This is an appeal against orders of Kenneth Martin J pursuant to reasons for judgment published in Billabong Gold Pty Ltd v Vango Mining Ltd [No 2][1] (primary decision).
In the primary proceedings, the appellant (Billabong) sued the first respondent (Vango) and the second respondent (Dampier) in relation to alleged breaches of an Ore Treatment Agreement dated 23 September 2014 (OTA). The dispute essentially concerned the proper construction and application of a 'right of first refusal' clause in the OTA and its assignability.
Billabong was not a party to the OTA when it was formed. The OTA was entered into by Vango and Dampier on the one hand, and a company called Northern Star Resources Ltd (Northern Star) on the other. At the time, Vango[2] and Dampier were joint venturers pursuant to a joint venture agreement dated 18 November 2013. The joint venture (Plutonic Dome JV) held a number of tenements, including tenements from which gold was produced at a deposit known as the 'K2 Deposit'. At the time, Dampier was a subsidiary of Dampier Gold Ltd (Dampier Gold). Subsequently, on 24 August 2016, Vango acquired from Dampier Gold all of the shares in Dampier, and Dampier became a wholly owned subsidiary of Vango. The practical effect of this was that Dampier Gold had no continuing direct or indirect interest (via Dampier) in the Plutonic Dome JV or its tenements from the end of August 2016.
Pursuant to the OTA, Northern Star, which had its own gold operations nearby, could be called on to crush and treat gold ore produced by the Plutonic Dome JV from the K2 Deposit. The K2 Deposit was a component of a greater number of mining tenements the subject of the Plutonic Dome JV.[3] The OTA contained, in cl 12.6, a 'right of first refusal' clause in favour of Northern Star which, when triggered required, Vango/Dampier to offer Northern Star an interest in the tenements held by the Plutonic Dome JV.
On 12 August 2016, Northern Star entered into an asset sale and purchase agreement with Billabong (Billabong Sale and Purchase Agreement) under which Northern Star agreed to sell its gold mining operations, including its tenements, to Billabong. Billabong was a subsidiary of a Canadian company and was incorporated on 27 July 2016, shortly prior to the entry into the Billabong Sale and Purchase Agreement.
As part of the sale to Billabong, Northern Star and Billabong also entered into a General Deed of Assignment and Assumption dated 11 October 2016 (Billabong Assignment Deed).
In broad terms, in the primary proceedings, Billabong alleged that, via the Billabong Sale and Purchase Agreement and the Billabong Assignment Deed:
it acquired, by way of assignment, Northern Star's rights under the OTA;
Vango/Dampier breached cl 12.6 of the OTA by failing to provide offers for the transfer of tenements to Northern Star in early 2016, and to Billabong in 2017, when the offer criteria in the OTA were engaged; and
Billabong, as assignee of Northern Star, was entitled to mandatory injunctions requiring equivalent offers to be made to it in relation to the Vango/Dampier tenements.
In general terms, Billabong claimed that cl 12.6 of the OTA was engaged:
by events in around May 2016 involving a transaction by which Dampier conditionally agreed to sell its 40% interest in the Plutonic Dome JV Tenements to Vango; and
by transactions in 2017 involving Vango/Dampier and Dampier Gold under which it was agreed that Dampier Gold could, in effect, reacquire an interest in the K2 Tenements by the commitment of certain capital expenditure.
The learned primary judge found that:
Vango/Dampier breached cl 12.6 of the OTA in 2016 by failing to offer the tenements to Northern Star.
The 2016 cause of action in favour of Northern Star arising from that breach was a bare cause of action which was not assignable to Billabong. Accordingly, his Honour held, Billabong had no claim to relief in respect of the breach of the OTA in 2016.
Even if that cause of action were assignable, the delay by Northern Star (as assumed assignor) in enforcing the obligation meant that Billabong (as assumed assignee) was disentitled to mandatory injunctive relief, and Billabong would have been confined to a remedy of damages at law.
Vango/Dampier breached cl 12.6 of the OTA in 2017, and Billabong was entitled to mandatory injunctive relief requiring an offer to be made to it in relation to the K2 Tenements.
Pursuant to the last‑mentioned finding, the judge made final orders requiring Vango/Dampier to make an offer to Billabong in respect of the K2 Tenements. An offer was made and accepted by Billabong prior to the hearing of this appeal.
As explained in more detail later, in this appeal Billabong challenges the judge's finding that the cause of action vested in Northern Star in 2016 was not assignable to Billabong, and the finding that even if it were assignable, Billabong would only be entitled to common law damages for the breach. Vango/Dampier contends that the judge was correct to find that the cause of action in 2016 was not assignable, but accepts that if it were assignable, the judge erred in finding that the breach precluded the grant of mandatory injunctive relief. Vango/Dampier also contends that having succeeded at trial in respect of the 2017 breach of the OTA, and obtained and accepted an offer in respect of the K2 Tenements, Billabong is now precluded from obtaining mandatory equitable relief in respect of the 2016 cause of action, including on the basis that it would cause hardship to Vango/Dampier. Accordingly, Vango/Dampier contends, even if the grounds of appeal succeed, this court ought not in any event grant mandatory injunctive relief in respect of the 2016 breach of the OTA.
For the reasons which follow, the appeal should be allowed. The assignment by Northern Star to Billabong of the cause of action for breach of cl 12.6 of the OTA in 2016 is not properly characterised as the assignment of a bare cause of action. Also, Vango/Dampier has not established any basis for refusing the grant of mandatory equitable relief. In particular, Vango/Dampier is not entitled to raise the defence of hardship for the first time on appeal.
[2]
Chronology of events 2010 - original acquisition by Dampier/Dampier Gold of tenements
[3]
On 5 March 2010, pursuant to an asset sale agreement, Dampier/Dampier Gold (Dampier Gold then being the holding company of Dampier) acquired from companies described as Barrick Group, 90 tenements comprising part of the Plutonic Dome project (Barrick Sale Agreement).
On 13 August 2010, Dampier and Dampier Gold entered into a royalty agreement with Barrick Group in respect of those tenements (Barrick Royalty Deed).
[4]
18 November 2013 - Vango/Dampier Farm‑In and Joint Venture
[5]
On 18 November 2013, Vango and Dampier entered into a Farm‑In Agreement, which recited that Dampier was the holder and beneficial owner of the tenements specified in sch 1, being various tenements designated 'EL52', 'M52' and 'P52'. It was agreed that Vango would carry out certain expenditure to earn an 'Initial Interest' in a joint venture in relation to the tenements. On the same date, Vango, Dampier and Dampier Gold entered into the Joint Venture Agreement (Dampier/Vango JVA), the commencement date of which was the date on which Vango earned the Initial Interest under the Farm‑In Agreement.
The tenements held under the Plutonic Dome JV will be referred to as the 'Plutonic Dome JV Tenements'.
[6]
December 2013/February 2014 - Barrick sale to Northern Star
[7]
On 21 December 2013, Northern Star, and entities associated with Barrick Group, entered into an agreement for the purchase by Northern Star of the 'Plutonic Dome Operations'. The Plutonic Dome Operations were some 36 km from the Dampier/Vango JVA operations.
On 14 February 2014, the Barrick Royalty Deed and the Barrick Sale Agreement were novated to Northern Star.
[8]
On 23 September 2014, Vango, Dampier and Northern Star entered into the OTA. The OTA recited that Vango was 'currently earning' up to a 75% interest in the Plutonic Dome JV from Dampier. The OTA provided, in effect, that Vango/Dampier could call for the crushing and treatment of gold ore produced by the Plutonic Dome JV K2 Deposit at a mill situated approximately 36 km from the Plutonic Dome JV Project, and 216 km northeast of Meekatharra. As noted earlier, the K2 Deposit was a component of a greater number of mining tenements the subject of the Plutonic Dome JV.[4]
The mill (Gold Mill) was situated on tenements held by Northern Star.[5]
The OTA provided, in effect, for access to crushing and treatment at the Gold Mill during the 'Term' (cl 2). By cl 1.1, the 'Term' commenced on the 'Commencement Date' and ended on the 'End Date'. The 'End Date' included the date of termination under cl 13. Clause 13 provided, amongst other things, for either party to terminate on three months notice.
The 'Commencement Date' was the date to be nominated by Vango/Dampier by giving at least three months written notice to Northern Star. No such notice was ever given, and no gold ore emanating from the K2 Deposit was ever presented for processing at Northern Star's Gold Mill.[6]
The material terms of the OTA are set out in [60] ‑ [64] below. They included terms controlling (1) the disposal of a party's interest in the OTA, and (2) the disposal of an interest in the Plutonic Dome JV Tenements. They included the 'right of first refusal' in cl 12.6, sometimes referred to as 'ROFR'.
[9]
On 4 February 2016, Northern Star and Dampier Gold entered into an agreement for the purchase by Northern Star of six of the Plutonic Dome JV Tenements.
[10]
On 22 March 2016, Dampier Gold sent to Vango documents titled 'Royalty Deed' and 'Agreement for Sale of Mining Assets'.
By 11 May 2016, Vango held 60% of the Plutonic Dome JV Tenements and wished to acquire the other 40% held by Dampier.[7]
On 11 May 2016, Dampier Gold sent to Vango a document titled 'Agreement for Sale of Mining Assets', a document titled 'Royalty Deed', a letter titled 'Assessment of Duty' and a letter titled 'Undertaking in relation to interest in tenements'.
Later on 11 May 2016, Vango sent to Dampier Gold a further draft of the 'Agreement for Sale of Mining Assets'.
These documents contained, in effect, proposals for Vango (which then held 60% of the tenements) to acquire Dampier's 40% interest in the Plutonic Dome JV Tenements. The judge said in this context:[8]
[11]
As the parties' proposed drafts evolved, the realisation of a difficulty seems to have dawned upon the lawyers for [Vango/Dampier]. That is, an ROFR exposure position to Northern Star, under the terms of the OTA looks to have realised as first needing to be addressed. Eventually, a condition came to be drafted which, in effect, would render any proposed sale and purchase of the minority interest in the tenements from [Dampier] to Vango, as being made a subject of the condition precedent. The condition precedent would be the prior receipt of a waiver from Northern Star. Such a waiver receipt condition came to be inserted into the exchanged drafts. The sale and purchase would not be completed upon, if the condition precedent from Northern Star was not received. It was not, as things turned out.
[12]
11 May 2016 - May 2016 Vango/Dampier Sale Agreement
[13]
On 11 May 2016, Vango, Dampier Gold and Dampier executed an instrument titled 'Agreement for Sale of Mining Assets' (May 2016 Vango/Dampier Sale Agreement), under which Vango agreed to purchase all of Dampier's 40% interest in the 'Tenements'.
The May 2016 Dampier/Vango Sale Agreement was conditional (cl 2.1(d)) on the parties obtaining 'any relevant consent or waiver from [Northern Star] in relation to any agreement between Dampier Gold, Dampier, Vango and Northern Star ...'.
Clause 3.1 provided that Dampier agreed to sell and Vango agreed to purchase the 'Assets' free from 'Encumbrances' (other than the 'Royalty' the subject of cl 3.2(c)). The 'Assets' were defined to mean a 40% interest in the 'Tenements' held by Dampier as at the date of the agreement. The Tenements included the tenements in sch 1 and included ML52/183.
By cl 3.2, the consideration comprised:
The 'Non‑Contingent Consideration' on the 'Settlement Date' of $2.2 million.
Four tranches of $1 million on specified milestones of gold production from the Tenements.
The Royalty under the Royalty Deed in the form annexed as annexure A.
On 12 May 2016, Vango and Dampier Gold each released an announcement to the Australian Stock Exchange (ASX) regarding the entry into an agreement for the purchase by Vango of Dampier Gold's 'remaining equity' in the Plutonic Dome Project (ie, via Vango's purchase of the 40% interest in the tenements held by Dampier Gold's subsidiary, Dampier).
[14]
12 August 2016 - Billabong Sale and Purchase Agreement
[15]
On 12 August 2016, Northern Star and Billabong entered into the Billabong Sale and Purchase Agreement. The material terms are referred to in [65] ‑ [83] below. Amongst other things, the Billabong Sale and Purchase Agreement provided for the purchase by Billabong of the 'Assets' as defined. It was common ground that the 'Assets' included the Gold Mill.
The Billabong Sale and Purchase Agreement also provided for 'Transferring Contracts' to be novated to, or assumed by, Billabong. The 'Transferring Contracts' included those listed in sch 5 to the Billabong Sale and Purchase Agreement, as well as any other contracts agreed by the parties to be Transferring Contracts with effect at 'Completion'. Schedule 5 did not include the OTA.
[16]
On 16 August 2016, Vango, Dampier and Dampier Gold entered into a 'Deed of Termination' to terminate the Dampier/Vango JVA and the Farm‑In Agreement.
[17]
16 - 24 August 2016 - Dampier becomes wholly-owned subsidiary of Vango
[18]
On 16 August 2016, Vango, Dampier and Dampier Gold entered into an agreement for the purchase by Vango of all of the shares in Dampier.
On 24 August 2016, Dampier became a wholly owned subsidiary of Vango.
The effect of this was that by 25 August 2016, Vango held 60% of the Plutonic Dome JV Tenements and Dampier, its now wholly‑owned subsidiary, held the other 40%.[9]
[19]
11/12 October 2016 - Billabong Assignment Deed and completion of Billabong Sale and Purchase Agreement
[20]
On 11 October 2016, Billabong and Northern Star entered into the Billabong Assignment Deed. The material terms of the Billabong Assignment Deed are referred to in [84] ‑ [89] below. Amongst other things, it was agreed that on and from Completion, Northern Star assigned and transferred to Billabong the interest held by Northern Star under each 'Assigned Agreement'. The 'Assigned Agreements' were referred to in the schedule to the Billabong Assignment Deed, and included the OTA.
On 12 October 2016, completion of the Billabong Sale and Purchase Agreement, and the Billabong Assignment Deed, occurred.
Notice of the assignment was given to Vango/Dampier on or by 21 October 2016.[10]
[21]
16 November 2016 - termination of May 2016 Vango/Dampier Sale Agreement
[22]
On 16 November 2016, Vango, Dampier and Dampier Gold executed an instrument titled 'Deed of Acknowledgment and Termination Agreement for Sale of Mining Assets'. Under this instrument, Vango, Dampier and Dampier Gold agreed to terminate the May 2016 Vango/Dampier Sale Agreement. Recital B stated that the parties acknowledged that 'they would be unable to complete the [May 2016 Vango/Dampier Sale Agreement] ... due to the lack of required third party consent ...'.
[23]
17 January 2017 - Heads of Agreement with Dampier Gold
[24]
On 17 January 2017, Vango, Dampier Gold and Dampier executed an instrument titled 'Heads of Agreement K2 Mine Development - Plutonic Dome Gold Project' (2017 HOA). The 'Parties' were described as Dampier Gold and Vango (and did not include Dampier), although, as has been mentioned, Dampier executed the document.
By the 2017 HOA, Dampier Gold and Vango acknowledged that Dampier Gold had completed the sale of its residual interest in the Plutonic Dome Gold JV Project to Vango on 25 August 2016 (presumably, a reference to the matters in [39] ‑ [41] above). The instrument acknowledged that amongst the tenements held by Dampier were tenements described as 'K2 Tenements', and that Vango intended to develop a mine in respect of the K2 Tenements (K2 Mine) over a period of three to five years. The instrument provided that Dampier Gold wished to contribute to the capital expenditure for the development of the K2 Mine in exchange for earning an interest in the K2 Tenements. It provided that Dampier Gold may contribute up to the lesser of 50% of CAPEX or $3 million.
Under the 2017 HOA, the K2 Tenements were described as 'ML52/183 and any such other contiguous tenements which cover adjacent, on‑strike or down‑dip extensions of the K2 ore‑body or mineralised zones'.
The 2017 HOA, by cl 8, was expressed to be binding insofar as it provided (by cl 9) that the 2017 HOA was to be kept confidential, but was:
[25]
otherwise subject to execution of a Mining Agreement (and any other legal documents) ... satisfactory to both [Dampier Gold and Vango] including terms of a usual nature and documents of this kind, but expressly including a right for [Dampier Gold] to be offered at any time following 12 months from the date of signing the mining agreement ... the priority right to earn the same interest as provided for in this [2017 HOA] in relation to the K2 Tenements over the other tenements held or partly held by Vango as previously acquired from [Dampier Gold] or [Dampier] that are to be developed by Vango. (emphasis added)
[26]
The 'other tenements' for which the proposed 'Mining Agreement' would include a priority right in favour of Dampier Gold to earn the same interest as provided for in relation to the K2 Tenements, will be referred to for convenience as the 'Additional Tenements'.
The 2017 HOA did not proceed.
[27]
On 12 May 2017, Vango, Dampier and Dampier Gold entered into a further instrument, titled 'Binding Terms Sheet' (2017 Binding Terms Sheet). It recited that Dampier and Vango were the holders of a 100% legal and beneficial interest in the 'Tenement'. The 'Tenement' was defined as (1) ML52/183, (2) any mining interest created in substitution for ML52/183 or effecting any amendments, substitution or variation to ML52/183, and (3) any other mining interest acquired for the purposes of the Joint Venture.
The 2017 Binding Terms Sheet provided, in general terms, for Dampier Gold to contribute up to the lesser of 50% of CAPEX or $3 million to the development of the Tenement. In consideration for the expenditure, Dampier Gold would earn a Joint Venture Interest, equal to lesser of the expenditure as a percentage of the CAPEX or 50%, within a two‑year 'Earn-in Period'. Following Dampier Gold satisfying the expenditure requirement during the Earn-in Period, Dampier Gold would be deemed to have earned the Joint Venture Interest.
The term 'Joint Venture Interest' was defined to mean, in effect, a party's undivided interest in (1) the obligation to contribute to expenditure, (2) the ownership of and right and obligation to receive in kind and to dispose of products produced by the Joint Venture, (3) the beneficial ownership as a tenant in common of the Tenement and, if applicable, the 'K2 Area', and (4) all other rights, benefits, liabilities and obligations accruing in, under, or arising out of the 2017 Binding Terms Sheet.
The term 'K2 Area' was defined to mean any contiguous tenements which covered adjacent, on‑strike or down‑dip extensions of the K2 ore‑body or mineralised zones.
The 2017 Binding Terms Sheet (unlike the 2017 HOA) did not include provision for entry into a 'Mining Agreement' under which Dampier Gold would have a right to earn an interest in the Additional Tenements.
On 16 May 2017, Vango and Dampier Gold each released an announcement to the ASX regarding the entry into of the 2017 Binding Terms Sheet.
[28]
On 12 June 2017, Billabong wrote to Vango and Dampier Gold. The letter asserted rights under cl 12.6 of the OTA, and sought information in that regard in relation to the transaction referred to in the ASX announcements of 16 May 2017.
[29]
On 8 November 2018, Billabong commenced the primary proceedings.
[30]
Northern Star owns and operates the [Gold Mill].
[Vango] is currently earning up to a 75% interest in the [Plutonic Dome JV] from Dampier.
[31]
[Vango] and Dampier in their capacity as the [Plutonic Dome JV] parties have requested that Northern Star crushes and treats the Gold Ore produced from the K2 Deposit by the [Plutonic Dome JV], at the [Gold Mill] which is located approximately 36 kilometres from the Plutonic Dome Gold Project and 216 kilometres north east of Meekatharra in Western Australia.
[32]
The Parties have agreed that the Gold Ore will be treated through the [Gold Mill] on the terms detailed in this [OTA].
[33]
The OTA contained a number of defined terms in cl 1, which relevantly provided:
[34]
1.1 Defined terms
In this Agreement:
...
Commencement Date means the date which is nominated by Plutonic Dome by giving not less than 3 month's written notice to Northern Star.
Dispose means to sell, assign, transfer, part with the benefit of, declare itself a trustee in respect thereof, grant an Encumbrance, grant an option in respect thereof or otherwise deal with.
End Date means the date the [OTA] is terminated in accordance with clause 13 or clause 18.
Mill means the Plutonic gold mine processing plant.
Plutonic Dome means [Vango] or Dampier as the context requires.
Tenements means all the tenements and tenement applications comprising the Plutonic Dome Gold Project tenure at the time of invoking clause 12 of this [OTA] ...
Term means the period commencing on and from the Commencement Date and ending on the End Date.
[35]
Clause 12 of the OTA dealt with the topic of the parties' right to dispose of interests under or in respect of the OTA and interests in the Plutonic Dome JV Tenements. Clause 12.1 provided:
[36]
12.1 Generally
A Party may not Dispose of its right, title or interest under or in respect of this [OTA] except in accordance with this clause 12 or as may otherwise be permitted by this [OTA]. (emphasis added)
[37]
Clauses 12.2 and 12.3 dealt with the parties' rights to dispose of their respective interests under the OTA:
[38]
(a) A Party may from time to lime Dispose of its right, title or interest under or in respect of this [OTA] (whether in whole or in part) to a Related Body Corporate of that Party with effect from the effective date of assignment.
(b) No Disposal under this clause 12.2 will be of any force or effect until the third party has entered into a deed whereby the third party agrees that if it ceases to be a Related Body Corporate of the disposing Party, it must, if so required by the non‑disposing Party, take such action to return the Disposed interest to the original disposing Party.
(c) No Disposal under this clause 12.2 will be of any force or effect until the third party has executed a deed in favour of the other Parties assuming all of the disposer's obligations and liabilities under this [OTA] (including the obligation to comply with clause 12) to the extent of the interest so assigned.
[39]
(a) Plutonic Dome may not Dispose of its right, title or interest under or in respect of this [OTA] unless under clause 12.2 or with the prior written consent of Northern Star which may be withheld in its absolute discretion.
(b) Northern Star may Dispose of its rights and obligations under this [OTA] provided the assignee has executed a deed in favour of [Vango] and Dampier assuming all of Northern Star's obligations and liabilities under this [OTA] to the extent of the interest assigned. (emphasis added)
[40]
Clauses 12.4 ‑ 12.6 dealt with, relevantly, Vango/Dampier's rights to dispose of an interest in the Tenements:
[41]
12.4 Disposal of all or part of the Plutonic Gold Dome Project Tenements
[42]
(a) [Vango] and Dampier will not (and will ensure that their Related Body Corporate do not) Dispose of any interest in the Tenements unless the following circumstances apply:
(i) [Vango] earns an interest from Dampier, or any withdrawal or surrender of the Tenements occurs, or any dilution of [Vango] or Dampier's interest occurs, pursuant to the terms of the [Farm-In Agreement] and [Dampier/Vango JVA] dated on or about 18 November 2013 (Plutonic Gold Dome Project JVA);
(ii) by way of an assignment under clause 12.5[;] or
(iii) by way of an assignment under clause 12.6.
(b) For the avoidance of doubt:
(i) A Disposal of all or part of the Tenements as between [Vango] and Dampier other than earning an interest or dilution of an interest under the Plutonic Gold Dome Project JVA shall trigger the application of clause 12.6;
(ii) clause 12.6 shall prevail over the pre-emptive rights of [Vango] and Dampier under the Plutonic Gold Dome Project JVA; and
(iii) any change in control of the issued shares in [Vango] or Dampier will not constitute a Disposal or a deemed Disposal of the Tenements for the purposes of this clause 12.
[43]
12.5 Disposed of Tenements to Related Body Corporate
[44]
(a) A Party may from time to time Dispose of its right, title or interest under or in respect of the Tenements (whether in whole or in part) to a Related Body Corporate of that Party with effect from the effective date of assignment.
(b) No Disposal under this clause 12.5 will be of any force or effect until the third party has entered into a deed whereby the third party agrees that if it ceases to be a Related Body Corporate of the disposing Party, it must, if so required by the non‑disposing Party, take such action to return the Disposed Interest to the original disposing Party.
(c) No Disposal under this clause 12.5 will be of any force or effect until the third party has executed a deed in favour of the other Parties assuming all of the disposer's obligations and liabilities under this Agreement (including the obligation to comply with clause 12) to the extent of the interest so assigned.
[45]
12.6 Right of First Refusal in relation to Disposal of Tenements
[46]
(a) Northern Star has the right of first refusal on the terms and conditions set out in this clause in respect of a Disposal of all or part of the Tenements by [Vango] or Dampier.
(b) Where [Vango] or Dampier receive a bona fide offer to purchase, or intend to make on offer to sell, for a consideration involving payment of:
(i) cash in whatever form and over any period including immediate cash, deferred cash, royalty, net smelter return, net profit interest), and or
(ii) publicly traded securities, the fair market value of the consideration shall be calculated using the closing price of such publicly traded security for the immediately preceding trading day, and or
(iii) assets other than cash or publicly traded securities, the fair market value of the consideration shall be calculated by an independent expert valuer with the appropriate expertise in the class of assets in question appointed by Northern Star at the cost of Plutonic Dome, such valuation to be conducted during the Offer Period (defined below) which shall be extended by up to 14 days to accommodate such valuation exercise,
[47]
the whole or part of its interest in the Tenements which it is willing to accept and Dispose of, [Vango] or Dampier (Offeror) must promptly send written notice to Northern Star of the offer to purchase or sell making the same offer to Northern Star (ROFR Offer) and giving a copy of the same to the other Plutonic Dome Party.
[48]
(c) The ROFR Offer must:
(i) set out all the details of the offer to purchase or sell that the Offeror has received or wishes to make, including the identity of the proposed acquirer (if then known), to enable an assessment of the acquirer's financial standing including, where applicable, details of the financial standing of the acquirer's Ultimate Holding Company (as defined in the [Corporations Act 2001 (Cth)]) and any proposed parent company guarantees; and
(ii) attach a copy of all the ROFR Offer and any valuation referred to in clause 12.6(b).
(d) Northern Star has the right for a period of 30 days following receipt of the ROFR Offer (Option Period) to accept the ROFR Offer in full.
(e) To accept the ROFR Offer Northern Star must give written notice of acceptance to the Offeror during the Option Period. Where written notice of acceptance is given by Northern Star during the Option Period the Offeror must sell the Tenements the subject of the ROFR Offer to Northern Star on the terms of the ROFR Offer.
(f) If Northern Star does not accept the ROFR Offer within the Option Period then, following the Option Period, the Offeror is free within 6 months from the date of the ROFR Offer, and subject to subsequent completion and delivery of the required assignment documentation specified in this clause 12 and all necessary regulatory approvals, to Dispose of the Tenements the subject of the ROFR Offer (and subject to the pre-emptive rights of the other Plutonic Dome Party) to the prospective acquirer at a price and subject to the terms and conditions which are no less favourable to Northern Star than the price, terms and conditions set out in the ROFR Offer. (emphasis added)
[49]
The Billabong Sale and Purchase Agreement, entered into on 12 August 2016, was between Northern Star, a Northern Star subsidiary (Northern Mining), Billabong and Billabong's parent company (2OI).
By the recitals, under the heading 'Background', the Billabong Sale and Purchase Agreement provided:
[50]
[Northern Star] carries on the Gold Operations and owns the Assets, which are all of the assets necessary to carry on the Gold Operations. [Northern Mining] is a wholly owned subsidiary of [Northern Star].
2. [Northern Star] wishes to sell and [Billabong], as the nominee buyer..., wishes to buy the Assets and assume the Assumed Liabilities on the terms and conditions of this agreement to enable [Billabong] to carry on the Gold Operations as a going concern in succession to [Northern Star] and [Northern Mining].
[51]
[Billabong] is a wholly owned subsidiary of [2OI] and [2OI] guarantees the due and punctual performance by [Billabong] of the Guaranteed Obligations in accordance with the terms of this [Billabong Sale and Purchase Agreement].
The 'Gold Operations' were defined in cl 1.1 to mean:
[52]
The gold mining operation known as the Plutonic Gold Operations conducted by [Northern Star] located approximately 180 km north‑east of Meekatharra in Western Australia using the Assets, which includes the Hermes project.
[53]
By cl 1.1, the 'Assets' meant 'all the assets necessary for [Billabong] to be able to conduct the Gold Operations in substantially the same manner as [Northern Star] being ...'. In the definition after the word 'being' there followed a reference to:
[54]
(a) Northern Star's interest in the Tenements;
>
> (b) the Plant and Equipment;
>
> (c) the beneficial interest in the Property and each Pastoral Lease;
>
> (d) the Gold In Circuits;
>
> (e) the Ore Stockpiles;
>
> (f) the Supplies Inventory;
>
> (g) the Records;
>
> (h) the Gold Operations IT Assets;
>
> (i) Northern Star's right to the goods and services to be supplied to the Gold Operations after Completion, and other benefits to be received by the Gold Operations after Completion, for which Northern Star paid before Completion;
>
> (j) the benefit of Northern Star's interest in the Contracts;
>
> (k) the benefit of Northern Star's interest in the Gold Operations Authorisations;
>
> (l) the benefit of Northern Star's interest in any Additional Asset Options which are the subject of an Acceptance Notice as at the Completion Date; and
>
> (m) all other rights, title interests and assets of Northern Star necessary for Billabong to be able to conduct the Gold Operations in substantially the same manner as Northern Star,
[55]
As noted earlier, it was common ground that the 'Assets' included the Gold Mill.
The term 'Contracts' was defined to mean:
[56]
The contracts entered into by [Northern Star] necessary for [Billabong] to be able to conduct the Gold Operations in substantially the same manner as [Northern Star] and which are not fully performed at Completion, including the Land Contracts and the Transferring Contracts, but excluding the Excluded Contracts.
[57]
The term 'Transferring Contracts' was defined to mean:
[58]
the Contracts which are necessary for [Billabong] to be able to conduct the Gold Operations in substantially the same manner as [Northern Star] (the benefit of which is to be transferred to [Billabong] with effect at Completion by execution of the General Deed of Assignment or individual deeds of assignment, including those listed in sch 5, and any other Contracts agreed by the parties to be Transferring Contracts with effect at Completion. (emphasis added)
[59]
Schedule 5 did not include a reference to the OTA.
The term 'Tenements' (which, for present purposes, will be referred to as 'Northern Star Tenements') was defined to mean the tenements listed in sch 4, and the Petroleum Pipeline Licence, together with any 'tenement or licence that is a successor, renewal, modification, extension or substitute for the whole or part of any such tenement or licence'.
The 'Excluded Assets' were defined to mean (1) Finished Product, (2) the Bryah Basin Assets, but only if the circumstances in cl 4.3 have arisen, (3) the Receivables and all other debts owing to [Northern Star] at Completion, or which become due and payable to [Northern Star] after Completion, in respect of the Gold Operations prior to Completion, (4) the Excluded Contracts, (5) all assets in connection with the operations of [Northern Star] other than the Gold Operations, (6) the Excluded Records, and (7) the IT Systems.
The 'Excluded Contracts' were defined to mean all hedging contracts, all contracts forming part of the IT Systems, and all contracts or policies of insurance affecting the Gold Operations. The 'Excluded Records' were defined to mean all records and books relating to the Gold Operations, and the Assets, the Property, the Pastoral Leases, or the Transferring Employees that met specified criteria in subpars (a) ‑ (g) of the definition.
'Completion' was defined to mean the completion of the sale and purchase of the Assets in accordance with cl 7. 'Completion Date' was defined, relevantly, to mean the date on which Completion occurred.
Clause 2.1 provided, in effect, that Completion was conditional on specified matters, including Billabong and Northern Star entering into a 'General Deed of Assignment'.[11]
Clause 3.1 provided that, on Completion, Northern Star must sell the Assets, and Billabong must buy the Assets, free of encumbrances. Clause 3.2 provided that the Excluded Assets were not included in the sale and purchase under cl 3.1.
Clause 3.4 provided that on and from Completion, Billabong must assume, pay, perform and discharge all 'Assumed Liabilities', and indemnify Northern Star against, and pay to Northern Star on demand the amount of, any Indemnified Loss suffered or incurred by Northern Star as a result of Billabong failing to comply with cl 3.4. The 'Assumed Liabilities' were defined to mean, amongst other things, 'liabilities arising out of or in connection with or otherwise relating to the Assets ... being liabilities relating to' specified matters. The specified matters included Employment Contracts, Trade Payments, rent and other outgoings of a recurring or periodical nature and any 'Contractual Liabilities' accruing after Completion, except to the extent that such liabilities arose in respect of acts or omissions before Completion. By cl 3.5, the 'Excluded Liabilities' (as defined) were not included in the assumption of 'Assumed Liabilities'.
Clause 10 referred to 'Transferring Contracts and Expired Contracts'. Clause 10.1 provided that cl 10 did not apply to a Transferring Contract the subject of cl 2.1(o) unless that condition was waived by Billabong in relation to that Transferring Contract. Clause 2.1(o) provided in effect that Completion was conditional on the contracting parties to specified Transferring Contracts consenting to novation or assignment to and assumption by, Billabong. The contracts specified in cl 2.1(o) did not include the OTA.
Clause 10.2 provided:
[60]
(a) [Northern Star] and [Billabong] must use reasonable endeavours to procure any necessary third party consents and procure that each Transferring Contract is novated to, or assigned to and assumed by, [Billabong] before Completion (such novation or assignment being conditional upon Completion occurring).
(b) If any Transferring Contract has not been consented to, novated or assigned before Completion (conditional upon Completion occurring), [Northern Star] and [Billabong] must use reasonable endeavours to procure that such Transferring Contract is novated or assigned to [Billabong] as soon as practicable after Completion. The parties acknowledge that neither [Northern Star] nor [Billabong] will be in breach of this agreement if any Transferring Contract is not the subject of an executed deed of novation or assignment by Completion.
(c) The General Deed of Assignment [ie, the Billabong Assignment Deed] is the agreed instrument to effect the requirements of this clause 10.1 where consent of a third party is not necessary. (emphasis added)
[61]
Clause 10.3 provided that Billabong was entitled to the benefit of the Transferring Contracts with effect from Completion. Under cl 10.3, if a Transferring Contract had not been novated or assigned at Completion, Northern Star assigned to Billabong on Completion the benefit of each Transferring Contract which could be assigned without consent, and if the benefit of any Transferring Contract could not be effectively transferred, except by novation or assignment, Northern Star was obliged, from Completion, unless and until such novation or assignment had occurred, not to exercise any rights under such Transferring Contract other than in accordance with a direction from Billabong, Northern Star was also obliged, to the extent lawfully possible, to do such other things reasonably requested of it to enable Billabong to obtain the benefit of that Transferring Contract.
Clause 10.4 provided that, with effect from Completion, Billabong must perform on behalf of Northern Star all of Northern Star's obligations and discharge all of its liabilities, under each Transferring Contract which remained to be performed after Completion.
[62]
The Billabong Assignment Deed was entered into between Northern Star and Billabong on 11 October 2016. The 'Background' recited:
[63]
[Northern Star] has agreed to sell, and [Billabong] has agreed to purchase, the Assets (as defined in the [Billabong Sale and Purchase Agreement]) on the terms and conditions set out in the [Billabong Sale and Purchase Agreement].
2. [Northern Star] has agreed that at Completion under the [Billabong Sale and Purchase Agreement] it will assign the benefit of each Assigned Agreement to [Billabong]. [Billabong] has agreed that at Completion under the [Billabong Sale and Purchase Agreement] it will assume the obligations of each Assigned Agreement in favour of the third party with the continuing rights under the Assigned Agreement.
[64]
In accordance with the respective obligations of [Northern Star] and [Billabong] under the [Billabong Sale and Purchase Agreement], the parties wish to provide for the complete vesting in [Billabong] of [Northern Star's] interests in each Assigned Agreement and for the assumption of all obligations thereunder by [Billabong]. (emphasis added)
Clause 2 of the Billabong Assignment Deed provided:
[65]
(a) On and from Completion, [Northern Star] assigns and transfers to [Billabong] the Assignor's Interest under each Assigned Agreement.
>
> (b) The assignment and transfer in clause 2(a) is subject to and takes effect on and from Completion.
>
> (c) As soon as practicable after Completion, [Northern Star] will provide notice of the assignment to the counterparty of the Assigned Agreement. (emphasis added)
[66]
By the cl 1.2, the terms 'Assigned Agreement', 'Assignor's Interest', and 'Completion' were defined as follows:
[67]
Assigned Agreement means each of the agreements, deeds and other documents described in the Schedule to this Deed (as amended, supplemented, novated, assigned and assumed up to the date of this Deed), which [Northern Star] and [Billabong] have designated as a Transferring Contract (as defined in the [Billabong Sale and Purchase Agreement]) under the [Billabong Sale and Purchase Agreement].
Assignor's Interest means all rights, title and interest of [Northern Star] in, to and under each Assigned Agreement; however in respect of an Assigned Agreement which relates to sites in addition to the Gold Operations (defined in the [Billabong Sale and Purchase Agreement] as being the Plutonic gold operations), only those rights, title and interest in respect of the Plutonic site will be assigned.
Completion means the completion of the sale and purchase under the [Billabong Sale and Purchase Agreement], as defined in the [Billabong Sale and Purchase Agreement][.] (emphasis added)
[68]
The schedule to the Billabong Assignment Deed in pt A included the OTA.
By cl 3(b) of the Billabong Assignment Deed, Billabong's expressed assumption of liabilities under the OTA was applicable from 'Completion'. It was not in dispute that 'Completion' under both the Billabong Sale and Purchase Agreement and under the Billabong Assignment Deed occurred on 12 October 2016.
By cl 4, the consideration payable by Billabong for the purchase comprised, in general terms, a cash payment of $12.5 million, the provision of shares in Billabong's parent, 2OI, a milestone payment of up to $10 million, and a royalty capped at $10 million.
[69]
In what follows, the May 2016 Dampier/Vango Sale Agreement and/or the drafts which preceded it in March and May 2016 (see [25] ‑ [33] above) will be referred to (as context requires) as the '2016 Transactions'. The 2017 HOA and the 2017 Binding Terms Sheet (see [46] ‑ [56] above) will be referred to as the '2017 Transactions'.
[70]
The learned primary judge found, relevantly in effect, that:
Vango/Dampier breached cl 12.6 of the OTA by the 2016 Transactions (2016 Breaches).[12]
Northern Star's chose in action in respect of this breach of contract by Vango/Dampier was not assignable to Billabong, in that it was a bare right of action.[13]
Had Northern Star litigated the issue, it would not have been granted injunctive relief for the 2016 Breach, but would have been entitled to common law damages only.[14]
Vango/Dampier breached cl 12.6 of the OTA by the 2017 Transactions (2017 Breaches).[15]
Billabong was entitled to mandatory injunctive relief in respect of the 2017 Breaches.[16]
The judge published the primary decision on 14 December 2021. His Honour said at the conclusion of the primary decision:[17]
[71]
In the end, [Billabong] has succeeded and should receive the injunctive relief it seeks against [Vango/Dampier] grounded upon the [2017 Transaction]. But no orders should issue at this time.
Given a potential for an underlying contempt sanction for a non‑compliance, injunctive orders of a court need to be certain in their terminology and precise in their articulation for all required performance obligations by defendants and, within limits, they should not require any continuing level of supervision from a court ... The plaintiff should prepare and exchange a minute of the proposed orders it seeks.
[72]
On 24 December 2021, Billabong filed a minute of proposed orders seeking a declaration that Vango/Dampier be obliged to make specified offers to Billabong. The specified offers were:
an offer, generally in accordance with the terms of the 2017 HOA, with Billabong referred to in substitution for Dampier Gold; and
an offer, generally in accordance with the terms of the 2017 Binding Terms Sheet, with Billabong referred to in substitution for Dampier Gold.
Billabong's proposed orders provided that either (but not both) offer could be accepted by Billabong within 30 days of receipt. Unlike cl 8 of the 2017 HOA, the first offer was not expressed to be binding only in relation to cl 9 (confidentiality).
Also on 24 December 2021, Vango/Dampier filed a minute of proposed orders. Vango/Dampier also proposed orders which included two offers. One was generally in accordance with the 2017 HOA, including, in cl 8, that the instrument was only binding in relation to cl 9 (confidentiality). The second offer was in terms generally in accordance with the 2017 Binding Terms Sheet.
[73]
On 25 January 2022, the learned trial judge published supplementary reasons for judgment: Billabong Gold Pty Ltd v Vango Mining Ltd [No 2][18] (Supplementary decision). In the Supplementary decision, the judge rejected a number of criticisms of Billabong's proposed minute of orders.[19] His Honour also observed that two other criticisms made by Vango/Dampier were accepted by Billabong, and could, in effect, be incorporated in the version for final orders.[20]
[74]
On 11 February 2022, the judge made the following orders (Primary Orders):
It is declared that, pursuant to cl 12.6 of the [OTA], the benefit of which agreement was signed to [Billabong] on or about 11 October 2016, [Vango/Dampier] are obliged to make the offers, to [Billabong] as set out in order 2 of these orders by ... 14 February 2022.
[Vango/Dampier] are hereby ordered to:
[75]
(a) make and deliver an offer in writing to [Billabong] that is open for acceptance in the terms as set out in Annexure 1 to these orders ...; and
>
> (b) make and deliver a further offer in writing to [Billabong] that is open for acceptance in the terms set out at Annexure 2 to these orders ...
[76]
Within 30 days of its receipt of each of the offers as referred to in par 2 of these orders, [Billabong] may elect to accept one, but not both, of the offers, and may do so by giving written notice of that acceptance (specifying expressly which of the two offers is being accepted) to [Vango/Dampier] ...
4. [Vango/Dampier] are ordered to pay 80% of [Billabong's] taxed costs of the proceedings[.]
Annexures 1 and 2 of the judge's orders were, broadly speaking, in terms of Billabong's minute of proposed orders with foreshadowed amendments in accordance with the Supplementary decision.
Clause 8 of Annexure 1 (broadly speaking, the offer reflecting the 2017 HOA) provided:
[77]
This Heads of Agreement will be legally binding upon acceptance. Nevertheless, the parties envisage, after good faith negotiations, the possibility of them entering into and executing a more detailed Mining Agreement, in terms reasonably satisfactory to both Billabong and Vango, including terms of a usual nature in documents of that kind, and expressly including a right for Billabong to be offered at any time following 12 months from the date of signing the Mining Agreement (or such other date as agreed between the Parties) the priority right to earn the same interest, in the same manner, applying mutatis mutandis, as provided for in this Heads of Agreement (concerning the K2 Tenements) over the [Additional Tenements] that are to be developed by Vango being the tenements listed at schedule 1 save for [specified tenements], each of which has expired.
[78]
Annexure 1 also included a sch 1 setting out the details of the Additional Tenements.
Annexure 2 (broadly speaking, the offer reflecting the 2017 Binding Terms Sheet) also contained an additional clause described as 'Zuleika Claim Clause' in the following terms:
[79]
By CIV action 1609 of 2020 Zuleika Gold Ltd, formerly known as [Dampier Gold] pursues a civil claim against Vango and [Dampier] in respect of a percentage interest in mining lease 52/183 of less than 50% (the Zuleika claim). That claim is contested and will be heard in the Supreme Court of Western Australia before Smith J on 21 March 2022.
[80]
On 11 February 2022, Vango provided unexecuted copies of offers in accordance with Annexures 1 and 2 of the Primary Orders.
On 2 March 2022, Billabong filed a notice of appeal.
It appeared to be common ground that the time for acceptance by Billabong of an offer under the Primary Orders expired on 11 March 2022.
On 11 March 2022, this court heard an application by Billabong, filed 4 March 2022, for a stay, suspension order or an extension of time. The court, by majority, dismissed the application, and reasons were delivered on 22 March 2022: Billabong Gold Pty Ltd v Vango Mining Ltd[21] (Stay decision).
On 14 March 2022, Vango and Billabong entered into an agreement in terms of Annexure 1 of the Primary Orders - the 'Heads of Agreement K2 Mine Development - Plutonic Dome Gold Project' (2022 HOA).
By an agreed statement of facts in this appeal, the parties accepted that:
After [Billabong] accepted the [2022 HOA], Billabong and [Vango/Dampier] have convened meetings of the K2 Mining Committee.
The K2 Mining Committee members for Billabong were nominated on 5 April 2022 and the members for [Vango/Dampier] were nominated on 21 April 2022.
On 26 May 2022 the K2 Mining Committee members attended a planning meeting to introduce the members and to discuss how the Committee would operate.
K2 Mining Committee meetings were then held on 30 June 2022, 18 August 2022 and 31 January 2023.
At the K2 Mining Committee meetings, the parties' representatives discussed processes concerning the operation and objectives of the Committee and the path forward for undertaking technical reviews for planning purposes.
On 12 September 2022, as a deliverable of the 18 August 2022 meeting, Vango compiled and delivered to Billabong, raw drill hole data for the K2 Mine.
As a deliverable of the 31 January 2023 meeting, Vango arranged for Billabong to undertake an inspection of the K2 Mine on 7 February 2023.
On 30 January 2023, Billabong provided the K2 Mining Committee with draft plans and budgets for consideration and comment. Pending approval of any such plans and budgets, management and operating personnel and contractors have not been appointed.
CAPEX in any amount greater than $3,000,000 has not been determined or approved by, the K2 Mining Committee and no amounts for Billabong's contributions in tranches have been, proposed to, or approved by, the K2 Mining Committee.
The Committee has not yet paid any costs or expenditure for the maintenance of M52/183. [Vango/Dampier] have paid all costs associated with maintaining M52/183 in good standing since commencement of the 2022 HOA.
[Vango/Dampier are] subject to a [Vango/Dampier-]supported off‑market scrip takeover bid by Catalyst Metals Limited (ACN 118 912 495) (Catalyst). The Catalyst takeover process limits [Vango/Dampier's] abilities to commit finances and expertise to future project developments within its Marymia Gold Project (which includes K2) until after 20 February 2023.
The Honourable Justice Smith has delivered her decision in CIV 1609 of 2020. The citation is [2022] WASC 357.
Her Honour decided (among other things), at [500], that a declaration should be made that Zuleika has a beneficial interest in K2 of 4.1% and an order should be made that [Vango/Dampier] do all things so as to transfer 4.1% of their legal interest to Zuleika. A declaration in those terms was made on 31 October 2022. This declaration is subject to an appeal by [Vango/Dampier].
[81]
Grounds of appeal and issues - overview Grounds of appeal
[82]
Billabong has advanced two grounds of appeal to the following effect:
The judge erred in finding that Northern Star's cause of action in respect of the 2016 Breaches was not assignable. His Honour should have found that the assignment from Northern Star to Billabong by the Billabong Assignment Deed was effective to assign any cause of action in respect of the 2016 Breaches because:
[83]
(a) Billabong had a genuine commercial interest in such causes as the Billabong Assignment Deed formed part of a composite commercial transaction, evidenced by the Billabong Sale and Purchase Agreement, by which Billabong acquired tenements and rights, incurred obligations, including as to the milling of gold under the OTA, all of which were associated with the cause of action assigned; and
>
> (b) the causes were part of a bundle of rights and obligations that were subject, in any event, of a pre‑authorised novation to Billabong under cl 12.3(b) of the OTA, and the Billabong Assignment Deed effected such a novation.
[84]
The judge erred in failing to hold that Billabong was entitled to mandatory injunctive relief in respect of the 2016 Breaches, and not merely common law damages for loss of opportunity, as there was no pleaded or established basis for denying such relief to Billabong, and denying any such relief in the absence of pleas or arguments to that effect, was not appropriate or fair.
[85]
Billabong submitted that the learned primary judge misstated and misapplied the relevant principles established by the High Court in Equuscorp Pty Ltd v Haxton,[22] where French CJ, Crennan and Kiefel JJ applied Lord Roskill's statement in Trendtex Trading Corporation v Credit Suisse.[23]
Billabong submitted, in effect, that the Billabong Sale and Purchase Agreement was entered into on 12 August 2016. At that time, there was no disposition of any right under the OTA. By the Billabong Sale and Purchase Agreement, in August 2016, Billabong had agreed to buy tenements and other assets of Northern Star's Plutonic Gold Operations. Billabong then 'had a commercial interest in all aspects of Northern Star's business as it pertained to that project', including the Gold Mill. In October 2016, when Billabong took an assignment under the Billabong Assignment Deed, 'it did so with a genuine commercial interest in [Northern Star's] Plutonic Gold Operations and the "Assets" which interest extended to ... rights of action under the OTA ...'.
Billabong further submitted that despite observations in WorkCover Queensland v AMACA Pty Ltd,[24] the proposition that the commercial interest needed to pre‑date the assignment is contestable - it was not mentioned in Trendtex or Equuscorp. There need not be a pre‑existing enforceable right,[25] and an assignment of a bare right has been upheld where the interest arose with the assignment.[26] In any event, Billabong's interest arose before the assignment. It arose in August 2016 upon execution of the Billabong Sale and Purchase Agreement. Also, the case of Coal Hub Pty Ltd v NSL Consolidated Ltd [No 4],[27] relied on by the judge, was distinguishable.
Furthermore, there was an 'authorised novation' under cl 12.3(b) of the OTA. By cl 12.3(b) of the OTA, Northern Star was authorised to 'Dispose' its rights and obligations to Billabong. That it did by the Billabong Assignment Deed. Upon execution of the Billabong Assignment Deed, 'Billabong, by replacement contract, took all of Northern Star's rights and obligations'.[28] This provided 'another answer to the defence resting on assertions as to the assignment of a bare right to litigate'.
[86]
In response to the appeal, in summary, Vango/Dampier in its written submissions submitted that in relation to ground 1, the judge was correct for the reasons he gave, and the choses in action in respect of the 2016 Breaches were not assignable. In particular, Vango/Dampier submitted that Billabong had no requisite commercial interest until completion of the Billabong Assignment Deed on 12 October 2016. Vango/Dampier submitted:
[Vango/Dampier] accept that the [Billabong Sale and Purchase Agreement] and [Billabong Assignment Deed] (as a composite commercial transaction) created, for Billabong, a genuine commercial interest in the OTA from the Completion Date of 12 October 2016.
However, [Vango/Dampier] contend that the timing of Billabong's genuine commercial interest and its acquisition of property rights is significant to the question of whether the cause of action is assignable.
[Vango/Dampier] do not accept that the [Billabong Sale and Purchase Agreement] created a genuine commercial interest for Billabong in the OTA prior to the [Billabong Assignment Deed]: cf Billabong's Appeal Submissions at [32], [36]; which submission is, in any event, beyond, and different from, its Appeal Ground 1.
[Vango/Dampier] say that prior to both its incorporation and the later [Billabong Sale and Purchase Agreement]/[Billabong Assignment Deed], Billabong:
[87]
79.1. had no genuine commercial interest in suing on those breaches of the OTA which occurred significantly prior in time; nor
79.2. had any [sic - no] relevant property right to which the cause of action was ancillary.
[88]
The Learned Trial Judge was correct to hold that, in those circumstances, there could be no valid assignment of the cause of action to sue on pre‑existing causes of action.
It is submitted that the temporal question was not resolved by the High Court in Equuscorp v Haxton. It is submitted that is unsurprising as that question does not appear to have been central to the arguments put to the Court.
French CJ, Crennan and Kiefel JJ held that there was a lawful assignment of the cause of action and appeared to rely on the Asset Sale Agreement and the Assignment Deed (in May and October 1997 respectively) as supporting the assignment. That is, it appears their Honours did not require a prior-to‑assignment commercial interest or property right.
Gummow and Bell JJ reached the same result on the lawfulness of the assignment. However, significantly, they relied on charges granted by Rural Finance in 1991 rather than the 1997 transactions. Rural Finance had charged its property in 1991 in favour of Equuscorp to secure its indebtedness. Heydon J took the same approach as that of Gummow and Bell JJ.
In the significant decision of [Trendtex], the House of Lords proceeded on the basis that the right to sue on the cause of action was (other things being equal) properly assignable via the agreement of 4 January 1978 because Trendtex Trading (prior to that January 1978 transaction) owed Credit Suisse a large sum of money which would not be recovered unless Trendtex Trading succeeded in its claim against CBN. That is, the genuine commercial interest clearly pre-dated the assignment.
[Vango/Dampier] contend that the resolution of the temporal question in the way submitted by [Vango/Dampier] is supported by the policy of the law which was against the trafficking of causes of action. (footnotes omitted)
If Billabong succeeded on ground 1, Vango/Dampier accepted that ground 2 should succeed.
Vango/Dampier further submitted that, in any event, whether grounds 1 and/or 2 are upheld, Billabong is not entitled to the relief sought on the appeal.
[89]
In the appeal, the 'Orders wanted' by Billabong included, relevantly:
Appeal allowed.
In addition to Order 1 of the [Primary Orders], order that:
[90]
(a) It is declared that, pursuant to clause 12.6 of the [OTA], the benefit of which agreement was assigned to [Billabong] on or about 11 October 2016, [Vango/Dampier] are obliged to make the offers to [Billabong], as set out in these orders.
>
> (b) [Vango/Dampier] are hereby ordered to make and deliver an offer in writing to [Billabong] that is open for acceptance in the terms as set out in Annexure 1 to these orders ...
[91]
(c) Within 30 days of the later of:
(i) [Billabong's] receipt of the offer referred to in paragraph (b) of these orders;
(ii) the refusal of any application for special leave to appeal to the High Court of Australia; or
(iii) the resolution of any appeal hearing in the High Court of Australia to the effect that the offer in order 2(b) is to be made[,]
[92]
[Billabong] may elect to accept the offer made pursuant to order 2(b) and may do so by giving written notice of that acceptance to [Vango/Dampier] ...
[93]
(d) Where [Billabong] elects to accept the offer as referred to in paragraph (b) of these orders, and does not wish to continue to enjoy the benefit of its acceptance of the offer contained in Annexure 1 to the [Primary Orders] (which offer was accepted on 11 March 2022) (March Acceptance), the parties are to confer as to the unwinding of arrangements arising as a consequence of the March Acceptance, including the return by [Vango/Dampier] to [Billabong] of amounts contributed by [Billabong], the disgorgement by [Billabong] of any farm‑in interest earned by [Billabong], and the dissolution of any K2 Mining Committee which has been formed[.]
[94]
In the alternative to orders 2(a), 2(b), 2(c) and 2(d), it is declared that [Billabong] is entitled to damages in respect of the breach of contract constituted by [Vango/Dampier's] failure to comply with their obligations under cl 12.6 of the [OTA] by reason of the failure to make the 2016 Offers (as defined in the submissions), such damages to be assessed in a separate trial.
[95]
There be liberty to apply on notice in respect of these orders, and in respect of any matters arising as a consequence of the March Acceptance. (emphasis added)
Annexure 1, referred to in proposed order 2(b) above, is a document the terms of which (broadly speaking and if made the subject of court order) would require Dampier to make an offer to Billabong in terms of the May 2016 Vango/Dampier Sale Agreement, with Billabong substituted for Vango as purchaser. In what follows, an offer in terms of annexure 1 will be referred to as 'Annexure 1 Offer'.
In oral submissions, Billabong said that its primary position in relation to relief was that it sought a mandatory injunction requiring an offer in terms of the Annexure 1 Offer to be made to Billabong, whilst, at the same time, retaining its interest under the 2022 HOA. Billabong, in the alternative, sought to 'unwind' the 2022 HOA only if this court found that it was not entitled to cumulative relief, and it was only entitled to an offer in terms of the Annexure 1 Offer or the offer which led to the 2022 HOA.[29]
[96]
Ultimately, the principal issues in the appeal were:
whether the assignment effected by the Billabong Assignment Deed of Northern Star's accrued rights against Vango/Dampier in respect of the 2016 Breaches of cl 12.6 of the OTA was ineffective at law as being contrary to public policy as the assignment of a bare cause of action; and
if the cause of action in respect of the 2016 Breaches was assignable, whether:
[97]
(a) Billabong is entitled to a mandatory injunction in respect of the 2016 Breaches (ie, a mandatory injunction requiring Vango/Dampier to make an offer in terms of the Annexure 1 Offer) in addition to the mandatory injunction obtained in respect of the 2017 Breaches, pursuant to the Primary Orders; and
>
> (b) if Billabong is not entitled to cumulative mandatory injunctive relief in respect of both the 2016 Breaches and the 2017 Breaches, whether this court has power to 'unwind' the relief granted in respect of the 2017 Breaches, pursuant to the Primary Orders, namely to 'unwind' the 2022 HOA and its performance since 14 March 2022 up to the time of this appeal (see [118] above), to enable Billabong to obtain, in the alternative, relief pursuant to an Annexure 1 Offer in respect of the 2016 Breaches.
[98]
The first issue will be referred to as 'Issue 1 - assignability', and the second will be referred to as 'Issue 2 - relief'.
[99]
It has long been said that generally a 'bare right of action' is not assignable. This remains the general rule.[30] This general rule is founded on public policy notions related to the doctrines of maintenance and champerty.[31] In general terms, maintenance is the financial support of litigation without just cause, and champerty is an aggravated form of maintenance marked by the feature that the stranger supporting the litigation will receive, in return, a share of the proceeds.[32] It has been described as 'trafficking in litigation'.[33]
Historically under the general law, champerty was 'especially feared' because the champertor's financial stake in the litigation was regarded as providing a temptation to suborn witnesses or pursue worthless claims. In particular, the early concern expressed was that the remedial processes of the law might be used as a tool of oppression, particularly by powerful nobles and officers.[34] In the Court of Appeal in Giles,[35] Steyn LJ observed, with reference to Professor Winfield's article on 'The History of Maintenance and Champerty':[36]
[100]
At the risk of oversimplifying the results of Professor Winfield's research, it seems that one of the abuses which afflicted the administration of justice was the practice of assigning doubtful or fraudulent claims to royal officials, nobles or other persons of wealth and influence, who could in those times be expected to receive a very sympathetic hearing in the court proceedings. The agreement often was that the assignee would maintain the action at his own expense, and share the proceeds of a favourable outcome with the assignor. Often these disputes involved a claim to the possession of land, and the subsequent sharing of land if the action was successful.
[101]
The law of maintenance and champerty did not however stand still, but accommodated itself to changing times.[37] The adverse consequences inimical to the public interest, that maintained actions were thought likely to produce, altered over the course of time and with changing social conditions, as did the recognition of what constituted a sufficient interest to justify interference in another's litigation by supporting it.[38] By the early 20th century:[39]
[102]
the law of maintenance and champerty depended upon the application of qualifications and exceptions hinged, for the most part, about what was an item of property as distinct from a bare right to litigate and what sufficed as a common interest between maintainer and the maintained. In British Cash and Parcel Conveyors Ltd v Lamson Store Service Co Ltd, Fletcher Moulton LJ said:[40]
[103]
'The truth of the matter is that the common law doctrine of maintenance took its origin several centuries ago and was formulated ... and defined ... in such a way as to indicate plainly the views entertained on the subject by the Courts of those days. But these decisions were based on the notions then existing as to public policy and the proper mode of conducting legal proceedings. Those notions have long since passed away, and it is indisputable that the old common law of maintenance is to a large extent obsolete ... The present legal doctrine of maintenance is due to an attempt on the part of the Courts to carve out of the old law such remnant as is in consonance with our modern notions of public policy ... Speaking for myself, I doubt whether any of the attempts at giving definitions of what constitutes maintenance in the present day are either successful or useful. They suffer from the vice of being based upon definitions of ancient date which were framed to express the law at a time when it was radically different from what it is at the present day, and these old definitions are sought to be made serviceable by strings of exceptions which are neither based on any logical principle nor in their nature afford any warrant that they are exhaustive ... [T]here is still such a thing as maintenance in the eye of the law, ... and the general character of the mischief against which it is directed is ... against wanton and officious intermeddling with the disputes of others in which the defendant has no interest whatever, and where the assistance he renders to the one or the other party is without justification or excuse. But in my opinion it is far easier to say what is not maintenance than to say what is maintenance.' (emphasis added) (footnotes omitted)
[104]
As the boundaries of unlawful maintenance were pushed back, the prohibition on the assignment of a bare right to litigate became more strictly confined.[41] Moreover, the exceptions or justifications which allow a person or body to maintain a litigant in a suit do not form a closed category.[42]
Whilst the class of exceptions and justifications is not closed, there are a number of well‑recognised categories of case which are exceptions to the general rule prohibiting the assignment of a bare right of action, or to which the general rule does not apply.
First, a right of action can be assigned if it is annexed to or ancillary to a property right being assigned.[43] Secondly, and more broadly,[44] even where the right of action is not annexed or ancillary to a property right, the rule does not apply if the assignee of the subsisting cause of action itself has a genuine and substantial interest, or a genuine commercial interest, in enforcing the claim that is otherwise distinct or separate from the interest merely derived from the assignment itself.[45] The requirement that the commercial or other interest be 'distinct or separate' exists because, were it otherwise 'the exception would swallow the rule because the assignment itself would always provide the commercial interest'.[46] Thirdly, albeit perhaps illustrative of the second category, there is no prohibition on an assignee taking an assignment of a cause of action to support and enlarge a right already acquired.[47] Fourthly, where the benefit of a contract is assigned, there is no impediment, on the grounds of maintenance or champerty, to the assignee pursuing a cause of action for breach which has occurred after the date of assignment.[48]
In Trendtex, the bank, Credit Suisse, took an assignment of a right of action being pursued by its customer, Trendtex, in connection with a consignment of cement to Nigeria in which a letter of credit had been dishonoured. Credit Suisse was held, in effect, to have a sufficient commercial interest in the litigation as it was a substantial creditor of Trendtex in connection with the arrangements for the consignment. However, the assignment agreement also provided for Credit Suisse to on sell the cause of action to a third party, and this latter aspect of the assignment was held to savour of champerty. That was effectively because the third party had no interest in the assignment that was distinct from the assignment itself.[49]
Genuine commercial interests have also been found in the relationship of members of the one corporate group, as well as in the relationship of shareholders and company.[50]
In WorkCover Queensland, a statutory body which had paid compensation in excess of $0.5 million to a worker injured by asbestos when working for the defendant, took an assignment of the worker's common law claims against the defendant from the worker's personal legal representative after his death. It was held that the statutory body had a genuine commercial interest in recouping its payment to the worker.[51]
In Rialto Sports Pty Ltd v Cancer Care Associates Pty Ltd,[52] the facts were that in 2014, the owner/developer of a strata building (Rialto) sold lots to various purchasers, including a lot to a company called SRProp. In 2018, SRProp and other purchasers commenced proceedings in the District Court against Rialto for breach of contract in respect of defective work in the common areas. On 20 May 2020, SRProp entered into an agreement to sell its lot to another company (CCA). The contract for sale was completed on 1 July 2020. On the same date (1 July 2020), SRProp also assigned, by deed, its claims in the District Court proceedings against Rialto. Rialto contended that the assignment was ineffective on the basis that CCA did not establish that it had a substantial pre‑existing commercial interest in the action by SRProp. It was held that the assignment was effective for two reasons. First, CCA had a sufficient interest in the action as at the time of the assignment (1 July 2020), having completed by then the purchase of the lot. Secondly, CCA also had a genuine and substantial pre‑existing commercial interest in the suit at that time by reason of having entered into the contract to purchase the lot on 20 May 2020.[53]
In every case, the totality of the transaction must be considered.[54] As has been observed, the concept of a genuine commercial interest is to be applied in a broad and practical way.[55] So long as the asserted commercial interest is both genuine and distinct from the assignment itself, there is no reason in principle to give a limited ambit to the notion of a sufficient commercial interest.
Vango/Dampier nevertheless contended that for the assignment of a cause of action not to savour of maintenance, the relevant commercial interest must exist prior to the assignment. Reference was made to WorkCover Queensland and, in particular, to the observations of McMurdo P[56] and Gotterson JA (with whom Martin J agreed). Gotterson JA said:[57]
[105]
From the discussion in the cases, several characteristics for sufficiency as a genuine commercial interest in this context can be discerned. In the first place, where the assignee relies on a genuine commercial interest to sustain an assignment, that interest must be one that has come into existence prior to the assignment. Plainly, a commercial interest in exploiting an assigned right, even if to recoup an amount paid in exchange for the assignment, would not, of itself, suffice. A commercial interest merely of that kind would tend to taint the assignment as savouring of maintenance or as champertous. It was on that basis that the assignment in Trendtex failed. The anonymous third party assignee had had no prior dealings with the parties to the assigned causes of action from which a genuine commercial interest might have arisen prior to the assignment.
Secondly, the pre-existing commercial interest need not be an interest which, itself, is enforceable at law or in equity. In Brownton, for example, the commercial interest that a defendant who had settled with the plaintiff had in recouping, if only partially, against another defendant who had refused to settle, was held sufficient to sustain an assignment of the plaintiff's rights against that defendant to the other defendant who had settled. The assignee's interest in recoupment was not a legally enforceable interest; yet, clearly, it was a genuine commercial interest which was in existence at the time of the assignment. Another example is found in Victoria Insurance Co v King which concerned an assignment by an insured to an underwriter of causes of action against a tortfeasor in circumstances where the insured did not have a right of subrogation. The underwriter clearly had a commercial interest in recouping payment made under the policy. Griffith CJ (with whom Chubb and Real JJ concurred) was in no doubt that the assignment was valid. (footnotes omitted)
[106]
Those observations in WorkCover Queensland were applied in Dover v Lewkovitz.[58]
For the reasons given below, we are not persuaded that for the purposes of the second category referred to in [126] above, a pre‑existing commercial interest is a necessary criterion, without which the assignment of the cause of action would necessarily fail. That is, while a commercial interest sufficient to support the assignment of a cause of action must be 'separate or distinct' from the interest in the assignment, it need not necessarily be 'pre-existing'. A separate or distinct interest has no necessary temporal requirement.
First, the need for a pre‑existing commercial interest does not appear to have been established by the High Court in Equuscorp, and, as Vango/Dampier accepted, the judgment of French CJ, Crennan and Kiefel JJ is contrary to its proposition.[59] Equuscorp concerned tax‑driven arrangements in which members of the public were invited to invest in blueberry farming schemes. Under these arrangements, a company (Rural) would advance money to lenders. Rural was a member of a group of companies controlled by the promoters of the scheme. Equuscorp had obtained, in 1991, charges over Rural to secure certain loan funds provided to the promoters. The farming enterprise collapsed. After the collapse, Equuscorp, in 1997, took an assignment of the loan agreements from the receivers and managers of Rural and sued the investors under the loan agreements. The loan agreements were held to be unenforceable for illegality, having been made contrary to the requirements of the law regulating the issue of prescribed interests. Equuscorp also claimed, in the alternative, for restitution of the advances made under the loan agreements as money had and received.[60] There were issues as to whether (1) the claims in restitution was assignable by Rural to Equuscorp, and (2) if so, whether the instrument of assignment, properly construed, assigned to Equuscorp the claims in restitution. Each member of the High Court held that as a matter of principle, the claims in restitution were assignable. French CJ, Crennan and Kiefel JJ held that Equuscorp had a legitimate commercial interest in acquiring the restitutionary rights upon the assignment of the purported contractual rights. Their Honours said:[61]
[107]
A restitutionary claim for money had and received under an unenforceable loan agreement is inescapably linked to the performance of that agreement. If assigned along with contractual rights, albeit their existence is contestable, it is not assigned as a bare cause of action. Neither policy nor logic stands against its assignability in such a case. The assignment of the purported contractual rights for value indicates a legitimate commercial interest on the part of the assignee in acquiring the restitutionary rights should the contract be found to be unenforceable. Equuscorp fell into the category of a party with a genuine commercial interest in the restitutionary rights. Notwithstanding the difficulties that may attend the claims having regard to particular circumstances and defences which might affect their vindication, the better view is that adopted by the Court of Appeal, namely, that the restitutionary claims were assignable. The question that next arises is whether they were assigned. (emphasis added)
[108]
As can be seen from this passage, the commercial interest found by their Honours to sustain the efficacy of the assignment was contemporaneous with the assignment itself.
In Equuscorp, Gummow and Bell JJ[62] and Heydon J[63] also held that the claims for money had and received were assignable, but found that the charge granted to Equuscorp by Rural over its assets in 1991 provided a sufficient commercial interest. Heydon J, however, also noted that the respondents had not explained why the assignment deed in 1997 was not itself sufficient to assign the causes of action for money had and received insofar as the loan instrument (in cl 4(i)) also included a charge by the investor/borrower in favour of Rural.[64] His Honour however did not pursue the point, as it was one 'rather under‑analysed on both sides'.[65]
Secondly, the point has been left open by the New South Wales Court of Appeal in Bakewell.[66] Further, the point was not under consideration in Dover, where, relevantly, the only question was whether the relevant commercial interest could exist in the absence of a pre‑existing enforceable right against the assignor.[67]
Thirdly, as Ipp JA explained in Project 28,[68] the interest 'must be distinct from the benefit that the person supporting the action seeks to derive from the litigation. ... It must be something beyond a mere personal interest in profiting from the outcome of the proceedings'. Also, in National Mutual Property Services, Lindgren J observed that, in this context, the expression commercial interest:[69]
[109]
refers to a commercial interest which exists already or by reason of other matters, and which receives ancillary support from the assignment. (emphasis added.)
[110]
That passage was cited with evident approval in Rialto,[70] where Gleeson JA (with whom Bell CJ & Macfarlan JA agreed) also emphasised the words we have italicised.
To similar effect, in TS & B Retail Systems Pty Ltd v 3Fold Resources Pty Ltd (No 3),[71] Finkelstein J referred to the 'inescapable' logic of Lord Roskill's view in Trendtex, and said:
[111]
This is especially so when ... the cause of action is connected with, or relates to, rights or interests owned, or that will fall into the ownership, of the assignee. (emphasis added)
[112]
Consistently with these authorities, what is required, in our respectful view, is that the interest be distinct from the assignment itself, not that it necessarily predate it. A pre‑existing commercial interest will typically be evidence of an interest distinct or separate from the interest acquired under the assignment itself. As we would respectfully understand the observations of their Honours in WorkCover Queensland, the need for a distinct or separate interest was supplied by the existence of a pre‑existing commercial interest in recouping the payments to the deceased worker, which arose upon payment of the compensation. Insofar as WorkCover Queensland may have appeared to indicate Trendtex required the interest predate the assignment, that proposition does not, with respect, seem to follow from Trendtex (see [127[72]] above).72
The evidentiary significance of a pre‑existing commercial interest does not, in our view, make such an interest a strict legal criterion conditioning the validity of the assignment. If, for example, the only asset of a subsidiary of a holding company was a cause of action in contract which it was pursuing against a defendant, and the holding company sold the shares in the subsidiary to a third party who also took an assignment of the subsidiary's cause of action, it is difficult to see why the sufficiency of the assignee's commercial interest would depend upon whether the transaction was structured in stages under which the sale of shares occurred first, followed by the assignment of the cause of action.
Fourthly, in the case of Giles, the House of Lords considered the position of a car rental company which provided replacement hire vehicles to motorists who had been involved in a motor vehicle accident, where the terms of the rental provided for the car rental company to sue the defendant in the motorist's name, and to recover its hire charges from the judgment. The car rental company had no pre‑existing commercial interest in connection with the motorist's cause of action prior to entering into the car rental agreement on the terms which allowed it to maintain an action against the defendant. It was held that the car rental agreement was not champertous. Lord Mustill (Lords Keith of Kinkel, Ackner, Jauncey of Tullichettle & Lowry agreeing) said:[73]
[113]
There is no 'wanton and officious intermeddling' in the dispute between the motorist and the defendant. The [car rental] company does not meddle at all, but allows the motorist to get on with the claim, and merely awaits a favourable result. True, the [car rental] company makes a profit, but this comes from the hiring, not from the litigation. For my part, I think it quite plain, without the need to go into any details of the law, that this transaction is neither champertous nor invasive of any requirement of public policy.
[114]
Fifthly, nothing in the policy justification for the rule - namely the avoiding of trafficking in litigation - imports the requirement that the relevant commercial interest must always predate the assignment. In effect, senior counsel for the respondents accepted that this is so.[74] Each case will depend upon its own facts and circumstances,[75] and the transaction must be considered as a whole, in assessing whether the assignment involves 'wanton and officious intermeddling with the disputes of others in which the [assignee] has no interest whatever ...'.[76]
[115]
Consistently with the fourth category of case referred to in [126] above, Vango/Dampier accepted that under the Billabong Assignment Deed, Billabong was assigned the benefit of the OTA on and from 12 October 2016 (the date of Completion) so that the cause of action for breach of cl 12.6 of the OTA which accrued thereafter, in 2017, was maintainable by[77]illabong.77
Further, there was no dispute by Vango/Dampier that the language of cl 2 of the Billabong Assignment Deed, read with the definition of 'Assigned Agreement' (see [85] ‑ [86] above), was apt, in its terms, to assign to Billabong on and from 12 October 2016 the cause of action vested in Northern Star for t[78] 2016 Breaches.78 Vango/Dampier's contention was that despite the language of the assignment, the general law would not countenance an assignment to Billabong of the cause of action which vested in Northern Star prior to 12 October 2016, as it would be contrary to public policy prohibiting the assignment of bare causes of action.
In this regard, Vango/Dampier contended that:
for the assignment of the cause of action not to savour of maintenance, the relevant commercial interest must exist prior to the assignment; and
Billabong had no pre‑existing commercial interest when it (purportedly) took an assignment of Northern Star's May 2016 cause of action on 12 October 2016.
Vango/Dampier must establish both propositions in order to succeed in opposing ground 1. We do not accept either proposition.
For the reasons explained in [135] ‑ [145] above, we do not accept the first proposition.
As to the second proposition, in our view, prior to completion of the Billabong Assignment Deed on 12 October 2016, Billabong had a genuine and substantial interest, or a genuine commercial interest, in enforcing the 2016 Breaches. That is because of the Billabong Sale and Purchase Agreement entered into on 12 August 2016. Under that agreement, Billabong agreed to purchase, and Northern Star agreed to sell, all of Northern Star's 'Assets' (as defined) in connection with its 'Gold Operations'.[79] The 'Gold Operations' constituted the gold mining operation conducted by Northern Star in an area near Meekatharra, relatively proximate to the area of the Platinum Dome JV Tenements.[80] The Assets being purchased by Billabong included the Northern Star Tenements and the Gold Mill. The Billabong Sale and Purchase Agreement was enforceable in equity, and Billabong had a commercial interest, as purchaser of the Northern Star's gold mining operations, in enhancing, or potentially enhancing, the value of those operations by augmenting its tenement holding in the area.
Further, contrary to Vango/Dampier's contention,[81] the fact that the OTA only became a 'Transferring Contract' and an 'Assigned Agreement' under the Billabong Assignment Deed on 12 October 2016 is irrelevant to this commercial interest acquired by Billabong on 12 August 2016.
Although, in this regard, Billabong had a relevant interest which preceded the assignment on 12 October 2016, another, and better, view is that when the transaction effectuated by the Billabong Sale and Purchase Agreement and the associated Billabong Assignment Deed is considered as a whole (see [131] above), the matters referred to in the preceding paragraph indicate that Billabong had a genuine and substantial interest or a genuine commercial interest in enforcing the 2016 Breaches beyond the assignment itself.
To the extent that the judge found there was no genuine commercial interest because (1) the two sets of tenements were 36 km apart, and (2) Billabong was not incorporated until 27 July 2016,[82] his Honour, with respect, erred. As to the first of those matters, 36 km, in this geographical context, is not an objectively material distance between the two sets of tenements, and commercially the parties to the OTA evidently regarded the tenements as effectively neighbouring for the purposes of the potential use of the Gold Mill for the treatment of ore. As to the second matter, the fact that Billabong was not incorporated until 27 July 2016 is irrelevant to the operation of the Billabong Sale and Purchase Agreement on 12 August 2016, and the subsequent assignment to Billabong in accordance with the Billabong Assignment Deed. Also, the decision of Coal Hub [No 4] relied on by the learned primary judge turned on its own facts and provides no material analogy to the present case.[83]
There is one further matter, unrelated to the assignment question, raised by Billabong. As noted in [108.1(b)] and [112] above, Billabong also submitted that there was a 'pre‑authorised novation' under cl 12.3(b) of the OTA which provided another answer to Vango/Dampier's assertion that the assignment involved a bare right of action.
The general rule is that where A enters into a contract with B, B cannot assign to a third party C the burden of its contractual obligations owed to A. Ordinarily, B can only be relieved of those contractual obligations and C be substituted in B's place by a tripartite contract of novation. The effect of novation is not to transfer the original rights and obligations of the parties, but to extinguish the original contract and replace it with a new one.[84] However, it is also possible that A may, in the contract with B, agree 'in advance' that a third party C can later assume B's contractual obligations to A. C's subsequent assent in accordance with the arrangements stipulated by the original contract may result in a novation and thereby a new contract between A and C.[85] The analysis proceeds on the basis of unilateral contract.[86]
Even if cl 12.3(b) of the OTA operated in the manner advanced by Billabong and there were a novation of the OTA resulting in a new contract between Vango/Dampier and Billabong upon the completion of the Billabong Assignment Deed (a matter effectively accepted by Vango/Dampier),[87] any novation would prima facie operate prospectively from the date of novation, absent a term providing for the novation to take effect from some earlier date.[88] Billabong did not contend that any novation took effect from a date preceding the completion of the Billabong Assignment Deed. Accordingly, we do not accept that this argument provides an additional basis upon which to conclude that the assignment was effective in relation to the 2016 Breaches.
[116]
The contest in relation to relief at the trial of the primary proceedings, the judge's findings and the position on appeal
[117]
Before turning to issue 2, it is convenient to outline the course of the trial in relation to Billabong's claim for relief and the primary judge's findings in that regard. As will be seen, the first of those matters is significant for the resolution of one of the arguments raised by Vango/Dampier in opposing the relief sought by Billabong.
In the primary proceedings, the learned primary judge ordered that a trial in relation to ascertaining Billabong's damages (if any) would be tried separately, if necessary, and after the trial of the liability issues. Consequently, no issues concerning Billabong's potential damages, if any, were to be determined at the trial.[89] The judge ordered (amongst other things):[90]
[118]
Any trial exercise as regards the quantification of damages or the ascertainment of equitable compensation for [Billabong], if required, be tried separately and subsequently[.]
[119]
In its amended statement of claim,[91] Billabong pleaded (amongst other things), in pars 3 ‑ 22, the alleged assignment, the '2016 Transactions', and the '2017 Transactions', and that each of the 2016 Transactions and the 2017 Transactions was in breach of cl 12.6 of the OTA. In its prayer for relief, Billabong claimed, in effect:
[120]
(a) a declaration that Vango/Dampier was in breach of cl 12.6 of the OTA in respect of each of the 2016 Transactions and the 2017 Transactions;
>
> (b) a mandatory injunction requiring Vango/Dampier to comply with cl 12.6 of the OTA;
>
> (c) an injunction restraining Vango/Dampier from completing the 2017 HOA and the 2017 Binding Terms Sheet;
>
> (d) an injunction restraining Vango/Dampier from, in effect, assigning or transferring their interests over the Plutonic Dome Tenements;
>
> (e) directions as to the implementation of order (b);
>
> (f) further and alternatively, damages; and
>
> (g) further and alternatively, equitable damages.
[121]
In its defence,[92] Vango/Dampier, inter alia, denied that Billabong was assigned any rights in respect of the causes of action alleged. Vango/Dampier also pleaded:[93]
[122]
(a) Vango and [Dampier] deny that Billabong is entitled to the relief claimed or any relief at all;
(b) if, which is denied, Vango and/or [Dampier] breached the [OTA] in the manner alleged, then Billabong would be adequately compensated by an award of damages;
(c) a mandatory injunction should not be granted because ... Billabong delayed and only raised the issue of its alleged rights under [cl 12.6 of the OTA] in respect of the [2017 Binding Terms Sheet] in June 2017 and then further sat on its hands and did not raise any alleged rights under [cl 12.6 of the OTA] with respect to the [May 2016 Vango/Dampier Sale Agreement] until October 2018. (emphasis added)
[123]
An earlier plea in the defence that Billabong was estopped by express and implied representations from claiming mandatory injunctive relief was deleted by Vango/Dampier.[94]
There was no plea resisting the claims for mandatory injunctive relief on the grounds of hardship. In particular, Vango/Dampier did not plead that, further or in the alternative to its plea of delay, mandatory injunctive relief in respect of the 2016 Breaches would be a cause of hardship because Vango/Dampier would not have offered or agreed to enter into the 2017 Transactions had Northern Star/Billabong claimed and obtained a 40% interest in the Plutonic Dome JV Tenements from Dampier in 2016. It may be observed here that such a defence, if it were intended to be relied upon, is not one of which it could be said that it would not 'naturally occur' to the defendants to raise it before the delivery of judgment by the primary judge.[95]
[124]
Parties' submissions at the trial in relation to injunctive relief
[125]
In written opening outline of submissions dated 13 August 2021, Vango/Dampier contended that Billabong should be denied a mandatory injunction because of 'its delay in taking action in support of its allegations of breach of the OTA'.[96]
In Billabong's reply submissions filed 20 August 2021, Billabong contended that Vango/Dampier's reliance on alleged delay failed in points of law and fact, and that delay on its own would not establish laches or acquiescence.[97]
In its oral submissions, senior counsel for Billabong referred to Vango/Dampier's resistance to a mandatory injunction, and observed that all that remained was 'the issue of delay'.[98] Senior counsel also observed that insofar as the delay argument was raised, there was no prejudice pleaded, nor any proof of prejudice, and no contention or basis for a defence of laches.[99]
In oral submissions, counsel for Vango/Dampier submitted, in the context of an exchange with the judge apparently on the question of whether Billabong should be confined to common law damages in respect of any breach of the 2016 Transactions[100] that Northern Star 'say [sic - sat] on its hands'.[101] Vango/Dampier made only one direct reference to delay at trial in the context of submissions as to relief:[102]
[126]
As for delay, I have taken your Honour to the 2018 letter,[103] which is the letter of demand about the [2016 Transactions], which, by then, had been cancelled, as your Honour has observed ... [a]nd I don't have anything further to say about that.
[127]
In closing, senior counsel for Billabong, responding to that last submission, reiterated that there was no contention, or basis for contending, that Billabong should be denied injunctive relief on the ground of laches.[104]
Subsequently in closing, senior counsel for Billabong said:[105]
[128]
As to the [2016 Transactions], your Honour, it ought be observed that Vango and Dampier knew about the necessity of obtaining a relevant waiver of the ROFR. They asked for it. They knew of their obligations under clause 12.6. They were self‑evidently aware of the necessity to obtain a waiver, because otherwise they would have to deliver a notice to enable Northern Star to take up the tenements that were contemplated being sold each to the other within the Vango[/]Dampier group.
So that's in a material circumstance, not, as our learned friend would have it, as a means of suggesting that you can dispense with clause 12.6, but to the contrary, it shows that the defendants proceeded with plan B knowingly, and they did so, in our submission, at their risk. It should not be incumbent on the beneficiary of a ROFR to move, and, in our submission, when it comes to weighing things in the balance, a court of equity will examine the position from the perspective of established doctrine.
If the defendants are unable to attract the application of the doctrine of laches or other relevant principles for the denial of relief, then, in our submission, equitable relief should follow. Your Honour will know that by reason of their closeness to the infrastructure held by Billabong, as well as the circumstance they are in some ways analogous to land, the tenements at stake in relation to both the 2016 and 2017 [T]ransactions are unique.
There is no evidence before your Honour, contrast the position in Streeter,[106] of any detriment by reason of the circumstance that these proceedings were commenced in 2018.
[129]
At trial, Billabong also handed up an 'aide memoire' with a flow chart showing (amongst other things) a pathway to the relief claimed in respect of both the 2016 and 2017 Transactions, with the consequence that Billabong would obtain (if such relief were ordered) a 90% interest in the K2 Tenements.[107]
Thus, as can be seen from the above:
At the trial, Billabong claimed that it was entitled to the benefit of both a 2016 ROFR offer and a 2017 ROFR offer. On appeal Vango/Dampier conceded that this was so.[108]
Vango/Dampier did not plead any fact or matter in support of a contention that, if each of the 2016 and 2017 Breaches were established, specific relief should not be granted in respect of both. Nor was any such contention advanced by way of submission to the primary judge.
[130]
Although Vango/Dampier pleaded that Billabong had 'sat on its hands' and was thereby disentitled to injunctive relief in respect of the 2016 Transactions (see [161] above), the judge apparently treated the defence as applying equally to delay by Northern Star itself. His Honour found, in effect, that Northern Star had adopted a strategy of 'just sitting by', which precluded injunctive relief in favour of Billabong. His H[109]ur said:109
[131]
[214] ... Northern Star at the time adopted a strategy of deferment and of non responsiveness - in terms of it not stating a position to [Vango/Dampier] as to a waiver. From the documents, this looks to have been a strategy of just sitting by, with a view to seeing whether or not the conduct of [Vango/Dampier] might ultimately trigger Northern Star's ROFR rights. In short, Northern Star looks to have been aware at the time in 2016 of [Dampier's] desire to dispose of its minority holding interest in the OTA tenements in 2016 to Vango. Northern Star watched all that unfold and without providing any response as to its position concerning a requested waiver. Of course, it was not legally obliged to do anything, despite the request to it for that waiver. But if Northern Star was then asking a court of equity for injunctive relief so as to enforce the making of an ROFR offer in its favour by [Vango/Dampier], then its deliberate non-responsiveness in 2016, is a consideration to be weighed against equitable relief (not damages of course).
[215] Ultimately, by about early June 2016, the position reached as between [Vango/Dampier] was that they [had deduced] that there would be no waiver forthcoming from Northern Star. Dampier Gold's proposed disposition of ([Dampier's]) minority interest in the OTA tenements to Vango, came then to be reframed - so as to ultimately be reworked, as an uncontroversial (from an ROFR engagement perspective) disposition of Dampier Gold's shareholding in [Dampier] over to [Vango].
[216] On my assessment of the mentioned documents, there is no basis demonstrated so as to elevate Northern Star's breach relief for any ROFR offer breach arising in 2016 to a level beyond Northern Star's common law right to damages for any such breach. This is so, in respect of the 2016 transactions - the subject of par 9 of [Billabong's statement of claim].
[217] Consequently, I would assess there is no basis established for injunctive relief at 2016, by which the extra assistance of a court of equity would or ought be afforded to Northern Star, had it litigated the issue at then - by way of greater relief for a breach of cl 12.6(b) by equitable relief under a mandatory permanent injunction issued against [Vango/Dampier] favouring Northern Star. That being the position for Northern Star, the [assignment by the Billabong Assignment Deed] to [Billabong] of Northern Star's rights could not deliver any better result of affording to [Billabong] any greater breach relief rights than those to which Northern Star itself would have been entitled. That would be only common law breach damages, for the loss of a 30 day window of opportunity to decide whether or not to accept in 2016 an ROFR offer from [Dampier] to dispose of its minority interest as held then in the OTA tenements on the same terms being then offered, in effect, to Vango.
[132]
His Honour did not find (as alleged by Vango/Dampier in the plea referred to in [172] above) that Billabong itself had been guilty of delay, disentitling it to equitable relief.
[133]
The judge's finding that Northern Star's 'sitting by' disentitled Billabong to equitable relief is challenged by ground 2 of the appeal. There is no notice of contention by Vango/Dampier that the judge should have found that delay on the part of Billabong itself precluded the grant of mandatory injunctive relief as sought in this appeal in respect of the 2016 Breaches. Nor is there a notice of contention to the effect that the judge's finding that the 2016 Breaches sounded only in damages ought be upheld on the alternative ground that an order for mandatory injunctive relief would cause hardship to Vango/Dampier.
Rather, ground 2 is conceded by Vango/Dampier if Billabong succeeds on ground 1.
[134]
As noted earlier, in oral submissions, Billabong said that its primary position in relation to relief was that it sought a mandatory injunction requiring an offer in terms of the Annexure 1 Offer to be made to Billabong, whilst, at the same time, retaining its interest under the 2022 HOA. Billabong, in the alternative, sought to 'unwind' the 2022 HOA only if this court found that it was not entitled to cumulative relief, and it was only entitled to an offer in terms of the Annexure 1 Offer or the offer which led to the 2022 HOA.[110]
Vango/Dampier contended that in the circumstances, Billabong is disentitled to mandatory injunctive relief in respect of the 2016 Breaches. Vango/Dampier's central proposition was that Billabong was not entitled to relief in respect of the 2016 Breaches and the 2017 Breaches, as that would result in 'overcompensation' and that, having obtained final orders in respect of the 2017 Breaches, there was no scope for additional relief in respect of the 2016 Breaches.[111]
There was no debate by either party as to whether the triggering events for the right of first refusal in respect of the 2016 Breaches created an equitable interest in the Plutonic Dome JV Tenements.[112]
[135]
In written submissions, Vango/Dampier contended, in effect, that there were three bases upon which Billabong was not entitled to the mandatory injunctive relief sought on the appeal in respect of the 2016 Breaches:[113]
By executing and delivering the 2022 HOA, Billabong made an election which prevents it from obtaining the relief it seeks in the appeal. The 2022 HOA was relevantly inconsistent with Billabong's 2016 appeal rights. Billabong now seeks to 'unwind' the 2022 HOA and enter into a manifestly different 2016 Transaction (or a 2016 and a 2017 Transaction).[114]
The 'unwinding' relief now sought by Billabong would happen after there had been compliance with the mandatory injunction ordered by the judge by order 2 of the Primary Orders. This cannot be done because Billabong is seeking effectively to vary the terms of the injunction after its performance.
The relief sought on appeal relevantly appears to allow Billabong to accept a 2016 Transaction offer and a 2017 Transaction offer. In the circumstances of this case, that would cause Dampier/Vango a hardship constituting an injustice, and the relief sought should be refused for that reason.
In oral submissions, Vango/Dampier accepted that there would be no question of 'unwinding' the relief obtained at first instance in respect of the 2017 Breaches if Billabong were entitled to have equitable relief both in respect of the 2017 Breaches and the 2016 Breaches.[115]
[136]
In relation to its first point, election, Vango/Dampier outlined the course of the transactions over the period leading up to entry into of the 2022 HOA. Vango/Dampier submitted that the acquisition by Billabong, under a 2016 Transaction ROFR offer, of a 40% interest in the complete set of tenements held by Dampier would be inconsistent, and in sharp contrast, with its rights to earn up to a 50% interest in the K2 Mine tenements. Consequently, by accepting the 2022 HOA it made an election.[116]
[137]
'Unwinding' and variation of mandatory injunction after performance
[138]
In relation to its second point, Vango/Dampier submitted:
Properly considered, Billabong is effectively seeking to amend the terms of the Learned Trial Judge's mandatory injunction so that it may consider the 2016 Transaction ROFR offers and the 2017 Transaction ROFR offers at the same time, according Billabong an opportunity to accept any combination of only a 2016 Transaction; only a 2017 Transaction (the [2022 HOA]), or a 2016 Transaction and the [2022 HOA].
Respectfully, this cannot be done because of the parties' performance of the Learned Trial Judge's mandatory injunction.[117]
[139]
In relation to its third point, Vango/Dampier submitted that, as a matter of discretion, a mandatory injunction should not be ordered because of hardship to Vango/Dampier or the prospect of overcompensation of Billabong. In essence, Vango/Dampier invited this court to infer, based on the contents of the relevant instruments, that had Northern Star/Billabong accepted an ROFR offer in 2016, the 2017 Transactions would not have occurred.[118]
[140]
Whether a defence of hardship could be raised on the appeal
[141]
In this context, Vango/Dampier accepted that a case at trial was not litigated by Vango/Dampier to the effect that if Billabong were to succeed in respect of the 2016 Breaches and the 2017 Breaches, Billabong could not obtain mandatory injunctive relief in respect of both sets of breaches.[119]
Vango/Dampier submitted in this regard that although the point was not litigated at trial, it may still run the point on appeal. That was because the only reason that the point was not litigated at trial was because the occasion for litigating it had not arisen. That was because, it was submitted, the judge found that there was no valid assignment in respect of the 2016 Breaches. Vango/Dampier submitted that had Billabong established both the 2017 Breaches and the 2016 Breaches, there would have been a separate or supplementary hearing on the question of whether there were any equitable discretionary defences precluding the grant of mandatory injunctive relief in respect of both the 2016 Breaches and the 2017 Breaches.[120]
Vango/Dampier submitted that at this separate or supplementary hearing, it would have made the submissions which it now makes in this appeal, namely that the grant of mandatory injunctive relief would occasion hardship to Vango/Dampier if it were to obtain the equitable relief in respect of both the 2016 Breaches and the 2017 Breaches. This was because, in essence, it is to be inferred that Vango/Dampier would not have entered into the 2017 Transactions had Northern Star or Billabong obtained and accepted an offer for the transfer of Dampier's 40% interest in the Platinum Dome JV Tenements in 2016. Because of this counterfactual (that Vango/Dampier would not have entered into the 2017 Transactions had an offer in terms of the 2016 Transactions being made and accepted in 2016), the grant of further injunctive relief in respect of the 2016 Transactions would now result in 'overcompensation' to Billabong, and that 'overcompensation' would be a source of hardship to Vango/Dampier.[121]
[142]
Billabong's response to Vango/Dampier's submissions on relief
[143]
In response to Vango/Dampier's submissions on relief, Billabong submitted:
Billabong did not make an election to enter into the 2022 HOA. Billabong proposed injunctive relief at trial without objection by Vango/Dampier. After the judgment, Billabong did not have a right to require an offer to be made in respect of the 2016 Breaches. Hence, there could have been no election.
Billabong does not seek a variation of the mandatory injunction. But in any event, par 2(d) of the orders sought merely proposes a 'pragmatic process' by which the parties may 'confer' about unwinding the arrangements since the Primary Orders. Moreover, this is not a case where it is 'impossible to unscramble the egg'.[122]
Vango/Dampier cannot raise hardship as an issue in the appeal as it was not litigated at trial. Also, Vango/Dampier's complaints as to a 'windfall' remedy are speculative. Further, for each breach, Billabong is entitled to separate relief.
[144]
Hardship may be raised as a defence to equitable relief in the nature of specific performance.[123] Hardship, with its focus on the effect upon the defendant of a decree of specific performance, is the hardship involved in a decree of specific performance as opposed to an order for common law damages - not for hardship flowing from the enforcement of the contract at law.[124] The defendant must show that a decree of specific performance would impose hardship amounting to oppression, outweighing the inconvenience to the plaintiff if the plaintiff were left to its remedy in damages.[125] At least generally speaking, the defendant must show that specific performance would be 'highly unreasonable'.[126]
Examples have included where there was a significantly detrimental change in position by a defendant in reliance on unfulfilled assurances by the plaintiff.[127] The defence also succeeded where, in a contract for the sale of land, the vendor would keep a substantial deposit, keep the benefit of improvements made by the defendant purchaser, and would retain possession of the land, but the purchaser, if compelled to complete the sale, would suffer severe hardship. If compelled to complete, the purchaser would, in effect, have been required under the relevant legislation to find a separate transferee for part of the land in question, which, in the circumstances, would likely result in the purchaser having to gift that tranche of the land to a third party or risk statutory forfeiture of that part of the land.[128]
[145]
In our view, the doctrine of affirmation by election[129] does not operate to preclude Billabong from seeking and obtaining a mandatory injunction in respect of the 2016 Breaches. Billabong's exercise of its right to sue for, and obtain injunctive relief in respect of, the 2016 Breaches was not inconsistent with the exercise of its right to sue for, and obtain injunctive relief in respect of, other (separate) breaches of the OTA, namely the 2017 Breaches.
An offer under cl 12.6 of the OTA, if accepted in respect of the 2016 Breaches, would have resulted in Billabong directly acquiring 40% of the Plutonic Dome JV Tenements. That result is not inconsistent with Billabong separately entering into a farm‑in agreement of the kind reflected in the 2017 Transactions to acquire, in effect, a further 50% interest in the K2 Deposit Tenements. The 2017 Transactions essentially conferred on the party entitled to farm‑in the right, but not the obligation, to earn an additional interest in the K2 Tenements by the commitment of capital expenditure.
The two sets of rights were not inconsistent in the manner described by Kiefel CJ, Edelman, Steward and Gleeson JJ in Allianz Australia Insurance Ltd v Delor Vue Apartments CTS 39788:[130]
[146]
This doctrine of election by affirmation of a contract has been recognised by decisions, including in this Court, for almost a century. The dominant rationale is that the 'the mere fact of intimating [a] choice' in relation to these alternative rights makes it 'inevitable, or necessary in the interests of justice, that the choice, when once made, should be irrevocable'. In other words, the choice between maintaining one right or set of rights and extinguishing an alternative, immediately inconsistent right or set of rights is one that must be irrevocable 'because [the sets of rights] are inconsistent [so that] neither one may be enjoyed without the extinction of the other and that extinction confers upon the elector the benefit of enjoying the other'. The very nature of the states of legal existence and non existence of a contract is that both states cannot subsist, like Schrödinger's cat, at the same time. (footnotes omitted)
[147]
Also, Billabong's pursuit of its rights in respect of the 2017 Breaches and obtaining of injunctive relief in that regard does not involve the completion of an exercise of a legal power in such a way to extinguish Billabong's rights in respect of the 2016 Breaches.[131] Nor does Billabong's assertion of its rights in respect of the 2017 Breaches involve taking a course of action, with knowledge of all relevant circumstances, such that an alternative set of rights is fully satisfied.[132] That is because the cause of action in respect of the 2016 Breaches cannot properly be regarded as an alternative cause of action to the 2017 Breaches.
It should also be noted for completeness that Vango/Dampier did not seek to rely upon the principles of waiver to contend that Billabong was precluded from obtaining relief in respect of the 2016 Transactions. In particular, no reliance was placed on waiver of the kind discussed by Toohey and Gaudron JJ in Commonwealth v Verwayen.[133]
We are unable to accept the first of the arguments advanced by Vango/Dampier (referred to in [179] above) as a basis for refusing a mandatory injunction in this appeal.
[148]
'Unwinding' and variation of mandatory injunction after performance
[149]
The second matter raised by Vango/Dampier (see [182] above) does not arise. As explained elsewhere in these reasons, Billabong is entitled to equitable relief both in respect of the 2017 Breaches and the 2016 Breaches. Accordingly, as Vango/Dampier accepted (see [180] above), there is no question of 'unwinding' the primary orders.
There is no analogy between Despot, on which Vango/Dampier sought to rely, and the present case under appeal. As noted earlier, in seeking final relief in relation to the 2017 Breaches, Billabong did not seek a remedy inconsistent with the remedy which it now seeks in respect of the 2016 Breaches. By contrast, in Despot the court found that a vendor who had obtained a money judgment for the balance of the purchase price following orders made for specific performance had made an election inconsistent with a remedy to set aside the order for specific performance.[134] Vango/Dampier's second argument should not be accepted.
[150]
The question of hardship amounting to injustice
[151]
The third and final argument upon which Vango/Dampier resisted any order for a mandatory injunction in respect of the 2016 Transactions was to the effect that equitable relief should be refused as a matter of discretion. In substance, Vango/Dampier contended that the grant of mandatory injunctive relief in this appeal would involve hardship amounting to an injustice to Vango/Dampier, and that it would not be reasonable to make such an order. Vango/Dampier contended, in effect, that it would not have offered to enter into a farm‑in agreement with Dampier Gold in respect of the K2 Tenements, along the lines agreed to in 2017, had Northern Star/Billabong claimed, and obtained, a 40% interest in the Plutonic Dome JV Tenements from Dampier in 2016.
The approach of an appellate court to an appeal ground that advances an argument not relied on at first instance is well established. The principles have been outlined in many cases including, by way of example, in Zerjavic v Chevron Australia Pty Ltd.[135] We adopt that summary without repeating it. Relevantly for present purposes:
An appellant is bound by the conduct of his or her case at trial. The opportunity to assert a new case at another trial should only be granted where the interests of justice 'require it' and such a course can be taken without prejudice to the other party.
Other than in exceptional circumstances it is contrary to principle to allow a party to raise a new argument which, whether deliberately or by inadvertence, he or she failed to put during the trial when there was an opportunity to do so. It is fundamental to the due administration of justice that the substantial issues between the parties are ordinarily settled at trial.
A point cannot be raised for the first time on appeal when it could possibly have been met by calling evidence at the trial.
Even if no question of further evidence arises, it may not be in the interests of justice to allow a new point to be raised on appeal.
In our view, it is not open to Vango/Dampier to run the argument on appeal for three related reasons.
First, the argument, as Vango/Dampier accepted, was not run at trial. The counterfactual relied on by Vango/Dampier in this appeal (see [186] above) was neither pleaded nor litigated in the primary proceedings, and the directors of Vango/Dampier were not called to give evidence in respect of it.
Secondly, any and all equitable defences should have been pleaded and run at trial. All issues, other than issues for quantification of damages or ascertainment of equitable compensation (if any), were to be tried at the trial which led to the primary decision.[136] There was no order, or reason for Vango/Dampier to suppose, that there would be a splitting of the trial of equitable defences between the pleaded delay[137] and other, non‑pleaded, equitable defences such as hardship.
Thirdly, the counterfactual inference which Vango/Dampier invites this court to draw is not self‑evidently correct, and moreover, is, at the least, a matter upon which Billabong might possibly have adduced evidence at trial if the issue had been raised. A question of the inference to be drawn as to what would have occurred in hypothesised circumstances in the past invites attention to all of the surrounding circumstances and events.[138] It is not to the point that, as senior counsel for Vango/Dampier submitted, Vango/Dampier now rely solely on the contents of the instruments. In responding to their argument, Billabong would not have been confined to the instruments themselves. It would have been open to Billabong to lead evidence as to any matter bearing on the probabilities of what would have occurred had Northern Star/Billabong accepted a 2016 ROFR offer. Prima facie, evidential matters might have included evidence as to Vango/Dampier's need for exploration expenditure in 2017 having regard to the status of the Tenements, the resources of Vango/Dampier and their financial commitments.
In these circumstances, an equitable defence of hardship cannot be run on this appeal.[139]
That being so, there is no basis to decline the primary relief sought by Billabong.
[152]
In accordance with the foregoing reasons, the appeal should be allowed. We will hear the parties as to the precise form of orders.
[153]
I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
[34] Magic Menu Systems Pty Ltd v AFA Facilitation Pty Ltd (1997) 72 FCR 261, 267; Giles (153); see also the discussion in Gladstone Ports [36] ‑ [52].
[179]
[35] Giles (328), approved by Lord Mustill on appeal (163).
[38] Magic Menu (267); see, generally, the review of the development of the law of maintenance and champerty by Gummow, Hayne and Crennan JJ in Campbells Cash [66] ‑ [82]; Gladstone Ports [53] ‑ [54].
[84] ALH Group Property Holdings Pty Ltd v Chief Commissioner of State Revenue (NSW) [2012] HCA 6; (2012) 245 CLR 338 [12] ‑ [13]; Di Giovanni v Dark Horse Developments Pty Ltd (in liq) [2014] WASCA 188 [26].
[112] See, for example, the discussion in P Young, C Croft, M Smith, On Equity (2nd ed) [11.220], pages 740 ‑ 741.
[218]
[113] Vango/Dampier had originally advanced a further reason for resisting relief. It submitted that Zuleika had undetermined claims in the Supreme Court against Vango/Dampier over the K2 Tenements, which, if successful, could render some of the relief sought by Billabong in this court impossible. In oral submissions (ts 131), Vango/Dampier said that it was no longer pressing this matter as a ground for resisting the relief sought on the appeal.
[219]
[114] Despot v Registrar General of New South Wales [2016] NSWCA 5 [108] ‑ [118].
[133] Commonwealth v Verwayen [1990] HCA 39; (1990) 170 CLR 394, 472 ‑ 473, 484 ‑ 485; compare Allianz [30] where Kiefel CJ, Edelman, Steward and Gleeson JJ observed that in Verwayen, the view taken by Toohey and Gaudron JJ did not command the support of the majority of the court.