MINERALOGY PTY LTD -v- SINO IRON PTY LTD [2019] WASC 262 (19 July 2019)

(iii) affidavit of Clive Theodore Mensink affirmed on 17 November 2015; and

(iv) supplementary affidavit of Clive Theodore Mensink affirmed on 19 November 2015

- an affidavit filed in Court of Appeal of Western Australia action CACV 177 of 2015:

(v) affidavit of Clive Theodore Mensink affirmed on 18 January 2016.

1. The Applicants rely upon the following documents in support of their application:

(1) letter from HWL Ebsworth to the Supreme Court of Western Australia dated 22 May 2019 (Letter);

(2) outline of submissions in support of application to inspect and copy documents filed on 17 June 2019 (Applicants' First Submissions);

(3) affidavit of Laura Alexis Morrissey sworn on 17 June 2019 (Morrissey Affidavit);

(4) outline of submissions of the Applicants in reply dated 2 July 2019 (Applicants' Second Submissions).

1. Mineralogy Pty Ltd (Mineralogy), the plaintiff in CIV 2368 of 2015, opposes the application. Mineralogy relies upon the following documents in opposition to the application:

(1) outline of submissions in opposition to application to inspect and copy documents dated 24 June 2019 (Mineralogy First Submissions);

(2) affidavit of Kane Christopher Jones sworn 24 June 2019 (Jones Affidavit); and

(3) outline of submissions in response to Applicants' reply submissions and in opposition to application to inspect and copy documents dated 12 July 2019 (Mineralogy Second Submissions).

1. I am able to deal with the Applicants' request for the affidavit said to have been filed in CACV 177 of 2015 at the outset. This affidavit has not been not filed in that proceeding (and I am not aware of it having been filed in any other proceedings in this court) and therefore, I am unable to grant access to a document which the court does not have.
2. The balance of these reasons deal with the Applicants' application for the Affidavits.

1. On 16 January 2016, the Applicants were each appointed as administrators of Queensland Nickel by resolution of its sole director at the time, Clive Theodore Mensink.[1]
2. On 22 April 2016, the creditors of Queensland Nickel resolved to appoint the Applicants as liquidators of Queensland Nickel. [2]
3. On 27 February 2017, the Supreme Court of Queensland ordered, pursuant to s 459A of the Corporations Act 2001 (Cth) (Corporations Act) that Queensland Nickel be wound up in insolvency.[3]
4. The Applicants are the third plaintiffs and Queensland Nickel is the second plaintiff in Supreme Court of Queensland Proceedings BS6596/17 (Queensland Proceedings). In the Queensland Proceedings, Queensland Nickel and the Applicants claim, inter alia, that a number of transactions entered into by, and amongst other companies, Queensland Nickel and Waratah Coal Pty Ltd (Waratah Coal) (the fifteenth defendant in the Queensland Proceedings) ought be set aside as voidable transactions under the Corporations Act.[4]
5. The relevant transactions occurred on 13 January 2016. Queensland Nickel and the Applicants contend the effect of those transactions was that:

(1) Queensland Nickel obtained 2,000,000 shares in China First Pty Ltd (China First) (the sixteenth defendant in the Queensland Proceedings), and a promise from Waratah Coal that it would consider making available to Queensland Nickel certain mining tenements which could be offered as security to third parties;

(2) Queensland Nickel came under a deferred obligation to pay $135 million to China First; and

(3) Queensland Nickel granted a charge over all of its assets to China First to secure the obligation to pay $135 million and a separate charge over all of its assets to Waratah Coal to secure an apparent liability of $100 million.[5]

1. The Applicants contend that Queensland Nickel was insolvent on 13 January 2016 and that the transactions were uncommercial transactions within the meaning of s 588FE of the Corporations Act. The transactions were uncommercial because, amongst other things, the shares in China First were of no value and Queensland Nickel could not use the mining tenements as security to satisfy the requirements of its creditors.[6]
2. The Applicants have signed, but unfiled versions of the Affidavits I refer to in para 1 presently in their possession and seek copies of the filed Affidavits in the West Australian Supreme Court proceedings because, by operation of s 53(1)(d) of the Evidence Act 1977 (Qld) (Evidence Act), sealed copies of affidavits filed in courts of other Australian jurisdictions are admissible as evidence in other jurisdictions without further proof.[7] Essentially, the Applicants could rely on the Affidavits in the Queensland Proceeding as authentic documents.

1. Order 67B r 16(1)(e) RSC provides:
   1. Documents that can be inspected or copied -

(1) any person referred to in rule 15 is, on payment of the prescribed fee, entitled during office hours to inspect and be given a copy of any of these filed documents -

(e) with the leave of the court or a registrar, any other document.

1. In the case of Vikas Rambal (ATF The Rambal Family Trust) v Pankaj Oswal (ATF The Burrup Trust)[8] (Rambal) Le Miere J considered an application by a nonparty for access to documents pursuant to O 67 r 11(1)(d) (the predecessor to O 67B r 16):

[8] [T]he principle of open justice is a strong reason for allowing access to documents that have been read by the court as part of the decisionmaking process, including the process of determining pre-trial applications. In such cases the court should lean in favour of disclosure if a legitimate interest can be shown for obtaining the documents and there is no good reason to refuse access.

[9] [A] party who is engaged in litigation has a legitimate interest in inspecting documents which contain information relevant to the issues in the litigation in which the applicant is involved.

[10] [W]here the documents sought have been filed but not read the principle of open justice is not engaged at all and the court should only give access to such documents where there are strong grounds for thinking it necessary in the interests of justice to do so.

1. The Rambal decision requires the court to engage in the following decision making process in deciding whether access to documents should be granted to nonparties:

Have the Affidavits been read by the court as part of the decisionmaking process?

1. The Applicants submit that the Affidavits have been read in open court as part of the decision making process. The Applicants refer to the decision of Tottle J in Mineralogy Pty Ltd v Sino Iron Pty Ltd [No 8][9] where his Honour said:

[Queensland Nickel] operates a nickel refinery in Yabulu, near Townsville, Queensland. Various deponents of affidavits filed by Mineralogy deposed to the fact that the price of nickel has dropped substantially in recent times, placing [Queensland Nickel] in financial difficulty. [Queensland Nickel] has, in the past relied on Mineralogy for loans when required: Mr Wolfe's affidavit affirmed 17 November 2015 (par 39), Mr Mensink's affidavit affirmed 17 November 2015 (par 19). As a consequence of the fall in the nickel price, [Queensland Nickel] is experiencing a liquidity crisis and it is claimed that it requires an injection of $28 million to avoid the closure of its refinery, job losses for up to 767 employees and to avoid [Queensland Nickel] being placed into administration: Mr Mensink's affidavit affirmed 19 November 2015 (par 7), Mr Wolfe's affidavit affirmed 17 November 2015 (par 70 and par 108), Mineralogy submissions par 140.

It is also contended that the closure of the Yabulu refinery will have a negative flow on effect on the economy of Townsville, [Queensland Nickel] being the town's largest private employer: Mineralogy submissions (par 137). Mineralogy claims that the refinery's closure will cause further job losses in Townsville: Mr Wolfe's affidavit affirmed 17 November 2015 (par 59 and par 108).

1. His Honour Justice Tottle made it clear that the Affidavits were read as part of his decision making process.[10] Although his Honour's decision was not delivered in these proceedings (it was in Supreme Court of Western Australia action CIV 1808 of 2013), the Affidavits are identical to those filed in CIV 1808 of 2013. The Applicants would be equally as entitled, pursuant to O 67B r 16(1)(e) RSC, to request access to those same affidavits filed in CIV 1808 of 2013. Accordingly, I do not consider it of import that the Affidavits were read in a different proceeding in this court - the fact is that they have been read as part of the decision-making process.

Do the Applicants have a legitimate interest in inspecting the Affidavits?

1. The Applicants submit they have a legitimate interest in inspecting the Affidavits because the Affidavits contain evidence relevant to the claim advanced in the Queensland Proceedings to set aside transactions entered into by Queensland Nickel on the basis that they were uncommercial transactions because:

(a) Queensland Nickel and the Liquidators plead in the Queensland Proceedings that whether or not the transactions were uncommercial depended upon the fact that the global nickel price was uncertain in January 2016;[11]

(b) the defendants in the Queensland Proceedings plead a good faith defence to resist the transactions being set aside. Such defence depends upon, amongst other things, whether Mr Mensink, who allegedly caused the transactions to be entered into, had reasonable grounds for suspecting that Queensland Nickel was insolvent;[12]

(c) the affidavit of Mr Wolfe dated 17 November 2015, at pars 74 and 75, deposes to the uncertainty of the global nickel price in January 2016, as does par 14 of the affidavit of Mr Wolfe dated 19 November 2015; and

(d) the affidavit of Mr Mensink dated 17 November 2015, at pars 7, 8, 11 and 12, and the affidavit of Mr Mensink dated 19 November 2015 at pars 6 and 7 deposes to Mr Mensink's knowledge of Queensland Nickel's solvency in late 2015.

1. Mineralogy submits that the Applicants do not have a legitimate interest in accessing the Affidavits for the following reasons:
   • (a) the Applicants obtained copies of the unfiled Affidavits in circumstances which Mineralogy contend were a breach of confidence and are the subject matter of a separate Queensland Supreme Court proceeding (number BS5366 of 2019) in which Mineralogy is involved as the third plaintiff and the Applicants are involved as first and second defendants (Queensland Access Proceedings). In the Queensland Access Proceedings, the relief sought by Mineralogy includes, inter alia:

(i) a declaration that the unfiled Affidavits are confidential information of the plaintiffs in the Queensland Access Proceedings;

(ii) a declaration that the Applicants' conduct in obtaining or retaining the unfiled Affidavits is in breach of the Applicants' equitable duty of confidence owed to the plaintiffs in the Queensland Access Proceedings;

(iii) an order that the Applicants be restrained from using or disclosing any information in the unfiled Affidavits; and

(iv) an order that the Applicants deliver up and destroy or delete every copy of the unfiled Affidavits.[13]

• (b) the Applicants' purpose in applying to access the Affidavits is to use them as evidence against Mineralogy in the Queensland Proceedings. In these circumstances where the Applicants' obtained the unfiled Affidavits in breach of confidence,[14] Mineralogy claim this is not a legitimate purpose for which access can be granted;
• (c) it is not only the immediate purpose for which the Affidavits are sought that must be taken into account. In considering the legitimacy of the Applicants' interest in the Affidavits, the court must consider whether the application perpetuates any illegality underpinning the request for access to the Affidavits.[15]

1. Rambal is authority for the proposition that the Applicants have a legitimate interest in accessing the Affidavits if the Affidavits 'contain information relevant to the issues in the litigation in which the applicant is involved'.[16]
2. The Applicants do rely upon the content of the unfiled Affidavits in support of their submissions to establish their legitimate interest in accessing the Affidavits.[17] To the extent that the submissions do so, I do not consider it is appropriate to have regard to those submissions. The circumstances in which the unfiled Affidavits were obtained are the subject of the Queensland Access Proceedings and it is not appropriate that I form a view as to the merits of those proceedings. Rather, it is appropriate that I consider this application on the basis that the Applicants do not have access to, and are unable to refer to, the content of the unfiled Affidavits.
3. However, the fact that a non-party does not have access to the content of a document filed in this court is not an impediment to gaining access to that document pursuant to O 67B r 16(1)(e) RSC- in fact, it is for that very reason that a non-party will seek access to a document.
4. It is for the Applicants to assert that the Affidavits contain information relevant to issues in the Queensland Proceedings (in this case the Applicants had the benefit of the decision of Tottle J in which his Honour detailed the contents of portions of the Affidavits[18]), and for this court to review the Affidavits and make a determination whether that is the case.
5. Having reviewed the Affidavits and the Queensland Proceeding pleadings annexed to the Morrissey Affidavit,[19] I am satisfied that the evidence contained in the Affidavits is relevant to the issues arising in the Queensland Proceedings and that, therefore, the Applicants have a legitimate interest in accessing the Affidavits.

1. The Applicants submit that there is no good reason to refuse access to the Affidavits.
2. Mineralogy submit the following as good reasons to refuse access:

(a) the Applicants are unable to pursue an application for access as they are seeking to rely upon their potential illegal conduct in obtaining the unfiled Affidavits (referred to as the ex turpi causa principle);[20]

(b) the application is an abuse of process as it attempts to pre-empt and usurp the process in, the outcome of, and involves unnecessary duplication of:

(i) the issues arising in the Queensland Access Proceedings; and

(ii) the process of disclosure in the Queensland Proceedings.[21]

1. It is important to make the distinction between the unfiled Affidavits (the subject, amongst other documents, of the Queensland Access Proceedings) and Affidavits filed in this court to which access is sought.
2. The Applicants are entitled, pursuant to O 67B r 16(1)(e) RSC, to apply for access to documents filed in this court. I have a discretion as to whether or not to grant access. It is pursuant to this regime that the Applicants have applied for access to the Affidavits. It is not any alleged illegal conduct of the Applicants in obtaining unfiled copies of the Affidavits that provides the basis for this application. Accordingly, the ex turpi causa principle does not apply.
3. Further, there is no duplication, usurping or pre-empting the issues that arise in the Queensland Access Proceedings (the issue being whether the Applicants obtained unfiled Affidavits in breach of confidence) or the disclosure process in the Queensland Proceedings (the parties are required to disclose documents in accordance with the Uniform Civil Procedure Rules 1999 (Qld) irrespective of whether or not they have obtained access to the Affidavits in this court).
4. I find that there is no good reason to refuse the Applicants access to the Affidavits.

(a) the Applicants have leave, upon payment of the prescribed fee, to inspect and take a copy of the following documents:

(i) affidavit of Daren Bruce Wolfe affirmed on 17 November 2015;

(ii) supplementary affidavit of Daren Bruce Wolfe affirmed on 19 November 2015;

(iii) affidavit of Clive Theodore Mensink affirmed on 17 November 2015; and

(iv) supplementary affidavit of Clive Theodore Mensink affirmed on 19 November 2015.

(b) There is no order as to costs of the application.

1. These orders will take effect from 9:00AWST on 24 July 2019.

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

[4] Applicants' First submissions paragraph 17.

[5] Letter from HWL Ebsworth to the Supreme Court of Western Australia dated 22 May 2019.

[8] Vikas Rambal (ATF The Rambal Family Trust) v Pankaj Oswal (ATF The Burrup Trust) [2014] WASC 86 [8] [10].

[9] Mineralogy Pty Ltd v Sino Iron Pty Ltd [No 8] [2015] WASC 473 [95] - [96].

[10] Supreme Court of Western Australia CIV 1808 of 2013 7 December 2015 Transcript T830.

[11] Morrissey Affidavit LAM 2: Queensland Proceedings second further amended consolidated statement of claim at par 387(a)(viii), Morrissey Affidavit LAM 3: Queensland Proceedings defence and counterclaim to the further amended consolidated counterclaim at par 386(d).

[12] Morrissey Affidavit Annexure LAM 3:Queensland Proceedings defence and counterclaim to the further amended consolidated statement of claim at par 398 - 401; Morrissey Affidavit LAM 4: Queensland Proceedings amended reply and answer at pars 398 - 401.

[13] Jones Affidavit Annexure KCJ-01: Statement of Claim prayer for relief.

[14] Mineralogy Second Submissions at par 3(b).

[15] Mineralogy Second Submissions at par 3(c).

[16] Vikas Rambal (ATF The Rambal Family Trust) v Pankaj Oswal (ATF The Burrup Trust) [2014] WASC 86 [9].

[17] Applicants' First Submissions par 18.

[18] Mineralogy Pty Ltd v Sino Iron Pty Ltd [No 8] [2015] WASC 473 [95] - [96].

[19] Morrissey Affidavit LAM. 2, LAM 3, LAM 4.

[20] Mineralogy First Submissions pars 19 - 25.

[21] Mineralogy First Submissions pars 26 - 29. Mineralogy Second Submissions pars 6 and 7.