Mentha v Epic Energy South Australia Pty Ltd, in the matter of ACN 004 410 833 Limited

Counsel for the Plaintiffs: Mr PD Crutchfield QC with Mr BA McLachlan

Solicitor for the Plaintiffs: Arnold Bloch Leibler

Counsel for the First Defendant: Mr DJ Williams QC with Mr AT Strahan

Solicitor for the First Defendant: Polczynski Lawyers

Counsel for the Second Defendant: Mr PW Collinson QC with Mr RD Strong

Solicitor for the Second Defendant: King & Wood Mallesons

ORDERS VID 1010 of 2017 IN THE MATTER OF ACN 004 410 833 LIMITED (FORMERLY ARRIUM LIMITED) (SUBJECT TO DEED OF COMPANY ARRANGEMENT) ACN 004 410 833 (AND EACH OF THE COMPANIES LISTED IN THE SCHEDULE) BETWEEN: MARK FRANCIS XAVIER MENTHA, CASSANDRA ELYSIUM MATHEWS, MARTIN MADDEN AND BRYAN WEBSTER IN THEIR CAPACITIES AS JOINT AND SEVERAL DEED ADMINISTRATORS OF ACN 004 410 833 LIMITED (FORMERLY ARRIUM LIMITED) (SUBJECT TO DEED OF COMPANY ARRANGEMENT) ACN 004 410 833 (AND EACH OF THE COMPANIES LISTED IN THE SCHEDULE) First Plaintiffs

ACN 004 410 833 LIMITED (FORMERLY ARRIUM LIMITED) (SUBJECT TO DEED OF COMPANY ARRANGEMENT) ACN 004 410 833 (AND EACH OF THE COMPANIES LISTED IN THE SCHEDULE) Second Plaintiffs

AND: EPIC ENERGY SOUTH AUSTRALIA PTY LTD (ACN 068 599 815) First Defendant MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY Second Defendant

JUDGE: DAVIES J DATE OF ORDER: 15 DECEMBER 2017

1. The following question be answered as follows: Question On a proper construction of the Documents: (i) are each of the Financiers entitled to prove under the Arrium Distribution Deed of Company Arrangement dated 4 November 2016 ("DOCA") for the amount (if any) of its Arrium Group Claim (as defined in the DOCA), without deducting the amount of its share of the Moly-Cop Proceeds or any part thereof?; and (ii) are the First Plaintiffs justified in admitting the Financiers to proof accordingly? Where: "Documents" means: (a) the Override Deed between, among others, the First Plaintiffs, the Second Plaintiffs and the Financiers, dated 30 September 2016; (b) the Required Consent Report made for the purposes of the Override Deed by, among others, Arrium Ltd, dated 17 November 2016; and (c) the Deed Poll (Remaining Obligors) made by the Second Plaintiffs, dated 30 December 2016. "Moly-Cop Proceeds" means the proceeds paid to Financiers as a result of the sale of the Moly-Cop business as recorded in the Share Sale Agreement dated 4 November 2016 between Comsteel Pty Limited (administrators appointed), The ANI Corporation Pty Limited (administrators appointed); OneSteel Americas Holdings Pty Limited (administrators appointed); OneSteel US Investments 1 Pty Limited (administrators appointed); OneSteel US Investments 2 Pty Limited (administrators appointed) and AMC US Acquireco, Inc; AMC Aus Acquireco Pty Limited; AIP MC Holdings Ltd and 1095038 BC LTD. Answer to part (i) Yes. Answer to part (ii) Yes. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Introduction 1 The first plaintiffs (who are partners of KordaMentha) ("the administrators" or "deed administrators" as appropriate) are the joint and several administrators of deeds of company arrangement ("DOCA") executed by the second plaintiffs on 4 November 2016. The second plaintiffs comprise the companies in the Arrium group ("the Arrium Group") which went into voluntary administration on 7 April 2016, and from 12 April 2016 to 4 November 2016, the first plaintiffs were also the joint and several administrators of the second plaintiffs. 2 The first defendant ("Epic") is one of approximately 4,000 general creditors of the second plaintiffs and, in this proceeding, has been appointed to represent the interests of all unsecured creditors of the second plaintiffs, other than the lenders and noteholders ("the Financiers") to Arrium Limited (now ACN 004 410 833 Limited) and its related companies under various unsecured syndicated facilities (34 participants), bilateral facilities (6 lenders) and note agreements (19 holders). The second defendant has been appointed to represent the interests of the Financiers in this proceeding. The Arrium Group is indebted to the Financiers under the facilities and note agreements in a total amount of approximately $2.8 billion ("the Financier Debt" or "Debt"). 3 At the time the second plaintiffs went into administration, the broader group of Arrium companies also included a number of indirect subsidiary entities that were not placed into external administration. Those companies ("the Moly-Cop entities") carried on a mining consumables business known as Moly-Cop. Some of the Moly-Cop entities had guaranteed the Financier Debt by way of "whole monies" guarantees under two deeds (together "the group guarantees"). 4 On 4 November 2016, the deed administrators (then as administrators) executed a contract for the sale of a number of the Moly-Cop entities ("the Moly-Cop sale entities") for US$1.23 billion ("the Moly-Cop transaction"). Upon completion of the sale on 3 January 2017, they distributed US$1.024 billion of the net transaction proceeds (approximately A$1.4 billion) to the Financiers with respect to the group guarantees. 5 The Financiers have lodged and, subject to the Court's direction, the deed administrators intend to accept proofs of debt for the full amount owing to them, without making a deduction for the amounts received by them from the sale of the guarantor Moly-Cop entities. A group of unsecured creditors, which are represented by Epic in this proceeding, have objected to the deed administrators accepting the Financiers' proofs of debt without making that deduction. 6 In this proceeding, the plaintiffs have sought an order pursuant to s 90-15 of the Insolvency Practice Schedule (Corporations) (Schedule 2 to the Corporations Act 2001 (Cth) ("the Act")) that the deed administrators are justified in admitting the Financiers' proofs of debt without deducting the value of any partial repayment made to the Financiers in respect of the group guarantees. Whilst the plaintiffs sought that order on the basis of the rule against double proofs in insolvency, the Financiers' Concise Statement put into issue whether the deed administrators are contractually bound to admit their proofs of debt in full without deducting the proceeds from the Moly-Cop transaction. 7 The following preliminary question was listed for hearing: On a proper construction of the Documents: (i) are each of the Financiers entitled to prove under the Arrium Distribution Deed of Company Arrangement dated 4 November 2016 (DOCA) for the amount (if any) of its Arrium Group Claim (as defined in the DOCA), without deducting the amount of its share of the Moly-Cop Proceeds or any part thereof?; and (ii) are the First Plaintiffs justified in admitting the Financiers to proof accordingly? Where: "Documents" means: (a) the Override Deed between, among others, the First Plaintiffs, the Second Plaintiffs and the Financiers, dated 30 September 2016; (b) the Required Consent Report made for the purposes of the Override Deed by, among others, Arrium Ltd, dated 17 November 2016; and (c) the Deed Poll (Remaining Obligors) made by the Second Plaintiffs, dated 30 December 2016. "Moly-Cop Proceeds" means the proceeds paid to Financiers as a result of the sale of the Moly-Cop business as recorded in the Share Sale Agreement dated 4 November 2016 between Comsteel Pty Limited (administrators appointed), The ANI Corporation Pty Limited (administrators appointed); OneSteel Americas Holdings Pty Limited (administrators appointed); OneSteel US Investments 1 Pty Limited (administrators appointed); OneSteel US Investments 2 Pty Limited (administrators appointed) and AMC US Acquireco, Inc; AMC Aus Acquireco Pty Limited; AIP MC Holdings Ltd and 1095038 BC LTD. 8 The contradictor on the preliminary question is Epic, which has contended that the answer to the preliminary question is "no". The plaintiffs did not make any submission on the preliminary question, saying that it is their position that the Financiers' construction of the Documents is wholly consistent with the parties' rights and obligations under general law based on the rule against double proofs in insolvency.

factual context 9 The following factual context is taken from the affidavit of Mark Korda, a partner of KordaMentha, sworn in support of the relief sought in the Originating Process. 10 The appointment of administrators to the second plaintiffs on 7 April 2016 constituted an event of default under the facilities and note agreements. As a result, the Financier Debt became immediately due and payable and the Financiers had the right to demand repayment of the Financier Debt from the Moly-Cop entities which were guarantors under the group guarantees. As at 7 April 2016, the total Financier Debt was approximately $2.8 billion, and exceeded the enterprise value of the Moly-Cop business. In order to facilitate an orderly sale of the Moly-Cop business, the administrators and the Moly-Cop entities sought forbearance from the Financiers from enforcing their rights under the group guarantees. In return for this forbearance, the Financiers required the proceeds from the sale of any Moly-Cop entity to be allocated to the Financiers in respect of the Financier Debt. The parties executed a suite of contractual documents (which included the Override Deed, the Required Consent Report and the Deed Poll) pursuant to which the Financiers agreed to the forbearance and gave the consents and releases required to implement the realisation of the Moly-Cop sale entities free of the Financiers' claims. In accordance with the contractual requirements, US$1.024 billion of the net proceeds was applied in partial repayment of the Financier Debt and on 3 December 2016, two deeds of release were executed under which each Financier released and discharged the Moly-Cop sale entities from all claims and obligations arising under or in connection with the facilities and notes. There are 22 Arrium Group entities which have remained guarantors of the Financier Debt following the sale of the Moly-Cop sale entities.

The Override Deed 11 The Override Deed contained the procedure for obtaining the consents and releases from the Financiers required to implement the realisation of the Moly-Cop sale entities free of the Financiers' claims and for the distribution of the proceeds amongst the Financiers. 12 By cl 1.5 of the Override deed, Arrium Ltd, the parent company of the Arrium Group (defined as the "Parent" in the deed: cl 1.1), was appointed the agent of every "Obligor", a term which included the guarantors under the group guarantees, to execute on their behalf a range of documents in respect of, or in connection with, the "Approved Transaction". 13 Clause 3.2 is headed "Guarantees and obligations to continue". Clause 3.1(a) relevantly provided that cls 3 to 8 of the deed prevailed over the facility documents and guarantees to the extent of any inconsistency. Clause 3.2(a) contained confirmation by the "Obligors" that their guarantees and obligations under the facilities and guarantees continued. Clause 3.2(b) contained the acknowledgement that cl 3.2(a) ceased to apply where an Obligor was released to give effect to the "Approved Transaction" and cl 3.2(c) contained the acknowledgement that the Override Deed contemplated the potential release of the Obligors to give effect to "Approved Transactions". An "Approved Transaction" was defined to mean, relevantly, a "Moly-cop realisation transaction": definition of "Approved Transaction" and "Realisation Transaction" (by cl 1.1). 14 Clause 3.2(d) is one of the key clauses relevant to the question of construction. It provided: 3.2(d) At each Consent Effective Time, the Remaining Obligors (other than the Nominated Released Obligors) acknowledge and agree that, notwithstanding any amendments, variations, waivers, releases or consents granted by the Financiers pursuant to this document (including the release of the Nominated Released Obligors): (i) until such time as the Financiers have received the total Amount Owing in full, the total Amount Owing remains outstanding; (ii) each such Remaining Obligor is jointly and severally liable to pay the Amount Owing in accordance with the terms of the Subject Finance Documents; and (iii) each such Remaining Obligor's obligations under the Subject Finance Documents are not affected by the variation, waivers, releases or consents granted. For the purposes of this clause 3.2(d) and in respect of any Consent Effective Time, each party acknowledges and agrees that each reference to the Remaining Obligors shall exclude those Nominated Released Obligors which will become Released Obligors at that Consent Effective Time. 15 The "Remaining Obligors" are the Arrium Group entities that remain guarantors of the Debt owed to the Financiers: definition of "Remaining Obligors" cl 1.1. 16 The "Amount Owing" was a defined expression "in respect of a Financier" (cl 1.1) and meant as follows: Amount Owing in respect of a Financier means its debts and claims (without duplication) under the Subject Finance Documents, which for the purposes of calculations and distributions under this document only, is the amount set out in the Global Commitments Register corresponding to the name of the Financier. 17 "Global Commitments Register" was another defined expression in cl 1.1 and meant: Global Commitments Register means the table set out in Schedule 3 (Global Commitments Register), as amended in accordance with clauses 6.2(d)(i) (Updates to Global Commitments Register) and 6.3(c)(ii) (Disagreements as to Amounts Owing). 18 The table in Sch 3 was dated as at 7 April 2016, the date when the second plaintiffs went into administration, and it set out the name of each Financier and the "Amount Owing" in respect of each Financier as at 7 April 2016. 19 Clause 3.2(e) of the Override Deed is relevant to the Deed Poll. Clause 3.2(e) provided: 3.2 Guarantees and obligations to continue … (e) On each Approval Date in respect of a Consent Request which attaches a Required Consent Report (which contemplates the release of a Nominated Released Obligor), each Remaining Obligor (other than those Nominated Released Obligors) must deliver to the Global Agent a deed poll in favour of the Financiers confirming paragraph (d) above. The Global Agent will hold the deeds poll in escrow to be released on the Consent Effective Time at which those Nominated Released Obligors are released in accordance with the terms of this document. 20 Clause 6 of the Override Deed is headed "Calculation of Amount Owing". Clause 6.2 is another key clause relevant to the question of construction and it relevantly provided as follows: 6.2 Global Commitments Register (a) The Amount Owing of each Financier as of the Relevant Date is set forth in the Global Commitments Register in Schedule 3 as at the date of this document, as amended in accordance with clause 6.2(b). (b) On or before 29 September 2016, the Global Agent must issue a Global Commitments Register confirming the Amount Owing of each Financier as of the Relevant Date, as advised by the Agent and the Financiers. The parties agree that absent manifest error, the Global Commitments Register as updated under this clause 6.2(b) amends Schedule 3 (Global Commitments Register) with effect on and from the date of this document. (c) The Amount Owing of each Financer shall be updated in accordance with clauses 6.2(d) (Global Commitments Register) and 6.3 (Disagreements as to Amounts Owing) to reflect increases in accrued interest, fees, costs and expenses in accordance with the terms of the Subject Finance Documents. (d) On each Record Date commencing on and from 30 September 2016, the Global Agent must: (i) update the Global Commitments Register for each Financier to reflect: (A) the Amount Owing as at that Record Date; … (e) The parties agree that absent manifest error, the Global Commitments Register, as updated under clauses 6.2(d)(i) and 6.3(c)(ii) amends schedule 3 (Global Commitments Register), with effect on and from the most recent Record Date. 21 "Relevant Date" was defined as 7 April 2016 (cl 1.1). "Record date" was defined to mean the last business day of each calendar month; and in the case of a "Proceeds Distribution Notice", the date of that Proceeds Distribution Notice (cl 1.1). A "Proceeds Distribution Notice" was a reference to the notice that the National Australia Bank ("NAB") (as "Global Agent" for the Financiers) was required to give the Financiers and Arrium Ltd on receiving the proceeds of a Moly-Cop realisation transaction, advising of the receipt and that the proceeds would be distributed to the Financiers in accordance with cl 5 of the Deed. Under cl 5(b)(i)(B), the proceeds were required to be distributed "pro rata" to the Financiers and the NAB was entitled to rely on the Global Commitments Register in determining, calculating and making the distribution: cl 5.2(b)(i)(C). Clause 1.2 provided that a reference to "pro rata" meant: in the proportion that a Financier's share of the Amount Owing bears to the total Amount Owing of all Financiers.

The Required Consent Report 22 Before the Moly-Cop business could be sold, cl 4.3 of the Override Deed required the administrators to prepare a "Required Consent Report" substantially in the form of Sch 11 explaining the proposed transaction and to seek the consent of the Moly-Cop Steering Committee: definition of "Required Consent Report" cl 1.1. 23 On 17 November 2016, a Required Consent Report in respect of the proposed sale of the Moly-Cop sale entities was provided by the deed administrators to the Financiers. The report (dated 17 November 2016) explained the proposed transaction in respect of the sale of the Moly-Cop sale entities and sought the consent of a committee of the Financiers to execute the proposed transaction. 24 The Required Consent Report was executed as a deed poll and was in the form of Sch 11 to the Override Deed but also contained an additional cl 5, which relevantly contained an acknowledgment as follows: 5.1 Acknowledgment (a) The Administrators, the Appointment Entities and the Appointment Obligors acknowledge that: (i) … (ii) … (iii) any proceeds or distributions received by the Financiers in connection with the Proposed Transaction will not prejudice their right to prove for the Amount Owing as of the Relevant Date or receive distributions under the DOCAs. 25 "Relevant Date" was 7 April 2016 and "the DOCAs" was a reference to the deeds of company arrangement entered into on 4 November 2016. 26 The Financiers gave their consent to the proposed transaction.

The Deed Poll 27 On 30 December 2016, the deed administrators entered into two deeds of releases of the group guarantees under which each of the Financiers released and discharged the Moly-Cop sale entities from all claims in connection with the facilities and notes. Also on 30 December 2016 the deed administrators entered into the Deed Poll required by cl 3.2(e) of the Override Deed. By the Deed Poll, each "Remaining Obligor" - that is each Obligor under the group guarantees other than the Moly-Cop entities that were released and sold - acknowledged that the proceeds of the sale of the Moly-Cop entities were insufficient "to discharge the Amount Owing in full" and that until such time as the Financiers received the "total Amount Owing in full", the total Amount Owing remained outstanding. 28 Clause 3(a) of the Deed Poll provided: 3 Acknowledgment and Agreement by Remaining Obligors (a) At the Transaction Implementation Date (as defined in the Required Consent Report), each Remaining Obligor acknowledges and agrees that, notwithstanding any amendment, variation, waiver, release or consent granted by the Financiers pursuant to the Required Consent Report: (i) the Proceeds from the Proposed Transaction (as defined in the Required Consent Report) being paid to the Global Agent are insufficient to discharge the Amount Owing in full; (ii) until such time as the Financiers have received the total Amount Owing in full, the total Amount Owing remains outstanding; (iii) each such Remaining Obligor is jointly and severally liable to pay the Amount Owing in accordance with the terms of the Subject Finance Documents; and (iv) each such Remaining Obligor's obligations under the Subject Finance Documents are not affected by the variation, waivers, releases or consents granted.

The DOCAs 29 It is also relevant to refer to the Arrium Group Distribution DOCA which was entered into on 4 November 2016. Clause 19.1(a) provided that proofs of debt in the administration are to be adjudicated as at 7 April 2016: … regardless of whether the Arrium Group 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 Arrium Group Claim to remain provable notwithstanding its novation, release or extinguishment.

principles for construction 30 As a general principle, the rights and liabilities of parties under a provision of a contract are to be determined by an objective consideration of its text, context and purpose, and in determining the meaning of the terms of a commercial contract, it is necessary to ask what a reasonable businessperson would have understood those terms to mean. That enquiry will require consideration of the language used by the parties in the contract, the circumstances addressed by the contract and the commercial purpose or objects to be secured by the contract. Unless a contrary intention is indicated in the contract, the Court is entitled to approach the task of giving a commercial contract an interpretation on the assumption "that the parties ... intended to produce a commercial result": Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd [2015] HCA 37 ("Mount Bruce"); (2015) 256 CLR 104 at [46]-[51] (French CJ, Nettle and Gordon JJ); Victoria v Tatts Group Limited [2016] HCA 5 at [51]. In applying these principles, conformable constructions must be given to the three documents in question as they form part of a suite of related documents and are to be read together: Zhu v The Treasurer of the State of New South Wales [2004] HCA 56 at [82].

submissions 31 The Financiers contended that the effect of the three documents, properly construed, is that they were entitled to lodge proofs of debt for the amounts owing to each of them as at 7 April 2016 without any reduction on account of the Moly-Cop proceeds received by them, and that the deed administrators must admit those proofs of debt in full. 32 Epic argued that the Financiers' contentions "involve the proposition that the parties effected a transaction that was grossly uncommercial" by reason that the Financiers have been able to obtain the full benefit of the enterprise value of the Moly-Cop group as a whole, where otherwise had those companies been wound up, at least a part of those proceeds might have been expected to flow into the general pool for the benefit of all creditors generally. It was argued that it made no sense from a commercial perspective for the deed administrators to have entered into an arrangement which not only gave the benefit of all the Moly-Cop proceeds to the Financiers where otherwise at least a part of those proceeds might have been expected to flow into the general pool, but also did not result in any reduction in the Financiers' proofs. It was submitted that very clear words would be required in order to support the construction contended for by the Financiers and that "an ordinary reading of the relevant clauses demonstrates the contrary". 33 In short form, Epic argued that the debt owing under the relevant finance documents in respect of each Financier was the source of the amount set out in the Global Commitments Register corresponding to that Financier and under those finance documents a partial repayment of the debt reduced the outstanding liability to the lender (and hence the "Amount Owing") "in the orthodox way". It was argued that the effect of the Override Deed and the Deed Poll, on a proper reading of the text of the relevant clauses, was to acknowledge and re-state the Remaining Obligors' liability to repay the amount owing after deduction of the proceeds from the Moly-Cop realisation transaction, and thereby protect against the risk that release of some of the Moly-Cop guarantors would unintentionally release the remaining guarantors. It was argued that it made commercial sense that such a risk would be anticipated and protected against whereas, it was said, it made no commercial sense for these transaction documents simultaneously to be facilitating a significant payment in reduction of the Debt whilst providing for the remaining Arrium Group guarantors to continue to be made liable for the whole of the Debt. It was also argued that cl 5 of the Required Consent Report did not, of its own terms, purport to preserve the Obligors' obligation to pay the whole of the Debt, notwithstanding its partial repayment, but instead the clause attempted to modify the effect of the DOCAs so as to oblige the deed administrators to admit the Financiers' proof of debt for the whole of the debt notwithstanding the partial repayment. It was argued that the attempt to vary the Financiers' entitlements was ineffective as it was not possible to vary the rights created under the DOCAs using a unilateral "acknowledgement" by the deed administrators after the DOCAs had been executed because it is cl 19 of the DOCA that prescribes the circumstances in which a proof of debt may be admitted to the distribution fund, and that the "Amount Owing" falls to be calculated in accordance with the provisions of the Override Deed. It was argued further that it was clear from the provisions of that Deed, including the definition of "Amount Owing" and cl 6.2(d)(i)(A) of the Override Deed, that the "Amount Owing" was to be reduced by the Moly-Cop sale proceeds received by the NAB as Global Agent in respect of the Moly-Cop transaction. 34 In reply, the Financiers contended that the Required Consent Report and the Deed Poll are the critical documents for resolution of the construction question and conclusive of it because both documents post-dated the DOCA under which proofs of debt are to be adjudicated as at 7 April 2016. It was also argued that the Required Consent Report and the Deed Poll did not vary the rights under cl 19.1 of the DOCA and that cl 19.1 was consistent with the Required Consent Report and the Deed Poll. Finally it was argued that cl 3.2(d) of the Override Deed was consistent with the Required Consent Report and the Deed Poll.

consideration 35 As the expression "Amount Owing" is a defined term in cl 1.1 of the Override Deed, the analysis should commence with the text of that definition. 36 Four initial textual observations are made about the defined expression "Amount Owing". First, the expression is defined "in respect of a Financier" - that is, it is a singular and not cumulative expression. This observation is pertinent in the context of cl 3.2(d) of the Override Deed, which uses the expressions "the total Amount Owing in full" and the "total Amount Owing" which, in ordinary meaning, must be a reference to the total of all the amounts owing of all of the Financiers. Secondly, the "Amount Owing" in the words of the definition is the amount set out in the Global Commitments Register corresponding to the name of the Financier. Thirdly, the debts and claims of a Financier under a finance document are "for the purposes of calculations and distributions under [the Override Deed]" the amount set out in the Global Commitments Register. Fourthly, whilst the expression "Amount Owing" is not defined by reference to an "Amount Owing" as at a particular date, cl 6.2(a) of the Override Deed picks up that requirement in providing that the "Amount Owing of each Financier as of the Relevant Date is set forth in the Global Commitments Register…". The "Relevant Date" was defined to mean 7 April 2016 and the Global Commitments Register, contained in Sch 3 to the Override Deed, recorded the "Amount Owing" to each Financier as of 7 April 2016. 37 The parties were at issue as to the proper construction of cl 6.2(d)(i) of the Override Deed. Clause 6.2(d)(i) expressly required the Global Commitments Register to be updated on each "Record Date" "to reflect the Amount Owing as at that Record Date". "Record Date" was defined in cl 1.1 of the Override Deed to mean the last business day of each calendar month and in the case of a Proceeds Distribution Notice, the date of that Notice. The Proceeds Distribution Notice was a notice which the Global Agent was required by cl 6.1 to give to the Financiers (in the form set out in Sch 8 to the Override Deed) advising of its intention to distribute the Moly-Cop proceeds in accordance with cl 5(b)(i) as soon as possible after receipt by it of the proceeds. 38 Epic argued that it was clear from the requirement in cl 6.2(d)(i) to update the Global Commitments Register as at the date of the Proceeds Distribution Notice that the Amount Owing was to be reduced by the proceeds received by the Global Agent in respect of the Moly-Cop realisation transaction. Epic submitted that cl 6.2(e) further supported this construction. Pursuant to cl 6.2(e), the update of the Global Commitments Register amended Sch 3 "with effect on and from the most recent Record Date" thereby, it was said, superseding all previous versions of the Global Commitments Register. 39 Epic also argued that cl 5(d) was telling against the Financiers' construction. Clause 5(d) concerned "Turnover Amounts". A "Turnover Amount", in short form, was an amount received by a Financier (referred to as a "Recovering Financier") outside the framework established under the Override Deed for the realisation of the Moly-Cop entities and the payment of the proceeds to the Financiers: definition "Turnover Amount" cl 1.1. Clause 5(d)(i) relevantly provided that: … for the purpose of determining the Recovering Financier's claims and debts against the Obligor (from whom the Recovering Financier received the Turnover Amount) under the relevant finance documents, the Recovering Financier's claims and debts against that Obligor (or those Obligors) will be taken to be reduced by the full amount of the Turnover Amount". Under cl 5(d)(ii), for the purpose of assessing the effect of a Turnover Amount on debts novated to a particular borrower, the Turnover Amount became a debt owed to the Recovering Financier "less any amount which is subsequently determined by the Global Agent to be the Recovering Financier's share of the Turnover Amount", the effect of which it was said, was that payments made to that Financier are deducted from its overall entitlement. Epic argued that the provisions regarding the treatment of the Turnover Amount were "at odds with the scheme that the Financiers contend is established under the Override Deed, where the Obligors' remain liable for the full amount of the Debt without reduction for payments made". 40 The Financiers argued on the other hand that cl 6.2(d)(i) must be read in context with cl 6.2(c) which required the "Amount Owing" of each Financier to be updated in accordance with cl 6.2(d) "to reflect increases in accrued interest, fees, costs, and expenses in accordance with the terms of the Subject Finance Documents". It was submitted that the updating referred to in cl 6.2(d)(i) related only to the requirement in cl 6.2(c), with the effect that in the pro rata distribution of proceeds to the Financiers, the "Amount Owing" to a Financier included accrued interest and the like. 41 Reference was also made to cl 3.2(d), pursuant to which "[at] each Consent Effective Time" the remaining Moly-Cop entities (termed the "Remaining Obligors") acknowledged and agreed that notwithstanding the release of the Moly-Cop sale entities (termed the "Nominated Released Obligors") from their obligations under the finance documents: (i) until such time as the Financiers have received the total Amount Owing in full, the total Amount Owing remains outstanding; (ii) each such Remaining Obligor is jointly and severally liable to pay the Amount Owing in accordance with the terms of the Subject Finance Documents; and (iii) each such Remaining Obligor's obligations under the Subject Finance Documents are not affected by the variation, waivers, releases or consents granted. 42 It was argued that cl 3.2(d) supported the Financiers' construction in that these acknowledgments and agreements were being given by the Remaining Obligors in the context of the Financiers' impending receipt of proceeds from a proposed Moly-Cop realisation transaction. Thus, it was submitted, cl 3.2(d), and specifically cl 3.2(d)(i), made it clear that the proceeds were not intended to reduce the "Amount Owing" in the defined sense of that expression. 43 The Financiers also argued that the Turnover provisions in cl 5 did not advance Epic's construction because those provisions did not apply to the Moly-Cop proceeds (referring to the definition of "Turnover Amount" in cl 1.1 and cl 2(a) of the Required Consent Report) and were not part of the provisions concerned with the calculation of the "Amount Owing" as set out in the Global Commitments Register. 44 The Financiers' construction of the Override Deed is to be preferred for the following reasons. 45 First, the textual analysis of the expression "Amount Owing" as defined in cl 1.1 does not support Epic's construction. Whilst the debts and claims under the finance documents provided the source for the calculation of the amounts set out in the Global Commitments Register, it is clear from the combination of the definitions of "Amount Owing", "the Global Commitments Register" and "Relevant Date", and from cls 6.2(a) and (b) that it is the debts and claims as at 7 April 2016. 46 Secondly, a construction of the definition of "Amount Owing" as referring to the debts and claims as at 7 April 2016 is congruent with cl 6.2(c) which only makes express provision for updating the "Amount Owing" of each Financier to reflect increases in accrued interest, fees, costs and expenses. That provision would be unnecessary on Epic's construction because the terms of the finance documents would of their own force operate to require such additional amounts to be included in the calculation of the "Amount Owing", as would any repayments. The fact that express provision was made in cl 6.2(c) in relation to those amounts is a strong textual consideration favouring the Financiers' construction and gives cl 6.2(c) an internal coherence with the other provisions of cl 6.2 read as a whole. 47 Thirdly, there is considerable force in the Financiers' submission that the terms of cl 3.2(d) support its construction based on the consideration that the acknowledgment and agreement of the Remaining Obligors that "until such time as the Financiers have received the total Amount Owing in full, the total Amount Owing remains outstanding" was given in the context of the Financiers impending receipt of proceeds from a proposed Moly-Cop realisation transaction. Clause 3.2(d) is thus telling against Epic's construction that the computation of the "Amount Owing" in respect of each Financier was to be reduced by the proceeds that the Financier received from a Moly-Cop realisation transaction. 48 Fourthly, cl 5 does not assist Epic's construction because the turnover amount was not an amount forming part of the calculation of the amount set out in the Global Commitments Register and, notably, there is specific provision to the effect that any turnover amount be taken to reduce the "Amount Owing" to Financiers, relating to payments received outside of any Moly-Cop realisation transaction. 49 The Financiers' submissions on cl 5.1(a)(iii) of the Required Consent Report should also be accepted. Conformably with cl 3.2(d)(i) of the Override Deed, the effect of cl 5.1(a)(iii) was to confirm that the payment of the Moly-Cop sale proceeds to the Financiers did not consequentially reduce the quantum of the amount in respect of which the Financiers were entitled to lodge a proof of debt. Additionally, and contrary to Epic's submissions, this clause did not seek (impermissibly) to vary the Financiers' entitlements under the DOCA but, rather, was consistent with cl 19.1 of the DOCA which provided that each Arrium creditor's entitlements were to be adjudicated by the Deed Administrators "as at the Appointment Date", namely 7 April 2016 (Sch A - Dictionary, definition of "Appointment Date"). 50 As the expression "Amount Owing" is also used in cl 3 of the Deed Poll in its defined sense the use of the expression in that context is also to be construed conformably with its use in the Override Deed. Moreover, as required by cl 3.2(e) of the Override Deed, cl 3 of the Deed Poll confirmed par 3.2(d) of the Override Deed. 51 In my view, read in context, there is no uncertainty or ambiguity about the meaning of "Amount Owing", as that expression is used in each of the three documents under consideration, and I accept as correct the construction advanced by the Financiers that the Moly-Cop proceeds did not reduce the "Amount Owing" to the Financiers. Epic's claim that the Financiers' contentions "involve the proposition that the parties effected a transaction that was grossly uncommercial" does not assist its argument. Such a claim, as asserted by Epic, if it may properly be made (about which I express no view at all), and if it be relevant on the construction question, does not mean that the Court should not give the text the meaning that arises on the unambiguous language but adopt a different construction to avoid giving the documents an operation which may be grossly uncommercial. In such a circumstance, the uncommerciality of the transaction would be a consequence of the deal struck, not the construction of the language. Moreover, if I am wrong and there is ambiguity or uncertainty arising on the textual analysis, reference to the surrounding circumstances and mutual knowledge of the parties does not direct any different conclusion on the construction of the documents. The administrators and various Arrium Group companies entered into the contractual acknowledgments, undertakings and commitments contained in the three documents as part of the commercial arrangements reached by the parties to enable the Moly-Cop sale entities to be sold free from the Financiers' claims and in the context where the enterprise value of the Moly-Cop business was less than the Debt owing to the Financiers and the Financiers' release of the Moly-Cop sale entities from their obligations under the guarantees was necessary for the sale of those entities. As between the parties themselves, it cannot be said that the effect of the documents, on the construction I have found, makes commercial nonsense or causes commercial inconvenience in a way that casts doubt on whether the parties intended the documents to have the meaning conveyed by the textual analysis (Mount Bruce at [51]). 52 Accordingly, the answer to both parts of the question is "yes". I certify that the preceding fifty-two (52) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Davies.

Associate: Dated: 15 December 2017 SCHEDULE A.C.N. 006 769 035 Pty Limited (Subject to Deed of Company Arrangement) (ACN 006 769 035) Akkord Pty Limited (Subject to Deed of Company Arrangement) (ACN 060 486 991) ANI Construction (W.A.) Pty Limited (Subject to Deed of Company Arrangement) (ACN 008 670 871) OS Finance Pty Limited (formerly known as Arrium Finance Pty Limited) (Subject to Deed of Company Arrangement) (ACN 093 954 940) AIOH Pty Limited (formerly known as Arrium Iron Ore Holdings Pty Limited) (Subject to Deed of Company Arrangement) (ACN 152 752 844) A.C.N. 004 410 833 Limited (formerly known as Arrium Limited) (Subject to Deed of Company Arrangement) (ACN 004 410 833) Atlas Group Employees Superannuation Fund Pty. Limited. (Subject to Deed of Company Arrangement) (ACN 060 568 998) Atlas Group Staff Superannuation Fund Pty Limited (Subject to Deed of Company Arrangement) (ACN 059 654 241) Atlas Group Superannuation Plan Pty Limited (Subject to Deed of Company Arrangement) (Subject to Deed of Company Arrangement) (ACN 065 649 050) Australian National Industries Pty Limited (Subject to Deed of Company Arrangement) (ACN 000 066 071) Australian Wire Industries Pty Limited (Subject to Deed of Company Arrangement) (ACN 064 267 456) ATMH Pty Limited (formerly known as Austube Mills Holdings Pty Limited) (Subject to Deed of Company Arrangement) (ACN 123 160 172) AWI Holdings Pty Limited (Subject to Deed of Company Arrangement) (ACN 004 157 475) B.G.J. Holdings Proprietary Limited (Subject to Deed of Company Arrangement) (ACN 004 859 536) Bradken Consolidated Pty Limited (Subject to Deed of Company Arrangement) (ACN 000 011 932) Central Iron Pty Limited (Subject to Deed of Company Arrangement) (ACN 143 503 397) Cockatoo Dockyard Pty Limited (Subject to Deed of Company Arrangement) (ACN 000 025 918) Comsteel Pty. Limited (Subject to Deed of Company Arrangement) (ACN 006 218 524) Coober Pedy Resources Pty Limited (Subject to Deed of Company Arrangement) (ACN 151 599 905) Eagle & Globe Pty Limited (Subject to Deed of Company Arrangement) (ACN 000 122 305) Email Accumulation Superannuation Pty Limited (Subject to Deed of Company Arrangement) (ACN 065 263 658) Email Executive Superannuation Pty Limited (Subject to Deed of Company Arrangement) (ACN 065 263 818) Email Holdings Pty Limited (Subject to Deed of Company Arrangement) (ACN 092 348 555) Email Management Superannuation Pty Limited (Subject to Deed of Company Arrangement) (ACN 065 263 710) Email Metals Pty. Limited (Subject to Deed of Company Arrangement) (ACN 004 574 681) Email Pty Limited (Subject to Deed of Company Arrangement) (ACN 000 029 407) Email Superannuation Pty Limited (Subject to Deed of Company Arrangement) (ACN 065 263 603) Emwest Holdings Pty. Limited. (Subject to Deed of Company Arrangement) (ACN 001 992 123) Emwest Properties Pty Limited (Subject to Deed of Company Arrangement) (ACN 003 146 334) GSF Management Pty Limited (Subject to Deed of Company Arrangement) (ACN 064 116 874) J. Murray-More (Holdings) Pty Limited (Subject to Deed of Company Arrangement) (ACN 000 158 412) John McGrath Pty Limited (Subject to Deed of Company Arrangement) (ACN 000 004 937) Kelvinator Australia Pty Limited (Subject to Deed of Company Arrangement) (ACN 007 873 734) Litesteel Products Pty Limited (Subject to Deed of Company Arrangement) (ACN 109 854 677) Litesteel Technologies Pty Limited (Subject to Deed of Company Arrangement) (ACN 113 101 054) Metals Properties Pty. Limited. (Subject to Deed of Company Arrangement) (ACN 000 040 040) Metalstores Pty Limited (Subject to Deed of Company Arrangement) (ACN 000 267 112) Metpol Pty Limited (Subject to Deed of Company Arrangement) (ACN 000 927 373) N.K.S. 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(Subject to Deed of Company Arrangement) (ACN 004 208 191) OS Americas Holdings Pty Limited (Subject to Deed of Company Arrangement) (formerly known as OneSteel Americas Holdings Pty Limited) (ACN 147 067 016) OS Building Supplies Pty Limited (formerly known as OneSteel Building Supplies Pty Limited) (Subject to Deed of Company Arrangement) (ACN 000 045 349) OS Coil Coaters Pty Limited (formerly known as OneSteel Coil Coaters Pty Limited) (Subject to Deed of Company Arrangement) (ACN 123 138 732) OS Corporate Pty Limited (formerly known as OneSteel MBS Pty Limited) (Subject to Deed of Company Arrangement) (ACN 096 273 979) OS Queensland Pty Limited (formerly known as OneSteel Queensland Pty Limited) (Subject to Deed of Company Arrangement) (ACN 010 558 871) OSRec Holdings Pty Limited (formerly known as OneSteel Recycling Holdings Pty Limited) (Subject to Deed of Company Arrangement) (ACN 059 240 952) OSRec Overseas Pty Limited (formerly known as OneSteel Recycling Overseas Pty Limited) (Subject to Deed of Company Arrangement) (ACN 105 479 356) OS Stainless Australia Pty Limited (formerly known as OneSteel Stainless Australia Pty Limited) (Subject to Deed of Company Arrangement) (ACN 004 610 851) OS Stainless Pty Limited (formerly known as OneSteel Stainless Pty Limited) (Subject to Deed of Company Arrangement) (ACN 006 362 652) OS Technologies Pty Limited (formerly known as OneSteel Technologies Pty Limited) (Subject to Deed of Company Arrangement) (ACN 096 380 219) OS USI1 Pty Limited (formerly known as OneSteel US Investments 1 Pty Limited) (Subject to Deed of Company Arrangement) (ACN 131 211 606) OS USI2 Pty Limited (formerly known as OneSteel US Investments 2 Pty Limited) (Subject to Deed of Company Arrangement) (ACN 131 211 571) Overseas Corporation (Australia) Pty Limited (Subject to Deed of Company Arrangement) (ACN 004 242 086) PTM Pty Limited (formerly known as Palmer Tube Mills Pty Limited) (Subject to Deed of Company Arrangement) (ACN 010 469 879) Pipeline Supplies of Australia Pty Limited (Subject to Deed of Company Arrangement) (ACN 008 573 475) Reosteel Pty Limited (Subject to Deed of Company Arrangement) (ACN 000 142 094) Roentgen Ray Pty Limited (Subject to Deed of Company Arrangement) (ACN 000 028 106) Southern Iron Pty Limited (Subject to Deed of Company Arrangement) (ACN 119 611 068) SSG Investments Pty Limited (Subject to Deed of Company Arrangement) (ACN 085 490 526) SSG No.2 Pty Limited (Subject to Deed of Company Arrangement) (ACN 087 840 720) SSG No.3 Pty Limited (Subject to Deed of Company Arrangement) (ACN 087 840 515) SSGL Share Plan Nominees Pty Limited (Subject to Deed of Company Arrangement) (ACN 085 943 540) ARIX Acquisitions Pty Limited (formerly known as SSX Acquisitions Pty Limited) (Subject to Deed of Company Arrangement) (ACN 090 574 520) ARIX Employees Superannuation Fund Pty Limited (Subject to Deed of Company Arrangement) (formerly known as SSX Employees Superannuation Fund Pty Limited) (ACN 064 431 116) ARIX Holdings Pty Limited (formerly known as SSX Holdings Pty Limited) (Subject to Deed of Company Arrangement) (ACN 087 813 116) ARIX International Pty Limited (formerly known as SSX International Pty Limited) (Subject to Deed of Company Arrangement) (ACN 084 990 947) AC Distribution Company Pty Limited (formerly known as The Arrium Creditor Distribution Company Pty Limited) (Subject to Deed of Company Arrangement) (ACN 082 181 726) ARIX Retirement Fund Pty Limited (formerly known as SSX Retirement Fund Pty Limited) (Subject to Deed of Company Arrangement) (ACN 064 431 303) ARIX Staff Superannuation Fund Pty Limited (formerly known as SSX Staff Superannuation Fund Pty Limited) (Subject to Deed of Company Arrangement) (ACN 064 431 072) Tasco Superannuation Management Pty Limited (Subject to Deed of Company Arrangement) (ACN 071 901 712) The ANI Corporation Pty Limited (Subject to Deed of Company Arrangement) (ACN 000 421 358) Tube Estates Pty. Limited (Subject to Deed of Company Arrangement) (ACN 010 449 939) Tube Street Pty Limited (Subject to Deed of Company Arrangement) (ACN 004 785 157) Tube Technology Pty. Limited. (Subject to Deed of Company Arrangement) (ACN 010 469 986) Tubemakers of Australia Pty Limited (Subject to Deed of Company Arrangement) (ACN 000 005 498) Tubemakers Somerton Pty Limited (Subject to Deed of Company Arrangement) (ACN 004 595 546) Western Consolidated Industries Pty Limited (Subject to Deed of Company Arrangement) (ACN 001 185 913) X.C.E. Pty Limited (Subject to Deed of Company Arrangement) (ACN 004 081 903) XEM (Aust) Pty Limited (Subject to Deed of Company Arrangement) (ACN 004 158 025) XLA Pty Limited (Subject to Deed of Company Arrangement) (ACN 004 239 392) XLL Pty Limited (Subject to Deed of Company Arrangement) (ACN 006 301 266) Zinctek Pty limited (Subject to Deed of Company Arrangement) (ACN 010 474 790)