143 Mr Ammon seeks to draw an inference from this advice to the effect that ConsMin were notifying him of tenements that were being acquired partly on his behalf and pursuant to the Joint Venture. However, there is nothing in the text of the email apt to convey that impression, and the advice is just as readily explicable on the basis that there was a project under development in which Mr Ammon had an interest in one tenement, and ConsMin the exclusive interest (and risk) in respect of other adjoining tenements. The fact that ConsMin did not advise Mr Ammon of its application for these two tenements until after the applications had been made suggests at least two things. The first is that there was no prior consultation as to this course, which might have been expected if the tenements were to be Joint Venture property. The second is that ConsMin may well have wished to avoid notifying Mr Ammon until after they had secured the ground lest he claim it himself, which would suggest that ConsMin at least regarded each party as free to act on its own interest, in respect of ground outside EL47/1140. I therefore find that PIO acquired those tenements on its own behalf and not on behalf of the joint venture.

144 Mr Ammon responded by email of the same day in the following terms:

I have checked out the new peggings on the web, ok no problems at this stage but I draw your attention to the fact that the Mindy Mindy Bedded Deposit may extend onto E47/1225.

The latter observation is inconsistent with the assertions made by Mr Ammon in evidence to the effect that he did not protest against PIO applying for these tenements because of an understanding that they would be held pursuant to the HoA and on his behalf. If that was in fact his understanding, there would be no point or purpose in referring to the fact that the hard rock deposit extended on to ConsMin's tenement. As he says he understood the HoA, he was to retain the exclusive right to that deposit. Mr Ammon's express observation to the effect that the hard rock deposit might extend on to ConsMin's tenement is only explicable if he understood that the HoA was confined to tenement EL47/1140.

145 In the latter part of September 2002, an issue arose in dealings with the Mines Department relating to the work programme for exploration on tenement EL47/1140. In the course of email exchanges relating to that topic, Mr Ammon advised Mr Peter Davies, of ConsMin, that:

[O]nce the licence has been granted and I have received the $250,000 option payment, the licence is, as far as I am concerned, your property and hence I have no objection to what you are proposing.

146 There is no reference at any point in these email exchanges to any of the other tenements. The terms in which Mr Ammon wrote are again consistent with his understanding that the agreement into which he had entered with ConsMin was restricted to EL47/1140.

147 On 4 February 2003, the application for tenement EL47/1140 was granted and Mr Ammon was paid $250,000 by ConsMin.

148 During May 2003, Mr Andrew Forrest of FMG contacted Mr Kiernan and arranged to meet with him to discuss the acquisition of an interest by FMG in the Mindy Mindy project. Negotiations then commenced in relation to a transaction having that effect. Mr Ammon was not advised of those negotiations.

149 On 5 June 2003, Mr Ammon sent an email to Mr Peter Davies, who had taken over as tenements manager of ConsMin in place of Mr Faris. The email took the form of a letter which was headed 'Requested Changes and Amendments to MINDY MINDY FARMIN JV HoA'. The text of the letter was as follows:

Under point 5.1 'Retained Interest' (p7) of the MINDY MINDY FARMIN JV HoA my retained interest is specified as block numbers: 2585u, 2586q, r, v and w.

Re-examination of the geological map supplied by Consolidated Minerals and your geological consultants provided for the identification of which blocks should be named as my retained interest, shows that the Mindy Mindy bedded hematite resource may in fact extend onto E47/1225 block 2585z, recently applied for by Consolidated Minerals. Would it be possible to amend the heads of agreement to include E47/1225 block 2585z as part of my retained interest.

150 The terms of this letter are entirely inconsistent with any understanding by Mr Ammon to the effect that the HoA conferred upon him a right to a retained interest in the hard rock deposit irrespective of the tenement upon which the deposit was located. To the contrary, the general thrust of the letter is to request an indulgence from ConsMin in the form of an extension of the description of his interest to additional blocks beyond tenement EL47/1140.

151 ConsMin did not reply to Mr Ammon's letter. On 21 July 2003, ConsMin announced to the Australian Stock Exchange that it had entered into a joint venture with FMG to evaluate and develop the Mindy Mindy iron ore project. The announcement advised that the joint venture 'will be on a 50/50 basis'.

152 The following day Mr Ammon sent an email to Mr Kiernan inquiring as to how there could be a 50/50 JV arrangement, given that he owned 20% 'of this project'. Mr Kiernan responded, advising that the arrangement with FMG took the form of FMG acquiring a 50% shareholding in PIO, so that Mr Ammon's percentages were not affected at all.

153 There were subsequent email exchanges between Mr Ammon and Mr Kiernan on the subject of the desirability of the transaction with FMG. In the course of that exchange, in an email dated 29 July 2003, Mr Ammon wrote to Mr Kiernan:

I have had a number of approaches from individuals would [sic] are interested in floating my retained interest and that makes this ground in its current 'preforrest' state potentially worth a great deal to me.

154 Mr Ammon accepted in his oral evidence that this assertion was not correct. The following exchange then took place with cross-examining counsel:

So if I could just follow on, so this is another lie that you've told Consolidated Minerals during the course of your dealings with them?---That statement I just pointed out is not correct.

Yes, and you knew it at the time not to be correct?---I can't remember everything.

If you don't know what a lie is, tell me, but that's a lie or was a lie?---I've just told you that article, those particular lines are not correct.

This exchange provides another example of prevarication by Mr Ammon when confronted with an obvious lie, and provides a further example of the reason why I do not generally accept his evidence where it conflicts with the evidence of other witnesses.

155 Another example is provided by an email which Mr Ammon sent to Mr Kiernan on 10 November 2003. In that email he wrote:

I also been [sic] approached by a number of stockbrokers with requests to float off my retained interest in E471140.

156 Mr Ammon accepted in cross-examination that this assertion was incorrect. When it was put to him in cross-examination that this was a further example of his propensity to tell lies if it suited his commercial purposes, he again prevaricated.

157 On 21 November 2003, Mr Ammon sent an email to Mr Kiernan in the following terms:

Some considerable time ago (around the time Forrest first bought in) I contacted Mark Davies pointing out that the Mackay / Schnellmann geology map of my retained interest (Mindy Mindy bedded hematite resource), prepared at your request, shows the ore body extending beyond the blocks designated as my retained interest in our JV agreement and onto your adjoining ground. In the letter to Mark I requested amendment of our JV agreement to reflect this fact but I have as yet received no response, this situation needs to be clarified, the clause in the JV agreement naming the specific blocks that constitute my retained interest should be removed reflecting the fact that this resource may extend beyond those blocks or some sort of covering letter should be provided clarifying the situation.

158 Mr Ammon's description of the land adjoining tenement EL47/1140 as 'your adjoining ground' is impossible to reconcile with his repeated evidence to the effect that he always understood the agreement which he had negotiated with ConsMin to give him the same interest in the tenements held by ConsMin as he enjoyed in EL47/1140. Mr Ammon's evidence in that respect is entirely inconsistent with every contemporaneous document and I have no hesitation in rejecting it.

159 Mr Kiernan replied to Mr Ammon's email inquiring as to whether he meant to refer to Peter Davies of ConsMin, to which Mr Ammon replied affirmatively. Mr Kiernan responded substantively to Mr Ammon's request by a letter dated 24 November 2003, in which he wrote:

I have reviewed the agreement, specifically with respect to the Retained Interest clause and do believe that no clarification is needed. The blocks that are to be retained as yours solely and not included in the joint venture are I think, clearly defined with no interpretation based on geological boundaries. In the agreement there is no reference to any areas outside of these blocks and there is no area of mutual interest contained in the agreement. However I am always open to suggestions in this regard if there is a benefit to our shareholders.

160 Thus, Mr Kiernan plainly had a view of the HoA in which its operation was restricted to EL47/1140. The fact that Mr Ammon had a similar view of the operation and effect of the agreement is apparent from an email which he had sent to the Mines Department at about this time (17 November 2003) in which he wrote:

Some time ago I pegged E47/1140 (since granted), there are two iron ore resources on the lease, the first a riverine pisolite resource, the second a bedded hematite resource. Consolidated Minerals entered into an agreement with me covering all the pisolite resource found on E47/1140, but not the bedded hematite resource found on E47/1140, which remains my exclusive property.

161 Notwithstanding the clear and unequivocal terms in which Mr Ammon wrote to the Mines Department, less than two weeks later, in an email of 29 November 2003 to Mr Kiernan, he disingenuously asserted:

[I]f I have in your opinion no interest in the above offending lease because it is 100% in your name, do I have in your opinion, any interest in any of the leases downstream from 47/1140 which were also pegged 100% in your name, again, this matter was raised with you on at least two occasions, and I wish to make it very clear that I only entered into agreement with you on E47/1140 on the understanding given to me by you at our HK meeting that I was entitled to 20% (diluting down to 2.5% as per agreement) of the entire project, ie E47/1140 pegged in my name, plus the other leases you subsequently peg in your name in relation to this project.

162 This email provides the first evidence of any assertion from Mr Ammon to the effect that he was entitled to an interest in the tenements held in the name of ConsMin, other than his oral evidence as to the discussions with Mr Kiernan in late May and early June, and again in Hong Kong in early September, which evidence I reject.

163 The evidence does, however, reveal one consistent pattern in Mr Ammon's conduct, and that is his willingness to tell lies if he perceives that they will advance his commercial interests. Another example of that propensity is provided by his email to Mr Kiernan of 2 December 2003, in which he replied to a request from Mr Kiernan to defer any further action for a week or so because Mr Kiernan would be overseas. Mr Ammon wrote:

I will get back to you/Davies on this matter as soon as possible, there is no urgency here, I know your [sic] a busy man, on another matter altogether, I have an in-principal [sic] agreement with Andrew Forrest on the floating off of my other iron ore properties, we are now hammering out the nuts and bolts, one of the questions arising is who is to be the sponsoring stockbroker for the issue.

Mr Ammon accepted in cross-examination that he had never arrived at an in-principle agreement with Mr Forrest.

164 As I have mentioned, Mr Ammon lodged caveats over tenements EL47/1191, EL47/1192, EL47/1224 and EL47/1225. I have already referred to the fact that the statutory declaration of 10 December 2003 which he made in support of those caveats makes no reference to the conversations with Mr Kiernan in which he alleges that Mr Kiernan acknowledged that the tenements for which ConsMin had applied were being held on his behalf. Nor does the statutory declaration make any reference to the conversation which he asserts took place with Mr Kiernan in Hong Kong in which Mr Ammon alleges that he complained of ConsMin's misuse of confidential information. That is because those assertions are a recent invention by Mr Ammon, designed to bolster his case.

165 On 1 April 2004, Mr Ammon swore an affidavit apparently intended for use in Warden's Court proceedings relating to EL47/1191, EL47/1192, EL47/1224 and EL47/1225. Although that affidavit relates the history of negotiations between Mr Ammon and ConsMin in some detail and refers to these proceedings, which had by then been commenced in the Supreme Court, the affidavit makes no reference whatever to the communications which Mr Ammon now asserts took place between him and Mr Kiernan at the end of May and early June 2002 or the conversation which he alleges took place between him and Mr Kiernan in Hong Kong on 3 September 2002, in which Mr Ammon asserts that he complained of ConsMin's misuse of confidential information. Mr Ammon's failure to refer to those obviously important matters in his affidavit reinforces my conclusion that they are a recent invention.

166 In the event, Mr Ammon and ConsMin have been unable to resolve their dispute and in 2004 Mr Ammon commenced these proceedings. Since then, ConsMin has continued to explore and develop the project, in conjunction with FMG, through PIO. In the course of those activities, on 5 March 2004, PIO applied for another exploration licence in the area, being EL47/1380. As there has been an order to the effect that the quantum of any relief to which Mr Ammon may be entitled in the form of damages or equitable compensation, be deferred for later determination, it is unnecessary to chart the work that has been done in developing the project, or to express any view as to its current value at this stage of these proceedings.

167 The evidence does establish that ConsMin, PIO and FMG have explored and planned the development of mining in the area without particular regard for the boundaries between EL47/1140 and the other adjoining tenements, on the basis that it is one single project being developed. I infer that course has been followed because of obvious practical reasons, when adjoining ground in a relatively remote location is being explored, and because the mining project, if developed, may well be developed as one project. However, that does not seem to me to shed any light on ConsMin's attitude towards the ownership of the various tenements, or to convey any admission against interest in that respect.

168 The parties led expert evidence covering three topics:

(a) the geological principles pertaining to deposits of pisolite iron ore generally, and in particular, the deposits in the Yandicoogina-Marillana-Weeli Wolli-Mindy Mindy Creek area;

(b) industry practice in relation to the use to which information of the kind contained in the Ammon Report might be put; and

169 The first two subjects are plainly appropriate topics for expert opinion evidence. During the trial, I expressed reservations on the question of whether the third topic was appropriately the subject of opinion evidence, given that the Ammon Report is written in language which is comprehensible to the court, albeit that technical terms are used within that document. It seemed to me then, and still seems to me, that in such a circumstance the proper ambit of expert evidence may have been limited to the meaning properly given to the technical terms used in the report, and did not extend to the meaning and effect of the report itself. However, notwithstanding the expression of those views, both parties led evidence on the subject. As it happens, the expert evidence which they led on that topic largely corresponds with the views which I would have formed without resort to such evidence in any event, and provides a convenient means for the expression of those views.

170 As I have mentioned, Mr Piestrzeniewicz was called to give evidence by Mr Ammon. He is a geologist with extensive experience in exploration for and mining of a variety of minerals, including iron ore. Although he has an ongoing commercial relationship with Mr Ammon, through Iron Ore Holdings Ltd, for reasons which will appear, it is unnecessary for me to assess the extent to which this relationship might affect the weight otherwise given to his evidence.

171 The evidence given by Mr Piestrzeniewicz addressed the first two topics I have identified above; namely, the geological principles relating to deposits of pisolite iron ore and the existence of industry practice relating to the use of information of the kind contained in the Ammon Report.

172 The evidence which he gave on the first subject was not controversial and corroborated the evidence given by Mr Ammon. It was not contradicted by any other witness. The effect of that evidence is generally to provide a context for the evaluation of the assertions made in the Ammon Report.

173 The second subject addressed by Mr Piestrzeniewicz was the question of whether there is an industry practice or standard in relation to the use to which information of the kind contained in the Ammon Report is put, in circumstances such as those which arose in this case; namely, in the context of a commercial negotiation, and a circumstance in which a party providing information has a mining tenement covering some, but not all, of the land to which the information might relate.

174 Mr Piestrzeniewicz asserted in evidence that it was his experience that in such a circumstance, the recipient of information of the kind contained in the Ammon Report would be considered by all involved to be under an obligation not to use that information for its own purposes, such as, for example, by applying for tenements in respect of adjoining ground. However, upon cross-examination, it became clear that Mr Piestrzeniewicz had never actually encountered a circumstance of that kind, and therefore could not speak of any experience of such a circumstance. Nor could he say that he had ever turned his mind to the outcome of such a circumstance before the question was posed to him in the context of this litigation. It is therefore clear that the view he expressed is not sustained by any actual experience which could be relied upon to establish an industry standard or practice. For that reason, I do not give Mr Piestrzeniewicz's assertion that there is such an industry standard or practice any weight.

175 Each of Mr Kiernan, Mr Vivian and Mr Davies expressed the view that in their experience there was no such practice. However, when regard is had to their evidence as a whole, including their cross-examination, it is I think fair to characterise their evidence as the expression of a personal view as to what should be the practice, rather than as providing evidence of an established or recognisable industry standard or practice.

176 For these reasons I conclude that the evidence does not establish that there is any particular industry standard or practice that would govern the use to which information of the kind contained in the Ammon Report could be put, in circumstances corresponding to those in which the Ammon Report was provided to ConsMin.

177 Mr Piestrzeniewicz also referred in his evidence to the Code of Ethics of The Australasian Institute of Mining and Metallurgy and the Code of Ethics of the Geological Society of Australia. Relevant portions of each of those documents were received in evidence. It is clear that Mr Piestrzeniewicz's familiarity and experience with each of those documents is very limited. But in any event, it seems to me to be clear that the terms of those documents are of no assistance in the resolution of the issues which arise in this case.

178 Clause 5 of the Code of Ethics adopted by The Australasian Institute of Mining and Metallurgy provides that:

Members shall apply their skill and knowledge in the interests of their employer or client for whom they shall act, in professional matters, as faithful agents or trustees.

It follows that a member:

...

(g) shall neither disclose nor use confidential information gained in the course of his employment without express permission.

179 This clause serves to reinforce the duty of confidence owed by any employee or private consultant to their employer or client. Thus, in the present circumstances, if it could be established that the Code of Ethics was a part of the substratum or framework of the employment relationship between ConsMin and, say, for example, Mr Vivian or Mr Davies, it could be applicable to the duties owed by each of those to ConsMin. However, it would not seem to me to add much to terms ordinarily implied into contracts of employment or engagement in any event. In addition, of course, its application in this case would beg the question of whether the information contained in the Ammon Report was properly regarded as confidential.

180 Article III(4) of the Code of Ethics of the Geological Society of Australia is equally unhelpful to the resolution of the issues in this case for the same reasons. It provides that:

A geologist shall not use, directly or indirectly, any employer's or client's confidential information in any way that is competitive, adverse, or detrimental to the interest of employer or client.

181 Therefore, if that clause added anything to the obligations ordinarily implied into the relationship between employer and employee or client and consultant (which I doubt), it would not have any application to the relationship between Mr Ammon and ConsMin in the circumstances of this case, and its application would in any event beg the question of whether or not the information contained in the Ammon Report was confidential. In addition, if Mr Ammon establishes that the information contained in the Ammon Report is confidential, it is difficult to see how either of the provisions in the Codes of Ethics identified by Mr Piestrzeniewicz could add anything to the duties which would be imposed by equity in any case.

182 For these reasons, I conclude that there is no industry standard or practice, nor any relevantly applicable code identifying appropriate conduct or behaviour which assists in the resolution of the issues which arise in this case.

183 Dr Jeffrey Vaughan was also called to give evidence on behalf of Mr Ammon. He holds a position as an Associate Professor in the Department of Applied Geology in the Western Australian School of Mines, which is a division of the Curtin University of Technology. He is acquainted with Mr Ammon, having taught him at the Kalgoorlie campus of the WA School of Mines. Because Dr Vaughan's evidence largely enunciates views I have in any event formed myself as to the construction to be placed upon the Ammon Report (which is the subject to which his evidence was directed), it is unnecessary to assess the extent to which his relationship with Mr Ammon might cast doubt upon his evidence.

184 In his report, Dr Vaughan succinctly described the Ammon Report in the following terms:

The Ammon report is mainly a compilation and interpretation of existing reports, maps and data, from a variety of sources, which were then assembled into a geological interpretation of the area within EL47/1140 (although the interpretation would extend beyond the boundaries of EL47/1140 by virtue of the fact that geology does not 'stop' at the boundaries). As far as I can tell, all of these sources were on the public record. As I understand the report, Mr Ammon took these disparate sources, both geographically and in time, and, presumably using his knowledge of geology, mining, processing and economics of iron ore mines, assembled them into a proposal that he believes has commercial value.

185 I agree entirely with that summary of the Ammon Report. It is a summary which includes a number of elements that may be of significance to the issues which arise in this case, each of which was expanded upon by Dr Vaughan in the course of his oral testimony. Those elements are:

(a) all the data and information contained in the Ammon Report was publicly available;

(b) the publicly available data was assembled and synthesised by Mr Ammon into a proposal to the effect that the area had commercial value; and

(c) the report provided a geological interpretation of the area within EL47/1140;

However, the information contained in the report in respect of EL47/1140 had implications for the land beyond the boundaries of that tenement.

186 On the question of the extent to which the report is to be construed as relating only to tenement EL47/1140, in the course of cross-examination, Dr Vaughan confirmed that anybody reading the Ammon Report would realise that it refers to the prospectivity of that tenement. He also acknowledged that it was not expressly stated anywhere in the report that it extended beyond the boundaries of EL47/1140. However, he expressed the view that the report 'implies a lot of stuff beyond 1140'. I accept that characterisation of the report, which seems to me to flow from its language, and in particular some passages to which I will shortly refer.

187 Dr Vaughan characterised the implications which arise from the Ammon Report as being 'obvious'. I do not accept that characterisation of the implications for two reasons. The first reason is that I have found that neither Mr Smith nor Mr Vivian realised the implications of the Ammon Report in respect of ground lying outside tenement EL47/1140 until those implications were drawn to their attention by Mr Reynolds. Each of Mr Smith and Mr Vivian are well qualified and experienced in the review of information of the kind contained in the Ammon Report, and yet each failed to identify the implications which arise from it in respect of ground outside EL47/1140. It is therefore, I think, a fair inference that those implications are somewhat obscure.

188 Nor do I think Mr Ammon, himself, appreciated those implications at the time he produced his report, or even for some time thereafter. I base that view on the fact that he chose to limit the ground which he included within EL47/1140, and thereafter made no attempt to expand upon the ground the subject of his tenements, despite having the opportunity and capacity to do so. I think it more likely than not, and I have found, that he did not apply for additional ground because he believed that he had captured all the ground likely to be of economic significance within EL47/1140.

189 The second reason I would not accept Dr Vaughan's characterisation of the implications of the Ammon Report for ground outside EL47/1140 as obvious, is the obscurity of the language that gives rise to those implications. As Dr Vaughan acknowledged, there is no express assertion of the proposition that economically viable deposits are likely to be found outside tenement EL47/1140 anywhere in the Ammon Report. Rather, the implication is to be drawn from three sources within the report; namely:

(a) the statement (made twice in the Project Summary, once in the page entitled 'Introduction' and again in the page headed 'Mindy Mindy Pisolite Resource Potential') that Mindy Mindy Creek was, in tertiary geological time, part of the Yandicoogina-Marillana-Weeli Wolli drainage system;

(b) the assertion that 'Clearly the entire length of the Mindy Mindy Creek paleochannel, and the beheaded section of the creek in particular, is highly prospective for subsurface, high grade, pisolite resources' (p 17); and

(c) Figure 2 of the report, which shows detrital ore located in the bed of the paleo-channel, which is shown trending north-west, a direction which is shown in the Figure as being 'to Weeli Wolli Ck'.

190 As Dr Vaughan acknowledged in his report, the Ammon Report does not state that the Mindy Mindy paleo-channel joins or connects with the Weeli Wolli paleo-channel, but because of the three references listed above, I agree with Dr Vaughan's view that the report offers a geological interpretation to the effect that such a join or connection is possible or probable. I accept that the possibility of such a join or connection between the two paleo-channels would be detected by an astute geologist, like Dr Vaughan, giving detailed and particular attention to the precise terms of the Ammon Report. It seems that Mr Reynolds drew such a conclusion from the terms of the Ammon Report, perhaps reinforced by his own knowledge and consideration of geological maps. However, the obscurity of the language, and the processes of deduction and reasoning required, are such that I do not think it fair to characterise the implications for ground outside tenement EL47/1140 as obvious.

191 ConsMin called Mr Michael McKevitt to give evidence. Mr McKevitt is a qualified geologist, who currently holds a position as Principal Mining Geologist with Golder Associates. He has worked as a geologist in a variety of different mines mining different minerals in different parts of the world.

192 Mr McKevitt's evidence covered much the same area as that covered by Dr Vaughan. The differences between the evidence which he gave and the evidence given by Dr Vaughan are differences in terminology rather than in substance. For example, Mr McKevitt described the Ammon Report in the following terms:

It is my opinion that the Ammon Report is intended to create interest for financial investment in exploration licence E47/1140. The report consists of a compilation of information, quotes, and concepts from previously published and publicly available data that promotes the impression that Mindy Mindy Creek is highly prospective for a significant pisolite iron-ore resource and mining operation. The information is not supported by any substantive data; rather it collects together information and presents it to indicate a substantial resource of iron-ore may exist within exploration licence E47/1140. The figures quoted in relation to resource tonnes and grades do not follow an accepted industry code or practice such as the JORC Code. (footnote omitted)

193 I accept that description of the Ammon Report, which appears to me to correspond in substance with the description given by Dr Vaughan.

194 Much of Mr McKevitt's evidence was directed to identifying, with precision and particularity, the publicly available information which corresponded to the data and assertions made in the Ammon Report. His evidence established, and I find, that all the data and information contained in the report was publicly available. That is not a surprising finding, given that the Ammon Report commences with an acknowledgement by Mr Ammon that most of the report 'consists of extracts of other people's work and that it contains substantial verbatim extracts from documents previously published by other authors'.

195 However, that does not mean that the Ammon Report is deprived of any element of novelty. The elements of novelty identified in the evidence of Dr Vaughan were confirmed by the evidence of Mr McKevitt, as the following passage from his cross-examination shows:

I suggest to you that the Ammon report discloses that Mr Ammon used geological knowledge in looking at that information and in setting it out as he has done in the report?---Yes.

He has not only set it out but he has assembled it in some instances in a form in which it wasn't previously assembled and I am referring in particular to the grid tables in the report?---Correct.

He assembled the information into a proposal which was intended to stimulate commercial interest?---That would be my opinion, yes.

And which the report presented as having commercial value?---The report itself, yes, definitely.

That information contains conclusions, does it not, in his report?---Yes.

Those conclusions hadn't previously been expressed so far as you are aware in any document?---Not to my knowledge, that's correct.

And so far as he made recommendations those recommendations haven't been previously made so far as you are aware in any document?---Not as far as I'm aware, no.

So, the elements of novelty contained within the Ammon Report are the synthesis and compilation of material from disparate sources, and the expression of the view that the deposits were likely to prove to be commercially viable.

196 On the question of whether a qualified reader of the Ammon Report would conclude that there were pisolite resources adjacent or contiguous to the boundaries of EL47/1140, Mr McKevitt expressed the view that such a reader would not immediately draw that conclusion without further work. However, Mr McKevitt also expressed the view that 'the geomorphology of the region makes targeting of the paleo-channels quite straight forward'. In his view, the publicly available information, including most particularly the Roy Hill geological survey map indicated the location of the paleo drainage system and, therefore, the areas in which it would be most logical to expect the potential occurrence of channel iron deposits. In his view, the approximate location where the Mindy Mindy Creek paleo-channel may have run through and connected into the Weeli Wolli Creek was clear from that map. Accordingly, it seems that in Mr McKevitt's view, very little additional information beyond that contained in the Ammon Report would be required to enable a qualified reader to conclude that there was a prospect of mineralisation in the area to the north-west of tenement EL47/1140, in the direction of Weeli Wolli Creek. However, as I have observed, Figure 2 within the Ammon Report seems to me to carry that connotation without need to resort to additional documents or information.

197 Accordingly, I do not accept Dr Vaughan's description of the implication of prospectivity in ground outside the boundaries of tenement EL47/1140 as being an obvious implication of the Ammon Report. Nor do I accept Mr McKevitt's view that further work would have been required before that implication could be drawn. Rather, I find that the implication could be derived from the Ammon Report itself, but was sufficiently obscure that it would only be drawn by some, but not all, experienced geologists reviewing that report. Mr Reynolds was one of those geologists who drew the implication, possibly reinforced by some analysis of his own. Mr Smith and Mr Vivian did not themselves draw the implication from the Ammon Report, until it was pointed out to them by Mr Reynolds.

198 I turn now to apply these findings of fact to the claims advanced by Mr Ammon.

199 As I have already observed, the clear and succinct enunciation of Mr Ammon's claims is a task that has consistently defeated his legal advisers. I will shortly endeavour to enunciate what I take his claims to be, drawing upon the disparate sources to which I have referred.

200 However, at the risk of inaccurate over-simplification, it seems to me that the essence of Mr Ammon's complaint is that ConsMin have used an idea which he had, and information which he gave them to apply for tenements additional to that which he held, with the result that if and when a mining project is established, Mr Ammon will not receive a share of the proceeds of all of that project, but only from mining undertaken on EL47/1140. Mr Ammon's sense of grievance in that regard has been exacerbated by the sale of 50% of the shares in PIO to FMG without prior reference to Mr Ammon. Mr Ammon feels that he has been sidelined while two financially stronger entities pursue the project in their own interests, even though he was the person who identified the economic potential of the area.

201 Mr Ammon's legal advisers have endeavoured to translate his grievances into a number of different causes of action. Sometimes that has required a degree of contortion. I do not make that observation critically because, of course, it is entirely proper for legal advisers to pursue all remedies reasonably open to their client, but for the purpose of providing a context for the sometimes convoluted propositions which underpin the causes of action relied upon.

202 Mr Ammon advances claims for breach of three contracts, being contracts which have been characterised as the First Agreement for Exclusive Access, the Second Agreement for Exclusive Access, and the HoA.

203 The fundamental difficulty with Mr Ammon's claim for breach of what he has characterised as the First Agreement for Exclusive Access, is that the arrangements which he made with ConsMin relating to its access to the ground, the subject of his application for EL47/1140, did not give rise to any binding and enforceable agreement. The exchange of consideration between the parties is, of course, an indispensable requirement before any agreement or arrangement can be binding and enforceable in law. Although the agreement has been characterised by Mr Ammon as an agreement under which he conferred an exclusive right of access upon ConsMin, Mr Ammon had no legal capacity to confer such a right, as his application for EL47/1140 had not then been granted. He did, however, undertake not to enter into any transactions with any third party in relation to the tenement the subject of that application for a period of 60 days as and from 22 April 2002, which would provide sufficient consideration passing from him to ConsMin. However, there was no consideration passing from ConsMin in exchange for that undertaking, as although there were communications relating to ConsMin paying Mr Ammon for a first right of refusal or exclusive option, no agreement to that effect was entered into at that stage, nor did ConsMin give any promises or undertakings in return for Mr Ammon's promise not to deal with other parties.

204 Accordingly, Mr Ammon's claim for breaches of a contract which he has characterised as the First Agreement for Exclusive Access must fail because the arrangements between himself and ConsMin did not, at that time, give rise to any binding and enforceable contract. However, nothing much turns upon this, as there was undoubtedly a binding agreement between Mr Ammon and ConsMin in approximately the form of the agreement which Mr Ammon has characterised as the Second Agreement for Exclusive Access, in respect of which Mr Ammon advances essentially the same claims as were advanced in relation to the First Agreement for Exclusive Access, save that EL47/1191 and EL47/1192 were applied for prior to the Second Agreement.

205 The exchange of emails between Mr Ammon, and Mr Faris and Mr Vivian of ConsMin between 18 and 23 May 2002 gave rise to a binding and enforceable agreement. The express terms of that agreement were essentially that Mr Ammon undertook not to enter into any agreement with any other party in relation to EL47/1140 for a period of 60 days after the expiry of his initial undertaking, for which he would be paid $10,000, and ConsMin was given the option to extend the period of operation of that undertaking for successive periods of 30 days in return for payment of $5000 for each such period, until the issues relating to the native title claims had been resolved, and inferentially, the tenement granted. During the period of the agreement, ConsMin was free to explore and evaluate the tenement, without objection from Mr Ammon.

206 In par 22 of the statement of claim, Mr Ammon asserts that the Second Agreement for Exclusive Access gave rise to an exotic variety of implied terms and conditions. They include terms and conditions relating to the use by ConsMin and PIO of information provided by Mr Ammon, and duties of good faith on the part of each of ConsMin and PIO.

207 In par 22A of the statement of claim, Mr Ammon asserts that the Second Agreement for Exclusive Access gave rise to obligations of confidence binding upon each of ConsMin and PIO, which restricted the use to which they could put the information which had been supplied by Mr Ammon.

208 The breadth and variety of the terms alleged to be implied, and the issues pertaining to the implication of a term of good faith are capable of giving rise to some complex and interesting questions of law - see for example, Mackay v Dick (1881) 6 App Cas 251; Butt v M'Donald (1896) 7 QLJ 68 at 70 - 71; Secured Income Real Estate (Australia ) Ltd v St Martins Investments Pty Ltd [1979] HCA 51; (1979) 144 CLR 596, 607; Peters (WA) v Petersville Ltd [2001] HCA 45; (2001) 205 CLR 126 at 142 [36]; Central Exchange Ltd v Anaconda Nickel Ltd [2002] WASCA 94; (2002) 26 WAR 33; Renard Constructions (ME) Pty Ltd v Minister for Public Works (1992) 26 NSWLR 234; Burger King Corporation v Hungry Jack's Pty Ltd [2001] NSWCA 187; Mason A, 'Contract and its Relationship with Equitable Standards and the Doctrine of Good Faith' (The Cambridge Lectures, 8 July 1993); Peden EM, Good Faith in the Performance of Contracts (2003); Douglas J, 'Exploring the Recent Uncertainty Surrounding the Implied Duty of Good Faith in Australian Contract Law: The Duty to Act Reasonably - Its Existence, Ambit and Operation' (Paper delivered at the LexisNexis Contract Law Master Class, 24 August 2006).

209 However, in the particular circumstances of this case, it is I think unnecessary to determine the precise breadth and application of the various terms and obligations asserted by Mr Ammon. Rather, it is I think preferable to focus upon the conduct which he asserts has given rise to breaches of those terms and/or obligations and, from that perspective, assess whether or not terms and/or obligations could be implied into the Second Agreement for Exclusive Access which could have been breached by that conduct. That course is practical because the conduct said to have given rise to the breaches is significantly narrower in scope than the various terms that are alleged to be implied into the agreement.

210 The conduct which Mr Ammon asserts gave rise to breaches of the terms and obligations implied or imported by the Second Agreement for Exclusive Access is pleaded in pars 37A.1 - 5 of the statement of claim. Those paragraphs occupy ten pages of the pleading and need not be repeated in full. In general terms, the conduct which is said to have given rise to a breach of contract is:

(a) provision of the information provided by Mr Ammon to Mackay and Schnellmann;

(b) use of the information provided by Mr Ammon for the purpose of applying for tenements adjoining his;

(c) use of the information provided by Mr Ammon in the course of the transaction with FMG, and by undertaking that transaction.

211 Dealing firstly with the provision of information provided by Mr Ammon to Mackay and Schnellmann, I cannot see any basis upon which a term or obligation could be implied into the Second Agreement for Exclusive Access which would render that conduct in breach. The whole purpose of the Second Agreement for Exclusive Access was to enable ConsMin to continue its evaluation of EL47/1140. The agreement was entered into at a time when both parties were aware that ConsMin had obtained the services of independent consultants to assist in its evaluation of the tenement. Accordingly, a term or obligation which precluded ConsMin from providing the information which had been provided by Mr Ammon to independent geological consultants, such as Mackay and Schnellmann, would be entirely inconsistent with the purpose and substratum of the agreement. Accordingly, no term to that effect could be implied (see Codelfa Construction Pty Ltd v State Rail Authority of New South Wales [1982] HCA 24; (1982) 149 CLR 337 at 404).

212 Turning to the allegation that ConsMin was in breach by reason of using the information provided by Mr Ammon for the purpose of applying for tenements adjoining his tenement, the requirements that must be satisfied before any terms can be implied into a contract are well known. They are set out in the following passage from B.P. Refinery (Westernpoint) Pty Ltd v President, Councillors and Ratepayers of the Shire of Hastings (1977) 180 CLR 266 at 283:

The conditions which any proposed implied term must satisfy are:

(1) it must be reasonable and equitable;

(2) it must be necessary to give business efficacy to the contract, so that no term will be implied if the contract is effective without it;

(3) it must be so obvious that 'it goes without saying';

(4) it must be capable of clear expression;

(5) it must not contradict any express term of the contract.

213 The High Court in Codelfa Construction Pty Ltd has also made it clear that the express terms of the contract are critical to the implication of a term. The express terms of the contract are the sole source of the implication of the term. Extrinsic circumstances cannot be relied upon in order to imply the term - only as an aid to construction of the express terms. This appears clearly in the following passage from the judgment of Brennan J in Codelfa Construction Pty Ltd at 403:

Although the necessity for the term to be implied must appear from and in the express terms of a contract, not from extrinsic circumstances, those circumstances may aid in ascertaining the meaning of the express terms and in identifying the matters to which they relate. The meaning and operation of the express terms, thus established, are the sole foundation for implying a term which the parties have not expressed. The relationship between the construction of express terms and the implication of a term is stated by Jordan CJ with his accustomed lucidity in Heimann v Commonwealth (1938) 38 SR(NSW) 691 at 695:

'In order to justify the importation into a contract of an implied term which is not to be found in the express language of the contract when properly construed, and is not annexed by some recognised usage, or by statute or otherwise, it is essential that the express terms of the contract should be such that it is clearly necessary to imply the term in order to make the contract operative according to the intention of the parties as indicated by the express terms. It is not sufficient that it would be reasonable to imply the term: Bell v Lever Bros Ltd [1931] UKHL 2; [1932] AC 161 at 226. It must be clearly necessary. And the test of whether it is clearly necessary is whether the express terms of the contract are such that both parties, treating them as reasonable men - and they cannot be heard to say that they are not - must clearly have intended the term, or, if they have not adverted to it, would certainly have included it, if the contingency involving the term had suggested itself to their minds ...'

The cases which, in recent times, have countenanced a reference to extrinsic facts are cases where the reference is made in order to understand the meaning and operation of the express terms of a contract; no case in this Court has approved an examination of extrinsic facts in order to find in them a promise to be implied.

214 The fundamental difficulty which Mr Ammon confronts in asking the Court to imply terms into the Second Agreement for Exclusive Access to the effect which he alleges, is that the agreement is only concerned with an undertaking given by Mr Ammon to the effect that he would not enter into any agreement with any other party in relation to EL47/1140. The express terms of the agreement deal only with EL47/1140, and have no bearing upon any other ground, including any ground adjoining EL47/1140. Nor do the express terms of the agreement make any reference whatever to the use to which ConsMin was to put the information previously provided by Mr Ammon. The agreement was therefore entirely silent with respect to the two subjects upon which Mr Ammon attempts to imply terms: namely, ground other than the ground within EL47/1140, and the use to which ConsMin could put the information provided by Mr Ammon. Nor did the Second Agreement for Exclusive Access have any bearing upon those topics. There is nothing in the agreement which impacts or bears upon ground other than the ground comprised within EL47/1140, or the use to which ConsMin could put information provided by Mr Ammon.

215 Accordingly, I am quite unable to see any basis upon which terms which would inhibit ConsMin from applying for mining tenements in respect of ground other than the ground comprised within EL47/1140, or which could inhibit ConsMin in relation to the use to which the information provided by Mr Ammon could be put, can be implied into the Second Agreement for Exclusive Access. The agreement is entirely unconcerned with those subjects. In my view there is no basis upon which any of the five requirements that must be satisfied before terms to the effect for which Mr Ammon contends could be implied into the Second Agreement for Exclusive Access could be met, let alone all five requirements.

216 I turn then to the allegation that ConsMin was in breach of the Second Agreement for Exclusive Access by using the information provided by Mr Ammon in the course of the transaction with FMG, and by undertaking that transaction. The first and most obvious difficulty with that proposition is that by the time of the negotiation of the FMG transaction, and the time that transaction was entered into, the Second Agreement for Exclusive Access had entirely run its course and no longer governed the relations between Mr Ammon and ConsMin/PIO. The HoA had been executed the previous year, after which it governed the contractual obligations between the parties, and the Joint Venture created by that Agreement had come into effect on 4 February 2003 when Mr Ammon's application for tenement EL47/1140 was granted. Accordingly, I can see no basis for the assertion that the Second Agreement for Exclusive Access continued to govern the contractual rights and obligations of the parties between May and July 2003 when the FMG transaction was negotiated and entered into.

217 The second and equally insuperable obstacle in the path of the proposition advanced on behalf of Mr Ammon is the impossibility of implying terms into the Second Agreement for Exclusive Access which would preclude ConsMin from using the information provided by Mr Ammon in relation to its negotiations with FMG, or from undertaking the FMG transaction, essentially for the reasons I have given above in relation to the allegation that there were implied terms limiting the use to which ConsMin could put the information supplied by Mr Ammon. The Second Agreement for Exclusive Access contained no express terms dealing with the use to which ConsMin could put information supplied by Mr Ammon, or the extent to which ConsMin could undertake negotiations or transactions with third parties. Nor did the agreement have any bearing or impact upon those subjects. Accordingly, Mr Ammon is unable to satisfy any of the requirements relating to the implication of terms to the effect of which he contends.

218 Mr Ammon's claims for breach of the contract constituted by the HoA are characteristically incomprehensible. There is very little correlation between the claims for breach of the HoA enunciated in the statement of claim, and the propositions advanced in the opening and closing submissions of counsel for Mr Ammon.

219 At trial, Mr Ammon's primary contention in this area was to the effect that PIO was in breach by denying that the HoA applied to the tenements adjoining tenement 47/1140 which had been obtained by PIO in its own name. That proposition is difficult to identify in the statement of claim. Doing the best I can to comprehend the pleaded case, it seems to focus upon assertions that:

(a) by applying for tenements in relation to the area adjoining EL47/1140, PIO breached cl 12.1 of the HoA, and a miscellany of terms to be implied into that agreement;

(b) by negotiating with Fortescue and entering into the transaction with Fortescue, PIO (or ConsMin) breached a miscellany of terms to be implied into the HoA;

(c) by refusing to transfer to Mr Ammon that portion of EL47/1225 which contains the extension of the bedded hematite resource not included within EL47/1140, PIO (or ConsMin) breached a term to be implied into the HoA.

The limited relevance of the pre-contractual negotiations

220 I have set out at length the findings of fact which I have made in relation to the negotiations between the parties which preceded execution of the HoA. That is because those findings are relevant to Mr Ammon's claims in equity and for misleading and deceptive conduct. However, they have only very limited relevance to Mr Ammon's claims for breach of the HoA. The task of a court construing a written agreement is to ascertain the intention of the parties to that agreement, from the words they have used. The subjective intentions of the parties prior to, or at the time of entry into the contract, are irrelevant to the process of contractual construction (see Codelfa Construction Pty Ltd at 352 (Mason J, as he then was); Australian Broadcasting Commission v Australasian Performing Rights Association Ltd [1973] HCA 36; (1973) 129 CLR 99 at 109 (Gibbs J, as he then was)). Accordingly, absent any claim for rectification (and there is no such claim in this case), evidence of the subjective intentions of the parties, as revealed by their pre-contractual negotiations, is irrelevant to the process of construction, and I have accordingly excluded from consideration the findings of fact which I have made in that regard when I come to construe the HoA.

221 However, in some circumstances, the negotiations of the parties prior to their contract may have a limited relevance. That is because evidence of the matrix of factual circumstances known to both parties at the time the contract was entered into, may be received as an aid to the construction of the contract. Accordingly, to the extent that evidence of the prior negotiations of the parties may establish objective background facts known to both parties, they are admissible for that limited purpose. (See Codelfa Construction Pty Ltd at 352; Royal Botanic Gardens and Domain Trust v South Sydney City Council [2002] HCA 5; (2002) 186 ALR 289; (2002) 76 ALJR 436, 445 [39]).

222 The objective facts known to both parties that appear to me to be most relevant to the construction of the HoA are that Mr Ammon had applied for the grant of tenement EL47/1140 in his name, that PIO had, prior to the commencement of negotiations for the HoA, applied for tenements EL47/1191 and EL47/1192 in its name, that the hematite deposit was not contained entirely within EL47/1140. To the extent that there is ambiguity or uncertainty in relation to the construction of the HoA, and in particular, the possible ambiguity in relation to the proper construction of the word 'Tenements' when used in that agreement, in my opinion those facts are relevant to and assist the resolution of that ambiguity or uncertainty.

223 Mr Ammon submits that there is no ambiguity or uncertainty which renders objective facts admissible as an aid to the construction of the HoA. He submits that the agreement, on its face, clearly embraces all the tenements for which PIO applied in respect to ground adjoining EL47/1140. Assuming, without deciding, that ambiguity or uncertainty is a pre-requisite to the admission of evidence of the factual content of the agreement (cf Lion Nathan Australia Pty Ltd v Coopers Brewery Ltd & Others [2006] FCAFC 144), Mr Ammon's proposition is an impossible one. As will be seen, the HoA makes no express reference to any of those tenements. Accordingly, it is impossible to construe the HoA as applying to those tenements, unless some facts beyond the scope of the document itself are established and taken into account.

224 Mr Ammon submits that there are other background facts properly taken into account in the construction of the HoA if, contrary to his primary submission, ambiguity or uncertainty is identified. The first of those concerns the Ammon Report, and in particular the proposition that the Ammon Report disclosed the pisolite resource on tenement EL47/1140 extending along the entire length of the Mindy Mindy Creek. I cannot see how this aids in the construction of the HoA. Tenement EL47/1140 is expressly referred to in the HoA. The express terms of the Ammon Report are limited to the characteristics of tenement EL47/1140. To the extent that the Ammon Report provides information which could lead to a conclusion to the effect that there were economic resources on ground other than EL47/1140, I have found that neither Mr Ammon, nor ConsMin drew that conclusion, although it was drawn by Mr Reynolds and conveyed to ConsMin. However, that was not an objective fact known to both parties.

225 Mr Ammon also points to the exclusive access agreement, as a background circumstance relevant to the construction of the HoA. Again, I am unable to see how this sheds any light on the construction of the HoA. However, if, contrary to my view, it does, because the exclusive access agreement was limited to tenement EL47/1140, it would not support a more expansive interpretation of the HoA.

226 The next matter Mr Ammon relies upon as a background fact relevant to the construction of the HoA is the fact that he provided express authority to ConsMin to manage EL47/1140 on his behalf. Again, I do not see how that fact sheds any light on the construction to be given to the HoA, but again, if, contrary to my view, it does, because the arrangement was limited to tenement EL47/1140, it would not support a more expensive interpretation of the HoA.

227 Mr Ammon also points to the fact that ConsMin/PIO advised the Mines Department that it proposed to treat the five tenements, including EL47/1140 as a single project for the purposes of departmental requirements relating to financial and technical capability statements in its letter to the department of 2 July 2002. The first problem with Mr Ammon's proposition is that there is no evidence to the effect that he was aware that ConsMin had written this letter at the time he entered into the HoA. In any event, however, as I have observed, in my view, the letter read as a whole, supports the proposition that ConsMin was advising the Mines Department that the tenements were to be treated as a single project for regulatory purposes despite their different ownerships. Thus construed, the letter serves to reinforce the fact of differential ownership, and would not support any contrary construction of the HoA.

228 Mr Ammon also relies upon the events which caused ConsMin to apply for the tenements on the adjoining ground, including the use made by Mr Reynolds of the Ammon Report. However, those facts were not known to Mr Ammon at the time of the HoA. Although he was aware that additional tenements had been applied for by PIO, he was not aware of the circumstances that gave rise to those applications.

229 Mr Ammon also relies upon the terms of the negotiations conducted during June 2002, and in particular the proposition that, on one scenario, Mr Ammon proposed that he receive a royalty in respect of ore produced from tenements other than EL47/1140. However, that is not a background or objective fact. Even if I had not found the terms of those negotiations to be equivocal, at their highest they would go no further than to establish Mr Ammon's subjective views which, as I have observed, are irrelevant to the construction of the HoA.

230 Mr Ammon also asserts that the conduct of the parties subsequent to their contract can be taken into account as an aid to the construction of the agreement. The question of whether the conduct of the parties subsequent to their agreement can properly be taken into account as an aid to the construction of the agreement is, I think, unresolved by authority (Spunwill Pty Ltd v BAB Pty Ltd (1994) 36 NSWLR 290 cf FAI Traders Insurance Co Ltd v Savoy Plaza Ltd [1993] VicRp 76; (1993) 2 VR 343; Hide & Skin Trading Pty Ltd v Oceanic Meat Traders Ltd (1990) 20 NSWLR 310 at 315 - 316; Pethybridge v Stedikas Holding Pty Ltd [2007] NSWCA 154 [59]; see also Carter JW, Peden E and Tolhurst GJ, Contract Law in Australia (5th ed, 2007) [12-12]). However, it is not necessary to resolve that question of principle in this case, because the subsequent conduct relied upon by Mr Ammon is, in my view, entirely equivocal and sheds no light upon the proper construction of the HoA.

231 The first matter relied upon by Mr Ammon is the fact that ConsMin/PIO informed him of the applications for tenements EL47/1224 and EL47/1225 shortly after the HoA had been entered into. However, I have found that communication to be entirely equivocal, and to be incapable of conveying any admission that those tenements were part of the joint venture.

232 Mr Ammon also relies upon the fact that Mackay and Schnellmann reported in respect of all tenements as if they were one project, and that ConsMin and PIO have treated their exploration and development of the tenements as one project. However, this also seems to me to be equivocal. There are obvious practical reasons for reporting on the project as a single project, given the common costs incurred in exploration and development and the common infrastructure likely to be used in extracting the resources from the different tenements. However, that approach is not inconsistent with the separate ownership of the different tenements.

233 Mr Ammon also relies upon the communications between himself and Mr Kiernan in November 2003 at the time their dispute emerged. However, there is nothing in Mr Kiernan's communications to Mr Ammon at that time which is inconsistent with ConsMin's position, or constitutes an admission which is in any way relevant to the construction of the HoA.

234 Accordingly, whatever be the legal position in respect of the extent to which post-contractual conduct can be taken into account as an aid to construction of a contract, in my view, none of the post-contractual conduct identified by Mr Ammon could, in any case, shed any light upon the proper construction of the HoA.

235 The HoA is dated 3 September 2002 and is more fully entitled 'Mindy Mindy Farmin and Joint Venture Heads of Agreement'. The parties to the agreement are PIO and Mr Ammon. It has two recitals in the following terms:

1. Ammon is the applicant for Exploration Licence 47/1140.
2. Ammon has agreed with PIO that, subject to the Retained Interest, PIO may earn an interest in the Exploration Licence and the parties shall enter into a joint venture for the purposes of exploring, and if warranted, mining of Minerals on the Tenements.

236 The recitals clearly differentiate between EL47/1140 and 'the Tenements'. The construction to be given to the latter word is central to Mr Ammon's construction argument. I will return to that issue shortly.

237 Clause 1 of the HoA contains definitions of the terms used. The term 'Commencement Date' is defined to mean the date of execution of the agreement, which was 3 September 2002.

238 The term 'Earning Period' is defined to mean the period commencing on the Grant Date and ending as provided in cl 4.2. The term 'Grant Date' is defined to mean the date that the application for EL47/1140 is granted. The Grant Date therefore became 4 February 2003. Clause 4.2 provides that the Earning Period will end when PIO has completed a feasibility study on 'the Tenements', or five years from the Grant Date (4 February 2003), whichever occurs sooner, unless the period is extended pursuant to cl 4.3. Clause 4.3 provides that if for any reason PIO is prevented from accessing any part of 'the Tenements' during the Earning Period, that period will be extended by a period equal to the length of time that access was denied.

239 Returning to cl 1, the term 'Joint Venture Expenditure' is defined to mean all costs, expenses and liabilities incurred in connection with the exploration, development and mining of 'the Tenements for Minerals'. The clause goes on to provide some greater specificity as to the components of that expenditure, and the accounting treatment to be used, in terms which are not relevant to the issues in the case.

240 The term 'Joint Venture' is defined by cl 1 to mean the joint venture constituted under cl 2.1 of the HoA. That clause provides:

2.1 The Participants hereby associate in an unincorporated joint venture for the purpose of exploring and, if warranted, developing and mining the Tenements.

241 The term 'Joint Venture Property' is defined by cl 1 to mean:

subject to the Retained Interest, all property of whatsoever kind held, developed, acquired or created by or on behalf of the Participants for the purpose of the Joint Venture including (without limitation):

(a) the Tenements;

(b) Mining Information; and

(c) Minerals, concentrate and ore prior to their being taken in kind by the Participants.

242 So, the joint venture property includes at least three components being 'the Tenements', 'Mining Information' and 'Minerals'. The expression 'Minerals' is defined by cl 1 to mean:

all naturally occurring substances obtained or obtainable by Joint Venture Operations carried out on or under the surface of the land the subject of the Tenements, but does not include the Retained Interest.

243 The term 'Mining Information' is defined by cl 1 to mean:

all technical information including (without limitation) geological, geochemical and geophysical reports, surveys, mosaics, aerial photographs, samples, drill core, drill logs, drill pulp, assay results, maps and plans relating to the Tenements or to Joint Venture Operations, whether in physical, written or electronic form.

244 The expression 'Retained Interest' is defined by cl 1 to mean the interest retained by Mr Ammon in accordance with cl 5 of the HoA. That clause provides:

Ammon retains at all times, full ownership and interest in the Mindy Mindy bedded hematite resource located in the southern portion of the Tenements and covered by blocks 2585u and 2586q, r, v and w ('Retained Interest').

245 I digress to observe that it is significant that in the HoA the parties have defined the bedded hematite resource to be retained by Mr Ammon by reference to graticular blocks found only within tenement EL47/1140, notwithstanding that they were both aware, as a result of Mr Ammon being sent the map prepared by Mr Reynolds, that the hematite resource was not entirely within tenement EL47/1140. The definition of the Retained Interest by reference only to ground falling within EL47/1140, is consistent with a construction of the HoA which would not extend its operation or effect to any ground adjoining EL47/1140. If it had been their intention to extend its operation to that adjoining ground, given that it was their intention that Mr Ammon have the exclusive right to the hematite resource, a definition of that resource which went beyond EL47/1140 would most likely have been used.

246 Returning to cl 1, the final definition to which I will refer is the most critical, being that of the term 'Tenements'. It is defined to mean:

subject to the Retained Interest;

(a) Exploration Licence 47/1140;

(b) any other mining tenement or interest in a mining tenement acquired by the Joint Venture;

(c) any mining tenement or mining tenements which may hereafter be in force or issued in law or in relation to the same ground as the tenements or applications for tenements referred to paragraphs (a) and (b) of this definition; and

(d) all rights to mine and other privileges attaching to the Tenements and all ore and Mineral-bearing material of whatsoever nature located on and under the tenements referred to in paragraphs (a), (b) and (c) of this definition.

247 The terms of the definition are relatively clear and simple. It includes two species of property - tenements (being those defined in paragraphs (a) - (c) of the definition) and the rights and privileges deriving from those tenements - including the ore derived from them (being the property defined in cl (d) of the definition).

248 The tenements comprising the first species of property included within the definition in turn fall into three categories, namely, EL47/1140, any other tenement or interest in a tenement 'acquired by the Joint Venture', and any tenement or tenements issued in relation to the same ground as falls within the first two categories of tenement.

249 Mr Ammon's argument places great reliance upon the fact that the term 'the Tenements' is used in the plural form throughout the HoA. However, the use of the plural form was the inevitable consequence of including more than one category of tenement within the defined term. It therefore seems to me to shed little or no light upon the construction to be applied to the term, which is of course specifically defined.

250 Mr Ammon's argument also places particular emphasis upon the proposition that there is no temporal limitation imposed by the definition in relation to the second category of mining tenement included, namely, tenements 'acquired by the Joint Venture'. While it is true that there is no express temporal limitation, the fact that any tenement must be acquired by the joint venture in order to fall within this aspect of the definition imposes an implicit temporal limitation. Clause 2.2 of the HoA provides that 'the Joint Venture shall commence on the Grant Date' (ie 4 February 2003, as it happened). Obviously tenements acquired by either party prior to the commencement of the Joint Venture could not be acquired 'by the Joint Venture'.

251 In factual circumstances, other than those which exist in this case, it could perhaps be argued that a tenement acquired by one or more of the parties for the purposes of the joint venture could be construed as falling within the expression 'acquired by the Joint Venture' once the joint venture had been created, by analogy to the principles pertaining to the acquisition of property by promoters on behalf of a company yet to be formed. However, it is unnecessary to consider any such argument in this case, because of my finding of fact to the effect that PIO, to the knowledge of Mr Ammon, acquired tenements EL47/1191 and EL47/1192 for its own purposes, and not on behalf of the joint venture. At the time those tenements were acquired, there had been no negotiations whatsoever in relation to the form of commercial arrangement to be entered into between ConsMin and Mr Ammon (if any). There had certainly been no negotiations directed towards a joint venture, as both parties knew.

252 So, given that both parties knew, at the time they executed the HoA, that Mr Ammon was the owner of EL47/1140, and that PIO was the owner of EL47/1191 and EL47/1192, the language they have used to define 'the Tenements' to be the subject of the joint venture is entirely inconsistent with any intention that tenements EL47/1191 and EL47/1192 be included.

253 By the terms of their agreement, the parties have provided that the scope of the tenements to be included within the joint venture is to be ascertained by a relatively simple question of fact - namely, was the tenement acquired by the joint venture, or does it cover ground which was once within such a tenement, or once within EL47/1140?

254 Applying that question to the tenements for which PIO applied prior to and immediately following execution of the HoA, I have found as a fact that those tenements were acquired by PIO on its own behalf, and not by the joint venture. Some of Mr Ammon's claims for misleading and deceptive conduct rely upon an assertion that the applications for tenements EL47/1191, EL47/1192, EL47/1224 and EL47/1225 were not made by or on behalf of the Joint Venture. And tenement EL47/1380, which was applied for by PIO after the dispute giving rise to these proceedings had surfaced, was plainly not acquired by the joint venture.

255 Accordingly, when regard is had to the limited background facts which I consider to be relevant to the construction of the HoA, it is clear from the language the parties have used that the term 'Tenements' does not include any of the tenements for which PIO applied in respect of ground adjoining EL47/1140.

256 That conclusion is reinforced by a number of other provisions of the HoA. For example, cl 3.2 provides:

Within 14 days of the Grant Date, PIO shall pay to Ammon $250,000 by way of reimbursement for past expenditure in relation to the Tenements.

257 In that clause, the term 'Tenements', cannot be referring to EL47/1191 or EL47/1192, as both parties were aware that Mr Ammon had not disbursed any expenditure whatsoever in relation to those tenements.

13.1 Warranties

Ammon represents and warrants to PIO that:

(a) he is the sole applicant for the Tenements and has good right and title to assign an interest therein free from any mortgages, claims, caveats, pledges, liens, charges or other encumbrances;

(b) there is no litigation nor are there any proceedings of any nature concerning the Tenements pending or threatened;

(c) the Tenements have been duly and properly applied for in terms of the Mining Act and all Outgoings due as at the Commencement Date have been paid;

(d) he has entered into no other existing agreement regarding the Tenements, he is not holding the Tenements on trust for, or on behalf of any other party and he has the sole and exclusive right to deal with the Tenements and, except for PIO, no other party holds any rights to explore, prospect or mine on any part of the Tenements; and

(e) to the best of his knowledge and belief all matters relating to the Tenements which would reasonably be regarded as material and proper for disclosure to an intending purchaser thereof have been disclosed to PIO.

259 There is no provision in the HoA whereby PIO gives any equivalent warranties in relation to tenements EL47/1191 and EL47/1192. The terms of cl 13.1 in general, and the warranty that Mr Ammon is the sole applicant for 'the Tenements' in particular, are completely and utterly inconsistent with any proposition to the effect that the term 'Tenements' was intended by the parties to include tenements EL47/1191 and EL47/1192 for which PIO had applied.

260 Accordingly, for these reasons, Mr Ammon's primary argument in respect of the HoA to the effect that, on its proper construction, it includes and incorporates all the tenements, for which PIO has applied on ground adjoining Mr Ammon's tenement, is entirely without substance and must be rejected.

261 Mr Ammon also relies upon cl 8.1 of the HoA, which is in the following terms:

8.1 During the Earning Period, PIO shall pay all Outgoings and maintain the Tenements in good standing ...

262 The term 'Tenements' expressly includes the tenement registered in Mr Ammon's name; namely, EL47/1140. Therefore, the effect of this clause was to oblige PIO to maintain at least that tenement during the Earning Period. But, contrary to Mr Ammon's submission, the clause tells one nothing of the extent of PIO's obligation to maintain any other tenements during that period - that can only be ascertained by reverting to the definition of the term 'Tenements'.

263 Clause 12.1 of the HoA is in the following terms:

12.1 Unless otherwise agreed by the Participants or required by law or the Listing Rules of the ASX, all information obtained in relation to the Joint Venture and that is not generally known to or generally available to persons who are knowledgeable in the mining industry (or which is generally known or generally available only as a result of a breach of this clause) shall be kept confidential and shall not be disclosed by the Participants.

264 Mr Ammon points to this clause as reinforcing submissions which he has put as to the confidential nature of the information exchanged between the parties prior to the HoA. However, I do not consider that the clause can be used for that purpose. By executing the HoA, the parties agreed to bind themselves to a substantial and enduring commercial relationship. Because of the nature of that relationship, as a joint venture, and because of the powers reposed in the Manager pursuant to the terms of the Joint Venture, there are undoubtedly fiduciary aspects of that relationship. Once that relationship was created, it is to be expected that the parties might wish to define the information which is to be kept confidential thereafter. However, that tells one nothing of their relationship prior to entry into the agreement. And after entry into the agreement, it defines the scope of their respective obligations of confidence.

265 For completeness, it is appropriate for me to return to the other claims pleaded by Mr Ammon in relation to the HoA, notwithstanding that those claims were not pressed to any significant extent in closing submissions.

266 The first such claim is to the effect that PIO breached cl 12.1 of the HoA and the miscellany of implied terms pleaded by applying for all of the tenements in relation to the adjoining ground. Of course this argument is hopeless in relation to EL47/1191 and EL47/1192, which were applied for more than four months before the HoA was entered into. But on the view which I take of the HoA, it is similarly hopeless in relation to all adjoining tenements, because the joint venture only extended to EL47/1140, and did not include any rights, duties or obligations in relation to the adjoining ground. For the reasons I have enunciated above in relation to the Second Exclusive Access Agreement, in my opinion, it is impossible to imply into the HoA, which is limited to tenement EL47/1140 and tenements acquired by the Joint Venture, terms which would impose obligations in relation to other ground. Further, the claim for breach of cl 12.1 must necessarily fail because it has not been established that there was any disclosure of confidential information by PIO at the time of applying for the tenements in question.

267 Mr Ammon has also claimed that ConsMin breached terms to be implied into the HoA by negotiating and transacting with FMG. However, Mr Ammon has not proven that ConsMin disclosed any confidential information in breach of cl 12.1 in the course of those negotiations, and the pre-emptive right conferred by cl 14 of the HoA is limited to the assignment of all or any of PIO's interest in the joint venture. No doubt the parties could have included clauses restricting PIO from dealing with its issued shares, but they did not do so. Plainly, there has been no breach of the pre-emptive provisions of the HoA by ConsMin selling 50% of the issued shares in PIO to FMG, and Mr Ammon does not contend otherwise. Accordingly, there is no substance in Mr Ammon's submissions of breach of the HoA in this respect.

268 Finally, Mr Ammon alleges that there has been a breach of the HoA by reason of ConsMin/PIO's refusal to acknowledge that he has the exclusive right to the bedded hematite resource, wherever that resource is located - that is, whether it is on EL47/1140, or EL47/1225. This proposition is answered by my conclusion that the joint venture extends only to EL47/1140.

269 For these reasons, Mr Ammon's claims alleging breach of either express or implied terms of the HoA must fail.

270 There are some other aspects of the HoA which are relevant to other propositions advanced by Mr Ammon, and to which I now turn.

Nothing in this Agreement shall be construed so [as] to constitute a Participant, a partner [sic], agent or representative of any other Participant or to create any partnerships or trust for any purpose howsoever except to the extent to which the manager is the agent of the Participants. No Participant shall be under any fiduciary or other duty to the other which will prevent it from engaging in or enjoying the benefits of any competing endeavours subject to the express provisions of this Agreement.

272 ConsMin and PIO argue that this clause is inconsistent with the existence of any fiduciary relationship between the parties following execution of the HoA. I do not accept that argument. The clause appears to me to expressly accept that a fiduciary relationship may arise from the role of manager, as agent of the Participants, and limits the scope of the fiduciary duties imposed by that relationship to preclude a duty arising which would prevent the manager from engaging in, or enjoying the benefits of any competing endeavours. That exclusion does not appear to me to be relevant to the circumstances of this case, because of course the scope of any fiduciary duty created by the relationship of the joint venturers will be defined by reference to the scope of the joint venture. Because I have concluded that the joint venture only extends to EL47/1140 and other tenements acquired by the Joint Venture, and does not extend to include the tenements on the ground adjoining tenement EL47/1140 held by PIO, it follows that any fiduciary duty arising from the HoA is similarly confined. So, no question of exclusion from a fiduciary duty arises in relation to the adjoining tenements, because there is no such duty in relation to those tenements.

273 Mr Ammon's claim that ConsMin and PIO breached duties of confidence owed to him is one of the least intelligible portions of a generally incoherent pleading. Doing the best I can to decipher that pleading, augmented by the opening and closing addresses of counsel for Mr Ammon, it seems that he claims that ConsMin and PIO owed duties of confidence to him in respect of the following information:

(b) Further information said to have been provided orally by Mr Ammon to Mr Vivian during the course of their meeting on 15 March 2002, being in particular information to the effect that economic resources might extend beyond the boundaries of EL47/1140;

(c) The documents given by Mr Ammon to Mr Vivian during their meeting on 15 March 2002, being in particular the exploration reports prepared by Australian Iron and Steel, Hamersley Iron and BHP and two maps;

(d) What the pleading describes as 'Additional Further Information' in the emails exchanged between the parties during the course of negotiations, being particularly matters relating to native title issues;

(e) The Mackay and Schnellmann Report, and all information subsequently provided by Mackay and Schnellmann as a result of their later investigations.

274 The conduct which Mr Ammon alleges constituted a breach of the duties of confidence owed is not easy to glean from his pleading but, doing the best I can, seems to come down to the use of the information identified for the making of applications for mining tenements in respect of ground adjoining EL47/1140, and in the course of negotiations with FMG, and by entering into the FMG transaction.

275 In my view, all but the first of the categories of confidential information claimed by Mr Ammon can be immediately excluded from further consideration. This is consistent with the approach taken by Mr Ammon's counsel in closing submissions, which focused almost exclusively upon the Ammon Report. I will shortly explain why I exclude all other claimed categories from further consideration.

276 Dealing firstly with the oral information said to have been provided by Mr Ammon to Mr Vivian in the course of their meeting on 15 March 2002, I have found that there was in fact no substantial information orally provided to Mr Vivian in the course of that meeting. In particular, I have found that there was no discussion in relation to the prospectivity of ground outside the boundaries of EL47/1140.

277 Turning next to the documents which were provided by Mr Ammon to Mr Vivian in the course of their meeting on 15 March 2002, all of those documents were in the public domain and readily available to any member of the public. There is therefore no basis upon which those documents could, in themselves, be said to be the subject of a duty of confidence.

278 Turning next to the miscellany of communications characterised in the pleading as the 'Additional Further Information', leaving aside the vagueness and generality of this class of information, the communications that fall within it are essentially nothing more than communications dealing with the management of native title issues pending determination of the application for EL47/1140, and the commercial negotiations between Mr Ammon and ConsMin. While I have no difficulty with the notion that the terms of those negotiations would have been regarded by the parties as confidential, plainly those terms did not provide any basis for the action taken by ConsMin which Mr Ammon alleges constituted breaches of confidence - namely, the claiming of other ground, and the negotiations and the transaction with FMG.

279 Turning finally to the Mackay and Schnellmann Report, to the extent that the information within that report has its source in the Ammon Report, it will be covered by Mr Ammon's claim for confidence in respect of that report. To the extent that the Mackay and Schnellmann Report contains information above and beyond that contained in the Ammon Report, it is obviously the product of work and investigations carried out by Mackay and Schnellmann. I cannot see any basis upon which Mr Ammon could claim that he is owed a duty of confidence in respect of that information, which was, in large part, not even disclosed to him.

280 Similarly, two of the three categories of conduct said by Mr Ammon to constitute breach of duties of confidence owed to him can be immediately excluded from further consideration. Those are the actions of ConsMin/PIO in undertaking negotiations with FMG, and entering into the FMG transaction. That conduct took place well after entering into the HoA after which cl 12.1 of the HoA governed the obligations of confidence owed by the parties. I have already held that that provision was not breached by ConsMin or PIO. In any case, Mr Ammon has not established that any confidential information was disclosed to FMG in the course of those negotiations.

281 There is a further reason why the negotiations for, and entry into the FMG transaction cannot provide Mr Ammon with any grounds for relief, and that is that he has suffered no loss, nor is it established that ConsMin or PIO have derived a profit for which it should account from that transaction. Mr Ammon still enjoys all his rights under the HoA with PIO. All that has happened is that the ownership of shares in that company has changed. There is nothing to suggest that the share transaction took place at anything other than proper value at the time it was undertaken. Accordingly, all that has happened is that ConsMin has converted an asset which it held, in the form of 50% of the shareholding in PIO, into cash. That is not something which could confer any entitlement to relief upon Mr Ammon.

282 For these reasons, Mr Ammon's claim for breach of confidence comes down to an allegation that ConsMin/PIO breached a duty of confidence owed to him by using the information contained in the Ammon Report to apply for EL47/1191, EL47/1192, PL47/1156, PL47/1157, EL47/1124, EL47/1125 and EL47/1380.

283 An immediate difficulty in the claim becomes apparent. The breach of duty is said to lie in PIO's application for tenements adjoining EL47/1140. However, the Ammon Report does not in fact say that the ground adjoining EL47/1140 is prospective, or likely to contain an economic resource. And I have found that there is no obvious inference to that effect from the Ammon Report, although such a conclusion might be deduced by an astute and qualified reader of the report. And I have also held that Mr Ammon did not himself identify the potential value of the adjoining ground. It follows that he did not endeavour to communicate that information in the report which he prepared.

284 Put another way, the relevantly critical information is the proposition that the ground adjoining tenement EL47/1140 may be sufficiently prospective to justify the trouble and expense of claiming tenements in respect of that ground. But in this case Mr Ammon, the party claiming breach of confidence, was not himself aware of that information, nor was he aware that he had conveyed it to the parties he claims breached a duty of confidence owed to him (on my findings, in respect of information of which he was unaware). Because 'the information conveyed' may be critical - see O'Brien v Komesaroff [1982] HCA 33; (1982) 150 CLR 310 at 327 (per Mason J, as he then was), on one view, this construction of the 'information' contained within the Ammon Report is, of itself, fatal to his claim for breach of confidence.

285 However, in deference to the elaborate arguments that were presented on the subject of breach of confidence, it is appropriate for me to undertake a rather more detailed analysis of the claim.

286 Subject to some qualifications to which I will refer, the elements of a successful cause of action for breach of confidence are often taken to be encapsulated in the following passage from the judgment of Megarry J in Coco v AN Clark (Engineers) Ltd (1969) RPC 41 at 47:

In my judgment, three elements are normally required if, apart from contract, a case of breach of confidence is to succeed. First, the information itself, in the words of Lord Greene, M.R. in the Saltman case on page 215, must 'have the necessary quality of confidence about it'. Secondly, that information must have been imparted in circumstances importing an obligation of confidence. Thirdly, there must be an unauthorised use of that information to the detriment of the party communicating it.

287 'One needs to know not only what was the information conveyed but also what part of that information was not common knowledge' (per Mason J; O'Brien at 327). And as Megarry J observed in Coco (at 47):

However confidential the circumstances of communication, there can be no breach of confidence in revealing to others something which is already common knowledge.

But this must not be taken too far. Something that has been constructed solely from materials in the public domain may possess the necessary quality of confidentiality: for something new and confidential may have been brought into being by the application of the skill and ingenuity of the human brain. Novelty depends on the thing itself, and not upon the quality of its constituent parts. Indeed, often the more striking the novelty, the more commonplace its components.

288 And as McPherson J has observed in Fractionated Cane Technology Ltd v Ruiz-Avila [1988] 1 Qd R 51 at 63; 'an "idea" is capable of being the subject of an obligation of confidence'.

289 As Bowen CJ observed in Interfirm Comparison (Australia) Pty Ltd v Law Society of New South Wales [1975] 2 NSWLR 104; (1975) 5 ALR 527 at 540 - 541:

[I]t is perfectly possible to have a confidential document, be it a formula, a plan, a sketch, or something of that kind, which is the result of work done by the maker upon materials which may be available for the use of anybody, but what makes it confidential is the fact that the maker of the document has used his brain and thus produced a result which can only be produced by somebody who goes through the same process.

290 In the course of argument ConsMin and PIO laid much emphasis on the fact that all the data and information upon which Mr Ammon relied in the Ammon Report was in the public domain (as I have found). However, as I have already observed, that fact does not, of itself, deprive the Ammon Report of the element of novelty, or preclude the conclusion that it conveys an 'idea' which has the requisite quality of confidence. The 'idea' which, in some circumstances, would be capable of having that quality is the proposition that development of the mineral resource likely to be found on EL47/1140 could be economically viable, notwithstanding the earlier rejection of the ground by a number of prospective explorers and developers. However, there are I think two obstacles in the path of a proposition that such information had the requisite 'quality of confidence' in this case.

291 The first problem is that to which I have already referred - namely, that the 'idea' which Mr Ammon had and which he conveyed through delivery of the Ammon Report to ConsMin was that there was a potential for tenement EL47/1140 to contain an economically viable resource. That 'idea', and the data which supported it, gave rise to another idea, first held by Mr Reynolds, to the effect that the ground adjoining EL47/1140 might also contain an economically viable resource. That is the idea which, when communicated to ConsMin, caused it to apply for tenements over the adjoining ground. But that is not an idea which Mr Ammon had or which he conveyed to ConsMin. Rather, he conveyed the information from which that idea was later drawn by somebody else. The critical item of confidential information therefore, in this case, was not that supplied by Mr Ammon, but rather that provided by Mr Reynolds, albeit derived from the information supplied by Mr Ammon.

292 The second problem in the path of the proposition that the novel 'idea' within the Ammon Report had the requisite quality of confidence, also derives from my conclusion that it is confined to the prospectivity and economic viability of the resource located within tenement EL47/1140. That is because Mr Ammon had applied for a tenement covering all the ground to which that idea pertained, and was therefore fully protected against any misuse of the information pertaining to that ground. This was precisely the course charted by the methodology which he described as 'project generation geology' - that is, first secure the ground and then sell the project to potential investors. As he put it; '[i]f you own the ground, you own the ground. If you don't, you don't'.

293 The 'idea' that EL47/1140 could be profitably developed as a mining project was conveyed to ConsMin as part of a marketing programme for an asset which Mr Ammon had secured. Because of that security, he was not vulnerable to any misuse of the information. That fact is reflected in the open marketing campaign which he undertook. Neither the letter to Portman, nor the letter to ConsMin were solicited nor endorsed with any claim to confidence. Nor apparently was the letter to the unnamed investor whose identity Mr Ammon never knew, and to whom Mr Ammon made no claim of confidence nor from whom did he ever recover the Ammon Report. Although the marketing programme upon which Mr Ammon embarked was targeted and confined, in a sense it was a public campaign targeted at those perceived by Mr Ammon to have a possible interest in investing in his asset. Mr Ammon's conduct in this regard is inconsistent with any perception on this part that the Ammon Report was confidential, and is explicable by his confidence that because he had secured the ground he was not vulnerable to misuse of the information contained within the report.

294 Accordingly, in the particular circumstances of this case, I conclude that the Ammon Report, and in particular the aspect of the report which had not previously been in the public domain, lacked the requisite quality of confidence to sustain Mr Ammon's claim for breach of confidence.

295 The second element identified by Megarry J in **Coco (**at 47) is the requirement that the information must have been imparted "in circumstances importing an obligation of confidence". Megarry J went on to suggest in Coco (at 48), that the test to be applied to the circumstances of communication was an objective one - to be viewed from the perspective of 'any reasonable man standing in the shoes of the recipient'. That view was also taken by Johnson J in Rapid Metal Developments (Australia) Pty Ltd v Anderson Formrite Pty Ltd [2005] WASC 255 [67] - [69]. However, the objective perspective of the recipient of the information does not give guidance as to the scope of an obligation of confidentiality, where one exists, as the Full Court of the Federal Court observed in Smith, Kline and French Laboratories (Australia) Ltd v Secretary to the Department of Community Services and Health [1991] FCA 150; (1991) 28 FCR 291 at 304. As their Honours observed, when considering the scope of the obligation of confidence:

[i]t is necessary not to lose sight of the basis of the obligation to respect confidences:

'It lies in the notion of an obligation of conscience arising from the circumstances in or through which the information was communicated or obtained'.

(citing Moorgate Tobacco Co Ltd v Philip Morris Ltd (No 2) [1984] HCA 73; (1984) 156 CLR 414 at 438.)

296 In Smith, Kline and French Laboratories (Australia) Ltd at 304 their Honours referred to the 'broad principle of equity that he who has received information in confidence shall not take unfair advantage of it' (Seager v Copydex Ltd [1967] RPC 349, at 368), and went on to observe:

To avoid taking unfair advantage of information does not necessarily mean that the confidee must not use it except for the confider's limited purpose. Whether one adopts the 'reasonable man' test suggested by Megarry J or some other, there can be no breach of the equitable obligation unless the court concludes that a confidence reposed has been abused, that unconscientious use has been made of the information.

297 Accordingly, the requirement that there be a finding of 'unfair advantage' or 'unconscientious use' seems to me to connote that the considerations to be applied may not be exclusively objective, but may also, where appropriate, take account of the subjective views and perspectives of the participants.

298 There have been various attempts, in texts and previous cases, to identify factors and circumstances that might be taken into account to determine whether the circumstances in which the information was imparted give rise to an obligation of confidence. Most of those attempts are qualified by the obvious observation that because of the breadth and variety of the circumstances in which such information might be imparted, an exhaustive list of relevant factors and circumstances is unachievable.

299 One such attempt was made by the Full Court in Smith, Kline and French Laboratories (Australia) Ltd at 302 - 303, where their Honours observed:

To determine the existence of confidentiality and its scope, it may be relevant to consider whether the information was supplied gratuitously or for a consideration; whether there is any past practice of such a kind as to give rise to an understanding; how sensitive the information is; whether the confider has any interest in the purpose for which the information is to be used; whether the confider expressly warned the confidee against a particular disclosure or use of the information - and, no doubt, many other matters.

300 In support of the submission that the circumstances pertaining to the delivery of the Ammon Report to ConsMin were such as to give rise to an obligation of confidence, Mr Ammon points to the nature of the report itself, and the negotiations which occurred after its delivery, including the agreement that he would deal exclusively with ConsMin for a period. However, the force of that is diminished by the fact that the exclusive dealing agreement protected only ConsMin, not Mr Ammon, and was restricted to dealings in respect of EL47/1140 in relation to which Mr Ammon's position was secured.

301 Mr Ammon also relied upon the evidence given by some of ConsMin's officers to the effect that they would not have published the Ammon Report generally after receiving it. However, when that evidence is scrutinised, it is clear that the reason they would not have published the Ammon Report was to protect ConsMin from rival bids for Mr Ammon's interest, not to protect Mr Ammon.

302 The other factors and circumstances that appear to me to be relevant to the assessment of whether the circumstances in which Mr Ammon provided his Report to ConsMin gave rise to an obligation of confidence are as follows.

303 First, Mr Ammon's interest in, and rights over the ground to which the report related was protected by the application which he had made for EL47/1140. Second, as I have observed, Mr Ammon believed that he had all necessary security over the ground and that his interest in the ground was fully protected. Third, objectively any recipient of the information in the Ammon Report would hold a similar view - namely, that Mr Ammon's interest in the ground, the subject of the express provisions of that report, was fully secured and protected.

304 Fourth, the circumstances in which Mr Ammon delivered the report to ConsMin and other prospective investors are, in my view, inconsistent with the importation of an obligation of confidentiality. As I have observed, the reports were delivered unsolicited and without claim of confidentiality or any realistic means of protecting confidentiality - particularly in the case of delivery to an investor whose identity was never known to Mr Ammon. Fifth, at no point in his dealings with ConsMin did Mr Ammon ever make any reference to the confidentiality of the report, or advance a claim for confidence. Sixth, at no point did Mr Ammon ever request a confidentiality agreement, notwithstanding his understanding that entry into express agreements to protect confidentiality was standard practice in the mining industry in Western Australia. Seventh, the evidence of the witnesses called on behalf of ConsMin established that it is in fact usual practice in the mining industry in Western Australia to seek an express written agreement of confidentiality if confidentiality is sought to be protected. Evidence was given by each of Messrs Kiernan, Macoboy and Davies to that effect.

305 Eighth, all the factual data and information contained within the Ammon Report was within the public domain. The element of novelty which, in other circumstances, could perhaps be characterised as confidential was essentially the proposition that the resource could be economically viable - a proposition advanced essentially as part of a sales pitch and at a level of great generality.

306 Ninth, Mr Ammon knew that the material would be supplied to third parties such as consultants, for their advice. Tenth, Mr Ammon made no complaint whatsoever when he became aware that other tenements had been applied for in late May 2002, and again in early September 2002.

307 Eleventh, Mr Ammon continued negotiating for the joint venture relating only to EL47/1140 after becoming aware of PIO's applications for tenements EL47/1191 and EL47/1192.

308 Twelfth, all emails generated by Mr Ammon in the course of negotiations for the HoA are consistent with him having only an interest in EL47/1140. Thirteenth, the HoA was limited to EL47/1140 and other tenements acquired by the Joint Venture, as its terms clearly show. Fourteenth, Mr Ammon made no claim to any interest in any ground other than EL47/1140 until late 2003, when an issue arose in relation to the hematite resource which he apparently considered was always to have been his. Fifteenth, and finally, at no point did Mr Ammon apply for any tenements other than EL47/1140, despite having the opportunity and capacity to do so.

309 When viewed together, these various factors and circumstances seem to me to point inexorably to the conclusion that the Ammon Report was not supplied to ConsMin in circumstances which imparted an obligation of confidence.

310 The third element of the cause of action identified by Megarry J in Coco (at 47), was described by him as 'an unauthorised use of the information to the detriment of the party communicating it'. In Lac Minerals Ltd v International Corona Resources Ltd [1989] 2 SCR 574; (1989) 16 IPR 27, this third element was referred to by La Forest J as the element of misuse of the information. That terminology avoids specific reference to the element of detriment - an element which later cases strongly suggest is not an essential component of the equitable claim for breach of confidence - see for example Attorney-General v Observer Ltd (1990) 1 AC 109; National Roads and Motorists' Association Ltd v Geeson [2001] NSWCA 343; (2001) 40 ACSR 1 at [58]; N P Generations Pty Ltd v Feneley [2001] SASC 185; (2001) 80 SASR 151 at [21]. Although the matter is not entirely free from doubt, the better view seems to be that detriment is not an essential element of the cause of action. In case a different view is taken elsewhere, it will be apparent from my findings that had it been necessary to find detriment, I would not have concluded it had been established, given my finding that Mr Ammon would not himself have made any attempt to claim the ground adjoining EL47/1140, had PIO not pursued that ground.

311 However, a claim alleging breach of confidence must nevertheless establish that the defendant misused the information, or, in the words of the Full Court in Smith, Kline and French Laboratories (Australia) Ltd at 304, took "unfair advantage" or made "unconscientious use" of the confidential information. As I have already suggested, that notion seems to me to import the permissible consideration of aspects of the conduct of the parties which sheds light upon their subjective views at the time, such as, Mr Ammon's conspicuous failure to make any complaint whatsoever when he became aware, in late May 2002, that PIO had applied for tenements EL47/1191 and EL47/1192, at a time when he had not even commenced negotiations in earnest with ConsMin. And, as I have observed, the terms of the negotiations between Mr Ammon and ConsMin appear to me to be only consistent with a tacit understanding that Mr Ammon's rights and interests were limited to EL47/1140, and that ConsMin enjoyed all the rights and interests deriving from the other tenement applications. That in turn is inconsistent with any perception by Mr Ammon to the effect that ConsMin had made unconscientious use of confidential information which he had supplied to it, as is his email to Ms Lovitt of 8 August 2002 in which he referred to ConsMin having negotiated in good faith. Plainly Mr Ammon did not consider that ConsMin had taken unfair advantage or made unconscientious use of his report until late 2003, when a dispute arose in relation to the hematite resource. His belated assertions of breach of confidence were only made after the dispute arose and Mr Ammon had received legal advice. They did not emerge from a common understanding or the implicit basis of his dealings with ConsMin. If, as I find, Mr Ammon himself did not at the time himself think that ConsMin had taken unfair advantage or made unconscientious use of confidential information which he had imparted, I can see no reason why a court should conclude otherwise.

312 For these various reasons, apart from the fatal flaw in Mr Ammon's claim for breach of confidence to the effect that the information which was used by ConsMin to claim the adjoining ground was not in fact conveyed by Mr Ammon, Mr Ammon's claim also fails because he fails to establish any of the elements which must be made out before the claim could succeed.

Lac Minerals Ltd v International Corona Resources Ltd

313 Mr Ammon's counsel placed considerable reliance on the decision of the Supreme Court of Canada in Lac Minerals Ltd. It was said that case bears a striking similarity to this. However, any such similarity is, in my view, entirely superficial. When the facts of that case are considered in detail, it is readily seen that they are very different to this.

314 The superficial similarities between the two cases lie in the fact that in Lac Minerals Ltd, two mining companies were negotiating towards a joint venture when one acquired the right to mine on adjoining ground from the owner of that right. However, that is where the similarities between the two cases end. The differences include the following:

(a) The claimant (Corona) told the defendant (Lac), directly and expressly of the economic desirability of the adjoining ground;

(b) The parties expressly discussed the acquisition of the adjoining ground for the purposes of their joint venture;

(c) It was found that but for the actions of Lac, Corona would have acquired the adjoining ground;

(d) Senior officers of Lac acknowledged an obligation of good faith and an industry standard or practice to the effect that one party would not acquire a property which was being pursued by a party with which it was negotiating;

(e) A senior officer of Lac acknowledged that the information he received from Corona was confidential and was received in circumstances of confidence;

(f) Lac made an offer to the owner of the right to mine the adjoining ground, at a time when it was aware that Corona also had made an offer for the adjoining ground;

(g) When Corona became aware that there was another bidder for the right to mine the adjoining ground, Lac did not disclose to Corona that it was that bidder;

(h) As soon as Corona became aware that Lac had acquired the right to mine the adjoining ground, a complaint was made and proceedings were commenced;

(i) The evidence established an industry practice to the effect that parties negotiating with each other would not use any information obtained in the course of those negotiations to the detriment of the other;

(j) The evidence failed to establish any standard or common practice within the mining industry of Canada whereby confidentiality was protected by express agreements.

315 In all these respects, the relevant facts of Lac Minerals Ltd are quite different to the facts which I have found in this case. Those differences of fact are crucial to the outcome of Lac Minerals Ltd. Accordingly, when regard is had to those differences, the decision in Lac Minerals Ltd provides no support for Mr Ammon's case.

316 For these various reasons, in my opinion Mr Ammon's claim for breach of confidence fails.

317 Mr Ammon's claims for breach of fiduciary obligation are easier to comprehend than some of the other claims he has advanced. They are almost exactly coterminous with his claims for breach of confidence. Indeed, at some points in the course of argument, his counsel was inclined to concede that if Mr Ammon's claims for breach of confidence failed, it necessarily followed that his claims for breach of fiduciary obligation must also fail. However, in the end, counsel resiled from that concession (if indeed it was ever made). However, because of the overlap between the two claims, it will be possible to deal with the claims for breach of fiduciary obligation relatively briefly.

318 Essentially Mr Ammon asserts that ConsMin, and in due course PIO, owed him a variety of fiduciary obligations by reason of the fact that he had entrusted them with confidential information and that he was vulnerable to the exercise of the powers which flowed from that confidential information, including the powers with which he clothed ConsMin in relation to the administration of his application for tenement EL47/1140. He alleges that those obligations were breached by PIO's application for tenements in relation to the ground adjoining EL47/1140, and by the negotiations with FMG, and the transaction with FMG. So the overlap between these claims and the claims for breach of confidence is almost complete.

319 At points the argument advanced on behalf of Mr Ammon seemed to advance the not uncommon heresy that once any kind of fiduciary relationship has been established, all conventional fiduciary duties apply to that relationship. However, it is well established that fiduciary relations are almost infinitely variable in type and category, and the extent of the obligations which attend the relationship depends critically upon the particular characteristics of the relationship - see the oft cited observations of Fletcher-Moulton LJ in Re Coomber [1911] 1 Ch 723, 728 - 729; Hospital Products Ltd v United States Surgical Corporation [1984] HCA 64; (1984) 156 CLR 41.

320 It is also recognised that an exhaustive definition of the circumstances in which a fiduciary relationship will be found has been elusive. Various attempts have been made to define the characteristics which will generally be present in such a relationship. Subject to one slight qualification, I am attracted to the enunciation provided by Wilson J in Frame v Smith (1987) 42 DLR (4th) 81; [1987] 2 SCR 99 at 136 where her Honour observed:

Relationships in which a fiduciary obligation have been imposed seem to possess three general characteristics:

(1) The fiduciary has scope for the exercise of some discretion or power.

(2) The fiduciary can unilaterally exercise that power or discretion so as to affect the beneficiary's legal or practical interests.

(3) The beneficiary is peculiarly vulnerable to or at the mercy of the fiduciary holding the discretion or power.

So, on this view, the identification of a discretion or power held by the beneficiary is central to the identification of a fiduciary relationship.

321 The slight qualification I would add to those observations concerns the issue of vulnerability. In Lac Minerals Ltd, La Forest J expressed the view that vulnerability was not an essential characteristic of a fiduciary relationship, and a similar view has been expressed in Australia (see C-Shirt Pty Ltd v Barnett Marketing & Managing Pty Ltd (1996) 37 IPR 315, per Lehane J). I incline to the view expressed in the latter case to the effect that vulnerability should not be regarded as the touchstone of fiduciary obligation, rather, the fundamental question is for what purpose and for the promotion of whose interest the fiduciary power is held. However, pursuit of these interesting questions of principle is unnecessary in this case, as in my view the facts which I have found determine the outcome of Mr Ammon's claims without need for resolution of these finer points.

322 The fundamental difficulty with Mr Ammon's claims for breach of fiduciary obligation is that they rest on two false premises. The first is that he provided confidential information to ConsMin with respect to the prospectivity of the ground surrounding tenement EL47/1140. For the reasons I have set out above in relation to Mr Ammon's claims for breach of confidential information, I have rejected that assertion. The second false premise is that ConsMin/PIO had a power which could be exercised to his detriment, by reason of their relationship. The power which he suggests could be exercised was the power to claim tenements in relation to the ground surrounding EL47/1140. However, ConsMin's capacity to make those applications was not derived in any sense from its relationship with Mr Ammon, although, as a matter of fact, its exercise was stimulated by the view expressed by Mr Reynolds after he had digested the information in the Ammon Report. However, that sequence of events is fundamentally different in character to a circumstance in which a fiduciary is clothed with a power which can be exercised to the detriment of the beneficiary.

323 Prior to the execution of the HoA, Mr Ammon and ConsMin were negotiating at arms length for a commercial venture. While that relationship does not necessarily exclude the possibility of a fiduciary relationship (see for example United Dominions Corporation Ltd v Brian Pty Ltd [1985] HCA 49; (1985) 157 CLR 1), ordinarily it is a circumstance which is inconsistent with the existence of such a relationship. And of course in this case, Mr Ammon's assertion that he was owed fiduciary duties by ConsMin in the course of their negotiations sits rather at odds with his own conduct, given that he felt free to lie to ConsMin regularly during the course of those negotiations, as and when it suited his interests.

324 Turning now to the situation after the execution of the HoA, I have already expressed the view that, under the terms of that agreement there was a fiduciary relationship between the parties to the joint venture, both by implication from the terms of the agreement and by analogy between the joint venture and a partnership. However, I have also expressed the view that the relationship defined by the HoA was confined to a relationship for the development and exploitation of EL47/1140 and other tenements acquired by the Joint Venture. Accordingly, there is nothing in the HoA which would extend any fiduciary obligations beyond obligations pertaining to those tenements. As no tenements have been acquired by the Joint Venture, it is limited to EL47/1140. And Mr Ammon does not allege that ConsMin have breached any obligation in relation to that tenement, other than his assertions that the negotiations with FMG, and the FMG transaction, somehow, in a manner which I am unable to identify, constituted an infringement of his rights. And, of course, once parties have entered into a contractual relationship, the extent of their equitable obligations will ordinarily be defined by the scope of their contractual relationship (see Price v Powers [2005] WASC 154).

325 Accordingly, for these reasons, in my opinion the claims for breach of fiduciary obligation must be dismissed.

326 As I have already mentioned, Mr Ammon's pleaded claim for misleading and deceptive conduct was so opaque that it was necessary for me to direct that a further document be provided during the course of the trial which specified his claims in that regard. Such a document was provided. However, as will be seen, the written closing submissions provided on Mr Ammon's behalf departed to a limited extent from the case which he particularised during the trial. That case identified six instances of conduct on the part of ConsMin/PIO which were said to be misleading and deceptive. The closing submissions also referred to six incidents of conduct that are said to be misleading and deceptive, but one of those instances is different to the case particularised during the trial. I will therefore deal with all seven aspects of the conduct by ConsMin/PIO which Mr Ammon asserts was misleading and deceptive.

327 The first is an assertion that on 14 March 2002 ConsMin represented to Mr Ammon that it would not disclose the Ammon Report, nor use the information in that Report or the further information provided by Mr Ammon in the course of his meeting with Mr Vivian on 14 March 2002 for any purpose other than considering whether or not to invest in 'the Mindy Mindy Deposit'. It is said that the representation was misleading and deceptive because ConsMin did not then intend, or consider itself obliged to limit its use of the Ammon Report and the further information provided by Mr Ammon in that way. It is further alleged that Mr Ammon relied upon ConsMin's misleading and deceptive conduct to his detriment by supplying further information to ConsMin.

328 As I have found that ConsMin did not make any representation, either express or implied to Mr Ammon to the effect that it would not disclose the information in the Ammon Report, or as to the use to which it would put that information, this claim must fail because Mr Ammon has failed to establish the representation upon which it is based. I would also observe that I have, in any event, found that Mr Ammon did not supply any further information of any value to ConsMin, or refrain from taking any action he would otherwise have taken, such as claiming the ground adjoining his tenement, so it is difficult to see how Mr Ammon could have suffered any loss or damage by reason of his reliance upon the alleged representation.

329 Secondly, Mr Ammon asserts that shortly after 18 March 2002, ConsMin represented to him that it would not disclose the further information which he had provided during his meeting with Mr Vivian on 14 March 2002, and would not use the Ammon Report or that further information for any purpose other than the limited purpose of considering whether or not to invest in 'the Mindy Mindy Deposit'. Mr Ammon alleges that this representation was misleading and deceptive, because ConsMin did not intend to limit its use of the Ammon Report and the further information he had provided, nor did it feel obliged to limit its use to the specific purpose he alleges. He further alleges that in reliance upon ConsMin's representation, he granted ConsMin and PIO exclusive access to his tenement, consented to a consultant being engaged to examine the area, and did not deal with any other party in respect of the tenement.

330 This claim must fail for essentially the same reasons as the first claim for misleading and deceptive conduct. I have found that no representation was made by ConsMin as to the uses to which it would put the Ammon Report. I have also found that no significant additional information was provided to ConsMin during the meeting between Mr Ammon and Mr Vivian. I have also held that Mr Ammon did not have the right to prevent ConsMin having access to the land the subject of EL47/1140 prior to its grant, and therefore Mr Ammon's purported grant of access did not provide ConsMin with anything of value, or cause him any detriment. Further, although Mr Ammon did undertake not to deal with any other party, on the evidence before me it is difficult to see how he has foregone anything of value, as at that time, there were no other parties interested in dealing with him in relation to the tenement.

331 Thirdly, Mr Ammon alleges that at the end of May 2002, ConsMin and PIO represented to him that if he extended the grant of exclusive access to his tenement, they would not disclose the information in the Ammon Report nor the additional information he had provided, nor would they use that information for any purpose other than the limited purpose of considering whether or not they would invest in 'the Mindy Mindy Deposit'. Mr Ammon alleges that this representation was misleading and deceptive because ConsMin and PIO did not intend to limit their use of that information, nor did they consider themselves obliged to limit the use to which they put it. Mr Ammon alleges that in reliance upon this misrepresentation he continued the grant of exclusive access to ConsMin and PIO and did not deal with any other party.

332 This claim must fail because of my finding that there was no representation of the kind alleged by Mr Ammon. Further, the purported grant of exclusive access to the tenement, and the undertaking not to deal with any other party, did not cause any significant loss or detriment to Mr Ammon.

333 Fourthly, Mr Ammon alleges that at or about the end of May, ConsMin and PIO represented to him that the applications for tenements EL47/1191 and EL47/1192 had been made for the purposes of, and on behalf of, the joint venture to be formed between them. He alleges that this representation was misleading and deceptive because, in fact, the applications had not been made on behalf of the joint venture. Mr Ammon alleges that in reliance upon that representation he continued negotiations with CSM and PIO and entered into the joint venture on 3 September 2002.

334 This claim must fail in light of my finding that there was no representation to the effect alleged by Mr Ammon and my further finding that during the course of his negotiations with ConsMin and at the time he executed the HoA on 3 September 2002, he did not believe that tenements EL47/1191 and EL47/1192 were to be included within the joint venture.

335 The fifth claim enunciated by Mr Ammon in the document which he lodged shortly after the commencement of the hearing was an allegation that on 3 September 2002, ConsMin represented to him that PIO's applications for EL47/1191 and EL47/1192 had been made for and on behalf of the joint venture. He alleges that representation was untrue, because those applications had not in fact been made on behalf of the joint venture. He further alleges that he relied upon the representation by executing the HoA on 3 September 2002.

336 This claim must fail because of the lack of any evidence that there was a representation to the effect alleged on 3 September 2002, and my consequential finding that there was no such representation. It must also fail because of my finding that, at the time Mr Ammon executed the HoA, he did not believe that tenements EL47/1191 and EL47/1192 were to be part of the agreement.

337 In Mr Ammon's written closing submissions, the fifth claim for misleading and deceptive conduct is put quite differently. In that document, the claim is advanced on the basis of a failure to inform Mr Ammon that ConsMin and PIO had decided, prior to 3 September 2002, to apply for tenements EL47/1224 and EL47/1225 for their own use and benefit and failed to inform Mr Ammon of that. The document does not identify how Mr Ammon is said to have relied upon that omission to his detriment, nor why the failure to inform is said to be misleading and deceptive.

338 There are many cases dealing with the principles pertaining to claims which lie within the area loosely described as misrepresentation by silence. However, it is, I think, unnecessary to review those cases for the purposes of dealing with this particular claim. That is because, on the facts which I have found, including, in particular, my finding that all negotiations between Mr Ammon and ConsMin/PIO and the HoA which they executed, were directed only to tenement EL47/1140, I cannot see any basis upon which a failure to inform Mr Ammon of an intention to apply for other tenements on adjoining ground could be characterised as misleading and deceptive conduct. Nor can I see any basis upon which Mr Ammon could successfully assert that he relied upon a mistaken belief induced by that conduct to his detriment.

339 The sixth claim for misleading and deceptive conduct enunciated by Mr Ammon is based upon an allegation that on or about 9 September 2002, ConsMin and PIO represented to him that the applications for EL47/1224 and EL47/1225 had been made for and on behalf of the joint venture. He alleges this misrepresentation was misleading and deceptive because, in fact, those applications had not been made for or on behalf of the joint venture. He further alleges that he relied upon this conduct to his detriment by continuing to comply with his obligations under the HoA.

340 This claim must fail by reason of my finding that there was no such representation made by ConsMin or PIO. Further, I do not see how Mr Ammon's performance of his legal obligations under the HoA could constitute detriment which would entitle him to a remedy.

341 For these various reasons, all of the claims enunciated by Mr Ammon for misleading and deceptive conduct must fail.

342 Because I have concluded that all the claims made by Mr Ammon must fail, no question of the form of relief to be granted arises. However, in case this matter is pursued on appeal, it is perhaps appropriate if I make some short observations which might be of assistance in case a different view is taken in relation to liability.

343 Dealing firstly with the claims in contract, if Mr Ammon's claim as to the proper construction of the HoA had been made out, the appropriate relief would have taken the form of a declaration as to the proper construction of that document. In relation to his other claims for breach of contract, the appropriate relief to be granted, in the event those claims had been made out, would of course have been to provide him with a remedy which would put him in the position in which he would have been had the contract been performed. However, I have found that Mr Ammon would not have acted any differently, and in particular, would not, himself, have applied for any tenements in respect of adjoining ground, whatever ConsMin/PIO had done.

344 Further, in relation to the alleged breaches of the exclusive access agreements, in light of my finding of fact that Mr Ammon believed, at the time he entered into the HoA, that it applied only to tenement EL47/1140 and any other tenements subsequently acquired by or on behalf of the joint venture, it follows that the remedy of any breaches of the terms alleged to be implied into the earlier agreements would not involve putting Mr Ammon into any different position to that in which he now finds himself.

345 Turning now to Mr Ammon's claims in equity, the precise form of relief to be granted in respect of those claims would, of course, depend critically upon the precise nature of the claim made out. However, given Mr Ammon's assertion that he erroneously believed, at the time he entered into the HoA, that it applied to what he has characterised as 'the entire project', it is difficult to see any basis upon which equity could sustain his claim to be awarded the entire project, given his willingness to enter into an agreement to take only 20%.

346 Turning finally to Mr Ammon's claims for misleading and deceptive conduct, for the reasons I have set out above, in my view, it is difficult to see how Mr Ammon could have suffered any significant loss or detriment in reliance upon any of the conduct alleged. It is therefore difficult to see any basis upon which he could be granted a significant remedy pursuant to the provisions of the Trade Practices Act 1974 (Cth).

347 For these various reasons, in my opinion Mr Ammon's claims should be dismissed in their entirety.