Mighty River International Limited v Mesa Minerals Limited

IN THE FEDERAL COURT OF AUSTRALIA WESTERN AUSTRALIA DISTRICT REGISTRY GENERAL DIVISION WAD 387 of 2014

JUDGE: BARKER J DATE: 14 MAY 2015 PLACE: PERTH

REASONS FOR JUDGMENT 1 Mighty River International Limited, a company incorporated in the British Virgin Islands, holds in excess of 94 million ordinary shares in Mesa Minerals Limited, a public company registered in Australia under the Corporations Act 2001 (Cth) and listed on the Australian Securities Exchange (ASX), which shareholding represents in the vicinity of 15% of Mesa's issued shares. 2 Mesa is a subsidiary of Mineral Resources Limited (MRL), which company is also listed on the ASX and holds about 67% of Mesa's issued shares. 3 Mr Yuzheng Xie is the sole director of Mighty River and has been since about 2000 when the company was founded. 4 Mr Xie was also a director of Auvex Resources Limited, as it was then named, between 22 January 2009 and 20 January 2010. 5 Mr Chris Ellison and Mr Bruce Goulds are both current directors of Mesa and have been since 25 May 2010. Mr Goulds is also the company secretary of Mesa and has been since 15 April 2011. 6 Mr Ellison is also a director of MRL and has been 27 February 2006. Mr Goulds is also the company secretary of MRL and has been since 27 February 2006. 7 The circumstances which have led to Mighty River being around a 15% minority shareholder in Mesa have resulted in what might be fairly described as corporate hostilities between Mighty River, on the one hand, and Mesa and MRL, on the other; or to personalise it, between Mr Xie, on the one hand, and Mr Ellison, on the other. 8 In 2008 Auvex entered into a joint venture with Mesa in relation to the Sunday Hill and Ant Hill mining leases, respectively M46/237 and M46/238, in Western Australia. The joint venture provided for the exploration and development of a manganese ore mine on the tenements. 9 In late 2009 and early 2010, a dispute arose between Mesa and Auvex in relation to the joint venture and, by February 2010, the mining and shipping of manganese from the Ant Hill tenement ceased. 10 In 2010, MRL commenced a takeover in respect of Mesa which ultimately resulted in MRL acquiring most of its current shareholding in Mesa. 11 A takeover was made by MRL in respect of Auvex, which was ultimately successful with MRL acquiring a 100% ownership interest by 2011. 12 At that point, Mr Xie ceased to be involved in Auvex but, through Mighty River, was left with a minority shareholding in Mesa, with MRL the majority shareholder. 13 In the course of the takeover, Mesa commenced a proceeding in the Supreme Court of Western Australia against Auvex in August 2010 (CIV 228 of 2010 (2010 proceeding)), in relation to which Mighty River sought leave to intervene. 14 During the takeover, a Takeover Panel application by Mesa, in 2010, resulted in findings that Mighty River had contravened the Act in its dealings with Mesa shares. 15 Following the conclusion of the takeover, Mighty River, in April 2012, commenced a proceeding against MRL and its directors in the Supreme Court of Western Australia (CIV 1549 of 2012 (2012 proceeding)) on the basis of an alleged unwritten agreement concerning the acquisition by MRL of Mighty River's shares in Mesa, which proceeding was subsequently settled. 16 In July 2014, Mighty River's solicitors wrote to Mesa requesting documents, by way of pre-action discovery, for the purposes of considering whether to commence proceedings against Mesa under ss 232 and 461 of the Act for statutory oppression and winding up respectively. 17 On 10 November 2014, however, Mighty River by its solicitors indicated to Mesa's solicitors that it would no longer pursue access by such a process and would instead pursue an application under s 247A of the Act for documents that it required. 18 The documents that it required in the proposed pre-action discovery and prior to this proceeding were similar. Mighty River, by its solicitors, in its letter of 10 November 2014 stated the order under s 247A is sought for the purposes of enabling Mighty River to determine the nature and scope of Mesa's port capacity and access rights with the Port Hedland Port Authority (port rights), and the terms upon which third parties are using the port rights and the general purpose mining lease G45/265 known as the Boodarie lease, to enable Mighty River to make a decision on the exercise of its rights as a shareholder of Mesa. 19 By originating process filed 19 December 2014, Mighty River applied to this Court, under s 247A of the Act, for access to the following documents: (1) all documents which record any information regarding the use by any third parties of the port capacity, access rights or Boodarie lease between December 2010 and November 2014; (2) the agreement between, among others, Mesa and the Port Hedland Port Authority in relation to the granting to Mesa of its port capacity, and any amendments, variations or related agreements; and (3) the agreement between, among others, Mesa and the Port Hedland Port Authority in relation to the granting to Mesa of its access rights and any amendments, variation or related agreements. (required documents) 20 Section 247A(1) and (2) of the Act relevantly provide as follows: 247A Order for inspection of books of company or registered managed investment scheme (1) On application by a member of a company or registered managed investment scheme, the Court may make an order: (a) authorising the applicant to inspect books of the company or scheme; or (b) authorising another person (whether a member or not) to inspect books of the company or scheme on the applicant's behalf. The Court may only make the order if it is satisfied that the applicant is acting in good faith and that the inspection is to be made for a proper purpose. (2) A person authorised to inspect books may make copies of the books unless the Court orders otherwise. 21 Mesa contends that, when regard is paid to the context in which the application is made, Mighty River is unable to demonstrate that in making the application it is acting in good faith and that inspection is to be made for a proper purpose, as required by subs (1). 22 In short, Mesa submits that when the relevant context is regarded, the application for access to documents is not made by Mighty River, as a member of the company with a genuine concern to protect its investment or by reason of any concern at all as to the use of the port rights. Rather, Mesa says Mighty River is making the application as a shareholder which, having elected not to accept the earlier takeover bid of MRL, now seeks to conduct itself as a de facto director of Mesa by demanding information and participating in decision making that otherwise is the province of Mesa's Board of Directors. 23 The primary issue on this application, therefore, is whether the Court is satisfied that, in making this application, Mighty River is acting in good faith and inspection is to be for a proper purpose. 24 If the Court is so satisfied, a further issue arises as to whether the terms of access proposed by Mighty River should be narrower than required.

Has the s 247A application been brought in good faith and is inspection to be for a proper purpose?

General principles 25 The principles to be considered by the Court in determining an application under s 247A are generally understood and agreed by the parties to this proceeding. In that regard, the summary of principles provided by Debelle J in Acehill Investments Pty Ltd v Incitec Ltd [2002] SASC 344; (2002) 223 LSJS 97 at [29] are often referred to with approval. His Honour there stated as follows: I have examined the decisions set out in the appendix to these reasons. Most concern provisions which have existed since 1985 permitting the court to order inspection of books of a company. Those provisions also stated that a court may only make an order for inspection if satisfied that the applicant is acting in good faith and that the inspection is sought for a proper purpose. Although not in the same terms as s 247A, those provisions were to the same effect so that the principles have equal application to the determination of applications under s 247A. They establish the following propositions relevant to the issues in this application. 1. The requirement that the applicant is acting in good faith and that the inspection is to be made for a proper purpose expresses a composite notion and the court will determine whether each has been demonstrated by applying an objective test: Barrack Mines Ltd v Grants Patch Mining Ltd [1988] 1 Qd R 606; Knightswood Nominees Pty Ltd v Sherwin Pastoral Company Ltd (1989) 7 ACLC 536 at 540 - 541. 2. The onus is on the applicant to demonstrate that he is acting in good faith and that the inspection is for a proper purpose: Intercapital Holdings Ltd v M.E.H. Ltd (1988) 6 ACLC 1068 at 1074. 3. The section operates where the applicant seeks to protect some specific or personal right by the making of the order. Examples are where a shareholder contemplates proceedings under s 233 of the Corporations Act (the statutory successor of s 320 of the Companies Code); Re Augold NL [1987] 2 Qd R 297 at 308 - 309; Re Humes Ltd [1987] VicRp 43; (1987) 5 ACLC 64 at 68 - 69; Grants Patch Mining at 107; or where a shareholder reasonably takes the view that a transaction could adversely affect his investment and he seeks to investigate the transaction for the purpose of determining what action he should take: Intercapital Holdings at 1074 - 1075; or where a shareholder seeks to ascertain facts for the purpose of considering a takeover offer: Knightswood Nominees Pty Ltd v Sherwin Pastoral Company Ltd at 539. Other examples are provided in a number of the cases listed in the appendix. 4. If the applicant's primary or dominant purpose is a proper purpose, it is not to the point that an inspection may be of benefit to the applicant for some other purpose: Re Humes Ltd at 70; Grants Patch Mining at 109 - 110; Cescastle Pty Ltd v Renak Holdings Ltd (1991) 9 ACLC 1333 at 1335. 5. The rights provided by s 247A should not be regarded as affecting the basic rule of company law that a shareholder should not ordinarily have recourse to the courts to challenge a managerial decision made by or with the approval of the directors: Re Humes Ltd at 68 - 69; Grants Patch Mining Ltd at 614. 6. Since every shareholder has a right to apply under the section for an inspection order, it is no answer to an application that, if an order is made, the applicant may acquire information not available to other shareholders and thereby be in a more advantageous position than those shareholders: Re Humes Ltd at 70; Grants Patch Mining at 615. 7. Applicants do not necessarily lack a proper purpose merely because (a) they are hostile to other directors; or (b) they will, after inspection, have more information than other members: Re Humes Ltd at 70. 8. The procedure under s 247A is not intended to be a process as wide-ranging as the process of discovery of documents so that, as a general rule, inspection will be confined to, say, the results of decisions of directors rather than all the documents such as board papers leading to decisions: Re Claremont Petroleum NL (No 2) [1990] 2 Qd R 310 at 314. I emphasise that this is a general rule. There may be occasions where it is proper to admit inspection of board papers. 9. Even where an applicant is acting bona fide and has shown a proper purpose, the court has a discretion whether to order inspection: Re Humes Ltd at 70.

Mighty River's submissions 26 Mighty River says it has discharged its onus of proving it seeks to inspect the required documents in good faith and that inspection is to be for a proper purpose, in that it has demonstrated that it is a significant shareholder in Mesa and has been a significant shareholder since at least 2010, as explained in Mr Xie's affidavit made 19 December 2014 and read at the hearing. It says that while there appeared to be some suggestions by Mesa, during cross-examination of Mr Xie at the hearing, that the number of shares held by Mighty River is less than 97,369,622 as stated by Mr Xie in his affidavit, it is not contentious that Mighty River has been and remains a significant shareholder in Mesa. 27 Mr Xie says, on behalf of Mighty River, that he has taken an active interest in the business and operations of Mesa and in Mighty River's investment. Mighty River submits that in the course of the hearing Mr Xie gave considered and frank evidence regarding his knowledge of the manganese industry, Mesa's operations and the future prospects for the company's assets. At a general level, considered further below, that broad submission might be accepted. 28 Mighty River says it is aware that the primary assets of Mesa, comprising the port rights and Boodarie lease, are being used by third parties, and that it is apparent that: (1) there has been third party use of Mesa's assets by at least MRL; (2) by its interim report dated 13 March 2015 for the period ending 31 December 2014 (2014 interim report), Mesa reported that it makes its port allocation "available to its parent entity, Mineral Resources Limited" and MRL "assists Mesa by sub-leasing" its Boodarie lease "for Mesa's benefit", though the extent of the use and the terms on which the use occurs are unclear from the interim report; and (3) Mr Ellison informed Mr Xie that MRL had been using Mesa's port rights (the evidence of Mr Xie in this regard was not challenged at the hearing). 29 Mighty River says that, despite being aware that Mesa has allowed its assets to be used by third parties since 2010, it is unable to ascertain, from the "vague and ambiguous information made available by Mesa", the benefit, if any, obtained by Mesa. It notes the following in relation to Mesa's annual and interim reports. (1) For the year ended 30 June 2010, the 2010 annual report makes no reference to any third party use of its assets nor any rental or other income received from its port rights or Boodarie lease. (2) For the year ended 30 June 2011, the 2011 annual report makes no reference to any third party use of its assets, nor any rental or other income received from its port rights or Boodarie lease. (3) For the year ended 30 June 2012, the 2012 annual report reports "Lease premiums" of $182,615 as "Revenue from continuing operations" but there is no explanation as to which lease this revenue relates or how revenue is being derived from one of Mesa's leases. (4) For the year ended 30 June 2013, the 2013 annual report reports "Lease premiums" of $770,679 as "Revenue", however there is no explanation as to which lease this revenue relates or how revenue is being derived from one of Mesa's leases. (5) For the year ended 30 June 2014, the 2014 annual report released on 24 September 2014 (that is, after the request by Mighty River for the required documents) reports "Rental income" of $1,091,245 and "Recovery of port rights usage" of $205,296. There is no explanation as to the source of the rental income, the property or lease from which the rental income is derived, or the reasons for which the port rights are being utilised (and by whom). (6) For the interim period of 1 July 2014 to 31 December 2014, the 2014 interim report reports "Rental income" as $764,840 and "Recovery of the direct costs of port rights used" of $158,704. For the first time Mesa reports that it makes its port allocation "available to its parent entity, Mineral Resources Limited" on a "costs recoverable basis" and "MRL assists Mesa by sub-leasing" the Boodarie lease for "Mesa's benefit". Mesa reports "Part of the sub-lease during the period has been to MRL on market terms". The terms or conditions on which the third party use was permitted during this six month period are not otherwise evident from this interim report, nor is the extent of the "part" of the Boodarie lease which is subject to the sublease on "market terms". 30 Mighty River submits there is insufficient detail regarding Mesa's third party arrangements for an interested shareholder to satisfy itself that those arrangements are in the best interests of Mesa's shareholders. Further, it says it is not clear from Mesa's information that any benefit at all was received for some years. 31 Mighty River says it seeks inspection of the required documents so it can consider whether the terms on which Mesa's assets have been used by third parties are fair and reasonable and in the best interests of Mesa's shareholders, and so that Mighty River can protect its investment and interests as a shareholder. Mighty River submits that Mr Xie's "thoughtful and considered evidence" was that while Mighty River is aware of third party use of Mesa's assets, he has been unable to obtain sufficient or any detail of the terms of that use. It submits that during cross-examination Mr Xie was candid about any limitations in his knowledge, showed himself to be a witness of truth, and has demonstrated a genuine desire to ascertain requested information to determine whether the use of assets is in the best interests of Mesa's shareholders. 32 Accordingly, Mighty River submits that having regard to its status as a long term, significant and interested shareholder in Mesa, it holds a proper concern in good faith as to whether the use by third parties of Mesa's assets, including the use of Mesa's assets by related parties, has been in the best interests of the company as a whole.

Mesa's submissions 33 Mesa submits the real issue is whether the Court in its discretion should be satisfied that Mighty River is acting in good faith and that the proposed inspection is for a proper purpose, so as to fulfil the statutory precondition. It says the unique facts of this case mean that the Court's assessment must take into account a history of prior hostilities and litigation spanning at least five years, referred to generally above and discussed further below. 34 In its closing submissions, Mesa addresses what it calls "the nature of Mighty River's evidence" with a focus on the oral evidence of Mr Xie during cross-examination, which Mesa says alternated between being evasive on the one hand, and candidly detrimental to Mighty River's application on the other. 35 Mr Xie's evidence, it is submitted, establishes that the dominant purpose of Mighty River is to use s 247A as an instrument (directly or indirectly) to: (1) usurp the well defined powers of the Board of Directors of Mesa in order to control decisions of Mesa by obtaining a de facto seat at the board table; and/or (2) extract a financial gain from MRL or the directors of Mesa. 36 In order to achieve these improper purposes, Mesa contends Mighty River has asked that this Court allow access to a vast number of internal and confidential documents that have already been the subject of: (1) litigation between Mighty River and Mesa in the 2010 proceeding; (2) specific requests for information by Mighty River's former solicitors to Mesa's solicitors in 2010, which were answered; (3) further requests for information from Mr Xie directly to Mesa's directorship in 2010 and 2011; (4) discovery sought by Mighty River in its further litigation with MRL in the 2012 proceeding, which action was settled on terms that applied to MRL and its subsidiaries; and (5) conferral in respect of a foreshadowed pre-action discovery application abandoned shortly before the filing of the present application. 37 In each case, Mesa says, the topic of port rights has been raised with Mesa and its directors in the context of litigation or proposed litigation. Mesa notes that although Mighty River has asserted that it had identified a cause of action as recently as 2014, it apparently did not occur to Mighty River - until it was suggested by counsel in cross-examination - to take the logical first step of enquiring with its former solicitors as to whether the key documents it seeks were already in the possession of its former solicitors. 38 Further to that, Mesa contends Mighty River has made no reasonable attempt to analyse the information that is readily available to it by way of public disclosures to the ASX, which it says it monitors. For instance, Mr Xie was unaware of the most recent financial report of Mesa until it was attached to an affidavit filed by Mesa in this action, and had not asked Mighty River's accountants or other advisers to examine and interpret any of the financial reports annexed to his own affidavit. 39 Mesa says there is no case for investigation, and that if Mighty River believed otherwise, it would have taken steps over the last five years to investigate matters that had been voluntarily disclosed to it, both directly and via the ASX. Mesa contends that for these reasons alone, the application must logically be seen as contrived and artificial, and therefore within a category of request that ought not be endorsed by the Court. 40 Mesa points to the fact that Mighty River requires access to, in Mesa's submission, the internal management information of Mesa, and that Mr Xie said in cross-examination that once Mighty River has that information, it proposes to share it with its shareholders and other business associates, advisors and accountants - notwithstanding it has not given the information already available via the ASX releases to its accountants. Further, Mesa notes Mighty River and/or Mr Xie are heavily involved in the business of marketing metals including manganese, in circumstances where Mr Xie said in his affidavit that he learnt a significant amount about the business and operation of Mesa by virtue of his former directorship of Auvex. The Court should also note, submits Mesa, that Mr Xie did not consider the scope of his request to access every document in Mesa's possession vaguely relating to its port rights to be oppressive or inappropriate. 41 In these circumstances, Mesa contends that this Court should decline to authorise the access requested. It says this is not the case of a genuinely concerned shareholder seeking to protect its investment; Mighty River continues to buy shares in Mesa no doubt with a view to maintaining or increasing its influence and leverage as a significant shareholder. In Mesa's submission, the purchase of additional shares means either the concern as to its shareholding is not genuine (or if genuine, has been allayed) or Mighty River anticipates a buyout at a premium, and the recent purchases are an arbitrage. 42 To the extent the requirement relating to good faith and proper purposes is a composite expression, Mesa submits the application should be dismissed for lack of proper purpose. If the "good faith" aspect retains a disjunctive quality, as I noted in Yara Australia Pty Ltd v Burrup Holdings Limited [2010] FCA 1273; (2010) 80 ACSR 641 at [129], Mesa says the application should fail, whatever the purpose of the application is found to be. 43 Mesa then identifies what it describes as the critical evidence of Mighty River affecting consideration of the composite notion of good faith and proper purposes. 44 It says this is the kind of case that requires an inquiry into the plaintiff's purposes at "several levels of immediacy" with respect to its conduct in bringing the application. At an initial level, Mighty River says that it seeks to obtain the required documents so that it can discern information in relation to the use of the port rights. At a second level, it says that, having obtained the documents and information, it proposes to do numerous things, including: (1) share this information with various unidentified parties associated with Mighty River in order to determine the action it should take; (2) discuss the information with the Board of Mesa; and (3) consider taking action against the Board of Mesa itself, or bring proceedings on behalf of Mesa against the Board, including (possibly) filing an application for pre-action discovery, which Mesa disputes could be sought. 45 Mesa says it is entitled to test the truth of these assertions, and the Court is entitled to enquire as to whether these purposes are borne out having regarding to all of the circumstances, and whether these purposes are in fact proper. Mesa notes the application is predicated on the notion that there is some obvious case for investigation - or some irregularity - which it denies. 46 Mesa notes that in or about August 2010, MRL acquired approximately 64% of the shares in Mesa via a takeover bid. Mighty River acquired a significant number of shares in Mesa during 2010, holding in April 2010 approximately 19% of the issued shares. After Mighty River requisitioned two spill motions, Mesa obtained a declaration from the Takeovers Panel in relation to findings of unacceptable circumstances in contravention of the Act, relating to Mighty River's shareholding in Mesa. Mighty River elected not to accept into the MRL bid, retaining its significant - but minority - shareholding thereafter. 47 Mesa says Mighty River first raised MRL's use of Mesa's port rights in approximately November 2010 when its former solicitors wrote to Mesa. In the letter, Mighty River's former solicitors referred to Mesa's confidential agreements with the Port Hedland Port Authority by name and date. Although the letter asks a series of direct questions, it does not ask for copies of the documents to be produced. Mesa notes it had in fact produced copies of the agreement in question, and the deed of variation, by way of preliminary discovery to Auvex's solicitors on 22 September 2010. Mr Xie, it notes, accepted in cross-examination that he was a director of Auvex at that time, and he "presumed" that these had been disclosed to Auvex. Although Mr Xie said he had not seen the agreements, he "presumed" that Mighty River's solicitors had contacted the Board of Auvex, and Mesa obtained copies of the agreements from the Board. 48 That letter of November 2010 was responded to by Mesa's solicitors on 15 November 2010, confirming that MRL had used the port rights for "good consideration". In that regard, Mr Xie accepted in cross-examination, Mesa says, that he had been aware of this matter since approximately 2010: You had been aware, hadn't you, since 2010 that MRL utilised the port capacity, hadn't you?--­Yes. But at the time, you were aware that, as asserted in your email of 30 October 2014, MRL had used the port and laydown and stockpile facility last four years. Is that right?---As Mr Ellison confirmed. (Emphasis added.) 49 Mr Xie wrote to Mr Ellison, director of Mesa and MRL, in December 2010 as follows: When auvex can do it with 3.5 usd pmtu you should be able to do it better! If you think you aren't able to do it, allow mighty river to give it a try! Additionally, we have prepaid port capacity we should have good saving there! Atlas technically paid 100million for aurox port access' I do not know how mrl are justified using mesa port capacity paying no or little consideration! (As in original.) 50 Mr Xie, Mesa says, further accepted that Mighty River had alleged improper use by MRL/Mesa of Mesa's port rights as part of the 2010 proceeding between Mesa and Auvex in the Supreme Court of Western Australia. Mesa notes Mr Xie accepted that he had participated in attempts by Mesa and Auvex to resolve those proceedings, and that in doing so he sought to acquire the marketing rights for all of Mesa's product produced in its joint venture with Auvex. Mr Xie says in his affidavit that the proceedings were resolved on 2 August 2011. Despite being represented throughout by solicitors who had raised the matter directly with Mesa, Mr Xie did not take the matter any further at that time or refer back to these former solicitors. 51 Further, Mesa notes the date for "resolution" of the proceedings, 2 August 2011, coincides with the day on which MRL finalised its acquisition of the shares in Auvex, in respect of which Mighty River had held shares, and Mr Xie was a former director. 52 Soon after, in late August 2011, Mr Xie wrote to Mr Ellison again, stating that he was "very disappointed on your answer about your commitment of acquisition of Might river's Mesa shares ..." (as in original). In this email Mr Xie makes an offer to accept the transfer of Mighty River's Mesa shares on the same terms as had been offered to Mesa's shareholders by MRL in its takeover bid: 1 MRL share, for every 70.6 Mesa shares. 53 His email ends with the words like mention to you on the phone, unless Min rather than use Mesa's port allocation for its iron ore export. of course iron ore have better profibility to Min. Let's see about that! (As in original.) 54 Mesa says Mr Xie accepted, essentially, that this was akin to him having said to Mr Ellison "buy my shares, unless MRL would rather use Mesa's port allocation for its iron ore export", as was put to him by counsel in cross-examination. He would not accept that his final words were intended by him to convey a threat in relation to MRL's use of the port rights, and said his statement was in relation to the future outlook for iron ore. 55 Mesa submits that evidence should be rejected as an unlikely explanation, particularly given that in 2011 that market was in a boom period, and that litigation was in fact commenced by Mighty River against MRL (and subsequently, Mr Ellison and Mr Peter Wade, directors of MRL) shortly after the offer was rejected by MRL. Mesa notes this issue was taken up by counsel with Mr Xie during cross-examination: And that was - that email of 24 August 2011 was some months prior to you suing alleging you had an agreement?---Because our lawyers said there is an agreement, Mr Bennett. So your purpose doesn't---?---Never mind. Never mind. I don't want to say anything. Yes. That's fine. So your purpose doesn't include an attempt to so threaten the directors of MESA, including Mr Ellison and Mr Goulds, as to provoke them to buy out your shares that are locked in as a minority?---lt's very simple, Mr Bennett. It's very simple. Mr Ellison coming to me everyday or most and calling Mr Cunningham, asking me for help so that he can acquire Auvex. Okay. And I have helped him, he agreed to buy my share and he - and then after this he said - he said he don't have agreement. No - you know. I mean, I'm stupid enough to believe him and - we hadn't have an agreement on paper. To the solicitor saying, you know - they … solicitor was … on the … and everything is go. And, you know - and there's no agreement. Now, obviously I … the case … taking a lot of my time. My shareholders say, look, Yuzheng, why you - you know. There is a lot of things that need to be done. You know. Why spending time on this. You know. So … agreement. Look, I have … I mean, that agreement is … you say it is not - that it is, you know - it's - sometimes people make a commitment. We do - in Asia we do a lot of - a lot of deals on a handshake. People - I - basically every day we do these. You know. We never have any problem. All right. When Mr Ellison says he's going to buy the share, I thought it's a done deal. All right. But these - like, if he say he … no agreement, you know, I'm - you know. I just didn't want to … you know, so … So Mighty River, in your view, is trapped as a shareholder because Mr Ellison didn't honour some ---?---It's not. --- commitment?---It's not trapped as a shareholder. If he want to buy … offer to buy and … he … buy it, he bought it, then it's fine. It's our - worth our investment offloaded. He haven't … then we're happy to hold it and then we continue to want to be engaged with this company and to make best out of the investment. So it's - we sold a lot of investments. We invested in so many projects here and then all … from before 2012. Three iron ore projects we've sold. 56 Mesa refers to the minutes of the MRL Board annexed to Mr Goulds' affidavit made 3 March 2015, which contains reference to continual approaches by Mr Xie throughout this period seeking to "offload" (as Mr Xie put it in his oral evidence extracted above) Mighty River's stake in Mesa. Mesa notes Mr Goulds was not cross-examined on the contents of any of the minutes, nor were objections taken. 57 Mesa says Mighty River brought the 2012 proceeding, notwithstanding that Mr Xie's email of late August 2011 contained an offer that post-dated the alleged agreement, and contained the statement "at lease we make it clear now, we DON'T have an agreement!" (as in original). Mesa further notes the litigation was also prefaced by a letter from Mighty River's former solicitors to MRL, which read in part as follows: Our client is ready, willing, and able to complete the Settlement Agreement forthwith. ... To this end, we are instructed to demand from MRL, as we hereby do, that it transfers to our client, in an off market transaction, the MRL Settlement Shares to satisfy the terms of the Settlement Agreement. This will amount to MRL transferring to our client 1,283,880 MRL shares in exchange for the 90 million shares owned by our client in Mesa. Alternatively, MRL can pay our client the cash equivalent of the MRL Settlement Shares as at the date of this letter. 58 It was put to Mr Xie, says Mesa, that MRL shares were trading on the ASX at or about that time for approximately $6 or $7 per share. 59 Following the filing of pleadings and the giving of discovery, Mighty River's former solicitors wrote to MRL's solicitors on 25 October 2012, in which the issue of the use of port rights was raised again, by way of the request for discovery of: All and any communications which your client has had with the Port Hedland Port Authority ('PHPA') in relation to the Utah Point Development and the port access agreement between Mesa Minerals and PHPA. 60 In re-examination, Mesa notes, Mr Xie confirmed that these documents requested in the letter of 25 October 2012 are the same as those now being sought in these proceedings. 61 Thereafter, in February 2013, Mr Xie instructed Mighty River's former solicitors to join Mr Ellison and Mr Wade personally to the proceedings. 62 On or around 1 October 2013, the parties executed a Deed of Settlement and Release, and the 2012 proceeding was discontinued. The terms of the Deed extend to MRL and its subsidiaries, including Mesa, by virtue of the definition of "Mineral Resources" in cl 1.1(e), and which terms are canvassed in Mr Goulds' affidavit. Mr Goulds was not cross-examined in relation to that paragraph, and there was no specific objection taken. 63 Following the events described above, Mesa says Mighty River agitated two applications, the first the proposed pre-action discovery between July and November 2014 and the second being the present application, first foreshadowed in Mighty River's solicitors' letter of 10 November 2014. Mesa notes the following with regard to these applications. (1) The letter of 30 July 2014 from Mighty River's solicitors to Mesa in relation to proposed pre-action discovery is phrased in terms that misleadingly suggest Mighty River did not know the identity of the "third party" said to be using Mesa's port rights. As set out above, this had been known to Mr Xie since November 2010. In the letter of 8 October 2014 from Mighty River's solicitors to Mesa's solicitors, this state of knowledge is attributed to Mr Xie as of 11 September 2014 (four years later) by virtue of having been informed by Mr Ellison that MRL had used Mesa's port rights. Nonetheless, Mr Xie's affidavit in these proceedings deposes that he has known of the state of affairs for "some years". Mr Xie also confirmed he was aware of the matter at the time Mighty River's solicitors wrote to Mesa in relation to the proposed pre-action discovery application. (2) The documents sought in the abandoned proposed pre-action discovery application were in substance the same as those now sought in this application, as confirmed by Mr Xie. The letter of 10 November 2014 from Mighty River's solicitors suggests the proposed pre-action discovery application was abandoned because Mesa would not "voluntarily" provide the documents sought. However, Mr Xie explained the change in strategy, in cross-examination, in the following way: And why was it that you abandoned your application for pre-action discovery and on 10 November gave notice that you wanted to exercise rights under section 247A? You had written from July 'til November a pre-action discovery?---Actually, I figured that - the thing is - actually I need to get all the fact together and understand it properly. And if there is a case then we will make a discovery. So I think our solicitors have reminded me basically, you know, we've got to find the information before we can -. (3) Mr Xie's statement in cross-examination therefore suggests that the present application has been brought as a "work-around" to the proposed pre-action discovery application, in an attempt to gather information that would otherwise be difficult to obtain by that process (it actually suggests that Mr Xie intends to use any information obtained to bring a further application for pre-action discovery). It is notable that the abandonment of the proposed pre-action discovery application coincides with an offer being delivered by Mr Peter Main, purported agent of Mighty River, to Mr Goulds in an email dated 17 October 2014, which contained the words that Mighty River "knows where Mineral Resources stands". In effect, Mighty River had asserted a known cause of action against Mesa/MRL such as to preclude pre-action discovery, which was confirmed in Mr Xie's email to Mr Ellison of 30 October 2014 (referred to further below). (4) Despite Mr Xie's numerous suggestions that he requires additional information in relation to the terms of MRL's use, he has taken no steps since November 2010 to obtain that information. This includes that he has not even contacted Mighty River's former solicitors to ascertain whether they hold the documents now sought. In that regard, Mr Xie "presumed" that they did hold at least two of the three categories of documents sought in the present application. (5) In any event, the assertion that Mr Xie requires additional information as to the terms of MRL's use is inconsistent with his own statements to Mr Ellison: (a) in December 2010, Mr Xie said in an email to Mr Ellison that he does not know "how mrl are justified using mesa port capacity paying no or little consideration"; and (b) four years later, on 30 October 2014, his email to Mr Ellison said (as referred to above): At last, as we spoke over the phone and you know that the facts are mineral resource benefited greatly from port access and lay down and stockpile facility Mesa owns last 4 years. Mesa's director fails to act best interest all Mesa shareholders we will be seeking for justice in that regard. (As in original.) (6) Furthermore, and in any event, the terms of MRL's use of the port rights have been disclosed by Mesa in its financial reports lodged with the ASX, annexed to Mr Xie's affidavit. Mr Xie nonetheless rejected matters put by counsel as being matters of "assumption"; however, it is apparent that counsel was merely "piecing together" Mr Xie's own knowledge as noted in cross-examination. Mesa also brought to Mr Xie's attention its 2014 interim report. Mr Xie had not seen the document before the hearing. 64 Mesa submits that while Mighty River says that it needs inspection under s 247A in order to "protect its investment", its conduct suggests otherwise. Mesa makes the following observations. (1) Mighty River has purchased an additional 750,000 shares since Mr Goulds' affidavit was filed, as accepted by Mr Xie. (2) Mr Xie could not explain why in his affidavit (sworn in December 2014) he deposed to holding 97,369,622 shares in Mesa, approximately 5 million more shares than at the date of Mr Goulds' affidavit in March 2015. (3) Mr Xie (and apparently Mighty River, and or its shareholders) remains "keen to progress investing in [Mesa]". Despite threatening oppression proceedings and/or proceedings to wind up Mesa on various occasions - including in relation to the proposed pre-action discovery application - he is "not interested in winding up the company". (4) Mr Xie apparently does not pay close attention to his trading in Mesa. In cross-examination he said that he instructs a broker to buy shares, sometimes the broker does not transact exactly the right numbers, and Mr Xie finds out from checking the register how many shares Mighty River holds. In that regard, Mr Xie admits to being "very vague with these numbers". (5) Mr Xie only sees roughly every second ASX announcement that is made by Mesa, has no alert set up to prompt him to read ASX announcements, and, critically, had not read the latest financial report issued by Mesa following the commencement of these proceedings. (6) Mr Xie does not have a thorough understanding of the ASX financial reporting system, and yet has not sought to have an accountant or adviser review the financial and annual reports annexed to his own affidavit and which he relies on in these proceedings, despite the fact that Mighty River has ready access to accountants. (7) As set out above, Mighty River made no attempt to ascertain whether any of the information that it now seeks has actually been in the possession of its former solicitors (and arguably its own possession) for over four years. In cross-examination, Mr Xie accepted that he "should have requested" these documents before commencing proceedings and said he intends now to do this. 65 Mesa submits that what actually emerges from the totality of the evidence before the Court is not evidence of a shareholder with a genuine concern as to protecting its investment, or any concern at all as to the use of the port rights. Mesa contends that the evidence suggests that Mighty River, having elected not to accept into MRL's takeover bid, now seeks to conduct itself as a de facto director of Mesa. It says this is evident from the following exchange between Mr Xie and counsel for Mesa: I mean, I need to understand this. If your contemplation involves winding up the company, you have just bought another 750,000 shares?---I am not interested in winding up the company. Well, why do you refer to 461? Why did you do that for five months last year and just a moment ago say you will evaluate it?---We just - actually the purpose is to - we discover in the document - not discover, basically to review - to get a document from the company. We will need to review it. Then we need ... maybe have a - engage a discussion with the - with directors in the company and, you know, when they made decision what they think is fair and, you know, so what the decision basis on - what is commercial enough and then we can talk about whether we need to get the court to get involved. So you are going to say to the directors, 'We challenge your commercial judgment as directors of this public company and if you don't want to discuss it then we will get a court involved or, alternatively, buy out our shares'. Is that the nature of the discussion you contemplate?---That's - no. That's not what I'm saying, Mr Bennett. It's what you have sought to achieve for five years - four years?---Look, if I was sought to achieve I could have … to take over - take over ... this company have a lot of potential. We see a lot of - we will continue to see a lot of potential. We just need to make sure that, you know, we - you know, if we made a wrong judgment, we need to understand where we have done wrong and, you know. 66 In that regard, Mesa contends the constant references by Mr Xie to "we" when speaking about Mighty River's shares in Mesa must be understood as his shareholders and advisors. It says this evidence shows that Mighty River's purpose is that Mighty River's stake in Mesa be offloaded to MRL for value, or Mighty River will hold its shares and push to be "engaged with this company and to make best out of the investment" as Mr Xie explained. Mesa says, however, that Mr Xie's concept of "engaging" with the company is not one which is congruent with Australian company law and is tantamount to assuming the powers of a de facto director. Mesa submits this is inappropriate, particularly where the shareholders of Mesa are bound by constitutionally limited rights of interference with the Board's decisions.

Mighty River's reply submissions 67 Mighty River replies to Mesa's detailed submissions by noting that Mesa does not oppose the application on the basis that it has disclosed information regarding third party use of its assets since 2010, or on the basis that the related party transactions regarding the use of its assets and the use of its assets by other parties are in the best interests of Mesa's shareholders. Rather, it contends a positive defence that there is no proper purpose. 68 Mighty River notes the following with regard to the history of the 2012 proceeding between the parties in the Supreme Court of Western Australia. (1) By cl 4 of the Deed of Settlement and Release between Mighty River and MRL, Mighty River provided a release to "Mineral Resources" from any future "Claims" of Mighty River against "Mineral Resources". "Mineral Resources" is defined in the Deed under cl 1.1(e) to include, relevantly, MRL and any subsidiary of MRL. A subsidiary is defined by reference to the definition of that term in the Act. (2) "Claim" is defined in the Deed under cl 1.1(b) to include, relevantly, "all causes of action ... and legal proceedings whatsoever ... which presently exist, ... in connection with, in respect of and arising, directly or indirectly, from the Supreme Court Action [being the 2012 proceeding] or the Alleged Contract". By cl 4.1 of the Deed, Mighty River releases Mineral Resources (as defined) from any "Claims". (3) The "Alleged Contract" was an agreement by which MRL was to purchase Mighty River's shares in Mesa. By the "Supreme Court Action" Mighty River alleged a breach of oral agreement by MRL. 69 Plainly, Mighty River submits, its application for information regarding the use of Mesa's assets by third parties has no connection whatsoever with either the alleged contract for MRL to buy shares from Mighty River, or the 2012 proceeding in the Supreme Court of Western Australia regarding this alleged contract. It says any contention that the Deed of Settlement and Release operates to prevent Mighty River from involvement in future proceedings is misconceived, and the Deed is irrelevant to this application. 70 In any event, Mighty River says, in Areva NC (Australia) Pty Ltd v Summit Resources (Australia) Pty Ltd [2007] WASC 207 at [48], Martin CJ (in relation to a foreshadowed application under s 237 of the Act) stated that: However, Summit and SRA submit that I should conclude that Areva is not acting in good faith and for the enunciated purposes because its application under s 237 is doomed to fail for the following reasons: (a) Areva will fail to establish that the grant of leave is in the best interests of SRA, because the compromise effected by the Deed of Settlement and Release has been effective to discharge and release any claim which SRA may have against either Resolute or MIU; and (b) Areva has no reasonable prospect of overcoming the rebuttable presumption that the grant of leave is not in the best interests of the company created by s 237(3). 71 Martin CJ stated at [49] to [50] (before granting the application under s 247A) that: Before considering those submissions, I should observe that when an application is made under s 247A, on the basis of a pending or foreshadowed application under s 237 of the Act, it is neither necessary nor appropriate for the court hearing the application … for access to records to in effect hear and determine the application for leave under s 237. Such an approach would entirely defeat the purpose and effect of s 247A. Put another way, as one of the purposes for which access to books and records may be granted under s 247A is the purpose of assessing and advancing an application under s 237, it would be quite wrong to deny an applicant access because of a conclusion that the application under s 237 had no reasonable prospects of success unless it was clear beyond argument that access to the books and records concerned could not affect the assessment of prospects of success of the application of the application under s 237. 72 Further, Mighty River makes the following submissions: (1) It is proper for a reasonable shareholder to exercise its rights as a shareholder to seek information from a company in relation to a transaction that could adversely affect its investment and where it seeks to investigate the transaction for the purpose of determining what action it should take: Acehill Investments at [29]. (2) As found by Brooking J in Intercapital Holdings Ltd v MEH Ltd (1988) 13 ACLR 595 at 601-602, it is neither necessary nor appropriate for the court hearing the s 247A application to consider the prospects of any future potential action arising from an inspection of a company's records. (3) As provided in Areva, it is not necessary for Mighty River to establish that it will succeed in any future claim. It is sufficient if the issue raised by the applicant is "substantive and not fanciful" and not "artificial, specious or contrived": Style Limited, in the matter of Merim Pty Ltd v Style Ltd [2009] FCA 314; (2009) 255 ALR 63 at [66]­[67]. 73 Mighty River notes that Mesa by its counsel suggested to Mr Xie in cross-examination that this application was brought so that "Mineral Resources [would] make an offer to purchase Mighty River's shareholding in Mesa", which suggestion was emphatically rejected by Mr Xie. Absent a purchase of Mighty River's shares by MRL, it was further suggested by Mesa that Mighty River is "trapped as a shareholder". As stated by Mr Xie in response, Mighty River is "not trapped as a shareholder. If [Mineral Resources] want to buy then it's fine ... [Mineral Resources] haven't then we're happy to hold it and then we continue to want to be engaged with this company and to make best out of the investment". 74 For the same reasons identified above, Mighty River submits that Mesa's assertion of an alleged collateral purpose is not sustained. The basis for the assertion is substantively unexplained by Mesa, save for generalised references to "prior and protracted disputes". 75 Mighty River contends the suggestion by Mesa of a collateral purpose was emphatically rejected by Mighty River, and the Deed of Settlement and Release and prior proceedings between Mighty River and MRL are plainly irrelevant to Mighty River's request for information regarding the use of Mesa's assets by other parties, including related parties. 76 It says it is not in dispute that Mighty River has been aware for some time that Mesa is allowing (at least) MRL to utilise its port capacity and access rights. There is no suggestion that Mighty River was aware of the terms on which Mesa was permitting third parties to utilise its assets, nor that any such agreements were in the best interests of Mesa's shareholders. 77 As noted above, Mighty River acknowledges Mesa disclosed as recently as 13 March 2015 in its 2014 interim report some use by related parties of its assets in the six months ending 31 December 2014, and in its 2014 annual report Mesa reported "Rental income", and "Recovery of port rights usage" under revenue. 78 Mighty River submits that plainly the available information is insufficient in that: (1) the reference to rental income in isolation provides no information about the source of the rental income nor the terms on which the rental income has been derived by Mesa; (2) by the 2014 interim report, Mesa announced that part of the Boodarie lease has been subleased to MRL on market terms and this is the first time that Mesa reported a sublease in respect of the Boodarie lease, although it is not in dispute that the Boodarie lease has been utilised by third parties prior to this reporting period; (3) Mesa has been permitting third parties to use its assets since 2010, yet its 2010, 2011, 2012 and 2013 annual reports do not refer to rental income, recovery of port rights usage or any subleasing arrangement with MRL in respect of the Boodarie lease; and (4) the information provided by Mesa to its shareholders as to the use of its assets by way of the 2014 annual report and interim report is, at best, vague and ambiguous. 79 Mighty River notes that Mesa referred to compliance with its disclosure obligations as a public company, but says in doing so, Mesa appears to misunderstand that s 247A confers a broad discretion on the Court. As observed in Rowland v Meudon Pty Ltd [2008] NSWSC 381; (2008) 220 FLR 362 by Bryson AJ at [41], the operation of that discretion: extends to consideration of what the Court ought to require that the company tell its shareholder, a different test to what the company has a legal duty to tell its shareholder. If the section was limited to providing means of enforcement for existing legal duties it would take an altogether different form, and the good faith requirement would not be appropriate. 80 In Rowland at [38], Mighty River notes, Bryson AJ approved the observation by McPherson J in Re Claremont Petroleum NL (No 2) [1990] 2 Qd R 310 at 314-315: The procedure under s. 265B is not intended as a form of or substitution for inspection of documents after discovery on affidavit or answers to interrogatories in pending litigation. I therefore consider that in many circumstances a shareholder ought not to be assisted by an order under s. 265B to examine decisions of directors, or the reports or records leading to those decisions; but I think that in a case like this he is entitled by inspection of books to find out what the results of those decisions are; that is to say, whether the company has entered into agreements, and with whom, disposing of corporate assets of value, and for what consideration, and what has happened to those assets or the consideration given in return for them. (Emphasis added.) 81 Mighty River further notes that Mesa seeks to rely on cl 13.4 of Mesa's Constitution dated 14 January 2002 in opposition to the application. 82 The Constitution provides at cl 13.4 that "unless authorised by a resolution of Directors or the Corporations Law, a Member is not entitled to inspect the books of the Company". Mighty River contends that, plainly, cl 13.4 of the Constitution has no application where, as is the case here, Mighty River seeks authorisation to inspect certain books of the Company pursuant to the Act. 83 Mighty River notes that on the basis of a letter sent by Mighty River's former solicitors, dated 15 November 2010, Mesa asserts that Mighty River previously had access to certain documents it seeks by this application. The letter states "We are instructed that in the course of the dispatch of the shipment by Mineral Resources as above, it had access to and utilized all or part of those areas and facilities of Utah Port which were granted to Mesa pursuant to a Facilitation Agreement entered into between Mesa and the Port Hedland Port Authority which [w]as varied by a Deed of Variation dated 24 September 2009". 84 In that regard, Mighty River notes that, first, it was suggested by Mesa that Mighty River therefore had access to the "Facilitation Agreement" and "Deed of Variation". Mr Xie gave evidence that he had not seen any such agreements, he did not obtain access to them in his capacity as a director of Auvex and he did not know whether Mighty River's former solicitors had seen the documents (though he presumed they had). So whether Mighty River's former solicitors had seen the documents mentioned in their letter is speculative, and its former solicitors were not called to give evidence in this matter. 85 Secondly, Mighty River says it has not sought inspection of a document titled "Facilitation Agreement". It does seek inspection of a document titled "Utah Point Facility Agreement", which is referred to in Mesa's 2010 annual report. Separately, in a letter to Mighty River's solicitors dated 6 August 2014, Mesa's solicitors have identified that Mesa is a party to a "Multi-User Agreement", inspection of which is also requested by Mighty River. Whether the "Facilitation Agreement" referred to by Mighty River's former solicitors is the same agreement as one of these requested agreements is unclear from the evidence before the Court. 86 Thirdly, Mighty River states it is consistent with Mesa's "secretive conduct" regarding third party use of its assets that the response by its solicitors, dated 15 November 2010, stated merely that "Mesa has allowed temporary use of pad 7 at Utah Point for good consideration": that is, Mesa provided no detail as to the terms on which third party use of its asset was granted, whether the use was on market terms, the period for which the use was granted, whether the use was granted to a related party such as MRL or whether the third party use was in the interests of Mesa's shareholders. 87 Finally, Mighty River says, the correspondence referred to by Mesa preceded an application by Mighty River to intervene in the 2010 proceeding. The use of Mesa's assets by third parties was not in issue in those proceedings, rather the issue was whether Mesa's port rights were an asset of the joint venture formed between Mesa and Auvex. It follows that that proceeding and associated correspondence from Mighty River's former solicitors are irrelevant to this proceeding. 88 Mighty River also observes that on 19 December 2014 the solicitors for Mighty River filed and served its genuine steps statement as required by s 6 of the Civil Dispute Resolution Act 2011 (Cth). Mesa now suggests that Mighty River's reference in the genuine steps statement to only the letter dated 10 November 2014 by Mighty River's solicitors and to the letter dated 12 November 2014 by Mesa's solicitors had the effect that it failed to disclose other correspondence between Mighty River and Mesa that preceded this application. 89 Any such suggestion by Mesa is, Mighty River submits, misconceived given that the relevant, earlier correspondence between the parties' respective solicitors was attached to Mr Xie's affidavit in support of the application, which affidavit was filed on the same date as the genuine steps statement.

Consideration 90 The Court, in considering these detailed submissions, is persuaded, primarily for the reasons advanced in the submissions and reply submissions of Mighty River, that access to the required documents should be permitted by the making of an order. 91 As has been noted above and the parties accept, the principles by which the Court should exercise its discretion under s 247A(1) are well understood. 92 In some cases, such as Knightswood Nominees Pty Ltd v Sherwin Pastoral Company Ltd (1989) 15 ACLR 151; (1989) 7 ACLC 536, and by Debelle J in Acehill Investments, it has been suggested that the requirement that an applicant for an access order satisfy the Court it is acting in good faith and the inspection is to be made for a proper purpose contains a composite notion. In Knightswood Nominees, Brooking J said, at 156, that he was disposed to think that all that the reference to good faith does is to remind one, first that the proper purpose set up must not be a mere pretence, and, secondly, that in considering purpose it will be necessary to go beyond the mere desire to obtain information by the inspection of the books and to ask what the applicant wishes to achieve as a result. 93 Perhaps, properly understood, his Honour was merely emphasising, as he went on to say, that an access order should not be made merely to satisfy the curiosity of an applicant to look at the books of a company. There must be reasonable grounds for making the order providing for the access. This need has been referred to in some of the authorities, including Intercapital Holdings, by Brooking J, as a "case for investigation". 94 The authorities recognise, as the parties do in their written opening and closing submissions, that while the principles may be broadly stated their application can involve complexities of judgement. 95 In Hanks v Admiralty Resources NL [2011] FCA 891; (2011) 85 ACSR 101 at [32], Gordon J observed that the following principles emerge from the authorities: (1) an applicant who has a significant shareholding and who has been a shareholder for some considerable time will more easily discharge the burden of showing good faith than one who has recently acquired a token holding; (2) an applicant need not show a difference between its interests and those of other shareholders; (3) the words "proper purpose" mean a purpose connected with the proper exercise of rights of a shareholder as a shareholder, as opposed to a purpose connected with some other interest, such as an interest as a bidder, under a takeover scheme, or as a litigant in proceedings against the company; (4) pursuing a reasonable suspicion of breach of duty is a proper purpose for seeking an inspection of a company's records; (5) it is not necessary that the applicant have sufficient evidence to bring or make out an action, however, and an applicant does not need to establish that it will succeed in any future claim - it is sufficient if the issue raised is "substantive and not fanciful" and not "artificial, specious or contrived"; and (6) the Court should not determine any substantive questions and should not attempt to do so on the hearing of an application under s 247A. 96 There is therefore no particular "checklist" of criteria that must be satisfied, so far as the case law is concerned. 97 I am satisfied that Mighty River is a substantial shareholder. Plainly it has not arrived on the scene recently. It has been locked in with its minority shareholding in Mesa since the takeover activities in respect of Auvex were completed. 98 On the face of it, there are proper grounds for Mighty River to be granted access to books so that it can better understand the way in which the port rights, including in connection with the Boodarie lease, have been or are being used and enjoyed. 99 I accept the submissions made on behalf of Mighty River, and set out above, that the disclosure of information by Mesa at this point, in relation to exactly what arrangements are in place in respect of those port rights, is limited and the information ambiguous and incomplete. 100 In my view, on the face of it, it is reasonable for a minority shareholder in the position of Mighty River, especially in light of the drawn out corporate hostilities between Mighty River, on the one hand, and Mesa and MRL, on the other, to be better informed about those matters than it currently is. 101 I have said in these preceding paragraphs that this appears to be the position, on the face of it. 102 The defence to the application put on behalf of Mesa, is that, however it might appear on the face of it, Mighty River, through Mr Xie, is not seeking access to the required documents in good faith, and that inspection will not be for a proper purpose, whether that phrase be seen as a composite notion or with disjunctive qualities. Mesa submits Mighty River is merely pursuing a course of action, disclosed by previous disputation and court proceedings, to force the purchase of its minority shareholding in Mesa and wants to act as a de facto director involving itself in the company's management. 103 In my view, there can be little doubt, as Mr Xie put it in cross-examination, and referred to above, that Mighty River would be pleased to consider an offer for the purchase of its minority shareholding in Mesa. That, however, does not mean that, as a minority shareholder, Mighty River is disentitled from making the application that it has made under s 247A(1) to gain access to the required documents. 104 In my view it is reasonable that Mighty River, in seeking to fully protect its investment in Mesa, should be entitled to have access to information that is relevant to its investment and which is presently, in my view, not adequately revealed in the recent annual or interim reporting of Mesa or other information provided, referred to above. 105 That a particular action or court proceeding is not finally identified as a possible consequence of this access is not a bar to the required access order. 106 I do not consider, on the evidence, that Mighty River by requesting the required documents is impermissibly involving itself in the company's management. 107 Nor am I satisfied that any of the forensic challenges to the testimony of Mr Xie identified in the closing submissions of Mesa undermine Mr Xie's credibility in relevant respects, or show Mighty River's application to be in effect a sham or a ruse. I generally accept the characterisation of the manner in which he gave his evidence, provided by Mighty River, as "thoughtful and considered". 108 Mr Xie presented as a witness not unaccustomed to corporate disputation and not unaccustomed to the range of questions that a skilled counsel, such as Mr Bennett, appearing for Mesa, proceeded to ask of him. I do not consider that Mr Xie gave contrived responses. He was quite open and prepared to admit what was obvious. However, he did not admit that his only purpose in bringing the application currently before the Court was, in effect, to "greenmail" Mesa or MRL into buying Mighty River's shareholding in Mesa. 109 As I say, while I have no doubt that Mr Xie and Mighty River would be pleased to receive a reasonable offer to buy out the minority interest in Mesa, the fact that there have been and are corporate hostilities between the relevant parties is not of itself a ground for impugning Mr Xie's evidence, given on behalf of Mighty River. 110 I am satisfied, in all the circumstances, that Mighty River, through Mr Xie, in making this application is acting in good faith and that inspection is to be for a proper purpose. 111 An order therefore should be made enabling Mighty River to have access to the required documents.

Should an order be made in the terms requested by Mighty River? 112 Mesa submits that for any order to be made in the terms sought by Mighty River would be oppressive. 113 It refers to the potential requirement for access to all documents which record any information regarding the use by any third parties between December 2010 and November 2014, a four year period, in relation to port capacity, as excessive. 114 This objection was particularly advanced to emphasise the submission of Mesa that the application of Mighty River was not made in good faith and for a proper purpose. 115 In my view, the Court having concluded that the access order should be made, there is no sensible means by which the order should be of a restricted nature so that only certain of the materials referred to or alluded to in the evidence before the Court should be the subject of the order. 116 While the order proposed would apply in respect of a four year period, and this would impose certain obligations on Mesa, it seems to me that it is necessary for all documents that bear upon the exploitation of Mesa's port rights and the Boodarie lease to be the subject of the order over that period so that adequate information is available to Mighty River to protect its investment in the company. In that way, the current ambiguity and incompleteness of the information disclosed on those matters by Mesa to date, is to be removed.

conclusion and order 117 I am, therefore, satisfied that the order proposed by Mighty River in its short minutes of order attached to its written closing submissions should be made. 118 However, before making those orders I will hear from the parties as to the relevant period and timing of the inspection for the purposes of [3] of that minute. I certify that the preceding one hundred and eighteen (118) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Barker.