FRANCO-NEVADA AUSTRALIA PTY LTD -v- SOUTHERN IRON PTY LTD [2026] WASC 43 (24 February 2026)

(a) Franco-Nevada's claim for payment of a royalty under the Royalty Deed was not released or extinguished by the Transaction Support DOCA or the Distribution DOCA;

(b) Franco-Nevada's claim was not novated;

(c) the terms of the Royalty Deed have not been varied by oral agreement or by conduct.

1. Given these conclusions, it was unnecessary for me to reach a concluded view on the remaining issues. For completeness, I have briefly set out the reasons that I would not have been satisfied Franco‑Nevada had established that Southern Iron should be estopped from asserting the Royalty Deed had been extinguished by the DOCAs or that I had the power or should exercise my discretion to make orders under s 447A.
2. The detailed basis for my conclusions are set out below.

1. Much of the factual background to the issues in these proceedings was not in dispute at trial and can be summarised as follows.
2. On 29 September 1993, Poseidon Exploration Ltd (which subsequently changed its name to Normandy Exploration Ltd) and Metals Exploration Ltd (as joint venturers) were granted an exploration licence (EL1868) to explore for minerals over an area more particularly described in the schedule to the exploration licence and depicted within the black lines on the map annexed to the licence (set out below), and known as Peculiar Knob.[2]

1. On 13 March 1996, Normandy Exploration, Metals Exploration, and Burmine Exploration (SA) Pty Ltd (Burmine) (Original Joint Venturers) entered into a heads of agreement with the Minister for Mines and Energy in South Australia, Ausmelt Ltd, and Meekathara Minerals Ltd (collectively referred to as SASE) in respect of the 'Coober Pedy Iron Ore Project'.[3] Under the agreement, the Original Joint Venturers agreed to give SASE access to EL1868 to undertake drilling to better define the iron ore resource, and to collect bulk test samples.
2. On 12 March 1999, by a deed of novation, the Original Joint Venturers and SASE agreed to the assumption by Sabatica Pty Ltd of Metal Exploration's rights and obligations, and the novation of the heads of agreement from SASE to SASE Pty Ltd.[4]
3. On 16 May 2002, the South Australian Minister for Mines and Energy granted a retention lease (RL103) to SASE Pty Ltd.[5] The retention lease, in effect, gave SASE Pty Ltd the exclusive right to undertake exploration work at Peculiar Knob.
4. On 4 December 2003, the joint venturers (who at this time were Newmont Exploration, Sabatica and Burmine) and SASE Pty Ltd entered into the Peculiar Knob Access and Royalty Deed (Royalty Deed).[6] As the terms of this deed are at the heart of the issues in the proceedings, I have set out the relevant terms of the Royalty Deed below, at [206] ‑ [211].
5. On 30 November 2005, Burmine (which was then subject to a deed of company arrangement) entered into a deed of assignment and assumption with St Barbara Mines Ltd (St Barbara), Newmont Exploration, Sabatica and SASE Pty Ltd. Under this deed, Burmine assigned its rights and interest in the Royalty Deed to St Barbara.[7]
6. On 21 August 2006, SASE Pty Ltd (and its parent company, Felix Resources Ltd) sold RL103 to Southern Iron.[8]
7. On 13 October 2006, Newmont Exploration, Sabatica, St Barbara (collectively the Joint Venturers), SASE Pty Ltd and Southern Iron entered into a deed of variation, assignment and assumption (Variation Deed). Under this deed, the Joint Venturers agreed to SASE Pty Ltd disposing of its interest in RL103 to Southern Iron, the deletion of cl 2.2 to cl 2.5 of the Royalty Deed, and for SASE Pty Ltd's rights and obligations under the Royalty Deed to be assigned to Southern Iron.[9]
8. On 16 May 2009, Newmont Exploration, Franco-Nevada, Sabatica, St Barbara and Southern Iron entered into a deed of assignment, assumption and consent, with an effective date of 20 December 2007.[10] Under this deed, Newmont Exploration assigned its rights and interests in the Royalty Deed to Franco-Nevada, a company which owns and manages a portfolio of royalties.[11]
9. From late October 2012 until about April 2015, Southern Iron mined iron ore from Peculiar Knob.[12] At that time, Southern Iron formed part of a division of the Arrium Group referred to as Arrium Mining, whose ultimate holding company was Arrium Ltd (Arrium Group).[13]
10. From January 2013 until August 2015, Franco-Nevada issued tax invoices to Southern Iron for royalties, which were paid by Southern Iron.[14] Given that the effect (if any) of this conduct is in issue between the parties, I have addressed the detail of these matters below at [241] ‑ [243].
11. In 2015, the Peculiar Knob mine was placed on care and maintenance.[15]
12. On 7 April 2016, voluntary administrators were appointed to Southern Iron and 93 other companies in the Arrium Group. At that time, no payments to Franco-Nevada under the Royalty Deed were outstanding.[16]
13. On 12 April 2016, the Administrators replaced the original administrators.[17] The first creditors' meeting of all Arrium Group companies was held concurrently on 19 April 2016.[18]
14. Between April 2016 and May 2017, representatives of Franco‑Nevada, St Barbara, and Southern Iron exchanged emails in relation to proposed amendments to the Royalty Deed. The effect of these communications is also in issue between the parties. For this reason, I have addressed the detail of these communications below at [271] ‑ [286].
15. On 26 October 2016, the Administrators issued a report to creditors pursuant to s 439A of the Act (s 439A Report). The s 439A Report related to all 94 companies in the Arrium Group.[19] In the s 439A Report, the Administrators recommended entry into materially identical transaction support DOCAs for 93 of the companies within the Arrium Group (including Southern Iron) and entry into the Arrium Distribution DOCA for the remaining company, to facilitate the sale and recapitalisation of the businesses and operations of the Arrium Group and to enable the aggregation and payment of all creditors' claims.
16. On 4 November 2016, the second creditors' meeting of each of the Arrium Group companies was held concurrently.[20] At this meeting, the creditors of each of the companies (including Southern Iron) resolved:[21]

That the Company execute a Deed of Company Arrangement, being the Transaction Support DOCA, consistent with the 'Overview of proposed DOCAs' and 'Key Features of the proposed Deeds of Company Arrangement' in Section 7 of the Section 439A Report to Creditors distributed to creditors and posted on the KordaMentha website on 26 October 2016.

That the Company execute a Deed of Company Arrangement, being the Arrium Distribution DOCA, consistent with the 'Overview of proposed DOCAs' and 'Key Features of the proposed Deeds of Company Arrangement' in Section 7 of the Section 439A Report to Creditors distributed to creditors and posted on the KordaMentha website on 26 October 2016.

(a) 93 of the 94 companies in the Arrium Group entered into a separate but materially identical 'Arrium Transaction Support Deed of Company Arrangement' with the Administrators (Transaction Support DOCA);[22]

(b) the Administrators and Arrium Creditor Distribution Company Pty Ltd (AdminCo) entered into the Arrium Distribution Support Deed of Company Arrangement (Distribution DOCA);[23] and

(c) the Administrators became the Deed Administrators.

1. On 12 January 2017, the Deed Administrators issued a letter to creditors of the Arrium Group who either had not lodged a formal proof of debt or where further information was required. The letter requested that the proof of debt form attached to the letter be completed and submitted to them.[24] Franco-Nevada never received this letter,[25] and did not lodge a proof of debt.[26]
2. On 20 April 2017, Mr Nicholls, who was senior legal counsel of Steel & Mining with Arrium Mining and Materials, sent an email to Mr McElligott of Franco-Nevada, and representatives of St Barbara and Sabatica, informing them that the Deed Administrators were running a sale and recapitalisation process for Arrium and proposing that copies of the Royalty Deed and the Variation Deed be included in the data room. Mr Nicholls asked the recipients to advise whether they had any objection to this proposal by close of business on 24 April 2017.[27] On 26 April 2017, Mr McElligott confirmed Franco-Nevada did not have any objection to this proposal.[28]
3. On 15 June 2017, the Deed Administrators announced they had chosen a Korean consortium as the preferred bidder for the Arrium Group.[29]
4. On 30 June 2017, two deeds of novation were entered into. The first, which is entitled the 'Novation Deed Arrium Australia - Sale Entities', concerned 14 companies within the Arrium Group (including Southern Iron) (Sale Entities Novation Deed).[30] The second, entitled the 'Novation Deed Arrium Australia - Non Sale Entities', concerned the remaining companies within the Arrium Group.[31] The effect, if any, of the Sale Entity Novation Deed on the Royalty Deed is an issue in the proceedings. For this reason, the relevant terms of this deed are discussed below at [182] ‑ [187].
5. On 5 July 2017, SIMEC Group Ltd and Liberty House Pte Ltd (GFG Alliance) entered into an agreement with a number of the companies in the Arrium Group, including Southern Iron.[32] Under this agreement, the GFG Alliance agreed to buy the shares of 12 Australian subsidiaries of the Arrium Group and three overseas companies, as well as the assets of Central Iron and Southern Iron. The sale of the assets of Central Iron and Southern Iron was subject to the satisfaction of certain conditions. Ultimately, this sale of the assets of Central Iron and Southern Iron did not proceed.
6. The entry into the agreement with GFG Alliance was the subject of an ASX announcement by the Deed Administrators on 5 July 2017,[33] and was approved by the Arrium Group's committee of creditors on 13 July 2017. On 13 July 2017, in announcing the approval by the committee of creditors of the agreement with GFG Alliance, the Deed Administrators announced they would move to a formal proof of debt process, including the adjudication of debts and determining the returns to creditors.[34]
7. On 17 July 2017, the Deed Administrators issued a notice to unsecured creditors inviting them to lodge formal proof of debts. It requested unsecured creditors prove their debts or lodge claims by no later than 14 August 2017 and noted that failure to lodge a formal proof of debt by this date would result in the creditor's claim being excluded and unable to object to the distribution.[35] Franco-Nevada did not receive a copy of this notice from KordaMentha.[36]
8. On 31 August 2017, a supplementary novation deed in relation to 12 companies in the Arrium Group was entered into.[37] Southern Iron was not a party to this deed. On the same date, 31 August 2017, the Deed Administrators announced that the sale of these 12 Arrium Group companies to GFG Alliance had completed.[38]
9. Further reports to creditors were issued by the Deed Administrators on 15 December 2017,[39] and 21 December 2018 providing updates on the progress of the Deed Administration, including the sales process and the distributions that had been made to creditors at that stage. Each of these reports disclosed that Southern Iron remained subject to a DOCA, and that it had not been sold or liquidated by the Deed Administrators.
10. On 19 June 2019, Southern Iron's sole shareholder, AIOH Pty Ltd (subject to deed of company arrangement) entered into an agreement with Peak Iron Mines Pty Ltd (Peak Iron) for the sale of all of the shares in Southern Iron (and Central Iron) (Share Sale Agreement).[40] The completion of the Share Sale Agreement occurred on 31 July 2019.[41] On that date, the Deed Administrators lodged a Form 5056 with the Australian Securities and Investments Commission (ASIC) giving notice that the Transaction Support DOCA for Southern Iron had wholly effectuated on its terms. The Deed Administrators certified, pursuant to s 445C(d) and s 445FA of the Act, that Southern Iron's obligations under the Transaction Support DOCA had been fulfilled and creditors' claims dealt with in accordance with the Transaction Support DOCA.[42] Subsequently, on 26 September 2019, the Deed Administrators lodged a Form 5603 (end of administration return) with ASIC.[43]
11. In early 2020, Southern Iron recommenced mining operations at Peculiar Knob.
12. On 19 July 2021, Mr McElligott sent an email to Peak Iron referring to the Royalty Deed and asking to speak to the appropriate person about the operations at Peculiar Knob and the Royalty Deed.[44] Marnus Bothma of Peak Iron responded on 22 July 2021 asking for copies of the relevant documents to be sent to him as he was not aware of any agreement.[45] Mr McElligott by email (copied to Ms Okely of St Barbara and Mr Jethwa of Sabatica) provided copies of the requested documents to Mr Bothma that same day.[46]
13. On 26 August 2021, Mr Bothma responded to Mr McElligott denying Peak Iron had any liability to Franco-Nevada as any claim had been released and discharged by the Transaction Support DOCA.[47] In a responsive email on 2 September 2021 (copied to Ms Okely), Mr McElligott requested copies of the transaction documents, any information memorandum and any correspondence in relation to the Royalty Deed.[48]
14. On 10 September 2021, Mr Bothma informed Mr McElligott the transaction documents contained confidentiality provisions and so he was unable to provide him with copies. Mr Bothma indicated he was seeking the consent of the counterparty and confirmed he was not aware of Franco-Nevada or its claim prior to receipt of the email from Mr McElligott.[49]
15. On receipt of this correspondence, the solicitors for Franco‑Nevada sought access to various documents from the Deed Administrators.[50] On 27 October 2021, Mr Bothma provided Mr McElligott with a copy of the index to the due diligence materials.[51] On 5 November 2021, Mr McElligott responded to Mr Bothma noting that the index included reference to two documents in relation to royalties and asking for copies of them.[52]
16. Correspondence was then exchanged between the respective parties' solicitors between December 2021 and January 2022.[53] In September and October 2021, Franco-Nevada's solicitors requested certain documents and information from the solicitors for the Deed Administrators,[54] which request was denied.[55]
17. On or about 17 August 2022, the Final Dividend from the 'Arrium Distribution Fund' was paid,[56] and the Distribution DOCA terminated. No distribution has ever been paid to or received by Franco-Nevada.
18. On 21 December 2022, Franco-Nevada commenced these proceedings.

1. The hearing of this matter took place in May 2024. Unfortunately, it has not been possible to finalise my reasons for decision before now.
2. To ensure that my assessment of the parties' cases has not been impaired by the delay between the hearing and the publication of these reasons, I have done the following.
3. First, my conclusion as to the credit and reliability of the only witness called at trial was written shortly after the trial. At trial, both parties accepted Mr McElligott was a witness of truth and that no credibility issues arose in relation to his evidence.
4. Second, I have refreshed my memory by reading the transcript of the evidence of Mr McElligott, as well as my notes of his evidence that I took during the trial, in addition to all of the documents tendered at trial. I had the benefit of detailed opening and closing submissions, including submissions as to the findings of fact that each party contended should be made.
5. Third, the primary issues in this case ultimately concern the construction of various documents that were tendered at trial. My consideration of these matters has not been impacted by the delay.
6. Shortly prior to the proposed date for delivery of these reasons, I requested further written submissions from the parties on a limited issue. This issue was the extent to which the question of whether the obligation to pay a royalty under the Royalty Deed was joint or several was relevant to the estoppel claim and the relief sought under s 447A of the Act. Both parties filed submissions on 16 February 2026. I have taken these submissions into account in reaching my decision on these issues.

1. As set out above, much of the factual basis for Franco‑Nevada's claim was not in dispute. The issues between the parties, in essence, concerned the legal characterisation of the events that occurred and the proper construction of the Royalty Deed, the relevant DOCAs, and the deeds of novation.

1. Franco-Nevada pleads that pursuant to the express terms of cl 3.1 of the Royalty Deed entered into on 4 December 2003, Southern Iron (formerly SASE Pty Ltd) was required to pay a royalty in perpetuity, calculated in accordance with the formula set out in cl 3.2 of the Royalty Deed, within 30 days of the end of each quarter to Franco‑Nevada (formerly Newmont) (as to 79.8%), Sabatica (as to 7.6%), and St Barbara (formerly Burmine) (as to 12.6%).[57] If the royalty was not paid by this date, SASE Pty Ltd or its assignee was required to pay interest on any amount outstanding at the rate set out in cl 4.3 of the Royalty Deed.[58]
2. The formula in cl 3.2 of the Royalty Deed included an amount 'A' which, pursuant to cl 3.2(b), was to be reviewed annually by adjusting this amount in proportion to the relative movement in the iron ore price for the Japanese fiscal year published in the most recent publication of the 'Iron Ore Manual' published by the TEX Report Co Ltd for Hamersley Iron Pty Ltd fines or such suitable equivalent as may be agreed by the parties if the TEX Report Co Ltd was not published, or did not provide for the relevant Hamersley Iron Pty Ltd fines price.[59]
3. Franco-Nevada says that under cl 7.6(b) of the Transaction Support DOCA, the Deed Administrators were given the power (but not the obligation) to extinguish Franco-Nevada's claim, but that the Deed Administrators did not exercise any power to extinguish its claim under the Royalty Deed, nor was it paid any dividend.[60] On this basis, Franco‑Nevada says that its claim to the payment of royalties under the Royalty Deed was not extinguished by the Transaction Support DOCA.[61]
4. On 30 June 2017, Southern Iron (and the other Arrium Group companies being sold by the Deed Administrators), AdminCo and all Arrium Group creditors entered into a novation deed. Pursuant to cl 2.1 of this deed, all pre-appointment claims of Southern Iron were novated to AdminCo, excluding Ongoing Liabilities. Ongoing Liabilities was defined under cl 1.1 to mean a liability under a Business Contract arising after 7 April 2016. Franco-Nevada says that its claim is an Ongoing Liability.[62]
5. In the alternative, Franco-Nevada pleads that Southern Iron is estopped from asserting that its claim for ongoing royalties was extinguished by the DOCAs on the basis of their negotiations of proposed amendments to the Royalty Deed (in the context of the communications said to give rise to the variation) and the request to put the Royalty Deed and the Variation Deed in the data room. Specifically, Franco-Nevada contends that:[63]

(a) between February 2014 and prior to 26 August 2021, it adopted an assumption in relation to the terms of its legal relationship with Southern Iron that its claim to royalties was not and would not be extinguished by the DOCAs, the novation deeds or the restructure of the Arrium Group;

(b) by reason of various communications between the voluntary administrators of Southern Iron and Franco-Nevada and its solicitors (including continued discussions regarding the proposed amendments to the formula in the Royalty Deed, and the request to put copies of the Royalty Deed and the Variation Deed in the data room), Southern Iron adopted the same assumption;

(c) prior to 26 August 2021, each of Franco-Nevada and Southern Iron knew the other would act on the basis of the assumption and intended this to be the case; and

(d) if Southern Iron were allowed to depart from this assumption, it would cause Franco-Nevada detriment and would be unconscionable for Southern Iron to do so.

1. Southern Iron sought particulars as to which natural persons were said to constitute the relevant state of mind of each party. In response, Franco-Nevada said that it was Mr McElligott and Mr Nicholls‑Maltman on its behalf, and Mr Nicholls and Mr Missikos on behalf of Southern Iron.[64]
2. The oral variation of the Royalty Deed is pleaded to arise as a consequence of the publication of the Iron Ore Manual, as referred to in the formula for the calculation of the royalty set out at [54] above, ceasing in about 2010. Franco-Nevada says that in or about 2012, Southern Iron and Franco-Nevada orally agreed, alternatively agreed by conduct, to vary the formula so that 'A' in the formu[65] was now:65

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1. The particulars of the oral agreement refer to two teleconferences (the first between Mr McElligott of Franco-Nevada and Mr Hardman and Mr O'Connoll from Arrium Mining 'on behalf of Southern Iron', and the second between Mr McElligott of Franco-Nevada and Mr Chiwanga), as well as an email from Mr Chiwanga to Mr McElligott dated 27 May 2013.[66]
2. Franco-Nevada pleads that between 1 October 2012 and 2015, it was paid royalties under the Royalty Deed calculated in accordance with the oral variation.[67]
3. In relation to the alternative plea that the agreement arose by conduct, the conduct relied upon by Franco-Nevada is a series of emails sent by Mr Chiwanga to Mr McElligott between 17 May 2013 and 3 August 2015 setting out the calculation of the royalty; the subsequent issue by Franco-Nevada of tax invoices to Southern Iron; the payment of the tax invoices; and the exchange of a draft amended Royalty Deed.[68]
4. Finally, in the event the Transaction Support DOCA does not preserve Franco-Nevada's rights under the Royalty Deed, Franco‑Nevada pleads it would be appropriate for an order to be made pursuant to s 447A(1) of the Act so that its claim is not extinguished as from the date of any order.[69] Three grounds are pleaded in support of the contention that this order would be appropriate, namely:[70]

(a) if its contentions are rejected, Southern Iron would obtain all the benefits of the Royalty Deed without the burden of continued payments;

(b) the order would not validate any action taken in reliance on the Transaction Support DOCA and would only vary the rights and obligations of Franco-Nevada as a creditor under the Transaction Support DOCA; and

(c) this would make the Transaction Support DOCA consistent with the s 439A Report.

1. Southern Iron admits that, by a deed of assignment and assumption dated 30 November 2005, it took an assignment of SASE Pty Ltd's rights and obligations under the Royalty Deed.[71] This included the obligation to make royalty payments to the parties identified in cl 4.1 in the proportions specified in that clause or as notified to it, but not the obligation to pay interest.[72]
2. Southern Iron refers in its defence to the s 439A Report of the Administrators. Southern Iron says the s 439A Report stated that:[73]

(a) at the conclusion of the DOCAs, the entities would be sold free of pre-appointment liabilities;

(b) creditors were required to lodge proofs of debt;

(c) the DOCAs provided for a single mechanism for the submission of proofs of debt and the payment of dividends, and extinguished all claims against all Arrium Group companies once the final dividend was paid; and

(d) where a proof of debt was not lodged with the Deed Administrators, the creditor will have abandoned all claims against the deed administration fund.

1. Southern Iron says both the Transaction Support DOCA and the Distribution DOCA are binding on all creditors; that any novated, released or extinguished claim was only provable if the Deed Administrators exercised a power under cl 19.1 of the Transaction Support DOCA for the claim to remain provable notwithstanding its novation, release or extinguishment; any Arrium Group creditor (which Southern Iron says includes Franco-Nevada) was taken to have abandoned any claim that was not the subject of a proof of debt lodged with the Deed Administrators; and the DOCAs could be pleaded as a total bar and defence to Franco-Nevada's claim.[74]
2. Southern Iron denies the only claims that were released, discharged and extinguished on payment of the Final Dividend were those which had been adjudicated and says that all creditors' claims were released, discharged and extinguished upon this payment occurring.[75]
3. Southern Iron says the Sale Entity Novation Deed did not vary or modify the operation of the DOCAs. It refers to the terms of a share sale agreement for 15 of the companies in the Arrium Group, which are different to the terms of the Share Sale Agreement, as well as the application brought by the Deed Administrators under s 447A of the Act to alter the operation of pt 5.3A of the Act in respect of certain debts and liabilities connected with contracts of these 15 companies. Southern Iron relies on the fact that no similar application was made in relation to the Royalty Deed.[76]
4. In respect of the alleged oral variation of the Royalty Deed, Southern Iron pleads that:[77]

(a) the majority of the conduct of Southern Iron relied upon by Franco-Nevada was not conduct of one of its officers and, accordingly, does not bind Southern Iron; and

(b) not all parties to the Royalty Deed participated in the oral discussions pleaded by Franco-Nevada. As a result, any variation was ineffective.

1. In relation to the communications pleaded by Franco-Nevada as comprising the common assumption, Southern Iron says that none of these occurred after 17 July 2017 when unsecured creditors were invited to submit a formal proof of debt; no amendment to the Royalty Deed was ever finalised or executed; no commitment was given by or sought from the Deed Administrators or Southern Iron that the liabilities under the Royalty Deed would remain intact; and none of the conduct relied on by Franco-Nevada bound Southern Iron to any alleged common assumption. In addition, it says that none of this conduct was known by Peak Iron prior to completion of the Share Sale Agreement.[78]
2. Southern Iron says that no relief can or should be granted under s 447A of the Act for a number of reasons. These include because Franco-Nevada's failure to receive any dividend from the Arrium Distribution Fund was as a result of its failure to lodge a proof as debt, as well as its 'unreasonable delay' in bringing the application.[79]

1. In reply, Franco-Nevada admits that it never lodged a proof of debt but says it never received any circular to creditors, proof of debt forms or call for proof of debts.[80]
2. In relation to the communications and conduct relied upon to found its oral variation and estoppel claims, Franco-Nevada says that the relevant individuals either had the authority to act on behalf of Southern Iron or were held out by Southern Iron as having authority to act on its behalf.[81]

1. The parties agreed that four issues arose for determination in these proceedings:

(a) Was Franco-Nevada's entitlement to royalties under the Royalty Deed extinguished by the Transaction Support DOCA and/or the Distribution DOCA?

(b) If not, has there been an agreement to vary the Royalty Deed?

(c) If Franco-Nevada's entitlement to royalties from Southern Iron was extinguished by the DOCAs, is Southern Iron estopped from denying Franco-Nevada's claim?

(d) If Franco-Nevada's entitlement to royalties has been extinguished and no estoppel arises, should an order be made under s 447A of the Act to the effect that pt 5.3A of the Act is to operate such that the DOCAs and the Sale Entity Novation Deed did not extinguish its entitlement to royalties?

1. Franco-Nevada bears the onus of establishing each of its claims on the balance of probabilities. In relation to the variation of the Royalty Deed, Franco-Nevada relied on oral discussions between Mr McElligott and various people, none of which were documented. In considering this evidence, I have applied the following principles.
2. In determining what was said in oral discussions in the absence of a contemporaneous record or other corroboration, the court is alive to the reality that words that are spoken are capable of bearing different and potentially opposed meanings depending on the nuance and emphasis given to particular words. A person's appreciation of the significance of these matters must necessarily be considerably diminished if there is a significant delay (as there has been in this case) between the date when the conversation took place and the hearing at which the evidence of that conversation is given.
3. As Hammerschlag J noted in John Holland Pty Ltd v Kellogg Brown & Root Pty Ltd:[82]

Where a party seeks to rely upon spoken words as a foundation for a cause of action, including a cause of action based on a contract, the conversation must be proved to the reasonable satisfaction of the court which means that the court must feel an actual persuasion of its occurrence or its existence. Moreover, in the case of contract, the court must be persuaded that any consensus reached was capable of forming a binding contract and was intended by the parties to be legally binding. In the absence of some reliable contemporaneous record or other satisfactory corroboration, a party may face serious difficulties of proof. Such reasonable satisfaction is not a state of mind that is obtained or established independently of the nature and consequences of the fact or facts to be proved.

1. The credibility of a witness and their veracity may be tested by reference to the objective facts that can be proved independently, particularly by reference to contemporaneous documents. In many cases, the only safe course is to place primary emphasis on the objective factual surrounding material, the inherent commercial probabilities and the contemporaneous documents. This is because the contemporaneous statements and documents are likely to be a more accurate reflection of events than later statements. Documents will often provide more valuable information than the attempted recollection of the facts by witnesses with an interest in the outcome of the litigation, particularly when the documents are accepted as genuine and were prepared by a person who had no reason to misstate the facts.[83]

1. Franco-Nevada called only one witness at trial, Dennis McElligott.
2. Mr McElligott is a chartered accountant by profession, and a director and employee of Franco-Nevada. He has been employed by the Franco‑Nevada group since 1996, initially working with the parent company of Franco-Nevada in Canada, before moving to Australia in 2008. Over this time, he has held a number of roles including as treasurer for the parent company, and chief financial officer for Franco‑Nevada and Franco-Nevada US. Since 2008, he has been managing director and the sole employee of Franco‑Nevada in Australia. Franco‑Nevada's business in Australia comprises a portfolio of royalties from resource projects, which are primarily gold focussed.
3. Senior counsel for Southern Iron agreed, quite appropriately in my view, that Mr McElligott was a witness of truth.[84] In his evidence, Mr McElligott answered the questions asked of him directly and succinctly, and made appropriate concessions, particularly in cross‑examination. To the extent Mr McElligott's evidence is relevant, I accept his evidence in its entirety.

Has Franco-Nevada's entitlement to royalties been extinguished?

1. The answer to this question depends on the proper construction of the Transaction Support DOCA and the Distribution DOCA. Before turning to the specific terms of these documents, it is useful to first summarise the legal principles that govern the proper construction of a DOCA.
2. Where a company is subject to a DOCA, it is the terms of the DOCA and the provisions of the Act that define the rights, obligations and powers of the parties, as well as the company's creditors.[85] The formal requirements of a DOCA are set out in s 444A and the prescribed provisions in sch 8A to the Corporations Regulations 2001 (Cth). These include an obligation to prepare an instrument setting out the terms of the DOCA.[86] The instrument must specify the extent to which the company is to be released from its debts,[87] as well as the day on or before which claims must have arisen if they are to be admissible under the DOCA.[88] These claims can only be those that would be provable against the company if it were wound up.[89] Pursuant to s 553(1) of the Act, claims are that are provable against a company in liquidation include 'all claims (present or future, certain or contingent, ascertained or sounding only in damages)'.
3. A company will only be released from a debt by a DOCA to the extent that the DOCA provides for the release and the creditor is bound by the DOCA.[90] The DOCA must also provide an orderly process for the realisation of the company's assets and payment of creditors.[91]
4. A DOCA is more than a set of promises between the parties to it; it is a document that contains terms which bind all creditors of the company whose claims arise on or before the day specified in the DOCA. These obligations arise from the combined operation of the DOCA and the Act in binding all creditors and not just those who voted in favour of entering into the DOCA.[92]
5. The fact that the operative force of a DOCA is derived from statute has implications on its proper construction, as well as the consequences of any alleged error in the DOCA.[93] It means that the proper construction of a DOCA is a matter of statutory construction (or as Rees J stated in In Re Antquip Hire Pty Ltd,[94] the construction of subordinate legislation) which must take into account the object and purpose of pt 5.3A of the Act.[95] As Rees J stated in In Re Antquip Hire Pty Ltd:[96]

Where subordinate legislation is directed to practical considerations, it should be construed in light of those considerations, not meticulous comparison of language, and if capable of more than one construction, the Court ought adopt an interpretation that leads to a reasonably practicable result. This rule of construction may be particularly useful when construing DOCAs, which are essentially practical and often imperfect instruments.

1. The object of pt 5.3A of the Act is set out in s 435A of the Act and provides:

The object of this Part is to provide for the business, property and affairs of an insolvent company to be administered in a way that:

(a) maximises the chances of the company, or as much as possible of its business, continuing in existence; or

(b) if it is not possible for the company or its business to continue in existence - results in a better return for the company's creditors and members than would result from an immediate winding up of the company.

1. As Stone J noted in City of Swan v Lehman Brothers Australia Ltd:[97]

Pt 5.3A clearly and precisely limits the extent to which creditors' rights to debts owed by the company may be restricted. Pursuant to s 444H the company is released from debt only to the extent provided in the deed and only in respect of a creditor who is bound by the deed. In addition there is a clear temporal limitation in s 444D(1) in that the claim to which it refers must have arisen 'on or before the day specified in the deed'.

1. If there is any error in the DOCA which is not wholly within the 'confines of the stipulations made binding by statute', the error cannot be resolved as a matter of construction or rectification. Remedial orders are required to be made under s 447A of the Act.[98]
2. In considering the proper construction of a DOCA, it is necessary to focus on the terms of the DOCA itself, matters of context that would be known to anyone interested in the affairs of the company,[99] and construe its provisions so as to avoid 'it making commercial nonsense or working commercial inconvenience'. Where a DOCA is to be understood in a particular context, the appropriate course is to recite those matters in the DOCA.[100]
3. The commercial purpose is ascertained by determining 'objectively what a reasonable person in the position of the creditors, the company and the other actual parties to the deed would understand that purpose to be'.[101]
4. Broadly speaking, the purpose of a DOCA is to regulate the rights of creditors in respect of their claims against a company and its property.[102] As stated by Kiefel CJ and Edelman J in Mighty River International Ltd v Hughes, '[t]his object is pursued by an intended flexibility or ... the wide variety of different possible deeds of company arrangement.'[103] A DOCA will not always require that the property of the company is made available for distribution to creditors. In their joint reasons, their Honours listed a number of examples which are consistent with the intended flexibility of DOCAs including: debt for equity swaps; the replacement of creditors' claims with rights as beneficiaries of a creditor's trust funded by a third party (such as a party wanting to acquire the company); a transfer of shares in the company from members to creditors; as well as a deed of moratorium which allows the company to trade out of its solvency difficulties.[104]
5. In relation to the continuation of pre-administration contracts post‑DOCA, as Vaughan J (as his Honour then was) stated in Smith as trustee of the Smith Investment Trust v Sandalwood:[105]

The position where the company initially intends to continue a pre-administration contract post-DOCA, with its ongoing benefits and burdens, is more nuanced. Let it be assumed that, despite intending to meet the obligations under the pre-administration contract, the company does not do so. A DOCA that is too widely drafted may disadvantage a contractual counterparty in a way that might be considered commercially unfair. But it should not be thought that a DOCA must have that effect. Insofar as s 444D(1) provides that the DOCA binds all creditors of the company it will only have that effect to the extent that the DOCA purports to have that effect. Where it is intended to continue a pre-administration contract post-DOCA the deed may exclude a claim for damages for future contractual breaches as a claim under - or a claim that is released by - the DOCA. Also, the DOCA may, and perhaps should, expressly preserve the rights of contractual counterparties where it is intended that a pre-administration contract is to be continued post-DOCA.

A poorly drafted DOCA may not do so. Or it may be that the DOCA proponent seeks to take the benefit of the pre-administration contract without assuming its burden. The contractual counterparty is not without available remedy. Application may be made under s 445D and in an appropriate case the DOCA will be terminated. It might also be that the court could fashion orders under s 447A to adequately protect the position of the contractual counterparty. And, as I have mentioned, depending on the nature of the contract and its terms, coercive relief and extra-curial relief may be available in any case.

Relevant context and terms of the Transaction Support DOCA and Distribution DOCA

1. On 4 November 2016, Southern Iron Pty Ltd (administrators appointed), the Administrators, and the Deed Administrators entered into the Transaction Support DOCA. On the same date, 92 other companies within the Arrium Group entered into separate DOCAs in materially identical terms, and AdminCo entered into the Distribution DOCA. At the time these documents were signed in November 2016, the Deed Administrators had identified 14 operating companies within the Arrium Group and eight other companies that might be sold,[106] but had not finally determined which entities or assets would be sold, by what structure or to whom. This did not occur until July 2017.
2. The relevant context to the entry into these agreements was set out in identical terms in each of the DOCAs in the 'Background'. Relevantly, this included that at the second meeting of creditors, held 4 November 2016, it was resolved that each of the companies in the Arrium Group (apart from AdminCo) execute a Transaction Support DOCA and AdminCo execute the Distribution DOCA 'consistent with the overview and key features of the proposed [DOCA] detailed in section 7 of the section 439A Report to Creditors provided by the Voluntary Administrators to the creditors of the Company on 26 October 2016'.[107]
3. All the DOCAs specifically excluded the provisions of sch 8A of the Corporations Regulations as terms of the DOCA (cl 2.6).
4. Each of the DOCAs contained a number of specific clauses relevant to their proper construction. In each Transaction Support DOCA, this included (in cl 2.11) the requirement, in considering the legal effectiveness of cl 11, cl 15, cl 17, cl 18, cl 19, cl 20 and cl 21 of the Transaction Support DOCA, to have regard to the enabling clauses in the Distribution DOCA. The similar clause in the Distribution DOCA required regard to be had to the Other Arrium DOCAs (which included the Transaction Support DOCA) in considering the legal effectiveness of cl 11, cl 13, cl 15, cl 18.1, cl 18.4, cl 18.5, cl 19 and cl 20.1 - 20.4 of the Distribution DOCA.
5. Clause 1 of the Transaction Support DOCA and the Distribution DOCA set out in identical terms the purpose and objects of each of the DOCAs. These included to:

(a) maximise the chances of the Arrium Group Companies, or as many of them as possible, continuing in existence;

(b) maximise the chances of a sale and recapitalisation of the Arrium Group Companies, or as many of them as possible;

(d) provide flexibility to potential purchasers of the assets of and shares in the Arrium Group Companies;

(f) provide for a cost efficient and speedy mechanism for the sale and realisation of the assets of the Arrium Group Companies, the novation, release and extinguishment of liabilities of Arrium Group Companies and the management of proofs of debt, determination of claims and payment of dividends;

(h) provide for the payment or transfer of proceeds from the sale or realisation of the assets of or shares in the Arrium Group Companies to AdminCo to be held in the Arrium Distribution Fund established under the Arrium Distribution DOCA;

(i) provide for payments out of the Arrium Distribution Fund to Arrium Group Creditors in accordance with the Arrium Distribution DOCA;

(l) grant all necessary and incidental powers to the Deed Administrators to effect the Purpose and Objects.

1. The Transaction Support DOCAs of each Arrium Group company (including Southern Iron) were inter-conditional on each other as well as the Distribution DOCA.[108]
2. Both the Transaction Support DOCA and Distribution DOCA terminated on the earliest occurrence of: the appointment of a liquidator; payment by AdminCo of the Final Dividend from the Arrium Distribution Fund; or the Deed Administrators determining the DOCA should terminate and Southern Iron be wound up. Termination of the DOCA took effect on the lodgement of a notice of termination with ASIC.[109]
3. Pursuant to cl 5.1 of both the Transaction Support DOCA and Distribution DOCA, the DOCA was binding on each Creditor, each Secured Creditor, each Owner or Lessor, the Directors, the Members and Deed Administrators. 'Creditor' was defined in both the Transaction Support DOCA and Distribution DOCA to mean 'any person who has a Claim against the Company being a Claim the circumstances giving rise to which arose on or before the Appointment Date [which is defined to mean 7 April 2016]'.[110] 'Claim' was defined broadly and meant 'any claim, notice, demand, costs (including legal costs and expenses), debts, dues, liabilities, damages, losses, action, proceeding, litigation, investigation or judgment, however it arises and whether it is present or future, fixed or unascertained, actual or contingent arising directly or indirectly from any act or omission by the Company or by any agreement, circumstance or event occurring on or before the Appointment Date and includes all debts or claims provable in a winding up of the Company pursuant to section 553 of the Act'.[111]
4. Clause 7.5 of each DOCA set out the broad powers of the Deed Administrators. These included the general power to exercise all the rights, powers, discretion and authority conferred by the constitution or at law on the directors.[112] It conferred on the Deed Administrators all the powers of a voluntary administrator appointed under s 436A of the Act,[113] as well as the power to:

(a) sell or realise all the assets and undertakings of the Company as the Deed Administrators thought fit (cl 7.6(b)(iv));

(b) for the purpose of giving effect to the sale and recapitalisation of the Arrium Group companies, novate, release or terminate all Contracts entered into by the Company (cl 7.6(b)(v));

(c) negotiate the termination or repudiation of any contracts entered into (cl 7.6(b)(xxvi)) or disclaim any contracts (cl 7.6(b)(xxvii);

(d) pay Unsecured Creditors rateably on the basis that all Unsecured Creditors were not materially or unfairly prejudiced when compared with the return they would have received in a liquidation of the Company (cl 7.6(b)(xxxvi) and cl 7.6(b)(xxxvii));

(e) extinguish Creditors' Claims (cl 7.6(b)(xxxvii) and cl 7.6(b)(xxxviii)); and

(f) do anything else necessary or convenient for the purpose of administering the DOCA (cl 7.6(b)(lviii).

For the avoidance of doubt, the powers granted to the Deed Administrators under this DOCA do not constitute any agreement that the Deed Administrators will novate, release or extinguish any Claims. (emphasis added)

1. Clause 7.10 of the Transaction Support DOCA set out the specific powers of the Deed Administrators to novate, release and/or extinguish claims against Southern Iron. Relevantly, it provided that:

(a) The Deed Administrators may in their sole and absolute discretion:

(i) novate Claims from the Company to another Arrium Group Company; and/or

(ii) release and/or extinguish Claims,

in order to give effect to the DOCA Purpose and Objects.

(b) Subject to clauses 19.1(a), 19.1(b) and 19.1(c) of this DOCA and clause 19.2 of the Arrium Distribution DOCA, each Creditor irrevocably consents to the novation and/or release and/or extinguishment of its Claims against the Company and the Deed Administrators may execute such form of release or novation as the Deed Administrators require to give effect to a Transaction. (emphasis added)

1. 'DOCA Purpose and Objects' was defined to mean those matters listed in cl 1 and analogous clauses in the 'Other Arrium DOCAs'.
2. Clause 7.10 of the Distribution DOCA was in similar but not identical terms. In the Distribution DOCA, cl 7.10(b) was subject to cl 19.1(a), cl 19.1(b), cl 19.1(c) and cl 19.2 of the Distribution DOCA.
3. Clause 15 of the Transaction Support DOCA established the Arrium Distribution Fund in accordance with cl 15 of the Distribution DOCA and required the proceeds of the sale of all assets to be paid into the Arrium Distribution Fund (cl 16.2). This was mirrored by cl 15.2 of the Distribution DOCA which provided that the Arrium Distribution Fund consisted of the proceeds generated from the Arrium Assets.
4. The powers of the Deed Administrators to sell or realise the assets was set out in cl 16 of the Transaction Support DOCA. Approval of the Arrium Creditors' Committee was required if the proposed consideration was greater than $20 million (cl 16.1(b)) but not required for the novation, release or extinguishment of any Claim (cl 16.1(c)(iii)).
5. Clause 18 of both the Transaction Support DOCA and the Distribution DOCA dealt with proofs of debt, although the clauses were not in identical terms. Relevantly, cl 18 of the Transaction Support DOCA provided that:

18.1 Proofs of Debt

Creditors' Claims are to be submitted and admitted for proof by the deed administrators of the Arrium Distribution DOCA in accordance with clause 18 of the Arrium Distribution DOCA.

18.2 No double proof

(a) In the event that any Claim is novated by the Deed Administrators or the Other Deed Administrators to another Arrium Group Company, such a novation will not create a new Claim or Arrium Group Claim.

(b) The rule against double proof will apply in respect the Arrium Group Companies in aggregate so that a Creditor proves only once against the Arrium Distribution Fund in respect of a Claim against a primary obliger but may not prove in respect of a Claim guaranteed by a co-guarantor.

(c) The rule against double proof will apply in respect to AdminCo such that a Creditor will not have any Entitlement in respect of any Claim arising from the partial repayment of a debt or obligation owing the Company which has been guaranteed by the Creditor.

1. The Distribution DOCA contained an almost identical term in relation to double proof.[114] However, cl 18.1 of the Distribution DOCA was expressed in significantly different terms. It set out in some detail the process for the calling and adjudication of proofs of debt by the Deed Administrators. This process included:

(a) the ability of the Deed Administrators to call for written proofs of debt in respect of 'Arrium Group Claims' at such times as deemed appropriate (cl 18.1(a));

(b) where a call was made by Deed Administrators, creditors were required to lodge their proofs of debt within 21 business days, which was defined as the Bar Date (cl 18.1(c)); and

(c) the Deed Administrators were required to assess each proof of debt 'as soon as reasonably practicable', determine whether it would be admitted and, if so, for what quantum (cl 18.1(d)), and to advise creditors of their determination within seven business days (cl 18.1(e)).

1. Clause 18.1 of the Distribution DOCA also dealt with the situation where a proof of debt had not been lodged, or it had been lodged and rejected. Where this occurred, cl 18.1(i) provided that:

An Arrium Group Creditor will have abandoned, and will be taken for all purposes to have abandoned, all Claims and entitlements (if any) in the Arrium Distribution Fund:

(i) which are not the subject of a Proof of Debt lodged with the Deed Administrators in accordance with paragraph (a); or

(ii) which have been rejected by the Deed Administrators and which are not the subject of any appeal or application to the Court within the time allowed for appeals in Regulation 5.6.54.

1. A Creditor's entitlement to payment from the Arrium Distribution Fund was set out in cl 19 of the Transaction Support DOCA and Distribution DOCA. The clause in the Transaction Support DOCA, which was in virtually identical terms in the Distribution DOCA, provided that:

(a) Notwithstanding any other provision of this DOCA or the Other Arrium DOCAs, each Creditor's Entitlements are to be adjudicated by the Deed Administrators as at the Appointment Date and, regardless of whether the Claim has been subsequently novated, released or extinguished by:

(i) the Deed Administrators pursuant to this DOCA or the Other Arrium DOCAs; or

(ii) any other party or parties, provided that the Deed Administrators determine to exercise their power under this clause to allow the Claim to remain provable notwithstanding its novation, release or extinguishment.

(b) Each Creditor will be entitled to receive distributions in respect of its Admitted Claim from the Arrium Distribution Fund in accordance with the order of priority in clause 19 of the Arrium Distribution DOCA, including as adjusted as required under clause 19.3(a) of the Arrium Distribution DOCA.

(c) Creditors are only entitled to receive such distributions and amounts as are declared by the deed administrators of the Arrium Distribution DOCA and as provided for in this DOCA and the Arrium Distribution DOCA.

(d) The deed administrators of the Arrium Distribution DOCA must pay Creditors their Entitlements under the Arrium Distribution DOCA as soon as reasonably practicable, including by issuing interim Dividends whenever considered appropriate by the deed administrators of the Arrium Distribution DOCA in their sole and absolute discretion.

1. 'Admitted Claim' was defined to mean 'any Arrium Group Claim that has been admitted to proof by the Deed Administrators or Other Deed Administrators pursuant to the provisions of this DOCA or the Other Arrium DOCAs, in the amount that it has been so admitted'. 'Entitlement' was defined to mean a Creditor's entitlement under cl 19.1 of the Transaction Support DOCA.[115]
2. Clause 21 of the Transaction Support DOCA and cl 20 of the Distribution DOCA were in similar (but not identical) terms and set out how creditors' claims were to be extinguished and/or discharged. Specifically, cl 21 of the Transaction Support DOCA provided that:

21.1 Release of Claims in exchange for Entitlement

(a) All Creditors having a Claim must accept their Entitlement under this DOCA in full satisfaction and complete discharge of all Claims which they have or claim to have against the Company and the Arrium Distribution Fund and the Deed Administrators may execute such form of release as the Deed Administrators require.

21.2 All Claims released, discharged and extinguished

(a) If the Deed Administrators have paid to a Creditor its full Entitlement under this DOCA, all of its Claims (to the extent not already extinguished by the Deed Administrators pursuant to this DOCA, the Arrium Distribution DOCA or the Other Arrium DOCAs) are released, discharged and extinguished.

(b) On banking the payment referred to in clause 21.2(a), each Creditor will be deemed to have released the Company, the Arrium Distribution Fund, the Voluntary Administrators, the Other Voluntary Administrators, the Deed Administrators and the Other Deed Administrators, and the Deed Administrators may execute such form of release as the Deed Administrators require.

(c) On payment of the Final Dividend from the Arrium Distribution Fund, all of the Creditor's Claims against the Company or the Arrium Distribution Fund, the Voluntary Administrators, the Other Voluntary Administrators, the Deed Administrators and the Other Deed Administrators, are released, discharged and extinguished.

(d) On banking payment of the Final Dividend, each Creditor will be deemed to have released the Company, the Arrium Distribution Fund, the Voluntary Administrators, the Other Voluntary Administrators, the Deed Administrators and the Other Deed Administrators, and the Deed Administrators may execute such form of release as the Deed Administrators require.

...

21.4 Bar to Creditors' Claims[116]

Upon release, discharge or extinguishment of a Creditor's Claim pursuant to this DOCA, this DOCA and the Other Arrium DOCAs can be pleaded by the Company, the Voluntary Administrators, the Other Voluntary Administrators, the Deed Administrators and the Other Deed Administrators as a total bar to the Claim and a total bar and defence to any legal proceeding brought at any time in respect of that Claim.

1. There were two primary differences between this clause and cl 20 of the Distribution DOCA. The first was that cl 20 referred to 'Arrium Group Creditors' instead of 'Creditors' and 'Arrium Group Claims' rather than 'Claims'. Second, cl 20.2(c) was a simpler and broader clause and provided that:

(c) On payment of the Final Dividend from the Arrium Distribution Fund, all Arrium Group Claims of any Arrium Group Creditor are released, discharged and extinguished.

1. To give effect to the novation, extinguishment and release of Claims, pursuant to cl 24.2 of the Transaction Support DOCA and cl 23.2 of the Distribution DOCA, each Creditor appointed each Deed Administrator as its attorney or proxy to do all things and sign all necessary documents.

Proper construction of Transaction Support DOCA and Distribution DOCA

1. At trial, there was no dispute that Franco-Nevada, as a contingent creditor, was a Creditor of Southern Iron. This was on the basis that it had a contingent claim for damages against Southern Iron in relation to possible future breaches of the Royalty Deed.[117] As a Creditor of Southern Iron, Franco-Nevada was bound by the Transaction Support DOCA. The primary issue was whether its claim under the Royalty Deed had been released or extinguished by cl 21 of the Transaction Support DOCA and/or cl 20 of the Distribution DOCA, or was deemed to have been abandoned under cl 18.1(i) of the Distribution DOCA. If its claim was not released or extinguished by either of the DOCAs or deemed to have been abandoned, Franco-Nevada is able bring its claim against Southern Iron and Southern Iron cannot rely on the bar set out in each of these DOCAs.
2. Franco-Nevada submitted that, on their proper construction, the DOCAs did not release or extinguish all creditors' claims but simply set out a process by which this could occur. It contended that the Transaction Support DOCA drew a distinction between:

(a) claims which were admitted to proof under cl 18, adjudicated by the Deed Administrators under cl 19, satisfied by a payment from the Arrium Distribution Fund and thereby extinguished under cl 21; and

(b) claims which survived the DOCAs. In respect of these claims, the creditors were not entitled to receive any dividend or distribution from the Arrium Distribution Fund. These claims remained with the relevant company and were not released or extinguished under cl 21.

1. Franco-Nevada denied that its claim under the Royalty Deed had been extinguished by cl 21 of the Transaction Support DOCA and/or cl 20 of the Distribution DOCA, or that it was deemed to have abandoned its claim under cl 18.1(i) of the Distribution DOCA. It advanced three reasons in support of this contention. First, Franco‑Nevada was not entitled to lodge a proof of debt with the Deed Administrators as its claim against Southern Iron had not been novated to AdminCo, released or extinguished. Where an obligation to submit a proof of debt had not arisen, Franco-Nevada could not be subject to any sanction for its failure to do so. Second, cl 18.1(i) of the Distribution DOCA only applied to claims against AdminCo. Given that, on its submission, its claim had not been novated to AdminCo, Franco‑Nevada had no claim against AdminCo which could be deemed to be abandoned. Third, the Distribution DOCA only bound creditors of AdminCo and was incapable, as a matter of law, of releasing Franco‑Nevada's claim against Southern Iron.[118]
2. In contrast, Southern Iron contended that all claims against each of the companies in the Arrium Group (including Franco-Nevada's claim against Southern Iron for ongoing royalty payments) were released, extinguished or deemed to have been abandoned by cl 21 of the Transaction Support DOCA and/or cl 18.1(i) and cl 20 of the Distribution DOCA, subject to the Deed Administrators' ability to take steps to provide for the continuation of any claim against a company in the Arrium Group.[119] As no step had been taken by the Deed Administrators, Southern Iron was entitled to rely on cl 21.4 of the Transaction Support DOCA and cl 20.5 of the Distribution DOCA as a bar to Franco-Nevada's claim in these proceedings.
3. In support of its construction, Southern Iron placed significant emphasis on the fact that, in general, the purpose of a DOCA is to give companies a 'fresh start' by extinguishing all claims against the company including contingent claims. It also pointed to the size and complexity of the administration of the Arrium Group. Counsel for Southern Iron submitted that it was clear from the references to Arrium Group companies and Arrium Group Creditors in the objects and purpose of the Transaction Support DOCA, that the administration of the Arrium Group was a 'group process'.[120] Given these matters, in its submission, it could not have been the intention that only Claims specifically addressed by the Deed Administrators were abandoned, novated, released and/or extinguished.[121]
4. Counsel for Southern Iron submitted that the construction of the DOCAs advanced by Franco-Nevada was illogical for two primary reasons. First, the proof of debt process would come after (rather than before) the novation, release or extinguishment of a creditor's claim. In its submission, this would require the Deed Administrators to undertake this process before all claims (including those of contingent creditors) had been identified and assessed. Second, there was a risk that claims that had not been identified by the Deed Administrators would be overlooked and not novated, released or extinguished.
5. For two primary reasons, I do not consider that these matters, of themselves, assist in the proper construction of the DOCAs.
6. First, the Administrators were appointed on 12 April 2016. At the time the DOCAs were entered into, the Administrators had been in control of the Arrium Group for almost seven months. It is clear from the s 439A Report that, by that time, the Administrators had a well developed understanding of the nature and quantum of the creditors of the Arrium Group. In the s 439A Report, the Administrators expressed the opinion that the Arrium Group companies had maintained their books and records in accordance with the requirements of the Act.[122] On this basis, the Administrators could have confidence that they had identified the creditors of the Arrium Group companies. Given these matters, it was not illogical for the Administrators to have formed a view that it was preferable for proof of debts to be submitted after there was greater clarity about what was being sold and which Arrium Group Claims would remain with any entity.
7. Second, it was open to the Deed Administrators to adopt a process which dealt with Claims on a high-level basis. This would ensure that any claims would not be overlooked and did not require the Deed Administrators to specifically consider each creditor's claim.
8. In considering the proper construction of the DOCAs, Franco‑Nevada submitted that the court could have regard to the novation deeds subsequently entered into on the basis that these agreements formed part of the context for the DOCAs, in assessing the mischief they were intended to remedy. Southern Iron denied any use could be made of these documents for the purposes of construing the DOCAs. While I accept that, at common law, it is possible to have regard to various extrinsic materials (including law reform reports) to ascertain the mischief a statute is intended to cure,[123] it is only in limited circumstances that matters that arise after the event can be referred to.[124] Where this is sought to be done, as Besanko J observed in Adelaide Brighton Cement Ltd v Wong:[125]

[A] person seeking to rely upon such a statement would need to establish, at the very least, that the statement was clearly one relating to the mischief the relevant provision was designed to remedy and that the statement was made by a person or body in a position to identify that mischief in a reliable way.

1. In this case, I do not accept that the novation deeds clearly identify the 'mischief' the DOCAs were designed to remedy. On their face, both of the novation deeds refers to cl 7.10 of the DOCAs as the source of the Deed Administrators' power to enter into the deed, but do not otherwise identify the relevant 'mischief'. I am not satisfied that Franco‑Nevada has established these deeds fall within the limited exception, and have not had regard to the novation deeds in considering the proper construction of the DOCAs.
2. At trial, both parties relied on similar background facts, passages of the s 439A Report, and clauses of the DOCAs as supporting the construction each contended for. In my view, many of the matters relied on by the parties are equivocal and are capable of supporting each of the constructions advanced. Ultimately, in considering the proper construction of the DOCAs, it has been necessary to consider which of the constructions advanced is more consistent with the text used in the DOCAs, the context in which these agreements were entered into, and the purpose of these specific DOCAs.
3. In considering whether Franco-Nevada's claims have been novated, extinguished or released, it is necessary to consider the text of the clauses in question in the context of the DOCAs in their entirety. The relevant structure of the DOCAs is set out at [95] - [116]. In that context, I turn to consider the proper construction of cl 18, cl 19 and cl 21 of the Transaction Support DOCA.
4. Clause 18.1 of the Transaction Support DOCA provided that Creditors' Claims 'are to be submitted' to the Deed Administrators of AdminCo in accordance with the process set out in cl 18 of the Distribution DOCA. Counsel for Southern Iron submitted that by the use of the words 'are to be submitted', this clause imposed a mandatory requirement on all Creditors of Southern Iron (including Franco‑Nevada) to submit a proof of debt, which would then be assessed by the Deed Administrators of AdminCo.[126]
5. I do not accept this submission. In my view, as was contended by Franco-Nevada, it is necessary to construe this clause in its entirety. This clause imposed an obligation on all creditors to submit a proof of debt in accordance with cl 18 of the Distribution DOCA. Clause 18 of the Distribution DOCA gave the Deed Administrators the power to call for written proofs of debt in respect of all Claims against companies in the Arrium Group at such times as they deemed appropriate (cl 18.1(a)). That is, pursuant to this clause, the Deed Administrators had the discretion to determine when they would call for proofs of debt.
6. In my view, the mandatory requirement imposed by cl 18 of the Transaction Support DOCA was that all creditors of Southern Iron were required to submit a proof of debt when the Deed Administrators called for proofs of debt to be lodged. This did not prevent the submission of proofs of debt at an earlier stage but gave the Deed Administrators the power and flexibility to deal with proofs of debt at the time of their choosing.
7. Turning then to cl 19 of the Transaction Support DOCA, cl 19.1(a) required the Deed Administrators to adjudicate a creditor's Entitlement as at 7 April 2016 'regardless of' whether the Claim had been 'subsequently' novated, released or extinguished by the Deed Administrators or any other party.
8. Franco-Nevada contended that, on the proper construction of cl 19.1(a) of the Transaction Support DOCA, this clause did not require the Deed Administrators to adjudicate each Creditor's entitlement; it simply set out the conditions upon which the adjudication was to occur. In its submission, cl 19.1(a) required a Creditor's Entitlement to be adjudicated:

(a) as at 7 April 2016; and

(b) only where that Creditor's Claim had been subsequently novated, released or extinguished by the Deed Administrators or by any other party, where the Deed Administrators exercised their power to allow the Claim to remain provable.[127]

1. In the alternative, Franco-Nevada submitted that cl 19.1(a) conditioned rather than mandated the adjudication process. On this construction, the adjudication of any proof of debt was to be carried out as at 7 April 2016 regardless of who novated, released or extinguished the claim.[128]
2. Consistent with the obligation in cl 18 requiring all creditors to submit a proof of debt, Southern Iron submitted that, on its proper construction, cl 19 required the Deed Administrators to adjudicate the claims of all creditors as at 7 April 2016.
3. The ordinary and natural meaning of 'regardless of' is 'paying no attention to' or 'without consideration of', and of 'subsequently' is 'occurring or coming later'.[129] That is, cl 19.1(a) required the Deed Administrators to adjudicate all claims as at 7 April 2016 without consideration of whether the claim had been novated, released or extinguished at a later date.
4. On its face, there are two alternative constructions of cl 19.1(a). First, this clause required the Deed Administrators to adjudicate the claims of all creditors of each of the Arrium Group companies as at 7 April 2016. Second, this clause set the date on which a claim by a creditor entitled to payment from the Arrium Distribution Fund was to be adjudicated by the Deed Administrators.
5. In considering which of these constructions should be preferred, consistent with the authorities referred to above, the court can have regard to the purpose of the DOCAs, as well as the statements made by the Administrators in the s 439A Report, as this report is specifically referred to in the Transaction Support DOCA as forming part of the factual background. It is also necessary, consistent with cl 2.11 of the Transaction Support DOCA, to have regard to the enabling clauses in the Distribution DOCA.
6. In the s 439A Report, the Administrators expressed the view that the 'optimal structure' for the realisation of the assets of the Arrium Group companies was for the shares in at least 13 key trading companies to be sold,[130] although this process had not been finalised at the date of the second creditors' meeting. Given this, the Administrators wanted to preserve maximum flexibility in finalising the external administration of the Arrium Group and to avoid the crystallisation of contingent claims.[131] The intended structure was for the liabilities to be 'transferred prior to sale' under the Transaction Support DOCA to AdminCo, and for a distribution to be made to creditors in accordance with their pre-existing rights from the Arrium Distribution Fund.[132] This intended structure allowed assets to be moved within the Arrium Group companies to the relevant sale entities, for the shares in the sale entities to be sold, for all relevant liabilities of each Arrium Group company to be transferred to a single fund, and for all proceeds of the share and assets sales to be transferred to the Arrium Distribution Fund for distribution to creditors of the Arrium Group.[133]
7. The Administrators emphasised in the s 439A Report that the flexibility provided by these arrangements would empower the Deed Administrators to deal the Arrium Group companies in a 'bespoke manner', in order to improve the return for creditors as a whole.[134]
8. The Administrators expressed the opinion that:[135]

(a) the Arrium Group had approximately 30,000 customers and 30,000 suppliers. Given this, the Administrators believed the sale of shares (as opposed to the assets) would require far less assignments or novations;[136] and

(b) a sale of shares would allow for a smooth transition of employment and enterprise agreements, as well as relevant intellectual property assets (which would not need to be assigned).[137]

1. In explaining the alternatives open to creditors and why the Administrators considered that liquidation was not in their best interests, one of the reasons proffered by the Administrators was that on liquidation, the claims of contingent creditors would crystallise, resulting in a lower return to creditors.[138]
2. At the second creditors' meeting, the Administrators stated, in answer to questions from creditors, that the Transaction Support DOCA did not effect a transfer of the creditors' claims to AdminCo and that a subsequent step was required, that pre-appointment claims could be extinguished or novated to AdminCo, and that any claim extinguished or released by the Deed Administrators would entitle the creditor to make a claim against the Arrium Distribution Fund.[139] These intentions and statements were specifically recorded as being among the purposes and objects of the DOCAs (cl 1(d) and cl 1(f)).
3. While I accept that in many (if not most) cases, the purpose of a DOCA is to extinguish all claims against a company, including all contingent claims, this is not the only purpose that is consistent with the object of pt 5.3A, as set out in s 435A of the Act. As noted by Barrett J in Blacktown City Council v Macarthur Telecommunications Pty Ltd:[140]

Examination of Pt 5.3A as a whole shows that there are several purposes which together contribute to the widely stated object. The provisions imposing the various moratoriums show that there is a purpose of allowing time for unpressured but reasonably prompt consideration of possible reconstruction possibilities. The provisions as to creditors' meetings and creditor decision-making, including those concerning deeds of company arrangement, show that there is a purpose of allowing reconstruction possibilities to be pursued in such a way that, if creditors so desire, a legacy of debt may be left behind and winding up, which would normally be the product of an intolerable debt burden, may be avoided.

1. The context to the entry into the DOCAs supports a construction that cl 19 of the Transaction Support DOCA did not, on its terms, require all claims of Creditors, including contingent claims, to be adjudicated as at 7 April 2016. Nor did cl 19.1(a), as was pleaded by Southern Iron, novate, extinguish or release all Creditors' Claims. If it had this effect, the Transaction Support DOCA would not avoid the crystallisation of contingent claims, nor provide a cost‑efficient and speedy mechanism for the sale of the Arrium Group companies and/or their assets.
2. Given this, it is my view that, on its proper construction, cl 19.1(a) simply defined the date on which a Creditor's Claim was to be adjudicated, namely 7 April 2016, rather than the date on which the Claims of all Creditors were required to be adjudicated. Where a Creditor's Claim was adjudicated by the Deed Administrators, the creditor was entitled to receive a distribution from the Arrium Distribution Fund (cl 19.1(b)). On the terms of cl 19.1(a), a Creditor's Entitlement to a distribution from the Arrium Distribution Fund only arose when a Claim was either novated to AdminCo, or released or extinguished by the Deed Administrators; or, subject to the consent of the Deed Administrators, a third party.[141]
3. This construction is consistent with both the context of this clause and the purpose of the Transaction Support DOCA. The context includes cl 7.8, cl 7.10(a), cl 7.10(b), cl 16.1 and cl 18.2(a) of the Transaction Support DOCA, statements by the Administrators to creditors in the s 439A Report, and the Deed Administrator's responses to questions at the second creditors' meeting.
4. Clause 7.8 confirmed that the powers granted to the Deed Administrators did not, of themselves, constitute an agreement the Deed Administrators 'will novate, release or extinguish any Claims'. The text of this clause, by the use of the word 'will', indicates that the novation, release or extinguishment of a Claim is a future act and that none of these actions have occurred by entry into the Transaction Support DOCA.
5. Similarly, cl 7.10(a) of the Transaction Support DOCA is not expressed in mandatory terms and does not, on its face, novate or extinguish any Claim. Instead, by the use of the word 'may', the DOCA gave the Deed Administrators the power to novate, release and/or extinguish Franco-Nevada's claim. This clause does not immediately novate, release or extinguish any Claim or constitute an exercise of this power by the Deed Administrators.
6. Under cl 7.10(b), each creditor irrevocably consented to the release, novation or extinguishment of their Claim and enabled the Deed Administrators to execute a release or novation to give effect to a transaction. It is clear from the text of this subclause that a further step was required to be taken by the Deed Administrators to release, novate or extinguish a creditor's Claim and that this did not occur automatically on entry into the Transaction Support DOCA.
7. Clause 16.1 required the approval of the creditors' committee for some matters, but not for the novation, release or extinguishment of any Claim. This requirement is, in my view, more consistent with a construction that these processes were to occur after entry into the Transaction Support DOCA.
8. By specifying the date a Creditor's Claim would be assessed, the Transaction Support DOCA removed any question as to whether a Creditor's Claim arose on its novation to AdminCo or on being released or extinguished by the Deed Administrators (all of which would post date entry into the Transaction Support DOCA). This construction is consistent with cl 18.2(a) of both the Transaction Support DOCA and the Distribution DOCA, which provided that the novation of a claim did not create a new claim.
9. I turn then to the proper construction of cl 21 of the Transaction Support DOCA. Clause 21.1(a) required 'all Creditors having a Claim' to accept their 'Entitlement' in full and final satisfaction and discharge of their Claim. 'Entitlement' was defined as 'a Creditor's entitlement under cl 19.1'. Where this occurred, the Deed Administrators were entitled to execute 'such form of release' as required (cl 21.1(a)).
10. Clause 21.2 of the Transaction Support DOCA set out the circumstances in which a Creditor's Claim was released, discharged or extinguished. These were: first, on payment of its full entitlement under cl 19.1 (cl 21.2(a)); second, on banking the payment of its full entitlement under cl 19.1 (to the extent the Claim was not already extinguished), the Creditor was deemed to have released (among others) the Company (cl 21.2(b)); third, on payment of the Final Dividend from the Arrium Distribution Fund, the Creditor's Claims against the Company (among others) was released, discharged and extinguished (cl 21.2(c)); and fourth, on banking payment of the Final Dividend, each Creditor was deemed to have released the Company (among others) (cl 21.2(d)).
11. In this case, Franco-Nevada has never been paid or banked any amount from the Arrium Distribution Fund. In addition, no evidence was adduced at trial that the Deed Administrators took any steps to extinguish Franco-Nevada's claim under the Royalty Deed. For this reason, the releases in cl 21.2(a), (b) and (d) do not apply. The question, therefore, is limited to whether its claim under the Royalty Deed has been released, discharged or extinguished under either cl 21.1(a) or cl 21.2(c) of the Transaction Support DOCA, or cl 20.1 or cl 20.2(c) of the Distribution DOCA.
12. Dealing first with the Transaction Support DOCA, Franco‑Nevada submitted that, on its proper construction, cl 21.1(a) only discharged creditors' claims that were adjudicated under cl 19.1(a). This was because, in their submission, a creditor's entitlement to a distribution was the 'quid pro quo' for the novation, release or extinguishment of its claim.[142] Counsel for Southern Iron rejected this construction and emphasised that the definition of 'Entitlement' was not limited to cl 19.1(a) but referred to the entirety of cl 19.1. In its submission, on its proper construction, 'Entitlement' referred to the right to prove in the administration and, if admitted to proof, to receive a distribution from the Arrium Distribution Fund. That is, in its submission, the clause referred to the proof of debt process and not its outworkings.
13. On its face, the text of cl 21.1(a) does not mandate the discharge, release and satisfaction of all Creditors' Claims. The release and discharge of all Claims is linked to the entitlement to receive (rather than the actual receipt of) a distribution from the Arrium Distribution Fund. In my view, in the context of the Transaction Support DOCA, cl 21.1(a) only released those Claims which were novated to AdminCo.
14. Counsel for Southern Iron submitted that cl 21.1(c) had a different purpose from the remaining subclauses. In its submission, this subclause was a 'final catch all' that extinguished all remaining claims when the Arrium Distribution Fund was exhausted.[143]
15. On the text of cl 21.2(c), the claim that is released is 'Creditor's Claims'; not 'Creditors' Claims'. It is necessary to give meaning to the text chosen by the parties which releases a singular creditor and all creditors. Given the structure of cl 21.2, it is my view that this clause only applied to a Creditor entitled to a distribution from the Arrium Distribution Fund and did not release, discharge or extinguish the Claims of all Creditors. This construction does not, as contended by Southern Iron, render cl 21.2(d) meaningless. The distinction between cl 21.2(c) and (d) was that the release in (c) took effect on payment of the Final Dividend, whereas the release in (d) took effect on the Final Dividend being banked. In my view, cl 21.2(c) protected Southern Iron against the possibility that a Creditor failed to bank the payment it received for the Final Dividend. Where a Creditor banked the Final Dividend, it was deemed to have accepted this payment in full and final satisfaction of its Claim.
16. For these reasons, unless Franco-Nevada's claim under the Royalty Deed was novated to AdminCo, I do not consider its claim was released under the terms of the Transaction Support DOCA.
17. I turn then to the proper construction of cl 18.1(i) and cl 20.1 of the Distribution DOCA.
18. Clause 18.1(i) deemed an Arrium Group Creditor to have abandoned all 'Claims' in the Arrium Distribution Fund which were not the subject of a proof of debt or had been rejected by the Deed Administrators.
19. Franco-Nevada emphasised that cl 18.1 of the Distribution DOCA referred to both an 'Arrium Group Claim' (defined as a claim against any Arrium Group company) and a 'Claim' (which was restricted to a claim against AdminCo) and that the use of the word 'Claim' in this subclause was deliberate. In its submission, on the text of this clause, a creditor was only taken to have abandoned a Claim and entitlement (if any) which was not the subject of a proof of debt or was rejected by the Deed Administrators, where the claim was against AdminCo.[144] Franco‑Nevada submitted this construction was consistent with the intended structure of the DOCAs which was for all liabilities to be transferred to AdminCo in exchange for the entitlement to a distribution from the Arrium Distribution Fund. All creditors whose claims were novated to AdminCo were entitled to lodge a proof of debt in the Distribution DOCA and only had a Claim against AdminCo.
20. In contrast, Southern Iron submitted that the use of the word 'Claim' rather than 'Arrium Group Claim' was 'an obvious drafting error' and that this clause released all Arrium Group companies from all Arrium Group Claims, including the claim by Franco-Nevada.[145] In support of this submission, counsel for Southern Iron referred to the definition of 'Claim' as referring only to those claims against AdminCo prior to 7 April 2016 and emphasised that any Arrium Group Claim that was novated to AdminCo occurred after this date and did not fall within this definition.
21. For the following reasons, I do not accept the use of the word 'Claim' where it appears in cl 18.1(i) was a drafting error. First, no evidence was adduced that would enable the court, from a consideration of the Distribution DOCA in the objective circumstances surrounding its execution, to conclude with certainty that a mistake had been made by the use of the word 'Claim' rather than 'Arrium Group Claim'.[146] In my view, the clause can be given meaning by reference to the text chosen by the parties.
22. Second, it is clear from the text of cl 18.2 and cl 18.3 that both 'Claim' and 'Arrium Group Claim' have been intentionally used in the Distribution DOCA. There is nothing in the text of the cl 18.1 that would support the conclusion that 'Claim' had not similarly been used deliberately.
23. Third, even if there were a drafting error (which I do not accept), the alleged error is not one 'wholly within the confines of the stipulations made binding by statute'.[147] A deed which seeks only to release claims made against that company is workable, particularly given the High Court's decision in Lehman Brothers. In my view, in order for the Distribution DOCA to be amended in the manner contended by Southern Iron, it would have been necessary for Southern Iron to seek and obtain remedial orders under s 447A of the Act to modify the Distribution DOCA. This did not and has not occurred.
24. Fourth, while I accept that, as a matter of law, any claim against an Arrium Group company that was novated to AdminCo only became a claim against AdminCo on the date of its novation, this does not, in my view, lead to the conclusion that the use of the word 'Claim' is an obvious error. This is because cl 19(a) of the Distribution DOCA (as well as cl 19.1(a) of the Transaction Support DOCA) required a Creditor's Entitlement to be adjudicated as at 7 April 2016 without regard to whether the Arrium Group Claim had been subsequently novated by the Deed Administrators pursuant to 'this DOCA or any of the Other Arrium DOCAs'.
25. In my view, cl 18.1(i), on its proper construction, only applied to Arrium Group Creditors with a Claim against AdminCo. Where a Claim was novated to AdminCo, creditors then only had a Claim against AdminCo. However, if a Claim had not been novated, a Creditor did not have any Claim against AdminCo. Its Claim remained as one against the relevant Arrium Group company and was not the subject of any deemed abandonment under this clause.
26. I turn then to cl 20 of the Distribution DOCA. The subclauses of cl 20 are drafted more broadly than the equivalent provisions in the Transaction Support DOCA. Clause 20.1 requires all Arrium Group Creditors with an Arrium Group Claim to accept their Entitlement under the Distribution DOCA in full satisfaction and complete discharge of their claim. In my view, this clause also links the entitlement to receive a distribution 'under this DOCA' to the release. For the same reason as set out in [158], in my view, this clause only released those Claims which were novated to AdminCo.
27. Clause 20.2(c) of the Distribution DOCA is drafted more broadly and purports to release 'all Arrium Group Claims of any Arrium Group Creditor'. While I accept that Franco-Nevada's claim was an Arrium Group Claim, I do not consider that this clause was effective to release Southern Iron from this claim for three reasons. First, as a matter of law, the Distribution DOCA only bound creditors of AdminCo. Unless Franco-Nevada's claim was novated to AdminCo, Franco-Nevada was not a creditor of AdminCo and was not bound by this DOCA. Second, the only Arrium Group company who was a party to this deed (and who was bound by it) was AdminCo. I do not accept this clause was effective to release a creditor's claim against any other Arrium Group company who was not party to this DOCA, including Southern Iron. Third, in interpreting the legal effectiveness of this clause, it was necessary to have regard to the corresponding clauses in the Transaction Support DOCA. On this basis, I consider this clause should be construed in a similar manner to cl 21.2(c) of the Transaction Support DOCA as releasing the claims of a Creditor entitled to a distribution from the Arrium Distribution Fund but not releasing the Claims of all Creditors.
28. Taken together, it is my view that, on the proper construction of the Transaction Support DOCAs, the Deed Administrators had the power to novate Arrium Group Claims to AdminCo. Where this power was exercised, these Arrium Group Creditors had a Claim against AdminCo. This Claim was subject to the proof of debt process set out in cl 18 of the Distribution DOCA. If a creditor whose Claim had been novated to AdminCo did not lodge a proof of debt, that creditor was deemed under cl 18.1(i) of the Distribution DOCA to have abandoned its Claim. In addition, if a creditor whose Claim had been novated to AdminCo lodged a proof of debt and its Claim was assessed as zero, that creditor's claim was released and discharged under cl 20.1 of the Distribution DOCA. This construction does not, as was suggested by Southern Iron, allow an Arrium Group Creditor to 'opt out' of the adjudication process. At all times, the power (and flexibility) remained with the Deed Administrators to novate, release or extinguish any and all Claims of Arrium Group Creditors.
29. This construction is consistent with the Administrators' statements to creditors at and prior to the second creditors' meetings regarding the effect of the DOCAs and the sequence of events, namely that a subsequent step was required to novate, release or extinguish a Claim and that this did not happen automatically on the execution of the Transaction Support DOCA. These statements included that claims of creditors that arose prior to 6 April 2016 'may be' or 'are able to be' extinguished or novated to AdminCo; that the DOCAs would be entered into prior to the novation of all pre-appointment date liabilities,[148] and that a subsequent step was required before claims were transferred to AdminCo.[149] It is also consistent with the statements that the claims of contingent creditors had not crystallised and would not under the proposed DOCAs.
30. I do not accept that the construction contended by Franco‑Nevada required the Deed Administrators to specifically consider and address each Claim. It was open to the Deed Administrators to address the claims on a high-level or general basis. In contrast, the consideration of which Claims should be maintained against a specific company and excluded from the relevant DOCA would, in my view, require consideration of each individual claim by the Deed Administrators.
31. In my view, the construction contended for by Southern Iron could, as submitted by senior counsel for Franco-Nevada, lead to an anomalous or unintended result. If the Transaction Support DOCAs released all claims, where was the power of the Deed Administrators to preserve these claims against an Arrium Group company?[150] On its face, neither the Transaction Support DOCA nor the Distribution DOCA contained any express power to do this. The power of the Deed Administrators in cl 19.1(a) to allow a Claim to remain provable was limited to Claims which were novated, released or extinguished by another party. In contrast, there was an express power given to the Deed Administrators to novate, release or extinguish claims. In my view, this also supports the construction of the DOCAs which I have reached.
32. The specific clauses of the Transaction Support DOCA relied on by Southern Iron[151] did not novate, release or extinguish Franco‑Nevada's claim. Each of these clauses set out the powers given to the Deed Administrators but did not confirm or constitute the exercise of any of these powers.
33. Further, while I accept that the Administrators stated that the execution of the DOCAs would allow the group companies to be sold 'free of liabilities',[152] this was not, in my view, a representation that this would occur, or that any Arrium Group company would be sold free of all existing liabilities, including all contingent claims. This was a possibility open to the Administrators depending on the terms that were negotiated. At the time of entry into the DOCAs, it was not clear which companies or assets within the Arrium Group would be sold and whether any pre-administration contracts would continue. In my view, this construction of the Transaction Support DOCA is consistent with the Deed Administrators having the ability, as part of the sales process, to determine whether any pre-administration contracts, with both their benefits and burdens, should be released or extinguished under the Transaction Support DOCA and the Distribution DOCA, or whether these rights should be preserved.
34. Taken together, I consider that the Transaction Support DOCA and the Distribution DOCA:

(a) applied to all debts and Claims (including the Claims of contingent creditors) that arose prior to 7 April 2016;

(b) were intended to maximise the chances of some members of the Arrium Group continuing in existence. To enable this to occur, it was intended that there be significant flexibility for the Deed Administrators to negotiate with potential purchasers of shares and/or assets of the Arrium Group;

(c) provided for the payment of all sales of assets and/or shares to be transferred to AdminCo to be held in the Arrium Distribution Fund to be paid to Arrium Group Creditors in accordance with the Arrium Distribution DOCA;

(d) set out a process for the novation, release and/or extinguishment of all liabilities of the Arrium Group companies. Creditors whose claims were novated, released or extinguished were entitled to lodge a proof of debt and participate in the distribution from the Arrium Distribution Fund consistent with their pre-appointment rights and in the priority set out at cl 19.2 of the Distribution DOCA;

(e) extinguished and/or released the Claims of all Creditors whose Claims were novated to AdminCo or released or extinguished by the Deed Administrators. Where this occurred, these Creditors could not then assert or rely on these claims against any Arrium Group company;

(f) if a creditor's Claim was novated, the creditor was not required to receive a distribution or payment in order for its claim to be extinguished or be deemed to have been abandoned; and

(g) where a Claim was not novated to AdminCo, or released or extinguished by the Deed Administrators, the creditor's Claim against the relevant Arrium Group company was not released. As a result, the creditor was not barred from commencing proceedings against that company to enforce its rights.

1. Given this construction, the question is whether Franco‑Nevada's claim for payment of royalties under the Royalty Deed has been novated, released or extinguished by the Deed Administrators. No evidence was adduced at trial that the Deed Administrators had extinguished Franco-Nevada's rights under the Royalty Deed, terminated or repudiated the Royalty Deed or disclaimed this contract. As a result, the answer to this question turns on the proper construction of the novation deeds.

1. On 30 June 2017, two deeds of novation were entered into by the Deed Administrators on behalf of each of the Arrium Group companies, AdminCo and in relation to the Sale Entities, by one of the Deed Administrators as attorney for each Arrium Group Creditor. They were described as the 'Novation Deed for Arrium Australia - Non-Sale Entities' (Non-Sale Entities Novation Deed)[153] and the 'Novation Deed Arrium Australia - Sale Entities' (which included, at Sch 1, Southern Iron).[154]
2. Relevantly, the Background to each of these deeds recited (at D) that:

Pursuant to the powers granted by the Deeds of Company Arrangement, each Arrium Group Creditor's Pre-Appointment Claims will be novated to AdminCo on and from the Novation Date, up to the Entitlement ultimately paid from the Arrium Distribution Fund to that Arrium Group Creditor, and the parties confirm such novation on the terms set out in this Deed. (emphasis added)

1. 'Novation Date' was defined as 31 December 2016 in the Sale Entities Novation Deed, and as 30 June 2017 in the Non‑Sale Entities Novation Deed.
2. The operative clause of both novation deeds was cl 2. These clauses were in almost identical terms[155] and provided that:

2.1 Novation

Subject to clause 2.2 and in accordance with the Deeds of Company Arrangement, the parties confirm that with effect on and from the Novation Date, the Pre-Appointment Claims are novated from each Australian Sale Entity to AdminCo for nil consideration.

2.2 Assumption of liability

The parties confirm that with effect on and from the Novation Date, AdminCo accepts the novation in clause 2.1 with the effect that:

(a) the Australian Sale Entities have no Liability in relation to a Pre‑Appointment Claim;

(b) in return, subject to the Deeds of Company Arrangement, each Arrium Creditor may make a claim for their Pre-Appointment Claim against AdminCo; and

(c) AdminCo is obliged to pay Arrium Group Creditors an amount in respect of all Pre-Appointment Claims, not exceeding the aggregate of the Entitlements ultimately paid from the Arrium Distribution Fund.

1. The distinction between the novation deeds is in the definitions of the terms used in this clause. In the Non-Sale Entities Novation Deed, the term 'Pre-Appointment Claims' was given a broad definition, namely:

any Claim arising directly or indirectly from any act or omission by that Australian Sale Entity or by any agreement, circumstance or event occurring on or before the Appointment Date and includes all debts or claims provable in a winding up of the Australian Sale Entity pursuant to section 553 of the Corporations Act 2001 (Cth), but excluding any Liability of an Novation Entity under a Guarantee or an Intercompany Loan.

1. In contrast, in the Sale Entities Novation Deed, 'Pre‑Appointment Claims' had a specific definition, namely:[156]

any Claim arising directly or indirectly from any act or omission by that Australian Sale Entity or by any agreement, circumstance or event occurring on or before the Appointment Date and includes all debts or claims provable in a winding up of the Australian Sale Entity pursuant to section 553 of the Corporations Act 2001 (Cth), but excluding:

(a) the Ongoing Liabilities; and

(b) any Liability of an Australian Sale Entity under a Guarantee or an Intercompany Loan.

1. This definition contained a number of other defined terms. Relevantly:

all Liabilities, irrespective of when they arise, in respect of

(d) a Claim by a counterparty under a Business Contract arising directly or indirectly from any act, omission, agreement, circumstance or event after the Appointment Date, even if the Business Contract was signed or entered into or commenced prior to the Appointment Date.

(b) 'Liabilities' meant 'any liability or obligation (whether actual, contingent or prospective) irrespective of when the acts, events or things giving rise to the liability occurred';

(c) 'Claim' was defined to mean 'any claim, notice, demand, costs (including legal costs and expenses), debts, dues, liabilities, damages, losses, action, proceeding, litigation, investigation or judgment, however it arises and whether it is present or future, fixed or unascertained, actual or contingent'; and

(d) 'Business Contract' was defined to mean 'an agreement, arrangement or understanding to which an Australian Sale Entity is party and which imposes continuing obligations on the Australian Sale Entity after the Novation Date'.

188 In order to consider the proper construction of the Sale Entities Novation Deed, it is necessary to insert the definitions of each of the defined terms into the operative clause. On doing so, cl 2.1 provides that:

Subject to clause 2.2 and in accordance with ... [each of the deeds of company arrangement between the Deed Administrators and each of AdminCo and each Australian Sale Entity dated 4 November 2016 (as varied from time to time)], the parties confirm that with effect on and from [31 December 2016], [any Claim arising directly or indirectly from any act or omission by that Australian Sale Entity or by any agreement, circumstance or event occurring on or before [7 April 2016] and includ[ing] all debts or claims provable in a winding up of the Australian Sale Entity pursuant to section 553 of the Corporations Act 2001 (Cth), but excluding:

(a) [all Liabilities, irrespective of when they arise, in respect of:

(d) [any claim, notice, demand, costs (including legal costs and expenses), debts, dues, liabilities, damages, losses, action, proceeding, litigation, investigation or judgment, however it arises and whether it is present or future, fixed or unascertained, actual or contingent'] by a counterparty under [an agreement, arrangement or understanding to which an Australian Sale Entity is party and which imposes continuing obligations on the Australian Sale Entity after [31 December 2016]] arising directly or indirectly from any act, omission, agreement, circumstance or event after [7 April 2016], even if the [agreement, arrangement or understanding to which an Australian Sale Entity is party and which imposes continuing obligations on the Australian Sale Entity after [31 December 2016]] was signed or entered into or commenced prior to [7 April 2016].]; and

(b) any Liability of an Australian Sale Entity under a Guarantee or an lntercompany Loan]

are novated from each Australian Sale Entity to AdminCo for nil consideration.

1. Clause 3 of both novation deeds recorded the novation as giving effect to the DOCA Purpose and Objects (as defined in the DOCAs), as well as the consent of creditors to the novation of their pre‑appointment claims and, for the Sale Entities Novation Deed, recorded that the Deed Administrators executed the Deed as attorney for each Arrium Group Creditor.
2. Franco-Nevada says that its claim for royalties is an Ongoing Liability and was not novated to AdminCo under cl 2.1 of the Sale Entities Novation Deed. In its submission:

(a) the Royalty Deed is a Business Contract that imposed continuing obligations on Southern Iron after the Novation Date; and

(b) its claim for royalties arose from an act occurring after 7 April 2016, namely the recommencement of mining and the acts of mining that occurred after that date, even though the Royalty Deed was entered into prior to 7 April 2016.

1. Southern Iron denied the Royalty Deed fell within the definition of 'Ongoing Liabilities'. In its submission, this definition was limited to contracts which the Deed Administrators had continued to operate after the Appointment Date, which enabled the relevant entity to be sold as a going concern.[157] On this basis, Southern Iron submitted the Royalty Deed did not fall within the exclusions in the definition of 'Claim' and any claim by Franco-Nevada arising from the Royalty Deed was novated to AdminCo.
2. I do not accept this submission and find that, on the proper construction of the Sale Novation Deed, Franco-Nevada's claim for royalties under the Royalty Deed was not novated to AdminCo.
3. The definition of Ongoing Liabilities does not, on the text of clause, exclude from novation only those business contracts that the Deed Administrators continued to operate after 7 April 2016. The only requirements for a contract to be a Business Contract were that:

(a) the contract (whether entered into before or after 7 April 2016) imposed obligations that continued after 31 December 2016; and

(b) the obligations arose from an act, omission, agreement, circumstance or event that occurred after 7 April 2016.

1. In my view, this definition is more consistent with a distinction being drawn between pre-appointment liabilities (which were novated to AdminCo), and contingent claims or claims under all contracts that were to continue after 31 December 2016. The combined effect of this clause, together with the Transaction Support DOCA, preserved the rights of contractual counterparties of these contracts that continued after 31 December 2016.
2. This construction is consistent with the context of the clause. This context included the obligation on the Deed Administrators imposed by the Transaction Support DOCAs to take steps to novate, release or extinguish any claims of creditors, as well as the flexibility given to the Deed Administrators as to how any subsequent transaction was to be structured.
3. This construction is also consistent with the purpose of the Sale Entities Novation Deed and the broader external administration of the Arrium Group, namely that each of the sale entities could be sold as a going concern with all relevant business contracts intact. This maximised the amount available in the Arrium Distribution Fund to pay creditors of the Arrium Group by not crystallising all contingent claims.
4. Applying this construction to the Royalty Deed, it is my view that the Royalty Deed was not novated to AdminCo under the Sale Entities Novation Deed. The Royalty Deed was entered into before 7 April 2016 and imposed continuing obligations on Southern Iron for the payment of royalties after 31 December 2016 for acts, circumstances, or events that occurred after 7 April 2016.
5. At trial, Southern Iron placed some emphasis on two matters. First, on 30 August 2017, the day prior to settlement of the sale of the shares to the GFG Alliance, an application under s 447A of the Act was made to the Federal Court.[158] In this application, the Deed Administrators sought orders to alter s 443A(1) of the Act so that they did not have any personal liability in respect of debts incurred by the companies during the administration in relation to the contracts specified in the application. No similar application was made in relation to Southern Iron before the sale of its shares.
6. Second, it was a specific term of the agreement with the GFG Alliance that the GFG Alliance acknowledged that the 'Arrium Sale Entities' would remain responsible for any claim that was not a Pre‑Appointment Claim and was required to procure that these entities met these claims as and when they fell due.[159] Southern Iron was not one of the 'Arrium Sale Entities' defined in this agreement.
7. In my view, neither of these matters assist Southern Iron's submission as to the proper construction of the Sale Entities Novation Deed.
8. In respect of the first matter, there is no evidence that Southern Iron incurred any liability to Franco‑Nevada during its administration and subsequent deed administration. During this time, the mine at Peculiar Knob was on care and maintenance and no obligation to pay royalties arose. For this reason, the Deed Administrators incurred no personal liability to Franco-Nevada that was necessary to address.
9. In relation to the second matter, in my view, the relevant obligation created by cl 7.5(a) of the agreement with GFG Alliance is the obligation on the 'Buyer' (Simec Group Limited) to 'procure' or cause the relevant entities to meet these claims as and when they fell due. That is, the primary obligation for payment remained with the relevant company, and an additional obligation was imposed on the Buyer to cause these payments to be made. As Peculiar Knob mine was on care and maintenance at the time the shares in Southern Iron were sold, any payment obligation would only arise if mining recommenced. The absence of such a clause from the Share Sale Agreement does not assist the proper construction of the novation deeds.
10. Southern Iron also referred to a number of proofs of debt that were lodged by various creditors of Southern Iron who, following adjudication by the Deed Administrators, received payments.[160] I also do not consider that these documents assist in the resolution of the issues in this proceeding. All of these documents were created after the relevant agreements (both the Transaction Support DOCA and Distribution DOCA as well as the Sale Entities Novation Deed) were entered into and, as a consequence, are not relevant to the proper construction of these agreements. In any event, it is not apparent from these documents as to whether any of these claims concerned rights or claims under a Business Contract that imposed obligations after 31 December 2016. In relation to at least one of these claims (Genesee and Wyoming), it appears from the proof of debt that the Deed Administrators terminated the contract. If this is correct:

(a) this contract could not be a Business Contract under the Sale Entities Novation Deed;

(b) the Claim was novated to AdminCo; and

(c) Genesee and Wyoming's only right was to lodge a proof of debt and seek a payment from the Arrium Distribution Fund.

1. In that context, its submission of a proof of debt is entirely consistent with what I consider to be the proper construction of these documents. Having found that Franco-Nevada's claim has not been novated, released or extinguished and that it is entitled to maintain its claim against Southern Iron in these proceedings, the question then is how the claim to royalties should be calculated.

1. Southern Iron's obligation to pay royalties to Franco‑Nevada arises under the Royalty Deed, which was entered into on 4 December 2003. The counterparties were Newmont (now Franco-Nevada), Sabatica, and Burmine (now St Barbara) 'as participants in the Coober Pedy Joint Venture'. Together, they are defined as the Joint Venturers.[161]
2. The obligation to pay royalties is set out in cl 3 of the Royalty Deed. Relevantly, it provides that:

3.1 Grant of Royalties

For the considerations contained in clause 2 of this Deed [Southern Iron] agrees to pay the Royalties to the Joint Venturers in perpetuity.

3.2 Calculation of Royalties

(a) The daily Royalty to be paid by [Southern Iron] on the production of Iron Ore from the Retention Lease or any Prospect shall be calculated as follows:

Where: R = the Royalty payable to the Joint Venturers in Australian currency in respect of a day;

A = three quarters of one Australian cent (A$0.0075);

B = the average percentage of iron content of Iron Ore produced from Mining Operations on that day as a number to the first decimal point and not as a percentage (for example 64.1 and not 64.1%)

C = total tonnes of Iron Ore produced from Mining Operations on that day.

The total amount of the Royalty payable in respect of each Royalty Period shall be the sum of the amounts of 'R' calculated for each of the days in that Royalty Period.

An example of the calculation of the Royalty is attached as Schedule 1.

(b) The amount for 'A' in the formula in clause 3.2(a) shall be reviewed annually commencing on the anniversary of the date of this Deed by adjusting the amount for 'A' in proportion to the relative movement in the Iron Ore price settlement for the Japanese fiscal year as published in the most recent publication of the Iron Ore Manual published by The TEX Report Co. Ltd. for Hamersley Iron Pty Limited fines (Direct Shipping Ore) or such suitable equivalent as may be agreed by the Parties if the TEX Report Co. Ltd. is not published or does not provide for the relevant Hamersley Iron Pty Limited fines price. The benchmark for 'A' as at the Commencement Date is US$0.2898 per dry long tone unit fines.

(c) If Other Minerals are recovered by [Southern Iron] incidental to its mining and processing of Iron Ore then [Southern Iron] shall pay seventy-five percent (75%) of its net profits (if any) derived from those Other Minerals to the Joint Venturers.

1. 'Royalties' is defined in cl 1.1 of the Royalty Deed to mean 'the perpetual royalties payable to the Joint Venturers pursuant to clause 3.2' and 'Royalty' means 'either one of them'. 'Royalty Period' means, relevantly, every calendar quarter ending on 30 June, 30 September, 31 December and 31 March.
2. Clause 4 sets out the royalty payment obligations and provides that:

4.1 Due Date for Payment

[Southern Iron] must pay the Royalties due to the Joint Venturers for a Royalty Period within 30 days after the end of that Royalty Period and the Royalties shall be made to the Joint Venturers in the following proportions:

or such other proportions as the Joint Venturers have last notified to [Southern Iron] (if any).

4.2 Royalty Statement

[Southern Iron] must submit a Royalty Statement to the Joint Venturers at the same time as payment of the Royalties for each Royalty Period and, in any event, within 30 days after the end of the relevant Royalty Period.

4.3 Failure to Pay Royalty

If [Southern Iron] does not pay any Royalty due to the Joint Venturers by the date on which it is payable then, without prejudice to any other rights of the Joint Venturers, [Southern Iron] agrees to pay to the Joint Venturers immediately on demand:

(a) interest at the Prescribed Rate on the unpaid Royalty calculated daily from the due date for payment until the payment has been made in full; and

(b) all costs and expenses (including legal costs and disbursements on a full indemnity basis) incurred by the Joint Venturers attributable to [Southern Iron]'s failure to pay that Royalty by the date for payment.

1. Under cl 6, Southern Iron covenanted that it would not dispose of the Lease without the prior written consent of the Joint Venturers, which would not be unreasonably withheld where the Assignee would be reasonably expected to meet Southern Iron's obligations under the Royalty Deed, and entered into a royalty deed in identical terms. In contrast, under cl 7, the Joint Venturers were entitled to assign their rights and obligations under the Royalty Deed by providing Southern Iron with written notice.
2. While the Royalty Deed did not confer on the Joint Venturers any legal or equitable interest in the Lease, cl 10 gave the Joint Venturers the right to lodge a caveat against the relevant mining lease.
3. Clause 18 required any variation of the Royalty Deed to be in writing and executed by the parties.
4. In about 2010, TEX Report Co Ltd ceased the publication of a rate for 'Hamersley Iron Pty Limited fines (Direct Shipping Ore)'. This enlivened the obligation of the parties under cl 3.2(b) of the Royalty Deed to agree a suitable equivalent.
5. The primary issue at trial was whether, following the cessation of this publication, there was an agreement (either oral or by conduct) to substitute a 'suitable equivalent', or to amend the terms of the Royalty Deed.
6. Franco-Nevada's primary submission was that there was an oral agreement to amend the Royalty Deed 'as between Franco‑Nevada and Southern Iron', which was 'corroborated by mutual acts of the parties in the three years following the conversation'. Franco-Nevada contended that both Mr Hardman and Mr Chiwanga (who were involved in the discussions it relied upon and were the authors of the relevant emails) were agents of Southern Iron and had either actual or ostensible authority to negotiate and agree to the variation of the formula in the Royalty Deed. Franco-Nevada also relied on the calculation, invoicing and payment of royalty claims which followed these conversations as being done by reference to the oral variation.[162]
7. In the alternative, Franco-Nevada submitted that an agreement between Franco-Nevada and Southern Iron to vary the formula in the Royalty Deed should be inferred from the course of dealings between Franco‑Nevada and Southern Iron. This included the preparation of invoices by Franco-Nevada and the payment of these invoices by Southern Iron on 11 occasions over two and a half years.
8. In closing submissions, senior counsel for Southern Iron did not dispute the matters relied upon by Franco-Nevada as having occurred; what was in dispute was their legal effect. Southern Iron denied these matters amended or varied the Royalty Deed for three reasons.
9. First, cl 18 of the Royalty Deed required any variation to be in writing and executed by the parties, which did not occur.
10. Second, the principle of privity of contract required all parties to the Royalty Deed to agree to the amendment of the Royalty Deed. There was also no evidence this had occurred. Senior counsel for Southern Iron emphasised that Franco-Nevada had not pleaded a separate or collateral contract between Franco-Nevada and Southern Iron, nor that the conduct relied upon bound all parties to the Royalty Deed.[163] Southern Iron contended that on the proper construction of the Royalty Deed, there was a single obligation on Southern Iron to pay a royalty to the Joint Venturers. If this were correct, this could not be overcome by limiting the relief sought in the proceedings to Franco‑Nevada's rights against Southern Iron.
11. Third, there was no evidence of Mr Hardman, Mr O'Connell or Mr Chiwanga having actual or ostensible authority to act on behalf of Southern Iron.
12. In Mirabela Nickel Ltd v Mining Standards International Pty Ltd,[164] the Court of Appeal summarised the general principles concerning the variation of contracts as follows:

(a) a variation of a contract alters the rights that accrue or the obligations that are assumed under a contract;[165]

(b) whether the further agreement terminates the original contract and replaces it with a new contract, or simply alters the original contract depends on the intention of the parties in the further agreement;[166]

(c) the further agreement must itself satisfy the rules which govern the formation of a contract including the requirement for valid consideration. A mutual exchange of promises will constitute consideration;[167]

(d) it is possible to infer a contract in the absence of an identifiable offer and acceptance. The essential question is whether the parties' conduct reveals 'a tacit understanding or agreement - ie whether it manifests 'mutual assent' - which evinces an intention to be legally bound to the essential elements of a contract';[168]

(e) a subset of parties to a multi-party agreement are able to alter the rights accruing or obligations assumed under a contract between themselves, with some limitations. These limitations include that a variation cannot affect the rights or obligations of a party to the multi-party agreement if that person is not a party to the further agreement. It is also possible that the 'structure and operation of a transaction' may require all parties to agree to any modification.[169]

1. In complex or long-term contracts, it is not uncommon for changes to be made.[170] As Finn J stated in GEC Marconi Systems Pty Ltd v BHP Information Technology Pty Ltd:[171]

The need frequently arises in relational contracts of significant duration to adjust terms to accommodate changed or unforeseen circumstances. For that reason it is common for such contracts to make express provision for variation. Nonetheless, and notwithstanding their contract, parties in an ongoing business relationship equally commonly 'regulate their relationships in accordance with what they consider is fair and reasonable or commercially necessary at particular points in time rather than by reference to a priori rights and duties arising under a contract'. (citation omitted)

1. Evidence of post-contractual conduct is admissible on the question of whether a contract was formed, but not its proper construction.[172] The terms of the contract can be inferred from a combination of surrounding circumstances including conversations, documents, and conduct.[173] These matters have to be viewed in light the surrounding circumstances and commercial context in which they took place.[174] However, it cannot be assumed from the fact that something has been done that there is a contract which has been partly performed.[175] This is because it is not uncommon for business people to act on an anticipated contractual relationship, before the contract is formed.[176]

What is the relevance of the requirement that any amendment or variation of the Royalty Deed be in writing?

1. At trial, senior counsel for Southern Iron did not concede that under Australian law where there is a clause in a contract requiring an amendment to be in writing, a contract can be varied by a later oral or implied agreement.[177] This was because a contrary view has been taken in the United Kingdom.[178]
2. At present, while this question has not been specifically considered by the Court of Appeal nor the High Court, the weight of authority in Australia, both by intermediate appellate courts[179] and single judges of this court,[180] is that these clauses do not prevent a contract from being varied orally or by conduct. Given this, I have proceeded on the basis that this reflects the legal position in Australia.
3. That said, a clause which requires any amendments to be in writing can have a significant evidentiary effect and is a fact to be taken into account in interpreting the subsequent conduct of the parties.[181]

Is Southern Iron's obligation to pay a royalty to the Joint Venturers a joint or several obligation?

1. Senior counsel for Southern Iron submitted that cl 3 of the Royalty Deed contained a single obligation which Southern Iron owed to its three counter‑parties (the Joint Venturers). As such, this obligation could not be varied by Southern Iron and Franco-Nevada alone. Senior counsel for Southern Iron drew particular attention to the spreadsheets subsequently sent by Southern Iron to Franco-Nevada which made it plain that it was applying the amendments discussed by Southern Iron and Franco-Nevada to the royalty payable to all counter‑parties. This was in circumstances where St Barbara and Sabatica were not party to these discussions and had not agreed to any amendment. In Southern Iron's submission, these documents were inconsistent with Franco‑Nevada's claim that the variation was intended to apply only as between it and Southern Iron, and were more consistent with an inference that any proposed amendments were to be discussed and agreed between Franco-Nevada and Southern Iron before being put to the other parties to the Royalty Deed. As was noted, this is, in fact, what subsequently occurred.
2. Franco-Nevada did not accept that the obligation in the Royalty Deed was a single obligation owed by Southern Iron to each Joint Venturer. In its submission, on the proper construction of cl 3.1 the Royalty Deed, there was 'a distinct and separate promise made by Southern Iron to each joint venturer' to pay a royalty to each of them.[182] Significant reliance was placed on the statement of the NSW Court of Appeal in Macquarie International Health Clinic Pty Ltd v Sydney South West Area Health Service that:[183]

It is said that a promise in favour of two promisees cannot be both joint and several. A test for whether such a promise is joint or several is that it is joint where breach of it to one promisee is necessarily a breach of it to all.

1. Franco-Nevada contended that, on its proper construction, if Southern Iron breached its obligation to pay a royalty to one of the Joint Venturers, this was not a breach of its separate obligation to pay a royalty to each joint venturer. Action could be taken by that party alone to enforce its rights under the Royalty Deed.
2. For the following reasons, it is my view that, on the proper construction of the Royalty Deed, Southern Iron's obligation to pay a royalty to the Joint Venturers was an obligation owed to them jointly and not severally.
3. On the text of cl 3.1, an obligation was imposed on Southern Iron to pay 'the Royalties' to 'the Joint Venturers' in perpetuity. 'Royalties' is defined to mean the perpetual royalties payable to the 'Joint Venturers' in perpetuity and 'Royalty' to mean either of them. I do not accept that, on its proper construction, this definition supports a construction that the singular 'Royalty' is a reference to the royalty payable to each joint venturer. On its face, cl 3.2 of the Royalty Deed contemplates the payment of two separate royalties: one for Iron Ore (cl 3.2(a)) and one for Other Minerals (defined as minerals other than Iron Ore) (cl 3.2(c)). In my view, the singular 'Royalty' is a reference to either of these royalties.
4. Clause 3.2(a) of the Royalty Deed sets out how the Royalty is to be calculated. The text of this clause refers to the 'daily Royalty to be paid by [Southern Iron]' and defines 'R' as 'the Royalty payable to the Joint Venturers'. On its face, this text refers to a royalty payable by Southern Iron to Franco-Nevada, Sabatica and St Barbara who collectively were the participants in the Coober Pedy Joint Venture, and are defined in the Royalty Deed as the 'Joint Venturers'.
5. Clause 3.2(b) of the Royalty Deed specifically contemplated the possibility that the publication referred to in this clause may cease to be published at some time in the future. Where this occurred, the Royalty Deed required the annual review of the amount for 'A' in the formula to be done by reference to 'such suitable equivalent as may be agreed by the Parties'. 'Parties' is defined in cl 1.1 as meaning the Joint Venturers (collectively) and Southern Iron, and 'Party' as meaning either the Joint Venturers or Southern Iron. That is, the text of this clause contemplated that that any 'suitable equivalent' be the subject of an agreement of all parties to the Royalty Deed, and not just a subset of them.
6. This construction is consistent with the context of the Royalty Deed, which includes the definition in cl 1.1 of 'Royalty Statement' as referring to 'a statement' (that is, a singular statement) prepared by Southern Iron, as well as the entitlement of each of the Joint Venturers to payment in cl 4.1 being expressed as a percentage of the one obligation.
7. It is also consistent with the purpose and structure of the Royalty Deed which granted Southern Iron access to tenements (including the Peculiar Knob area) which were owned by the Coober Pedy Joint Venture for the purpose of exploration and mining of iron ore (and other minerals). The consideration for this access was Southern Iron's agreement to pay a royalty to the Coober Pedy Joint Venture (as a collective) in perpetuity.
8. Given this conclusion, any amendment to the calculation of the royalty under the Royalty Deed required all of the Joint Venturers to agree to the amendment. There is no evidence that Sabatica or St Barbara agreed to these amendments either expressly or by conduct. On this basis, I find there has been no variation or amendment to the Royalty Deed.
9. In case I am wrong on the construction of the Royalty Deed and the royalty obligation arising under cl 3.1 is a several obligation, I have set out briefly my conclusions as to whether Franco‑Nevada established its claim on either of the alternative grounds advanced at trial.

Did Franco-Nevada and Southern Iron agree to vary the Royalty Deed?

1. The first conversation concerning the proposed amendment of the Royalty Deed occurred in October 2012. At that time, Mr McElligott was contacted by representatives of Arrium Mining. Initially, Mr McElligott did not recall who he spoke with but, having refreshed his memory from a handwritten note he took at the time,[184] recalled that he spoke with Mr Hardman and Mr O'Connell. Mr McElligott's recollection was that this discussion occurred shortly prior to production commencing at Peculiar Knob.
2. During this conversation, Mr Hardman and Mr O'Connell raised the issue about there being a 'lack of the reference price in the TEX report'. Mr McElligott suggested the Steel Bulletin Board Index be used as a substitute and the representatives of Arrium Mining suggested the Platts Index. Mr McElligott agreed the Platts Index was acceptable and, as a result, 'we agreed to use the Platts index with the freight adjustment that was in the royalty agreement'.[185] Mr McElligott recalled that they also discussed an amendment to the timing at which the measurement of the tonnes mined would occur. The representatives of Arrium Mining proposed that the tonnage be calculated as the ore went through the crusher, as this was more precise, which he agreed to.[186] At the conclusion of the telephone conference, they asked him to prepare a template invoice and send it to them.[187]
3. Mr McElligott could not recall whether he provided Mr Hardman and Mr O'Connell with a template invoice following this conversation.[188] However, on 31 January 2013, Mr McElligott prepared and sent an invoice to Southern Iron for payment of royalties for the mining of iron ore from Peculiar Knob for the quarter ending 31 December 2012.[189]
4. On 17 May 2013, Mr McElligott received an email from Mr Chiwanga raising a separate issue in relation to the calculation of the royalty. This concerned the need to convert the result of the formula, which produced an amount in United States dollars (USD), to Australian dollars (AUD), which was the payment currency.[190] Initially, in an email to Mr Chiwanga of 27 May 2013, Mr McElligott did not agree to any change and Mr Chiwanga agreed to have 'a second look' at the matter.[191] After sending this email, Mr McElligott spoke with Mr Chiwanga about the proposed change. Mr McElligott's evidence in relation to the conversation was that:[192]

I reiterated the points in my email that this didn't seem to be allowed under the royalty agreement. And, further, I thought it was self-harm on their part, because they were doing this at a time - at a rare point in time when the Australian dollar was actually trading above par with the US dollar. And that, over the long term, this would probably be harmful to them if they insisted on this adjustment. Macdonald's response was that they are getting their revenues for iron ore sales in US dollars and that putting this FX adjustment in the calculation would be a better match of their revenues and expenses, and they, therefore, wanted it in the calculation. And my response was, well, you can't be changing the royalty calculation from one quarter to the next - the formula, as the FX rate goes up and down. And he said, 'Yes, we're aware of that.' And that was it. We agreed and moved on.

1. Shortly after the end of each quarter, Mr McElligott received an email from Mr Chiwanga attaching an Excel file which set out the relevant royalty calculation for that quarter.[193] For each quarter between December 2012 and June 2015,[194] Mr McElligott reviewed these calculations, and prepared a tax invoice to Southern Iron based on the calculations of Arrium, with 10% added for GST.[195] Subsequently, Franco‑Nevada received payment of each of these invoices from Arrium Iron Ore Holdings on behalf of Southern Iron.[196]
2. Mr McElligott explained in some detail, by reference to one of these spreadsheets, how he prepared the invoices. In his view, the formula could be expressed more simply as:[197]

.0075 multiplied by the current swap price divided by the historic price divided by the current exchange rate. That gives you the figure A. It's equivalent to what's in the agreement. And then multiplied by those figures, B and C, in the royalty agreement, which is the grade and the tonnage.

1. The spreadsheets prepared by Arrium included a calculation of the royalty that was payable to both Sabatica and St Barbara using the amended formula. No evidence was adduced at trial as to whether Sabatica and St Barbara similarly prepared and sent invoices to Southern Iron or whether these parties received funds from Southern Iron as payment for royalties calculated in accordance with these spreadsheets.
2. On 13 February 2014, Mr Chiwanga sent a draft amended royalty deed to Mr McElligott by email (copying in Anne Keaney of OneSteel and Mr O'Connell). In the covering email,[198] Mr Chiwanga drew attention to two main variations to the way in which the royalty was calculated namely:

(a) the constant inputs to the calculation had been amalgamated into a single rate; and

(b) the calculation was to be based on monthly data sets and not daily data sets.

1. The covering email noted that if the royalty was calculated on this basis, there would be a very minor variation to the amounts payable to Franco-Nevada, Sabatica and St Barbara.
2. Mr Chiwanga attached a number of documents to the covering email including a document entitled 'Peculiar Knob Royalty Deed'[199] and a document entitled 'Amendment and Restatement Deed Peculiar Knob Royalty',[200] as well as spreadsheets showing the calculation of the royalty under the proposed amended deed. The amendments proposed in the first document were not limited to the calculation of the royalty but sought to restate and modernise the agreement by including, for example, anti‑money laundering provisions. In relation to the calculation of the royalty, the restated deed proposed that 'A' be defined as '0.0004241 x FOB Price / FX Rate' where FOB Price was defined as the 'Platts Price less the Freight Price' and FX Rate as the average monthly AUD/USD exchange rate as published by the Reserve Bank of Australia. Both 'Platts Price' and 'Freight Price' were defined in this clause to mean:

Platts Price is the average for the applicable Month of the daily average of all low price and high price quotations for the Platts IODEX for iron ore fines 62%FE CFR North China as published in Platts publications Steelmarkets Daily and on Bloomberg under the ticker IODBZ00 PL.

Freight Price is the average for the applicable Month of the daily Australia (Pilbara)/China Capesize Freight Rate per metric tonne of Iron Ore as published by Platts SBB Steelmarkets Daily.

1. Mr Chiwanga requested that Mr McElligott review the documents and provide feedback, following which they would 'progress from there'. These documents were never executed nor were these proposed changes reflected in the royalty calculations that followed this email.[201]
2. Senior counsel for Southern Iron submitted there was no evidence before the court on which it could be found that the relevant representatives of Southern Iron had actual or ostensible authority to amend or vary the terms of the Royalty Deed, or that Southern Iron intended to vary the terms of the Royalty Deed.
3. In considering the context in which the discussions occurred and the emails relied upon exchanged, senior counsel for Southern Iron drew attention to: the fact that the representatives of Southern Iron involved in the discussions and in sending the documents relied upon by Franco-Nevada were not directors or officers of Southern Iron; Mr McElligott's knowledge that the terms of the Royalty Deed required formal variations to be in writing;[202] and the absence of any other reference in any documentation, apart from the documents evidencing the calculation and payment of the royalty, to the oral agreement now relied upon by Franco-Nevada.[203] In its submission, these factors were more consistent with there being no legally binding agreement between Franco-Nevada and Southern Iron.
4. For the following reasons, even if the obligation to pay a royalty were a several obligation, I would not have been satisfied on the balance of probabilities that in June 2012 there was an oral agreement to vary or amend the Royalty Deed in the manner pleaded in par 68 of the statement of claim.
5. First, Mr McElligott's evidence of his conversation with the representatives of Arrium was to the effect he agreed with these representatives that the Platts Index (adjusted for freight) should be used in substitution for the TEX Report Co Ltd and that total tonnes be measured after leaving the crusher as opposed to the tonnes produced from mining operations. There was no evidence that there was a discussion of the use of the 'Platts index - IODEX 62% fines CFR North China with an adjustment for freight using the Platts index - FOB netback Australia Capesize' as pleaded at par 68 of the Statement of Claim, nor that he discussed and agreed an amendment to the formula for 'A' in cl 3.2 in the specific terms pleaded in that paragraph. His evidence, which I accept, was that the discussion was at a higher or broader level and did not descend to this level of particularity.
6. Second, I am not positively persuaded that the parties intended that this discussion would itself constitute an oral agreement to vary the Royalty Deed. The conversation concluded with a request that Mr McElligott forward a template invoice to Arrium Mining. In my view, this request is more consistent with an intention that further work was required to be done to agree the specific amendments required to the Royalty Deed to reflect their broad agreement.
7. Third, during this conversation, there was no discussion about the need to include a mechanism in the formula for conversion of United States dollars to Australian dollars. This issue only arose in May 2013 when emails were exchanged between Mr Chiwanga and Mr McElligott and a telephone conversation subsequently occurred. Given this, I do not accept that any oral variation to the Royalty Deed in relation to the foreign exchange conversion occurred in June 2012, as pleaded.
8. Fourth, Mr McElligott's evidence was that he had a conversation with Mr Chiwanga following receipt of his email in May 2013 regarding the further proposed amendment. Mr Chiwanga's response to his email was that he would 'have a second look' and 'revert back in the next couple of weeks'. This language does not support an inference being drawn that the parties had agreed at that stage to a variation to the Royalty Deed. Once again, I consider this language to be more consistent with an intention to consider the matter further for the purpose of subsequently agreeing the specific amendments that would be required.
9. In relation to the alternative argument that the agreement was varied by conduct, for the following reasons, in the event, the obligation to pay a royalty was a several obligation, I would have inferred from the conduct of Franco-Nevada and Southern Iron between 29 July 2013 and 3 August 2015, that these parties agreed to amend the formula in the Royalty Deed as set out in par 69A and par 69B of the statement of claim.
10. First, between May 2013 and August 2015, Mr Chiwanga sent emails to Mr McElligott which attached calculations of the royalty for the previous production quarter. In each of these spreadsheets, the royalty was calculated on an identical basis, namely 'grade x tonnage x rate'. Each spreadsheet reflected that the assessment of the grade of iron ore (%Fe) occurred at the mining stage, but that tonnage was calculated 'ex crusher'.
11. From the imbedded formula in these spreadsheets, the 'rate' was calculated in the following manner:[204]

Rate per Fe% divided by (converted Benchmark 'A' multiplied by 0.0075) divided by the $A:$US FX rate

1. In each of the spreadsheets, the first two elements were also calculated using an embedded formula. The 'rate per Fe%' was calculated by dividing 'FOB'[205] by the Benchmark 'Fe'. 'FOB' was the CFR price,[206] which had been calculated from the Platts Index, less freight. The 'converted Benchmark 'A'' reflected the conversion of the benchmark prices from long tonnes to tonnes or US tonnes to English tonnes.[207]
2. I accept and find that each of these royalty calculations between May 2013 and August 2015 were not done on the basis of the formula set out in cl 3.2(a) and (b) of the Royalty Deed, but on a different basis. This different basis reflects the amendments discussed by Mr McElligott with Mr Hardman and Mr O'Connell in October 2012, as well as his subsequent email exchange and discussion with Mr Chiwanga in May 2013.
3. Second, after receipt of these calculations, Franco‑Nevada accepted these draft calculations were accurate and reflected their agreement by issuing invoices to Southern Iron each quarter between May 2013 and August 2015 in the amounts shown in the spreadsheets. In turn, Southern Iron accepted the accuracy of these invoices by paying the amounts invoiced by Franco-Nevada without objection. I infer from this conduct that there was an understanding between the parties which evinced an intention to be legally bound to the amendments to the calculation of the royalty discussed by their representatives.
4. Third, the Royalty Deed was a long-term contract which specifically contemplated the possibility that changes would be required. From the conversations between these parties, the emails that were exchanged between them, the fact that mining was occurring at Peculiar Knob which enlivened the obligation for the payment of a royalty, and the manner in which the royalty was calculated, invoiced and paid, I infer that these parties regulated and documented the amendment to their relationship by what was commercially necessary at that point in time, rather than strictly by the terms of the Royalty Deed.

Is Southern Iron estopped from asserting that Franco-Nevada's claim to royalties was extinguished by the DOCAs?

1. Given the conclusions I have reached in relation to the proper construction of the Transaction Support DOCA, the Distribution DOCA and novation deeds, it is not strictly necessary for me to address this issue. However, in case I am wrong in my construction of these instruments and given the matter of estoppel was the subject of argument before me, I set out below my brief reasons in relation to this issue.
2. In essence, Franco-Nevada contended that, by reason of a series of communications between it and Southern Iron (both before and after the appointment of the Administrators and Deed Administrators), both parties adopted a common assumption that Franco-Nevada's entitlement to royalties would not be extinguished by the Transaction Support DOCA or Distribution DOCA. Franco-Nevada says that it would suffer detriment if Southern Iron was allowed to depart from this assumption.
3. Southern Iron did not dispute these communications had occurred but denied these matters were sufficient to ground an estoppel, or that Franco‑Nevada had suffered any detriment. Further, in its submission, an estoppel by convention had 'no place' in the statutory scheme in pt 5.3A of the Act, because a DOCA is not a matter of private rights but is a statutory instrument for which the Act provides statutory remedies.[208]
4. In Con-Stan Industries of Australia Pty Ltd v Norwich Winterthur Insurance (Australia) Ltd, the High Court summarised the requirements of an estoppel by convention in the following terms:[209]

Estoppel by convention is a form of estoppel founded not on a representation of fact made by a representor and acted on by a representee to his detriment, but on the conduct of relations between the parties on the basis of an agreed or assumed state of facts, which both will be estopped from denying. The existence of an estoppel based on a convention between the parties has often been recognised: ... [J]ust as estoppel by representation requires a representation of fact, so too estoppel by convention requires the assumed state of affairs to be an assumed state of fact.

1. The elements of an estoppel by convention or estoppel at common law can be summarised as follows:[210]

(a) a party (A) has adopted an assumption as to the terms of its legal relationship with another party (B);

(b) party B has adopted the same assumption;

(c) both parties have conducted their relationship on the basis of that mutual assumption;

(d) each party knows or intends that the other will act on that basis; and

(e) departure from the assumption will cause detriment to one of them.

1. There is a question as to whether an assumption of mixed fact and law may, for the purposes of an estoppel by convention, be regarded as an assumption of fact. In Western Australia, the Court of Appeal has accepted an estoppel by convention can arise where the assumption of law or mixed fact and law relates to 'private law rights'.[211]
2. There is also a question as to whether the assumption can extend to future matters or is confined to an existing fact.
3. In The Bell Group Ltd (in liq) v Westpac Banking Corporations [No 9],[212] Owen J discussed what was required to establish detriment for the purposes of an estoppel case.[213] Relevantly, his Honour stated that:[214]

Detriment has to be real or material. A speculative possibility of detriment is insufficient for an estoppel case. But although detriment must be material or real, it is not necessary to prove pecuniary loss.

In Austral Standard Cables Pty Ltd v Walker Nominees Pty Ltd, Handley JA held that an estoppel could be established although the evidence to support it did not justify a positive finding that the representee would otherwise have avoided the detriment. His Honour said (at 540) that it would be sufficient for the representee to establish that reliance caused it to lose a real chance of avoiding that detriment. Handley JA also proffered the view, relying on Foran v Wight (at 427), that an estoppel by representation may be established if the representation is a cause, even if only a contributing cause, of the representee's reliance. It was sufficient if the representation was an inducing cause though not necessarily the inducing cause.

Where a party asserting an estoppel wishes to rely upon a loss of opportunity as a relevant detriment, that party must first prove (on the balance of probabilities) that it would have done something to pursue the opportunity in question. But that party need not prove on the balance of probabilities that pursuit of that opportunity would have been successful, so long as there was a real chance of success. This, it seems to me, is the force of Austral Standard Cables. The person relying on the representation, and alleging a loss of opportunity because of it, does not have to prove that he or she could actually have avoided the detriment. If that were the case, the phrase 'a real chance' would have little meaning. And just as reliance can be established by inference, so too can detriment. The absence of direct evidence of detriment does not necessarily preclude a finding of detriment.

1. The course of conduct relied upon by Franco-Nevada at trial commenced with the initial email from Mr Chiwanga on 13 February 2014 attaching a draft amended Royalty Deed, the communications between the parties regarding the proposed amendments to the deed that followed from that date until 19 April 2017, and the request that the Royalty Deed as well as the Deed of Variation dated 13 October 2006 be placed in the data room so they were accessible by potential purchasers.
2. Once again, the factual basis for Franco-Nevada's claim was not in dispute. The issue between the parties was whether these facts gave rise to the common assumption pleaded and, in particular, whether Franco‑Nevada had established any detriment.
3. The initial draft Royalty Deed sent on 13 February 2014 was sent only to Mr McElligott, and no other representatives of the Joint Venturers. However, many of the subsequent documents were provided to Franco‑Nevada as well as representatives of both St Barbara and Sabatica. Following the initial email exchange in February 2014, a further amended deed was provided by Mr Nicholls to Mr McElligott, Ms Okely of St Barbara and Mr Jethwa of Sabatica[215] on 14 November 2014. The covering email recorded that:[216]

Arrium and Franco-Nevada have been working on the documents to record the arrangements for the calculation and payment of the above royalty which, as you know, needed updating to reflect current circumstances.

1. In his email, Mr Nicholls stated that both Arrium Mining and Franco‑Nevada were 'largely comfortable' with the documents and that they considered the Royalty Deed should be updated by means of a restated deed. The attachments to the email[217] included a draft amendment and restatement deed (marked up against the original deed sent to Mr McElligott by Mr Chiwanga on 13 February 2014) as well as a draft restated royalty deed marked up against the Royalty Deed. The draft restated royalty deed included the following proposed recitals (excluding the mark-ups):

1. The Payor has commenced the production of Iron Ore from the Mining Lease and the Parties have agreed to amend the terms of the Current Royalty Deed to reflect:

(a) the agreed mechanism for the calculation of the Royalties based on the Payor's current production processes; and
>
> (b) changes to published reference rates since the Original Royalty Deed was executed,

but otherwise with the intention of maintaining the provisions and principles of the Original Royalty Deed.

1. This Deed restates the terms of the Current Royalty Deed to reflect the amendments agreed between the Parties and so as to provide a single, amalgamated reference document recording the terms of the Royalties as at, and to apply on and from, the Commencement Date.

1. The substantive mark-ups to the formula in this document were broadly consistent with the contents of the draft deed sent by Mr Chiwanga to Mr McElligott on 13 February 2014.
2. Nothing was done in relation to these draft documents until 5 January 2016 when Ms Okely responded to Mr Nicholls and requested copies of the most recent mark-up of the documents.[218] After expressing the view that the parties should work towards finalising the amendments (to which Mr Nicholls agreed), Ms Okely provided St Barbara's comments to Mr Nicholls, Mr McElligott and Mr Jethwa on 13 April 2016.[219] Ms Okely followed up with Mr Nicholls again on 19 July 2016, while observing this may be unlikely given the appointment of the Administrators.[220]
3. On 26 September 2016, Mr Nicholls responded that the Administrators were supportive of the agreements being finalised and provided comments on the changes proposed by Ms Okely.[221] Mr Nicholls also referred to the fact that Southern Iron was in voluntary administration and that it would be necessary to include a clause to limit the liability of the Administrators.
4. Ms Okely provided a copy of the amended deed to Mr McElligott with her further marked-up comments on 25 October 2016 and requested that he review and let her know whether Franco‑Nevada was 'happy to proceed on this basis'.[222] The amended deed attached to Ms Okely's email did not propose any changes to the formula for the payment of the royalty.[223]
5. Mr McElligott forwarded Ms Okely's email to Mr Nicholls‑Maltman, a director of Franco-Nevada,[224] who provided some further suggested amendments by email on 30 October 2016,[225] as well as marked up documents.[226]
6. Mr McElligott forwarded this email (and the attachments) to Mr Nicholls and Ms Okely on 7 November 2016.[227] In his covering email, Mr McElligott suggested the parties have a conference call to finalise any remaining issues.[228] The draft documents attached to this email contained an acknowledgement that the proposed amendments to the Royalty Deed, which were to take effect from 30 June 2012, reflected the manner in which Southern Iron had calculated and paid the royalties since that date.[229]
7. Following a further exchange of emails between these parties, a conference call was arranged for 25 November 2016[230] (which was after the DOCAs had been executed on 4 November 2016). Mr McElligott, Mr Nicholls-Maltman, Ms Okely and representatives of Arrium Mining attended the call. At trial, Mr McElligott could not recall who attended this call on behalf of Arrium Mining but recalled there was a discussion about Sabatica being uncontactable and how this could be addressed.[231]
8. In February 2017, Mr McElligott was contacted by Jonathon Missikos, the Commercial Manager Development of Arrium Mining. He arranged to meet with Mr Missikos in Perth to discuss further amendments that Arrium Mining proposed be made to the Royalty Deed. Mr McElligott met with Mr Missikos on two occasions. Mr Nicholls-Maltman attended the first meeting, although Mr McElligott could not recall whether he attended the follow‑up meeting. At these meetings, Mr Missikos proposed that a further amendment be made to the royalty payment formula to address the mining of low-grade magnetite ore, which Mr McElligott agreed to.[232]
9. After this meeting, Mr McElligott received a letter from Mr Missikos on 3 April 2017. The letter attached a series of example calculations reflecting the methodology that was discussed and agreed at their meetings in February. Mr Missikos requested that Mr McElligott review the calculations and, if acceptable to Franco‑Nevada, contact the other royalty holders to 'gauge their support'. Mr Missikos asked whether the other royalty holders agreed to the changes and asked Mr McElligott to contact Mr Nicholls to finalise the agreement. [233]
10. Mr Nicholls-Maltman responded on 13 April 2017 (copying Ms Okely into the email) to explain Franco-Nevada had not had an opportunity to finalise the revised drafts. The email attached revised drafts of the agreements for review and suggested a further teleconference to finalise matters.[234] On 19 April 2017, Mr Nicholls responded to this email, agreeing that a phone call was a good idea and raising a couple of specific matters for discussion, including new clauses concerning the external administration of Southern Iron.[235]
11. Ms Okely emailed Mr Nicholls and Mr McElligott on 20 April 2017 to confirm St Barbara was content with the proposed amended documents, subject to a definition of 'Commencement Date' being included.[236] Ms Okely followed up with Arrium Mining on 23 May 2017 to ask whether any progress had been made.[237]
12. On 20 April 2017, Mr Nicholls emailed Mr McElligott, Ms Okely, Mr Jethwa and Ms Loh to ask whether they consented to the Royalty Deed and Variation Deed being put into the data room run by the Deed Administrators as part of the sale and recapitalisation process for the Arrium Group. Mr Nicholls referred to this process as being in its 'final stage'.[238] Mr McElligott confirmed on 26 April 2017 that Franco‑Nevada did not have any objection to this.[239]
13. The proposed amended Royalty Deeds were never finalised nor signed. Mr McElligott explained that because the sales process was ongoing, he understood or expected that the finalisation of the agreement would be 'put on hold until after the completion of any sale process' and that they would resume with the new owner.[240] He did not believe Franco-Nevada's entitlement to be paid royalties had changed or would change as a result of the administration or deed administration process.[241]
14. Mr McElligott accepted, from announcements made at the time, that he was aware GFG Alliance had purchased a number of the companies in the Arrium Group, including Southern Iron. He believed this to be the case until about mid July 2021. It was only at that time that he learnt from some internet searches he undertook that Peak Iron had acquired Southern Iron and resumed mining at Peculiar Knob.[242] When he discovered this, he undertook a search of the mining register which confirmed the acquisition,[243] discussed the matter with Mr Nicholls‑Maltman, and contacted Peak Iron to discuss the matter.

Did the parties proceed on the basis of an assumption which both parties accepted to be true?

1. Franco-Nevada submitted that by these communications between 2012 until 2017, some of which occurred after the appointment of the Administrators and entry into the DOCAs, Franco-Nevada, St Barbara and Southern Iron negotiated proposed amendments to the Royalty Deed. Some of these communications were also provided to Sabatica. In April 2017, the Deed Administrators sought the consent of Franco‑Nevada, St Barbara and Sabatica to the Royalty Deed and the Variation Deed being placed in the data room that was set up for the sale of various entities in the Arrium Group as the then stated intention was to sell Southern Iron as a going concern.[244] In its submission, these communications were only consistent with an assumption being made by all parties that the Royalty Deed remained on foot and had not been impacted by entry into the Transaction Support DOCA or the Distribution DOCA.
2. Southern Iron denied the conduct relied upon by Franco‑Nevada was capable of supporting a conclusion that all relevant parties assumed that the Royalty Deed was and would remain on foot during the administration of Southern Iron, and after the effectuation of the Transaction Support DOCA and the Distribution DOCA. Senior counsel for Southern Iron emphasised that during the external administration of Southern Iron, it was only the Administrators (and then Deed Administrators) who had the power under the Act to bind Southern Iron. In its submission, there was no evidence of the Deed Administrators' intention throughout this process, nor was there any evidence that Mr Nicholls or Mr Missikos had the power to bind Southern Iron or constitute its state of mind. Second, in its submission, there were a range of other 'commercially logical reasons' for the conduct relied upon by Franco-Nevada.[245] The ongoing sales process sought the sale of a number of the Arrium Group companies (including Southern Iron) as a going concern. For this reason, it was commercially logical that proposed purchasers of Southern Iron should have access to the Royalty Deed and Deed of Variation to consider whether or not they would assume the liability under the Royalty Deed as part of any sale.
3. I do not accept the second submission. This aspect of Franco‑Nevada's claim is only relevant if, contrary to the conclusion I reached in relation to the proper construction of the DOCAs, the claims under the Royalty Deed had been extinguished by these DOCAs. If this were the case, there would be no good commercial reason for these documents to be disclosed to any potential purchaser. This is because, as senior counsel for Southern Iron submitted at trial, any potential purchaser of Southern Iron did not receive any benefit from the Royalty Deed; the Royalty Deed was only relevant insofar as it contained the burden of the payment of the perpetual royalty to the Joint Venturers.
4. In my view, the totality of the conduct of Franco-Nevada, St Barbara, and the employees of the Arrium Mining division of the Arrium Group is more consistent with an assumption that the Royalty Deed and Variation Deed had not been extinguished by entry into these DOCAs and were material contracts that required disclosure to a prospective purchaser.
5. While I accept that there is little evidence of the intention of the Deed Administrators, I accept and find that from they were aware of the negotiations at least from September 2016, and infer, from the fact that the sales process was run and controlled by the Deed Administrators, that the request to place the Royalty Deed and Deed of Variation in the data room was done at their request or at least with their knowledge.
6. I also accept and find that this assumption was adopted by not only the representatives of the Arrium Mining division but also Peak Iron as purchaser of the shares in Southern Iron. This is apparent from the inclusion of a proposed payment under the Royalty Deed in monthly revenue and cash flow forecasts, an email sent by Mr Bothma to Newmont Mining on 20 March 2020[246] in which he asked to get in touch with the appropriate person in relation to a royalty 'it holds over the [Peculiar Knob mine]', monthly revenue and cost forecasts prepared by Peak Iron, calculations of the estimated royalty that might be payable, as well as emails between Mr Bothma and Mr Argyle of CI Partners. In my view, these documents are more consistent with an assumption being made by Mr Bothma, Peak Iron and Southern Iron that a royalty was, or at least may, be payable under the Royalty Deed.

Would Franco-Nevada suffer any detriment if Southern Iron were permitted to resile from the assumption?

1. Senior counsel for Franco-Nevada accepted that in order to establish detriment, it was necessary for Franco-Nevada to establish, on the balance of probabilities, that it lost the real chance to avoid the detriment complained of.
2. Senior counsel for Southern Iron submitted that Mr McElligott's evidence fell 'far short' of establishing the pleaded detriment.
3. For two primary reasons, I accept Southern Iron's submission.
4. First, the detriment pleaded by Franco-Nevada that occurred as a result of the common assumption was that it did not pursue and lost the opportunity to negotiate with the Deed Administrators to preserve Franco‑Nevada's claim or to bring an application under s 447A of the Act prior to the commencement of these proceedings.
5. Mr McElligott's evidence was not that he would have done either of these things. His evidence was that he would have done two things: first, contacted St Barbara (but not Sabatica); and second, sought and obtained legal advice.[247] Senior counsel for Franco‑Nevada submitted that the 'clear purpose of those acts was to take the steps to ensure that the royalties were preserved'.[248]
6. While I accept that these acts are consistent with an intention to take steps to ensure the preservation of the royalties, they are also consistent with consideration being given as to whether to submit a proof of debt in the administration. I am not persuaded on the evidence before me that one of these was more likely than the other. In my view, these actions are equally likely. On this basis, I am not satisfied on the balance of probabilities that Franco-Nevada would have pursued the opportunities pleaded as having been lost.
7. Second and in any event, given my conclusion that Southern Iron's obligation to pay a royalty was a single obligation owed to each of the Joint Venturers, I do not consider that either of the matters pleaded by Franco-Nevada were actions that could have been taken by Franco‑Nevada alone. Both actions, which sought to preserve entitlements under the Royalty Deed, would have required the agreement and participation of St Barbara and Sabatica. There is no evidence that this could have occurred. Given this, I am not satisfied that Franco-Nevada suffered any detriment from Southern Iron resiling from these assumptions.
8. In its further written submissions filed on 16 February 2026, Franco-Nevada contended that it was possible for parties to a contract to act as if an obligation were several when, as a matter of law, it was a joint obligation.
9. The primary issue with this submission is that it does not reflect the course of conduct Franco-Nevada relied upon as founding its estoppel claim. This conduct was the exchange of correspondence, draft agreements, and conference calls between representatives of Franco‑Nevada, Southern Iron and St Barbara. Sabatica was also copied into some of the correspondence. I do not accept that this course of conduct supports any inference being drawn that the parties acted as if the obligation were several.
10. As a result of this conclusion, it is unnecessary for me to consider the remaining issues, including whether it is possible that an estoppel can operate in the context of pt 5.3A of the Act and I decline to do so.

Should any order be made under s 447A of the Act?

1. Given the conclusions I have reached on the other aspects of Franco‑Nevada's claim, it is also strictly unnecessary for me to reach a concluded view on this aspect of the Franco-Nevada's claim. However, given the matter was argued at trial, it is appropriate that I give brief reasons in relation to this issue.
2. Franco-Nevada contended that in the event its construction of the Transaction Support DOCA was not accepted by the court, the court should make orders under s 447A of the Act because, in the absence of orders being made, Southern Iron would receive all of the benefits of the tenements without the burden of the payment of royalties in perpetuity. Specifically, it sought an order that pt 5.3A of the Action operate in respect of the voluntary administration of Southern Iron so that the Transaction Support DOCA, the Distribution DOCA and the Sale Entities Novation Deed did not extinguish Franco-Nevada's right to royalties in perpetuity under the Royalty Deed.
3. Southern Iron denied the court had power to make the orders sought by Franco-Nevada because Franco-Nevada had not identified what provision of pt 5.3A should be modified, nor what amendment should be made to any of these documents. Southern Iron also contended that the relief sought by Franco-Nevada would have a retrospective effect on substantive rights, as it was not limited to the date any such order was made.
4. Even if the court were satisfied it had power to make any order under s 447A of the Act, Southern Iron submitted the court should not exercise its discretion to make the orders sought for three primary reasons. First, Franco-Nevada took no steps to seek a commitment or assurance from the Administrators that the Transaction Support DOCA would not result in the deemed abandonment or extinguishment of its claim under the Royalty Deed and did not lodge a proof of debt. In its submission, any consequences of the Transaction Support DOCA and the Distribution DOCA that flowed to Franco-Nevada were a result of its failure to take any steps to protect and preserve its rights and the court should not step in to assist it at this stage. Second, Franco-Nevada had delayed significantly in commencing these proceedings. Third, Southern Iron received no benefit under the Royalty Deed (as varied and assigned).
5. Section 447A(1) of the Act provides that:

The Court may make such order as it thinks appropriate about how this Part is to operate in relation to a particular company.

1. It is recognised that this section gives the court a broad power that should not be read down. It is not limited to the power to make orders curing a defect or remedying the consequences of a departure from the provisions of pt 5.3A of the Act.[249] It is, however, necessary to identify a provision in pt 5.3A which is to be modified in relation to the particular company.[250]
2. Orders can be made under this section even where the administration of a company has ended and can be made in respect of past events or matters, although orders can only take effect from the time they are made.[251]
3. Where a deed of company arrangement has terminated, the court does not have the power pursuant to s 445G of the Act to make orders to vary a deed of company arrangement. That said, Sackville AJA expressed the view in Re New Bounty Pty Ltd; Winpar Holdings Ltd v Baron Corp Pty Ltd that:[252]

[T]here might be circumstances in which s 447A(1) supports an order varying or setting aside particular provisions of a deed of company arrangement, not for the purpose of validating actions taken in reliance on the deed (as in Australasian Memory v Brien), but in order to vary rights and obligations or to invalidate otherwise valid actions. Those circumstances are likely to be rare. Moreover, consistently with the reasoning of the High Court, any such power can be exercised only to make an order prescribing how Pt 5.3A, or a provision within Pt 5.3A, is to operate in relation to the relevant company. Further, the power can only be exercised so as to prescribe how Pt 5.3A, or a provision thereof, is to operate as from the date the orders are made.

If this is correct, there are difficulties in bringing Winpar's Proposed Orders within the scope of s 447A(1). Proposed Orders 1 and 2 provide that Pt 5.3A is to operate 'in such a way as to empower the court to vary the [DOCA]' so as to delete cll 6.2(b), 6.2(c) and 9.2. Section 447(1) cannot be construed so as to permit the court to make an order that effectively amends Pt 5.3A to confer a power on the court that it does not already have under Pt 5.3A. The power conferred by s 447A(1) is to make an order about how Pt 5.3A is to operate in relation to a particular company. It is not a power to redraft Pt 5.3A to confer a power not otherwise available to the court. It is for this reason that the authorities state that before an order can properly be made under s 447A(1), it is necessary to identify a provision in Pt 5.3A the operation of which is to be modified in relation to a particular company.

1. The criticisms made by Southern Iron in relation to the relief sought by Franco-Nevada are, in my view, well-founded. At this stage, Franco‑Nevada has not identified what specific modifications of pt 5.3A are sought; this prevents the court from making any orders under this section. However, even if it was possible to frame the relief in an appropriate form, for the following reasons, I would not have exercised my discretion to make orders under s 447A of the Act.
2. First, at all material times, Franco-Nevada was aware that the appointment of external administrators could have an impact on its claim for royalties. As set out in their annual reports, this was a known risk. Notwithstanding this, on the evidence before the court, Franco‑Nevada took no positive steps and made no specific enquiries as to whether its claim to royalties survived the external administration of Southern Iron. Notably, Mr McElligott did not make any enquiries or seek confirmation from the Deed Administrators or the representatives of Arrium Mining that this was the case, nor did he obtain any details of the proposed sale of the mining division to GFG Alliance and how this sale may impact Franco-Nevada's rights. While Mr McElligott's evidence was that he believed, based on legal advice, that its claim had not been extinguished by the Transaction Support DOCA because this DOCA only affected past royalties and not future royalties,[253] he only obtained a copy of the Transaction Support DOCA from his solicitors in about August 2021.[254] Given this, I infer and find that this advice was only obtained after Southern Iron refused to pay the royalty and not while Southern Iron was subject to the Transaction Support DOCA.
3. Second, I accept and find that there has been a significant delay in seeking relief from the court. As was noted by Sackville AJA in Re New Bounty Pty Ltd:[255]

There is no hard and fast rule as to the period of delay that suffices to disqualify a party from claiming relief under s 447A(1). A short delay may be sufficient if it results in irremediable prejudice to another party; a longer delay may be disregarded if no party is prejudiced by the delay. A court may also take into account the public interest in having matters dealt with swiftly and, in certain cases, to ensure that standards of commercial morality are maintained.

1. Where a defendant or third party sustains significant prejudice by reason of the delay in instituting proceedings, this prejudice will be a sufficient basis on which the court will refuse to grant the relief sought. However, in the absence of significant prejudice, delay of itself, even if unexplained, is not a sufficient reason to justify the refusal.[256]
2. In my view, the relevant delay in this case is not limited to the delay between the date Southern Iron refused to pay the royalty to the commencement of these proceedings, but includes the delay between the date that the external administration of the Arrium Group was finalised to the commencement of proceedings.
3. Relevantly, from the correspondence sent by Franco-Nevada's solicitors to Peak Iron's solicitors on 10 December 2021, I accept and find that by that time, Franco-Nevada's claims in these proceedings had been identified. I also accept and find that by mid-January 2022, Franco‑Nevada knew from the response it received that Peak Iron and Southern Iron denied there was any ongoing liability under the Royalty Deed.[257]
4. Only two explanations were given for the delay between December 2021 and the commencement of these proceedings in December 2022, First, it was necessary for Franco-Nevada to discuss the matter with its legal advisors, and review the documents then available to them. Second, these were without prejudice discussions between the parties in early 2022.[258] However, Mr McElligott accepted there was nothing preventing Franco-Nevada from commencing proceedings on 30 March 2022.[259]
5. As at March 2022, the administration of Southern Iron had been finalised for more than two and a half years. In these circumstances, if Franco‑Nevada wished to seek orders modifying the effect of pt 5.3A, it should have done so without delay. This did not occur and is a significant factor weighing against the court exercising its discretion.
6. Third, and in any event, given my conclusion that Southern Iron's obligation to pay a royalty was a single obligation owed to each of the Joint Venturers, I would not have exercised my discretion to make the orders sought by Franco-Nevada. In my view, any order which sought to preserve entitlements under the Royalty Deed for Franco-Nevada alone, would place Franco-Nevada in a preferred position compared to St Barbara and Sabatica. Any order in relation to the Royalty Deed would, in my view, have required these parties to be joined as necessary parties to the proceedings.

(a) Franco-Nevada's claim for payment of a royalty under the Royalty Deed has not been released, novated or extinguished by the Transaction Support DOCA, the Distribution DOCA or the novation deeds, and a declaration should be made to that effect; and

(b) the terms of the Royalty Deed have not been varied by oral agreement or by conduct.

1. I will hear from the parties as to the precise form of the orders that should be made to reflect these reasons, as well as to the appropriate orders as to costs.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.

[1] Notice of intention to abide by decision filed 26 October 2023.

[14] Exhibits 17 - 28; Exhibits 30 - 41; Exhibits 43 - 54.

[50] Exhibit 179; Exhibits 191 - 193; Exhibit 195.

[57] Re-amended statement of claim filed 16 April 2024 (Statement of Claim) [14], [15A], [16], [18], [21].

[60] Statement of Claim [60] - [62].

[62] Statement of Claim [48] - [53], [64].

[63] Statement of Claim [73] - [88].

[64] Plaintiff's response to first defendant's request for particulars of the statement of claim filed 14 March 2023, Responses 6 - 8.

[65] Statement of Claim [67] - [68].

[66] Statement of Claim [68] Particulars.

[68] Statement of Claim [69A] - [69B].

[71] Further re-amended defence filed 30 April 2024 (Defence) [12].

[80] Amended reply filed 9 May 2024 (Reply) [2].

[82] John Holland Pty Ltd v Kellogg Brown & Root Pty Ltd [2015] NSWSC 451 [94].

[83] In the matter of Kit Digital Australia Pty Ltd (in liq) [2014] NSWSC 1547 [7]; Effem Foods Pty Ltd v Lake Cumbeline Pty Ltd [1999] HCA 15; (1999) 161 ALR 599 [15]; Hughes v St Barbara Mines Ltd [No 4] [2010] WASC 160 [157].

[85] MYT Engineering Pty Ltd v Mulcon Pty Ltd [1999] HCA 24; (1999) 195 CLR 636 [25].

[86] Corporations Act 2001 (Cth) s 444A(3).

[87] Corporations Act 2001 (Cth) s 444A(4)(d), s 444H.

[88] Corporations Act 2001 (Cth) s 444A(4)(i).

[89] City of Swan v Lehman Brothers Australia Ltd [2009] FCAFC 130; (2009) 179 FCR 243 [30] (Stone J), [117] (Rares J), [138] (Perram J).

[90] Corporations Act 2001 (Cth) s 444H.

[91] City of Swan v Lehman Brothers Australia Ltd [38] (Stone J).

[92] Corporations Act 2001 (Cth) s 444D(1); MYT Engineering Pty Ltd v Mulcon Pty Ltd [25].

[93] City of Swan v Lehman Brothers Australia Ltd [7] (Stone J).

[94] In Re Antquip Hire Pty Ltd [2020] NSWSC 487 [70].

[95] CIC Insurance Ltd v Bankstown Football Club Ltd [1997] HCA 2; (1997) 187 CLR 384, 408 (Brennan CJ, Dawson, Toohey & Gummow JJ).

[96] In Re Antquip Hire Pty Ltd [72].

[97] City of Swan v Lehman Brothers Australia Ltd [26].

[98] City of Swan v Lehman Brothers Australia Ltd [8] (Stone J) citing with approval Reed Constructions Australia Ltd v DM Fabrications Pty Ltd [2007] NSWSC 1190; (2007) 25 ACLC 1463 [20].

[99] Goldus Pty Ltd v Cummins [No 4] [2021] FCA 1095 [183].

[100] Goldus Pty Ltd v Cummins [No 4] [184].

[101] City of Swan v Lehman Brothers Australia Ltd [62] (Rares J).

[102] City of Swan v Lehman Brothers Australia Ltd [83] (Rares J).

[103] Mighty River International Ltd v Hughes [2018] HCA 38; (2018) 265 CLR 480 [7].

[104] Mighty River International Ltd v Hughes [45].

[105] Smith as trustee of the Smith Investment Trust v Sandalwood [2019] WASC 109 [175] - [176].

[108] Exhibit 97, cl 3.1; Exhibit 98, cl 3.1.

[109] Exhibit 97, cl 4.1; Exhibit 98, cl 4.1.

[110] Exhibit 97, Sch A; Exhibit 98, Sch A.

[111] Exhibit 97, Sch A; Exhibit 98, Sch A.

[112] Exhibit 97, cl 7.5; Exhibit 98, cl 7.5.

[113] Exhibit 97, cl 7.6(a); Exhibit 98, cl 7.6(a).

[116] This is cl 20.5 in the Distribution DOCA.

[117] See the discussion of this term by Vaughan J in Smith as trustee of the Smith Investment Trust v Sandalwood [161].

[118] Lehman Brothers Holding Inc v City of Swan [2010] HCA 11; (2010) 240 CLR 509 (Lehman Brothers).

[119] Defendant's opening submissions [40].

[121] Defendant's opening submissions in reply [8], ts 212.

[123] CIC Insurance Ltd v Bankstown Football Club Ltd (408).

[124] See, for example, ANZ Ltd v Commissioner of Taxation [1994] FCA 915; (1994) 48 FCR 268, 291 ‑ 292 where Hill J referred to the notes to a particular section in an explanatory handbook which explained the differences between the Income Tax Assessment Act 1936 (Cth) and the Income Tax Assessment Act 1922 (Cth), issued by the Treasurer on 31 August 1936.

[125] Adelaide Brighton Cement Ltd v Wong [2008] FCA 496 [48].

[127] Plaintiff's opening submissions [49].

[128] Plaintiff's opening submissions [57].

[140] Blacktown City Council v Macarthur Telecommunications Pty Ltd [2003] NSWSC 883; (2003) 47 ACSR 391 [19].

[141] I do not accept that on the text of cl 19.1(a), this clause purports to novate, release or extinguish all claims, and do not accept it had this effect.

[142] Plaintiff's opening submissions [47].

[144] Plaintiff's opening submissions in reply [12].

[145] First defendant's opening submissions [43].

[146] Reed Constructions Australia Ltd v DM Fabrications Pty Ltd [20].

[147] Reed Constructions Australia Ltd v DM Fabrications Pty Ltd [20].

[151] Exhibit 97, cl 7.5, cl 7.6(a), (b)(v), (xxxviii) and (lix); Exhibit 98, cl 7.5, cl 7.6(a), (b)(v), (xxxvii) and (lviii).

[155] In the Non-Sale Entities Novation Deed, 'Australian Sale Entity' is replaced by 'Novation Entity'.

[157] Defendant's opening submissions in reply [35].

[160] Exhibit 137 and Exhibit 139 (CRLC Australia Pty Ltd); Exhibit 141 and Exhibit 142 (Genesee and Wyoming Australia Pty Ltd); Exhibit 182 and Exhibit 187 (Paul Grinter).

[161] In this section, I have substituted the current party's name for the original party.

[164] Mirabela Nickel Ltd v Mining Standards International Pty Ltd [2025] WASCA 82 (Mirabela Nickel).

[167] Mirabela Nickel [182], [186].

[169] Mirabela Nickel [234] ‑ [235].

[170] GB Energy Ltd v Protean Power Pty Ltd [2009] WASC 333 [69].

[171] GEC Marconi Systems Pty Ltd v BHP Information Technology Pty Ltd [2003] FCA 50; (2003) 128 FCR 1 [230].

[172] GB Energy Ltd v Protean Power Pty Ltd [74], citing with approval Brambles Holdings Ltd v Bathurst City Council [2001] NSWCA 61; (2001) 5 NSWLR 153 [25] (Heydon JA).

[173] County Securities Pty Ltd v Challenger Group Holdings Pty Ltd [2008] NSWCA 193.

[174] Australian Broadcasting Commission v XIVth Commonwealth Games Ltd (1988) 18 NSWLR 540, 548.

[175] GB Energy Ltd v Protean Power Pty Ltd [77], citing with approval Integrated Computer Services Pty Ltd v Digital Equipment Corp (Aust) Pty Ltd (1988) 5 BPR 11,110, 11,117.

[176] GB Energy Ltd v Protean Power Pty Ltd [77], citing with approval Sagacious Procurement Pty Ltd v Symbion Health Ltd [2008] NSWCA 149 [117].

[178] MVB Business Exchange Centres Ltd v Rock Advertising Ltd [2018] WLR 1603; ts 168.

[179] Hawcroft General Trading Co Pty Ltd v Hawcroft [2017] NSWCA 91; Bundanoon Sandstone Pty Ltd v Cenric Group Pty Ltd [2019] NSWCA 87 [122]; White v Philips Electronics Australia Ltd (t/as Philips Healthcare) [2019] NSWCA 115 [43].

[180] See for example GB Energy Ltd v Protean Power Pty Ltd; Gardenisle Pty Ltd v Johnson [2019] WASC 271 [245]; Mirabela Nickel Ltd v Mining Standards International Pty Ltd [No 5] [2023] WASC 62.

[181] GEC Marconi Systems Pty Ltd v BHP Information Technology Pty Ltd [213] ‑ [223] (Finn J); Ryder v Aphrodite Gold Ltd [2017] WASC 377 [228] (Banks‑Smith J); Elvidge Pty Ltd v BGC Construction Pty Ltd [2006] WASCA 264 [35].

[183] Macquarie International Health Clinic Pty Ltd v Sydney South West Area Health Service [2010] NSWCA 268 [200].

[193] See Exhibits 12 - 13 (quarter ending 31 Dec 2012); Exhibits 19 - 20 (quarter ending 30 Jun 2013); Exhibits 29 - 30 (quarter ending 31 Dec 2013); Exhibits 40 - 41 (quarter ending 30 Mar 2014); Exhibits 46 ‑ 47 (quarter ending 30 Jun 2014); Exhibits 51 ‑ 52 (quarter ending 30 Sep 2014); Exhibits 60 ‑ 61 (quarter ending 31 Dec 2014); Exhibits 64 ‑ 65 (quarter ending 30 Mar 2015); Exhibits 71 ‑ 72 (quarter ending 30 June 2015).

[195] ts 95; Exhibit 10 (31 Dec 2012 quarter); Exhibit 16 (31 Mar 2013 quarter); Exhibit 21 (30 Jun 2013 quarter); Exhibit 26 (30 Sep 2013 quarter); Exhibit 31 (31 Dec 2013 quarter); Exhibit 42 (31 Mar 2014 quarter); Exhibit 45 (30 Jun 2014 quarter); Exhibit 50 (30 Sep 2014 quarter); Exhibit 59 (31 Dec 2014 quarter); Exhibit 66 (31 Mar 2015 quarter); Exhibit 70 (30 Jun 2015 quarter).

[196] Exhibits 17 - 18 (payment for 31 Mar 2013 quarter); Exhibits 22 - 23 (payment for 30 June 2013 quarter); Exhibits 27 - 28 (payment for 30 Sep 2013 quarter); Exhibits 32 - 34 (payment for 31 Dec 2013 quarter); Exhibits 43 ‑ 44 (payment for 31 Mar 2014 quarter); Exhibits 48 - 49 (payment for 30 Jun 2014 quarter); Exhibits 53 ‑ 54 (payment for 30 Sep 2014 quarter); Exhibits 62 - 63 (payment for 31 Dec 2014 quarter); Exhibits 67 - 69 (payment for 31 Mar 2015 quarter); Exhibits 73 - 75 (payment for 30 Jun 2015 quarter).

[201] See for example Exhibit 40 and Exhibit 41.

[204] This formula is in column S of the tab entitled 'Calculation' or 'Calculation Revised'. See for example, Exhibit 13.

[209] Con-Stan Industries of Australia Pty Ltd v Norwich Winterthur Insurance (Australia) Ltd [1986] HCA 14; (1986) 160 CLR 226, 244 ‑ 245.

[210] Browning v ACN 149 351 413 Pty Ltd (in liq) (formerly known as Enviren Constructions Pty Ltd) [2016] QCA 169 [42]; Mineralogy Pty Ltd v Sino Iron Pty Ltd [2017] FCAFC 55 [332].

[211] Alpha Wealth Financial Services Pty Ltd v Frankland River Olive Company Ltd [2008] WASCA 119; (2008) 66 ACSR 594 [26] (Pullin JA), [164] (Buss JA, Steytler JA agreeing); George 218 Pty Ltd v Bank of Queensland Ltd [No 2] [2016] WASCA 182; (2016) 313 FLR 287 [123].

[212] The Bell Group Ltd (in liq) v Westpac Banking Corporations [No 9] [2008] WASC 239; (2008) 39 WAR 1.

[213] While in that case the claim was an estoppel by representation, both parties accepted that his Honour's discussion as to the element of detriment were relevant to an estoppel by conduct claim.

[214] The Bell Group Ltd (in liq) v Westpac Banking Corporations [No 9] [3502] ‑ [3503].

[224] ts 100. At trial, Mr McElligott sometimes referred to Mr Nicholls-Maltman as Mr Nicholls. In these reasons, I refer to him as Mr Nicholls-Maltman to distinguish him from Mr Mark Nicholls, the legal counsel at Arrium.

[245] Defendant's opening submissions [61].

[249] Australasian Memory Pty Ltd v Brien [2000] HCA 30; (2000) 200 CLR 270 [17].

[250] Re AFG Insurances Ltd [2002] NSWSC 735; (2002) 20 ACLC 1588 [23]; Honest Remark Pty Ltd v Allstate Exploration NL [2006] NSWSC 735; (2006) 234 ALR 765 [66].

[251] Australasian Memory Pty Ltd v Brien

[252] Re New Bounty Pty Ltd; Winpar Holdings Ltd v Baron Corp Pty Ltd [2015] NSWSC 1060; (2015) 107 ACSR 504 [224] ‑ [225].

[255] Re New Bounty Pty Ltd; Winpar Holdings Ltd v Baron Corp Pty Ltd [240].

[256] Re New Bounty Pty Ltd; Winpar Holdings Ltd v Baron Corp Pty Ltd [242].