KANOWNA MINES PTY LTD -v- GRANGE RESOURCES LTD [2025] WASC 473 (11 November 2025)

(a) The power of the court to make orders for discovery under O 26 of the Rules of the Supreme Court 1971 (WA) (Rules) confers a discretion on the court to make an order for discovery of relevant documents.[2] Documents which are relevant to the issues in the proceedings are those that either advance a party's case or damage their opponent's case, or lead to a train of inquiry that would either advance a party's case or damage their opponent's case.[3]

(b) The court's discretion is to be exercised having regard to the timely and cost-effective disposal of litigation.

(c) Discovery is an essential part of the administration of justice. The ultimate test is whether the discovery sought is necessary to fairly dispose of the proceedings.[4]

(d) Orders for discovery in the CMC list of this court are usually restricted to discovery of documents that are directly relevant to an issue. It remains open to parties to apply for orders for discovery of specific classes or categories of documents that directly or indirectly enable that party to advance their case or damage their opponent's case.[5]

(e) In determining what classes of documents are relevant, the court must consider the pleadings together with the conduct and the nature of the action. A general pleading in defence, such as a mere denial, does not, of itself, enable an order to be made which would have the effect of widening the net of discovery.[6]

(f) In deciding what orders to make, the court must consider the cost to the parties and whether the discovery sought is proportionate to the value, importance, and complexity of the subject matter in dispute and the financial position of the parties. In the absence of evidence, it is difficult for the court to make a proper assessment of proportionality.

1. Kanowna's claims against the defendants arise as a consequence of two events that occurred on 12 September 2023. On that date, Grange gave notice to Kanowna of its intention to sell its interests under a royalty deed to Vox, and, shortly afterwards, sold these interests to Vox as part of a sale of a portfolio of royalty interests for $8 million and the provision of Royalty Search Support Services (defined in [32] of the Amended Statement of Claim (Statement of Claim)).
2. Kanowna says that Grange's conduct was in breach of its obligations under cl 7.1 and cl 7.2 of a royalty deed entered into on 29 January 2002 (as amended on 28 December 2007) (Royalty Deed). These clauses entitled Grange to assign its obligations under the Royalty Deed to any third party provided that:

(a) it first advised Kanowna of the full details of the proposed terms of the assignment (cl 7.1(a));

(b) the proposed assignee entered into a deed covenanting to be bound by the terms and conditions of the Royalty Deed (cl 7.1(b)); and

(c) if the entire consideration for the proposed assignment was cash or the cash value could be readily ascertained, Grange first offered to assign the royalty to Kanowna for the same consideration and on the same terms and conditions. If this offer was not accepted within 15 business days, Grange could then assign the royalty to a third party for that same consideration and on the same terms and conditions (cl 7.2).

1. Kanowna says that Grange did not provide it with full details nor sufficient notice of the proposed assignment of the royalty to Vox. In relation to the alleged breach of cl 7.2, Kanowna pleads that by no later than 29 July 2023, Grange had ascertained the cash value of the proposed assignment, alternatively at all material times, the cash value was readily ascertainable, but did not offer to assign the royalty to Kanowna for the same consideration and on the same terms and conditions.
2. By way of relief, Kanowna seeks declarations as to the proper construction of the Royalty Deed, that Grange has breached its obligations under the Royalty Deed, and the deed of assignment of the royalty to Vox is void. In the alternative, Kanowna seeks damages for Grange's breach of the Royalty Deed.
3. Grange denies it has breached any obligations under the Royalty Deed and says that its conduct satisfied its obligations to Kanowna under cl 7.1 of the Royalty Deed. It says that on the proper construction of its agreement with Vox, Grange assigned its interests in a number of royalty deeds and that no amount was allocated to Vox's purchase of the royalty under the Royalty Deed. It also says that the consideration for the assignment of its interest in the Royalty Deed was not readily ascertainable.
4. Similarly, Vox denies there has been any breach of the Royalty Deed or that Kanowna is entitled to the relief sought.

Should any orders for discovery be made against Grange?

1. There is only one disputed category of documents Kanowna seeks from Grange, namely category 14A. This category seeks discovery of:

Documents (including correspondence) made between 12 September 2023 and 12 September 2024 for the purposes of financial advice, financial reporting, tax advice (excluding legal advice), tax reporting or tax lodgement in connection with the sale of the Royalty Interests.

1. Kanowna says this category is relevant to two issues in the proceedings. First, the question of whether the cash value of the entire consideration for the proposed assignment of the royalty to Vox was readily ascertainable. Second, whether Grange valued the Royalty Search Support Services as having a nil cash value (as contended by Kanowna)[7] or was valuable consideration (as contended by Grange).[8]
2. Kanowna says the obligation in cl 7.2 of the Royalty Deed was triggered if the cash value of the consideration for the Royalty Deed was readily ascertainable. In its submission, this did not require Grange to have actually ascertained the cash value; it was sufficient if Grange was capable of doing so. Kanowna says the financial documents it seeks in category 14A are relevant to the question as to whether Grange (or its agents) assigned a cash value to the Royalty Deed from the consideration it received from Vox for the purposes of 'accounting for and/or calculating (for example) income, profit or capital gains tax'. It says it is the fact that the cash value of the assignment of the Royalty Deed could be ascertained and not the date any calculation occurred that renders this category of documents relevant.
3. Grange denies category 14A is relevant to any issue in the proceedings. In its submission, the question as to whether Grange was in breach of its obligations under the Royalty Deed is to be determined as at the date of the alleged breach. On this basis, it contends that the only documents that are relevant are those that were in existence at the date of the breach.[9]
4. Grange drew attention to its agreement to give discovery of documents relevant to the question as to whether the cash value of the consideration was readily ascertainable. In its submission, the documents sought by Kanowna are captured by the agreed discovery categories, as well as documents already discovered by it in the pre-action discovery proceedings commenced by Kanowna.[10]
5. In addition, Grange says that, as presently drafted, category 14A is too broad, and would require discovery of documents which are commercially sensitive with, at best, only limited forensic utility.
6. I agree with this submission and, for the following reasons, do not consider that an order should be made to require Grange to discover documents falling within category 14A.
7. First, the question as to whether the obligation in cl 7.2 of the Royalty Deed has been breached is to be assessed as the date of the alleged breach. In its statement of claim, Kanowna has specially referred to a number of internal valuations of the royalty under the Royalty Deed obtained by Grange,[11] as well as an allocation of a portion of the proposed purchase price to the Royalty Deed in the initial offer made by Vox.[12] All of these documents were in existence as at the date of the alleged breach of the Royalty Deed and are, in my view, relevant to the issues pleaded by Kanowna. The documents sought in category 14A (if they exist) are not limited to documents which existed as at the date of the breach and captures any assessment of the value of the Royalty Deed which occurred after the date of the alleged breach. In my view, any documents of this nature (if they exist) are not relevant to the issues to be determined in the proceedings.
8. Second, there was no evidence before the court, nor was there any submission advanced by the plaintiff, to support the contention that Grange may have been required to separately account for any consideration it received from the sale of its interests under the Royalty Deed. These interests were, in essence, a contractual entitlement to the payment of royalties. Given this, the sale of these interests does not give rise to any capital gains tax obligation or, on its face, any requirement for Grange to separately allocate the consideration it received for the sale of the Grange Royalty Portfolio to each contractual interest.
9. Third, in category 13, Grange has agreed to discover documents between 1 August 2021 and 12 September 2024 that relate to valuations or estimates of the value of any of the royalty interests that comprise the Grange Royalty Portfolio. This category will require Grange to discover any valuation or estimate of the value of the royalty under the Royalty Deed which exists between these dates. In my view, this category encompasses the documents required to be produced by Grange which are relevant to the issue of whether the consideration for the proposed assignment was readily ascertainable.
10. Fourth, even if I were satisfied this category of documents might be relevant to the issues in the proceedings, I would not, in the exercise of my discretion, order discovery of this category. This category would require the assessment of a large number of financial and taxation documents over two separate financial years. In my view, it is not consistent with the case management considerations set out in O 1 r 4A and 4B of the Rules to require this to occur in relation to documents which are, at best, only adjectivally or indirectly relevant. In my view, these documents are not necessary to fairly dispose of the proceedings.

Should any orders for discovery be made against Vox?

1. At the conclusion of the hearing, only two categories remained in dispute between Kanowna and Vox, namely categories 18 and 19.
2. Category 18 seeks discovery of:

Documents made between 1 August 2022 and 14 December 2023 comprising or evidencing communications between Vox and Grange including their respective agents or Related Bodies Corporate that mention or relate to any of the following (including where referenced by another name, abbreviation or initialisation):

(a) KML;

(b) Northern Star Resources Limited;

(c) M27/57;

(d) the Red Hill Royalty Deed (including its amendment);

(e) the RSPA including its negotiation or amendment;

(f) the Grange Royalty Portfolio or any of the Royalty Deeds, the parties to the Royalty Deeds, or the Royalty Interests that comprise the Grange Royalty Portfolio;

(g) the Royalty Search Support Services;

(h) the Notice of Sale; and

(i) the Vox Assignment Deed.

Documents including internal communications of Vox or of its Related Bodies Corporate, or between any of the entities that are Related Bodies Corporate of Vox, made between 1 August 2022 and 14 December 2023, which mention or relate to any of the terms listed in paragraph 18 above.

1. Kanowna says category 18 is relevant to a number of issues in these proceedings, including:

(a) whether the cash value of the consideration for the assignment of the royalty can be readily ascertained;

(b) whether Grange breached cl 7 of the Royalty Deed;

(c) whether Vox had notice or knowledge of or involvement in Grange's purported breach of cl 7 of the Royalty Deed; and

(d) whether Grange's purported assignment of the royalty to Vox is effective, ineffective, or remains subject to the right of first refusal.

1. In relation to category 19, Kanowna says this is relevant to Vox's knowledge of Grange's purported breach of cl 7 of the Royalty Deed. It says that discovery of these internal communications will allow Kanowna to properly test whether Vox was a bona fide purchaser for value without notice, although it accepts this is not expressly pleaded by Vox.[13]
2. Vox says neither of these categories should be ordered as the documents sought are irrelevant and, in any event, the categories are far too broad. It says that Kanowna's pleaded case is based on the premise that the cash value of the consideration for the proposed assignment of the Royalty Deed by Grange to Vox was readily ascertainable by Grange. On this basis, it says the only documents that are relevant are documents that record or disclose the value that Grange ascribed to the consideration given for the Royalty Deed. Vox has already agreed to provide discovery of any documents in its possession which disclose this.
3. Vox denies there is any issue in the proceedings as to whether or not the cash value of the consideration was objectively 'readily ascertainable'. For two reasons, I do not accept this submission.
4. First, it is clear from [40] and [41] of the Statement of Claim that Kanowna pleads two alternate cases. The first is that by no later than 29 July 2023, the cash value of the proposed assignment had been ascertained by Grange. This case focuses on what Grange knew as at 29 July 2023. The only documents that are relevant to this plea are documents which establish Grange's knowledge as at 29 July 2023. In the alternative, Kanowna pleads that at all material times, the cash value of the proposed assignment of the Royalty Deed was readily ascertainable. At present, the particulars to this alternative plea refer to the conduct of both Grange and Vox, and state that further particulars may be provided after discovery and prior to trial. In my view, the documents that are relevant to this claim extend beyond Grange's knowledge and make documents recording Vox's knowledge or view of the cash value of the proposed assignment of the Royalty Deed relevant and discoverable.
5. Second, and in any event, Grange specifically pleads in its defence that the proper construction of cl 7 of the Royalty Deed requires the cash value to be objectively 'readily ascertainable'.[14] This is put in issue by Kanowna's reply. On this basis, I accept that the question as to whether, on the proper construction of cl 7 of Royalty Deed, the cash value was required to be readily ascertainable subjectively by Grange or objectively is an issue to be determined at trial. This, however, is a question of the proper construction of the Royalty Deed. I accept that at present, the plaintiff does not plead an alternative case based on this construction. Given this, I do not consider the documents sought by Kanowna are relevant to this issue.
6. On the basis of my conclusion in [30], I do not accept that Vox's obligations of discovery are limited to discovery of any valuations (or similar documents) produced by Grange that are in its possession. However, this does not mean that orders should be made for discovery in terms of category 18. This is because this category has been drafted by reference to key terms rather than the issues in the proceedings. In doing so, it goes significantly beyond what is necessary or appropriate for a matter in the CMC list of this court. At present, the only restriction contained in the category is the date range. Apart from this, it requires production of documents 'that mention or relate' to any of the nine matters set out in that category. By way of example, it would require production of any document that mentioned Northern Star Resources, as well all drafts of the RSPA, even if the amendments do not relate to or concern the Royalty Deed.
7. My preliminary view is that Vox should be required to discover documents between 1 August 2022 and 12 September 2023 that:

(a) record or relate to the value or structure of the consideration given by Vox in exchange for Grange's rights under the Royalty Deed; and

(b) mention or relate to Kanowna's right of first refusal contained in cl 7.2 of the Royalty Deed.

1. Vox does not accept that there is any issue in these proceedings as to whether it was a bona fide purchaser for value without notice. In its submission, it does not follow from its denial of [52] of the Statement of Claim that orders should be made that would have the effect of widening the ambit of discovery. In that context, it is important to note that Kanowna pleads, and Vox admits, that Vox was aware of the terms of the Royalty Deed and Kanowna's rights pursuant to cl 7. Given this admission, on the pleadings as they currently stand, I accept that whether Vox was a bona fide purchaser for value without notice is not an issue that will require determination.
2. My preliminary view is that Vox's internal documents may be relevant to the question of whether the cash value of the proposed assignment of the Royalty Deed to Vox can be readily ascertained and whether the agreement between Grange and Vox was structured so as to defeat Kanowna's rights under cl 7 of the Royalty Deed. However, I consider that these documents are likely to be captured within the categories set out at [33] above.

1. For these reasons, I do not consider that Grange should be ordered to provide any additional categories of discovery.
2. In relation to Vox, my preliminary view is that Vox should be ordered to provide some further discovery but not in the terms proposed by Kanowna. At the hearing, I indicated that if this were the conclusion I reached, I would hear from the parties before making any orders. Once the parties have had an opportunity to consider these reasons, I will hear from them as to the appropriate orders to be made which will finalise Kanowna's application.

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

[1] See Singh v Friedman [2013] WASC 78; Roe v Western Australia [2013] WASC 130; Lanco Resources Australia Pty Ltd v Griffin Energy Group Pty Ltd [2016] WASC 322.

[2] Technomin Australia Pty Ltd v Xstrata Nickel Australasia Operations Pty Ltd [2010] WASC 218 [3] ‑ [8]; British Association of Glass Bottle Manufacturers Ltd v Nettlefold [1912] UKLawRpAC 45; [1912] AC 709, 714.

[3] Perpetual Trustees Co Ltd v Burniston [2012] WASC 26 [30].

[5] Cove House Illiquid Investments DAC v YA Global Investments LP [2018] WASC 349 [27].

[6] Ibes Corp & Seas Sapfor Ltd v Momentum (Aust) Pty Ltd [1994] FCA 1580 [14]; Forty Two International Pty Ltd v Barnes (No 2) [2011] FCA 210.

[7] Statement of Claim [40], Particular D.

[9] Franklin Pty Ltd v Metcash Trading Ltd (2009) 76 NSWLR 603; [2009] NSWCA 407 [10].

[11] Statement of Claim [28] - [29], [34].

[13] Kanowna's submissions filed 23 October 2025 [31].

[14] First defendant's Defence [9(d)(ii)(A)(1)].